The following chart shows that people are the most comfortable returning to work within a month or less as compared to other activities. The percentage is 65% so there is still a substantial minority who are still concerned about returning to their previous work environment.
Despite this greater comfort in returning to work, there are firms that are beginning to take advantage of the overnight remote work requirements that have stemmed from COVID-19 to implement them on a more permanent basis. Synchrony Financial, the GE Capital consumer finance spinoff, has announced one of the most ambitious cost-cutting plans centered largely around shifting more of its workforce to working remotely and cutting back its office space and corresponding costs. Here are the key components of the plan.
- Allows all its US employees to work from home permanently.
- Requires some employees to work from home all the time with no access to an office.
- Requires all employees to work from home at least some of the time.
- Requires even management with “assigned seats” to work from home at least 1-2 days a week.
Synchrony will have three types of offices:
- Virtual offices: employees will work from home permanently, and there is no office they can go to.
- Hoteling offices: employees work at home permanently, but if they need to, can book a desk at a nearby office location.
- Hybrid offices: employees can work from home but they have an assigned seat at a nearby office where they can work at least three days a week.
There are some trends that are irreversible. These include e-commerce, digitization, alternative energy, cloud computing, artificial intelligence, robotics, and now with Covid forcing companies around the world needing to have millions of employees work remotely, this appears to be another one. The train is leaving the station and companies will have to figure out how to make it work.
Raj Choudhury, “Our Work From Anywhere Future”
Raj Choudhury is an associate professor at the Harvard Business School, and the author of the HBR article, “Our Work From Anywhere Future.” He was interviewed by the Harvard Business Review. The interview is called “Why Work-From-Anywhere Is Here To Stay.
Choudhury started focusing on remote working in 2015 by researching one particular organization. One would have thought it would have been a private company. Wrong. He studied the U.S. Patent Office of all organizations. The USPO actually started a program in 2012 which enabled workers to work from anywhere. Upon further reflection, I guess it does make sense that a government agency that is privy to the most cutting edge ideas would be the one to be on the leading edge of innovation. His research discovered something interesting. He compared productivity gains, not between working from home and the office, but between working from anywhere and working from home and concluded that it rose by 4.4%.
While the patent office was far ahead of the curve, Covid has accelerated the trend exponentially. According to Choudhury,
“I think what the pandemic has done is, it has accelerated this phenomenon by at least a decade.”
Why does he think that company leaders should adopt this approach to running their businesses?
So the way I frame this to the companies that I do research with or talk to is that the biggest reason to embrace work from anywhere is, it becomes a way, a mechanism to attract and retain the best talent. The way I think CEOs and senior managers should think about work from anywhere is, if this becomes a more prevalent form of flexibility, then the best employees, for their own individual reasons, will start demanding this. And if you are a company that does not offer work from anywhere, there’s a real risk of losing your best employees.
To shift the organization to a work-from-anywhere approach will require a mindset change, somewhat akin to when Satya Nadella took over running Microsoft and declared that they will be a cloud-centric company and that the days of being PC centric were now over. The author believes that making this shift will require management teams to center their thinking and organizational design around this. Top management will have to begin catering to more talented people who want greater flexibility and figure out ways to put these important pieces of the puzzle together to produce a productive, effective, cohesive organization in this more flexible age.
It’s not really challenges or constraints. It’s about what kind of organizational transformation needs to happen to support work from anywhere. So I think the bottom line is if you’re listening, and if you are a senior manager or a CEO, you should think about how your organizational processes relate, so how your organization processes as they relate to four or five things need to change. And what are those processes? They relate to how you communicate. They relate to how you share knowledge. They relate to how you socialize. They relate to how you measure productivity. And then finally, they relate to how you manage data privacy and regulation. So it is really an organizational transformation project.
The most controversial part of remote work is the loss of socialization and spontaneous interactions that can foster deep connections, collaboration, and breakthrough ideas and execution. The office I work in is relatively small so we have had a close working environment. Fortunately, we have been able to leverage off of our close relationships and trust to remain effective in a remote environment. With that being said, I also work closely with a lot of out of state co-workers and we have had a remote work relationship for a long time out of necessity that has also been effective. This is Choudhury’s counter to the natural concern about what is lost when people work remotely. His example is based on a larger company in a campus setting, which of course is not all companies, but his point is valid for larger companies to some extent.
So the argument is very simple. What they say is that, think about a physical campus. And think about many, many people working on that physical campus with lots of buildings. The argument they make is that it’s very unlikely that you’re going to have a serendipitous watercooler conversation with someone who’s on a different floor in the same building you work with, or work in. And if that person, that other colleague is in a different building, then probably you’ll never meet that person.
