Jason McCann of Vari | Creating a Culture of Learning and Innovation for the Future of Work

ABOUT THIS EPISODE

Entrepreneurship is the lifeblood of our economy” says Jason McCann, CEO of Vari, in this podcast with Frank Cottle. To support entrepreneurship and create positive workplaces that ebb and flow with the needs of its people and projects, we must build a culture of learning and innovation – starting now.

GUEST

Jason McCann

Co-Founder and CEO of Vari®

Transcript

Frank Cottle [00:00:46] Jason, welcome to the Future of Work podcast. We’re excited to have you here today, and I forward to an enlightened conversation.  

Jason McCann [00:00:55] I am too Frank. Glad we got to do this. I’m looking forward to today’s chat.  

Frank Cottle [00:00:59] Oh, well, you know, Jason, you and I have known each other for a while, and I certainly know your company quite well. Let me give a little introduction for those that aren’t familiar with you. And I’ll start off by saying that I know your mission was originally to. Create workspaces that elevated people and you started from the inside out. And in 2013, you co-founded Vari who builds the popular very desk sit and stand desk sets that are used worldwide by over 98 percent of the global Fortune 1000. That’s pretty, amazing number. Overall, since its founding, Vari has been recognized for its growth and innovation, and SMU. Cox named it Dallas Fastest Growing Business, and Ernst and Young named View Entrepreneur of the Year. So welcome, Jason. We’re excited to have you aboard and to dig into the future of work.  

Jason McCann [00:01:54] Excited to be here. Thanks for that. You joined our conversation. So, look forward to sharing some of this knowledge and what we’ve both been through here on this journey.  

Frank Cottle [00:02:03] You know, between the two of us as we were just talking, we have one hundred and twenty years of experience. So, my God, I mean, we’ve been around the stump a few times and do have a firm.  

Jason McCann [00:02:18] And we’re still fighting the good fight. So, we’re trying to crack the code.  

Frank Cottle [00:02:22] You bet. Giving it a good try. But tell me, where do you see the future of the workplace going? And I emphasize workplace, not the future of work. That’s a massive, massive topic. But where do you see the workplace, itself going?  

Jason McCann [00:02:37] Yeah. So, we, you know, we think about it in probably three different ways. So, the idea that there will be a workspace for people to come together, for collaboration, for community, for culture or apprenticeships, for learning is going to play a vital role as we think about the future of. The idea of what that workspace looks like is it flexible? Does it change? Is it a safe and healthy environment? Is it close to where people live? As it used daily one day a week, three times a week, monthly, annually quarterly? That’s still up for debate. It’s being worked through. Second thing is, we see for people that can have that flexibility for the types of jobs because maybe 50 or 40 percent of jobs would allow for some type of work from an anywhere or work from home type environment. So, I think you’re going to see a lot of changes continue to happen in that space and then sort of a third space that continues to evolve where team members can come together. It may not be a permanent space for a company. Maybe it’s a shared space co-working space, a flexible workspace. It might be a third option, but we do think the idea of people being able to have focused time, it’s going to be important for their work and heads down on projects. But the idea that we’re ultimately better together and working in a synergistic way is going to continue to happen. So those are kind of the three areas that we see continue to emerge and really change year over the next years ahead of us.  

Frank Cottle [00:04:01] Well, you know, it’s funny. For about five years now, we’ve been saying that the next workplace facility, whether it’s an office or a co-working center or something, should be built on a bike path, not on a metro line. That the way people move in the way that we work and the way we want to lead our lives is quite different. And I noticed one of the largest companies in our industry, IWG, put out an interesting article this morning in their U.K. newsletter. I read everything that goes on in the industry. And I was talking about the four-day workweek, and I read an article last night about the Chinese workweek, which is nine six nine a.m. to nine p.m. six days a week. That’s pretty much a standard workweek. And I thought we’d go to the four-day workweek, and they stick on the nine six. They started looking at the differences in the way cultures approach, work, and workplace. And I’d be interested in your thoughts on that. Does the Western world fall behind by this, this new model? Well, we talk about the great resignation and everybody finding themselves. Is this a productivity issue that a losing battle or for some of us and a winning battle for others of us globally, we all work so that we are one people in that regard? We’re human beings. But what’s your thought on that? Changes to the workplace relative to time and the value that that that adds or detracts a four-day workweek reduces the value of the real estate that’s being used four days a week instead of five days a week or six days a week. And that impacts the value of commercial real estate, which impacts yields, which impacts finance, which impacts savings, et cetera, to, you know, kind of an interesting domino effect. So, I’d probably confuse the heck out of you. But what what’s your what’s your thoughts?  

