Is Working From Home Working?

EPISODE #218 TRANSCRIPT

The dust is well and truly starting to settle on the Covid pandemic, and life is back to relative normality. For example, I was just able to travel to and enter Australia with no proof of vaccination and no recent Covid test. While I was there, I was able to seamlessly cross state borders without any checks or restrictions. 

Contrast this to the situation just over 12 months ago. I had to get permission from the government for me and my wife, Kathy (who is a US citizen) to leave Australia to travel to the USA. Permission, which I might add was initially denied. I also had to show my electronic vaccination card to be granted access to the few public places that were actually open.

Now, one of the lingering Covid hangovers that hasn't yet been resolved is the question of hybrid work. Many companies are increasingly keen to see their people return to the office… but many of their employees increasingly don't want to do so. Decisions still have to be made by many companies as to how they're going to handle this transition. 

I've seen a huge increase in the number of studies, articles, and blogs that are focusing on the return to office issue - so much so that it feels as though we're approaching a critical inflexion point. How is the landscape developing? And what does it mean for leaders who have to manage not just their own expectations, but the expectations of the people in their teams as well? 

WHAT ARE COMPANIES PLANNING FOR A RETURN TO THE OFFICE?

We're starting to see a huge divergence in how different companies are approaching the return to office issue. Some have really embraced work from home: companies like Airbnb and the Aussie tech unicorn, Atlassian, are saying that employees never have to go into the office again. And it's not just the stodgy, old industrial firms that are looking for a return to more in-person attendance. Future-thinking luminaries like Elon Musk are now stressing the value of in-person collaboration. 

A recent survey by US company, Resume Builder, asked a number of senior leaders what policies they’d be looking to implement in the coming year with respect to work from home arrangements. The survey found that nine out of 10 companies will require some sort of return to the office by 2023 - but, to sweeten the pot, almost all of these are offering employees incentives to return. The benefits cover a really broad range, including: 

• Commuter benefits

• Curated meals while on site

• Pay-rises 

• Pet-friendly offices; and

• More casual dress codes. 

Even right now, two thirds of companies currently require employees to return to the office in some way, shape, or form. 

Here's something really interesting: of the companies surveyed, only one in five said that they will sack workers who refuse to return. Believe it or not, I actually find this number really low. What it effectively means is that when an employer says, “You have to do this because it's important to the company,” the employee just says, “Yeah, nah. I think I'll just ignore that and do what I want to do instead.” 

What culture will that breed when some people follow the rules that the company lays down and others choose to ignore them? That's going to require some really strong leadership. On one hand, you have the struggle to reassert messages of cultural expectations, and what the company values. On the other, you have potential long-term implications for talent retention and employee value proposition. But in my head, if you're going to make the rule, then you need to enforce it. If you don't intend to enforce it, don't make the rule in the first place. 

In terms of how much and how often employees will have to show up, the survey found that, most commonly, in-person attendance will likely be required three or four days per week. For the vast majority, it'll never go back to full-time attendance - and only one company in 20 would insist upon that full-time return. On the other hand, only around 10% of companies say that they'd require attendance on two days or less. So you're probably looking at the three to four day in-person work week. 

I also think it's worth recognizing that the drive to have employees back in the office isn't just a matter of leadership insecurity. 96 percent of the leaders surveyed genuinely see the benefit of face-to-face work through things like: 

• Improved communication 

• Greater creativity

• Increased productivity: and 

• Improved culture.

So what does that mean? Well, for leaders, you have a chance to shape the way this return to work will happen - and it definitely needs to happen. It's just a matter of how, and how well. Knowing what will make a difference to performance, and not being overly focused on process and policy, but rather the desired outcomes will be the real determinant of success or failure.

HOW HAS LEADERSHIP CHANGED POST-PANDEMIC?