So instead, what all remote companies have done is to redesign the process of socialization. And they’ve created these virtual water coolers, which essentially bring together people across the organizational hierarchy, so some junior folks, some middle managers, and maybe even the CEO herself. And that session is engineered by someone, so maybe it’s my job at the firm to organize these water coolers every Monday morning or every Friday afternoon, and I bring together this random group of people to talk about the company culture. So they can talk about what’s going well, what’s not going well. And the final thing I’ll say, Alison, is what these all remote companies have told me is that in their view, and I’m not an organizational culture scholar, so I’m not going to pretend that I know everything here, but in their view, culture is less about physical artifacts like the gym or cafeteria, but it’s about shared values.
In order to create a sustainable work-from-anywhere company, it’s incumbent upon everyone in the organization to move away from an office-centric work style because if upper management does not then there will be a fear that one needs to be close by to get more recognition and a better chance for advancement. Conversely, if one sees their peers coming into the office every day because upper management is there, then one may feel the need to do so as well and this would defeat the work-from-anywhere effectiveness. Because people don’t want to be forgotten and they want to be noticed, these are big behavior influencers. These are very legitimate concerns. Synchrony Financial recognizes this as well as its plan described above requires upper management to work remotely for at least 1-2 days per week.
According to Choudhury,
So you don’t want to create two sets of workers, physical workers, and remote workers, who are not intersecting in terms of their information and social networks. The way to prevent that risk is to say, we will embrace remote as at least a majority remote model, where a majority of employees will work remotely or will work remotely for the majority of their time. And very, very importantly, remote work will be done by not only the junior folks, the middle managers, but also by the senior managers and the C suite, because the real risk is, if everyone is working remotely, but the C suite is still working physically from some office location in New York or Detroit, then everyone is going to show up, all the middle managers will show up to that location to get face time. So I think the signal that needs to be sent is, this is the new way we work. Everyone does the same. Senior managers do it. C suite does it. And we are all doing to support the processes to make this work.
From a personal perspective, even when I was in the office I was often on the phone with my door closed so it wasn’t like there was constant interaction with me. With that being said, I have always had an open-door approach so if someone wanted to talk to me and I was available it could happen somewhat spontaneously. On the other hand, I have found it to still be effective having one to ones or conversations with my direct reports and peers via phone or Zoom to stay in contact and in a relationship so that I know what is needed from me to support those who report to me and for me to convey to them what I think will be helpful for them to do their jobs more effectively. I have always worked best with people who are energetic, committed, trustworthy, self-starters, and are proactive in reaching out to me when they need feedback, advice, or decisions versus me having to micromanage my direct reports due to insecurities on my part or not being able to trust them. Choudbury believes that this type of relationship will be critical to make work-from-anywhere successful.
So managers need to be now coached in how to trust employees. And that’s a difficult habit to change if you’ve done this for 20 years in a certain way.
And I think that is just, that Orwellian approach is really counterproductive, because you can do it in the short term, but if you just keep doing it, then your best employees will leave at the first available opportunity. So the solution really is to rethink, again, how you measure productivity. Should it be done based on the number of hours you stare at a screen? Or should productivity be measured based on output? Should it be measured based on customer feedback? You could rethink how you measure the productivity of employees.
Finally, it will be very interesting to see how much less costly, secondary cities will benefit from this work-from-anywhere trend. The author has been following Tulsa which has made a concerted effort to position itself as a great remote work location and so far it seems to be successful according to the author.
So the setting that I worked on, the research setting is Tulsa Remote, which is an organization in Tulsa, Oklahoma, funded by a private nonprofit foundation. And they instituted a program back in 2018 where they tried to move talent back to Tulsa, and they exclusively focused on remote workers, because Tulsa didn’t have those companies where these talented people could work in large numbers. But they realized that if the person is working remotely, then you don’t need a company there. And they were extremely successful in attracting such talent back.
And now they are, I believe, in their third batch of doing this, and this is a wonderfully diverse set of people, moving from all over America to Tulsa, Oklahoma. And I feel that model could be replicated across towns and cities of America, across towns and cities all around the world, to really solve, or at least partially solve the problem of reverse brain drain.
This work-from-anywhere will most likely gather even more speed when companies are having their office leases expire. It will be at that point that many will have to think even more seriously about shifting more aggressively to a work-from-anywhere approach since they will now have options available to them that were not there previously. This will be very interesting to see how it unfolds and what impact it will have on office space usage and what cities will be net beneficiaries and which ones will be hurt by it.