Jason McCann [00:06:05] Well, I think the idea of impact and productivity are probably the two things when I think about when I think about WeWork. And workspace, so entrepreneurs that you know, entrepreneurship, which I believe is the lifeblood of our economy, I don’t I don’t know that that’s encapsulated in a four-hour workweek or a seven-day workweek. So, I don’t I don’t know that both the rates and entrepreneurship is just like life events and flows and almost like seasons there at times to reap the harvest or at times to plant the seeds. There’s time to recharge. And so, I think about Allwork.Space really being flexible and absorbing and moving in. So, we always talk about, you know, should the walls move to the space move, should your edge, your needs and your times move, Allwork.Space should operate like that. It shouldn’t be confines of that, just like your life. So, you’ve got to lean in when it’s time to work hard. And there’s times when you do get to rest and recharge just like in the normal time of day. So, I don’t look at it as it’s got to be four hours and it’s for 90 hours or 60 hours. I think every business, every journey, every entrepreneur, every passion project that’s out there going to ebb and flow and that there’s no one perfect cookie cutter forever for the next 100 years out there. It’s going to continue to flow. I do think the spirit of entrepreneurship taking pride in the grind, taking pride in the work. I spent the weekend with my grandmother just heard ninety-nine and she talks about just the honor in it, working in the bomb factories during World War Two and going in to serve while her husband was overseas and doing jobs that were needed to get back on the farm to go back and be teaching these school children to be leading in a community. Well, that’s not a four-day workweek. That’s a commitment to lights and entrepreneurship and hard work. And so, I think society is finding ways to make this impact. So, what we can learn faster, leveraging technology or being in a classroom that’s twenty-four seven, you know how you can continue learning what we can make a positive impact and serve and volunteer or working in a workspace. Like all those things, it’s not just four days a week, it’s not just six days a week. It’s going to be a lifestyle choice.  

Frank Cottle [00:08:17] It’s interesting as we look at the great resignation topic and tie that into it. It’s hard to resign life, you know, so people are so demonizing their work week or demise, their time into different sectors, it seems, and it seems a little to me a little too much stop start. I’m a serial entrepreneur. I know you are too. And I always have a pad of paper or a phone with a notepad in it or something like that with me all the time and the ideas come to you. Thoughts on improvement come to you when they come to you, and it could be something on the beach. It could be on a bus; it could be anyplace, but you must blend. I think that comes to the joy of work that you’re talking about with your grandmother that if we can find things that we can, can find joy in as we were, that that’s really the key to the true workweek, which is just being productive and looking at family productivity and things as important as corporate productivity, you know, is teaching your children any less important than, you know, making a sale for the company. Oh, it’s more important to so you should be at least to do all of this.  

Jason McCann [00:09:49] Yeah, I think if you can maintain, you know, like a book like mindset which talks about being in that growth mindset so that the moment that you’re not learning that you shut down, that you’re being tight lipped about supply versus that remaining grateful, remaining optimistic, can I find a better way? Is there a way to simplify this? Is there a solution here? Is there some way that I can make a positive impact by constantly keeping your brain and your lifestyle and leading by example for your children or your spouse or your partner for your community? Finding ways leaning over to pick up the trash and toss it away, like do the work and just continue to move on. You don’t need to ask for a thank you. Don’t need a pat on the back. Do your job like kind of like the Bumble Bee as the Stoics talk about, it’s like we’re all put on this planet to make an impact, to create amazing memories, to build healthy relationships. So how do you do that? How do you do that and work? How do you do that community? How you do that? Your family is not just sitting on the couch, absorbing consumption and Jo ordering online. It’s about getting out there and finding ways to do good things and make an impact. And if you can monetize it and do all this, the flywheel effect kicks in. It rises to tide for all of us.  

Frank Cottle [00:11:02] No, I couldn’t agree more. The amount of gray hair I have or the lack of hair that I have overall defines that a lot of people ask me about. Retirement and I speak exactly what you said, I think we’re all put here to create and produce and the moment you stop being productive, you stop finding value with your life overall and certainly you’re not enriching the lives of others. Improving my golf game, which is beyond the pale, is not a good life’s ambition. You know, in my opinion, believes it’s too it’s to produce and create. So, I completely agree with you. You know, it’s funny how when we talk about this or we talk about the great resignation, you’re in a business that sees a lot of flexibility. You’re talking about flexibility a moment ago in your hand, going back and forth, back, and forth. I do see you moving along and moving things around to the shit shapeshift buildings from the inside. It’s hard to shapeshift those walls on the outside. That’s a whole nother topic, but inside you’re constantly doing that. What do you think a corporate or a company’s large or small ability to continually adjust itself? The way it uses its space relative to the business phase it’s in. What do you think that has to do? With the war for talent, with the keeping good people, and with this this discussion about the great resignation that’s going on,  

Jason McCann [00:12:58] I think it’s leaders of organizations. We are constantly in a mindset of really got to innovate or die. So, are we going to leapfrog ourselves or are we going to create a culture of innovation? Are the team members that were surrounding marching towards a common goal to make a positive impact out there? But in a very entrepreneurial. So, whether they’re the CEO and the entrepreneur or operating as interpreters and coming up with the next big ideas and solutions, and then what are the tools that they need to be successful? When do they need to collaborate and share those ideas? And that iron onion happens when team members are innovating together and coming up with the next big thing? Where do they need focus time to just really do what it does every day a deep dove and get into their read for hours and figure things out and then come back together and test these theories and ideas on the battlefield of commerce. That’s what we need to be thinking about. We think about the tools that are accessible to our team. So, at those moments where they need to be together and then is building owners. You talk about we build these beautiful bones and structures and then literally rebuild the insides every four or five years and rip it up and throw it in the landfill and create bones and space ecosystems that operate. Be smart about what the way we design our houses so that they’re flexible over time, that we continue to have in flow and change them as needed so that we continue to be smarter about really the impact that we’re having on the environment. So, kind of combining all those things, but nonstop pushing for innovation. Because in that growth mindset, you’re growing, you’re dying. And so, for us as leaders, as optimists, whether we’re in politics or whatever, like we’re pushing for hope versus fear, finding solutions, innovation, and that allows us really to make a bigger impact and create companies and really elevate the entire world.  

Frank Cottle [00:14:58] You know, I think you’re right. I know when we first started building buildings back in the late 70s, early 80s, we chose a furniture system at that time. This was well before Vari it was an existence where we obviously chose a Vari, but we chose our systems of Switzerland. And if you’re familiar with them, it looks like a bunch of steel tinker toys, and you can do exactly what you’re talking. And we configured desks, conference rooms, management rooms. We had a kit that you know, you had to break the stuff apart, put it back together. But we did it specifically. We chose it specifically back in the late seventies because it had that flexibility, and we knew that we would be changing. Overall, it proved to be a while. It was expensive to buy upfront. It proved to be a very, very good value and bring us value beyond the furniture. That flexibility mode, which takes me over to you, made a comment in what you were just saying about speed. Speed is good. Feeling building is faster because you can move things around and therefore make them more efficient. We have a saying that it’s not the big, the need, the small, it’s the fast eat, the slow and we really try to practice. That speed is a good concept as a company part of our philosophy. But how do you see that impacting corporations? And I know you have your own I’ll call them labs, co-working and business center labs. They’re there on a massive scale, several hundred thousand square feet of probably the industry’s biggest test kitchens, if you will. What do you find that your own flexibility is in that space? And how do you use speed to change as a tool to improve the performance of the real estate group?  

Jason McCann [00:17:16] Yeah. As we were touring clients to our headquarters and to Bill, which is just north of the Dallas Fort Worth airport, and as they were walking through and we had our electric standing desk and walls and was our headquarters, they would wave their hands around and go, I want all of this. And what they were describing was the energy of the space that they wanted it. Now, like snap your fingers. And so, because our business model was built very differently than the traditional furniture model. We’re in stock and we’ve got four distribution centers in the U.S., we said we’re going to ship same day and we kind of grew up not being from the furniture industry that allowed us to have speed ticket to ship out product. And they said, well, can you assemble it in space plan and design it? These were things that I wasn’t planning on doing. But again, just like every other retail listening to the pain points that your customers are going through, they said, can we get to the space faster? And so, we were able to come in and install twenty-five thousand square feet in a matter of eight hours because and I joked that we wanted everything to be so easy to assemble and I could build something, anything we make in five minutes that allowed us to learn that we could assemble furniture and set it up faster. But every CEO’s we were talking to, they would go into a white box space and they’re like, why isn’t this? I can envision my product in here.  

Jason McCann [00:18:33] So we started just testing the idea with a couple of asset owners. One was equity office here in Dallas on a project, and we staged it. They would call it a spec suite. So, we put our furniture in there, and the beauty was because what we called it was if they did evergreen tenant improvement, if they got the space ready, we could put our furniture in, the client said. Instead of a four to one thousand density, we want five people for one thousand for furniture move. So literally they were able to lease the space faster, which makes sense. This is kind of building up to the logic of how we got here. Just like a model home where you see it staged, Chip and Joanna, get in there and make it look natural. I want the house as is fully furnished and IWG and with their space product, and we work at others recognized in the co-working that people want. It’s furniture space. And so, we recognized it early on at an enterprise level because the market was so hot out here wasn’t as obvious what was going on. So, we decided to buy our own building. So, we bought a building that was had been empty for six years, really invested in the great tenant Evergreen Improvement. So, it really is done. Like we said, we’re going to polish all the concrete. We’re going to get put out the lights and we’re going to get the spaces ready. So, in a matter of just days, a client can move in. Well, this is a four hundred thousand square foot building and we leased it in less than one year, fully furnished. And the way we figured out with their space is that we could have three-to-five-year leases kind of fill. That mission for us would allow us to learn what anybody even like it. Do they want a two-year lease of life? We just said, let’s try it or we leased it four hundred thousand square feet and subsequently bought our second building to prove one. We weren’t just lucky, but then we could see if we could learn faster. And so, and we’re now building our third building. So, by the end of summer, twenty-two will have a million square feet in Dallas Fort Worth of two buildings built in the 80s that we reimagined that look totally different and one we were building from the ground up 180000 square feet to a wall.  

Jason McCann [00:20:35] Really, for us, it’s a living, breathing ideation by adding showroom. So, whether it’s Verizon and Microsoft, or 20 clients that lease large footprint spaces from us or great amazing companies like Rumble On publicly traded on Nasdaq, but our smallest space is ten thousand square feet. Our largest is two hundred thousand square feet, so we lease out large blocks. We don’t have individual offices, but it’s for us learning the energy of the space. Can we do music in the lobby, cool food services, music in the restrooms, biophilia, which I didn’t know what that was five years ago. Like plants throughout the space have an engaged campus, and then other asset owners can tour the space and learning. Can we do these projects for others? But yeah, this is a million square feet that we’re learning every day. What do people use? What do they not use once a year or every 90 days, we’ve come in and changed the space if they need it? So literally during COVID, one of our clients said we have a six point seventy-five to 1000 density requirement, but now we’re going to find 1000. Just change the space, welcome the team back. That’s how we learn together. And then we can share those ideas with other great asset owners or fast-growing companies to create new products and solutions I didn’t know weren’t in the soft seating business before these buildings two years ago. And now we’ve got a multi-million-dollar cell line. And what do people use? So, they want smaller spaces with private areas. So, we’re just we’re learning, and this is a living, breathing lab and showroom for us now.  

Frank Cottle [00:21:59] Well, you know, I think what you’re doing there is interesting and what’s interesting to you? You referenced your project with equity office. You know, Equity Office was originally developed, created by the company by Sam Zell out of Chicago. And I go way back with Sam, and I remember one of the I was on a meeting with him and a bunch of other crusty old guys in Dallas, actually. And Trammell Crow was there to at this meeting and these guys were peppering families. You’re building these smart suites in your offices that look like Executive Suite. We hate. Of sweets, why are you building these things? And Sam, who had an interesting approach, he said, well, I want to service the entire lifecycle of my customer base. And everybody went, Oh yeah, I’m the captain. The whole room all rule it since I can’t go, and we had a conversation with will grow and I trying to talk him into something. And he said, boy your tail and get away my dog. And that was the end of the conversation. So, you know, I failed miserably at my purpose for being at this meeting, but Sam’s response was very thoughtful. I want to service the entire life cycle of my customer. And as we look at large commercial developers today from equity on, I would say on down but sideways, up, down every which way. Today, 30 40 years after Sam said that everybody wants to service the entire lifecycle of a customer base. And that requires flexibility and flexibility. So, I think as a concept. Flexibility is really the driver is the driver to speed for growth of companies. It’s the driver to occupancy for growth of yield and real estate. It’s the driver to tenant, excuse me, employ longevity because we all need to flex and grow in our employment structure. So that whole concept of thriving on that concept of flexibility, I think, is a big contribution that I hope you guys continue to make.  

Jason McCann [00:24:25] Yeah. With the chief investment officer. So, we talked to that are managing the tens of millions of square feet and the data is out there and you’re probably closer to it than I am at some point. Call it two to 30 percent will be in this flexible space there. And to your point on the lifecycle because we talk about creating lifelong fans, we want to be with our fans on their entire journey when they start their own companies, when they get promoted, when they start to think about it. But these ecosystems that are inside of these assets, if 30 percent is going to be flexible, then how do we do it smart? So how do we do one time tenant improvement limited and how do we are we smart about the products and services that we’re offering? How do we drive enough revenue in that so that it makes sense from a financial perspective? And then when the capital markets support it, I think that’s the most interesting thing out there. It’s like, well, we get a 40 to 50 percent premium by offering a flexible space so we can if we can drive more revenue per square foot, I can argue that we can turn a space faster or just like in multifamily, they may be able to turn a space of three days. I’ve proven we can turn a space in a matter of a couple of weeks. We can. We sit right up to the next person close to what hospitality does or what traditional co-working does. This is at an enterprise level. The rent revenue is 30 to 40 to 50 percent, plus there is no more dollars going out. There’s no job going in a landfill like reusing can drive more revenue in the portfolio, so these portfolio managers recognize it. So now if the capital markets will support it, we recognize that you’ve got to serve the customer. If that’s what the C-suite wants and what? He nailed it. You know, whatever you’re that WhatsApp email, that’s exactly the way the mindset is.  

Frank Cottle [00:26:13] Well, you know, I want to I want to challenge you with something you say. You listen to the customer, and I know you’ve done a lot of that historically and done it very well. But what you’re just saying right now is of these property portfolios come to us and they want this, or they want them. The corporates want this. They want that. I think that very is missing something, honestly. And that and I challenge you on this. You should build or redesign, maybe collaborative leave with others, a full, highly flexible workplace and a box kit that can be provided to these property companies so they can serve their tenants better. That is more of a highly flexible, more of a co-working style model where you provide the full operating system, not just the fixtures and furniture, fixtures and equipment that goes into an operating system. Because the biggest challenge that landlords out today goes back to this four-day workweek discussion. You know, four-day workweek is a 20 percent vacancy factor, right? OK, or 20 percent value reduction in conventional real estate.  

Jason McCann [00:27:33] Or more parking efficiency  

Frank Cottle [00:27:35] Or more parking efficiency. That’s right.  

Jason McCann [00:27:38] But only they might. They might split it the other way.  

Frank Cottle [00:27:48] And the only solution they find are existing operators or want to do joint ventures with them, but nobody is giving them the full kit operationally. And that’s something I think you guys should look at  

Jason McCann [00:28:03] Today in our journey. So, we provide the space planning. And so, we can stage a space, we can space planet. We can host the events; we can get the space ready and market ready. That includes the plants and the staging so that it is like show ready, the music and everything. As clients move in, we can literally change the space because your requirements may change for the for the owner of the building, we provide the next level of space planning and workplace strategy for the tenant that’s moving in so their density, we want to move the offices. We also provide the service side or would make all those changes. And after they’ve moved in, we provide the service we can come in and change the space over time as they need it. All those already built, it is a couple more layers of pieces. You’re correct that we don’t have yet and are offering not to say that we won’t soon. But that’s allowed us to work directly with these asset owners to provide space planning, staging, hosting events, working with the commercial real estate community, changing the space after they sign the leases, showing them how we do our leases here. Space, because we’re an operator, we understand the pain points of that. So, we’ve already worked with all the majors, the Cashman’s, the jails, all of us. They’re starting to understand how we do it. They also know how other great organizations do it. And then as the tenants, we provide the services. So, there’s a couple of pieces that we don’t have yet, but we’re getting there. I think as we’re learning very quickly and because we did a thousand offices during COVID here in the last 12 months that we transformed spaces, a lot of those were for asset owners that were competing against sublease market of a fully furnished basis. They took their generic space, and we live ended up bankrupt and it’s working. So, we’re still learning, you know, we’re only nine years old and trying to catch it. And so, we’re trying to we’re trying to learn as best we can with that. We’re getting it. It’s a fair challenge where we’re going as fast as we can  

Frank Cottle [00:30:02] I think we can leave it at that. Overall, the good, good place to kind of depart and reschedule some thought processes, maybe on a private side. But that says what? What could the future of work look like if you were fully integrated into the operating side of the space as opposed to the. Just shape shifting, the physical side of the space overall and that this isn’t a plug for you or your company, this is an important thing for every major company to be thinking about right now about how do we adjust internally and make space work so that we can keep the people, attract the people, and get the most efficiency possible? So, Jason, I want to thank you very much for your time today. I know you’re quite busy. And I really am grateful to you for sharing your thoughts with us.  

Jason McCann [00:31:00] Frank, my pleasure. And I’ve enjoyed our talk to your iron on iron make you be smarter. So, I appreciate it. And I love what you’re doing. And as you as you’ve been fighting the good fight here for many years, I’m thinking about the future of work. So, appreciate that.