Now, I’m a firm believer in the fundamentals of good leadership. Great leadership is great leadership. And if you were a great leader in 2019, it's very unlikely that that's going to change in 2023. Although situationally, at different times, in different industries, at different leadership levels, and in different economic cycles, certain leadership fundamentals can become more, or less, important. 

I recently came across a Wall Street Journal article, ‘What Good Leadership Looks Like Now vs. Pre-Covid’, which cited a recent Korn Ferry study. In case you aren't familiar with Korn Ferry, it's one of the five global executive search firms affectionately known as “SHREK firms”, an acronym for the five companies’ initials: 

• Spencer Stuart 

• Heidrick & Struggles 

• Russell Reynolds 

• Egon Zehnder; and 

• Korn Ferry.

Of course, they have access to a lot of senior executives in really significant companies. They place them in the top jobs globally, and they sell other executives to them. This really is the rarefied air of the job placement market, right? 

Anyhow, Korn Ferry conducted a study based on the Drucker Institute's rankings for overall effectiveness. They compared the top leadership traits and competencies of the companies that were listed in the Wall Street Journal's Management Top 250 list. Traits are the personality characteristics central to who a person is, whereas competencies are observable skills that either come naturally, or can be attained and honed with experience. This data comes from thousands of executives across more than 850 US companies, so it's pretty widespread and credible. 

Now, the comparison between 2020 and 2022 didn't change much when it came to basic leadership traits. In 2020, the five dominant traits were: 

• Tolerance for ambiguity 

• Adaptability 

• Risk taking 

• Trust; and 

• Openness to differences. 

The only change in 2022 was that curiosity replaced openness to differences.

In contrast to this, the critical leadership competencies shifted much more through the course of the pandemic. In 2020, the critical competencies were: 

• Builds effective teams 

• Drives engagement 

• Communicates effectively

• Collaborates; and 

• Cultivates innovation. 

The only one of these five competencies that survived in 2022 was collaborates. The other four, all new entrants, were: 

• Global perspective 

• Manages ambiguity

• Interpersonal savvy; and 

• Instills trust. 

It's not too hard to see why this might be the case. Supply chains have been in disarray for some time, and the increases in complexity and ambiguity have pushed us to a completely different place. 

But think about the competencies in relation to the personal interactions. The 2020 competencies of engagement, communication, and team building have been replaced by interpersonal savvy and trust. Now, do these require new competencies to be developed? Or is it simply a sign of the increasing degree of difficulty of the leadership task itself?

It used to be much easier to get away with not placing a dedicated focus on the individual relationships that underpin a team. But now, it feels harder to be successful as a leader if you don't have that. Interpersonal savvy and trust are much more difficult to develop remotely and with a limited number of interactions to form the relationships. The quality of these interactions also suffers from remote communications. How many of your team do you think are looking at something on their screen, which is completely unrelated to a conversation you are having in a Zoom meeting? 

So, for all the people who want to stay home and just say, “I can work just as effectively from home, and I'm more productive to boot!” Well, they may be right to some extent. Discrete tasks are very doable remotely, but anything that requires collaboration and interaction is markedly degraded - and you'll have a much harder time developing the trust and building the culture that high performing companies are built upon. 

WHAT ARE THE PEOPLE AT THE TOP THINKING?

I was just about to start writing this article when something in my inbox caught my eye... Another Wall Street Journal article, which was entitled, ‘Your Boss Still Thinks You Are Faking It When You Are Working From Home’. How can I let this one pass? 

Recent research found that office occupancy rates in the US are still below 50 percent, and many executives are suffering from what we call “productivity paranoia”. 85 percent of leaders still think it's harder to know if employees are being productive when they work from home. This isn't just founded on doubts about effort and productivity, it’s also fuelled by the recently observed trends that have dominated the mainstream media, like the Great Resignation and Quiet Quitting. 

There's definitely something to the concept that many people are less productive when they aren't in the office, and the jury's still out as to whether or not this productivity gap is bridged by the time savings of not having to physically prepare for and commute to the office. I suppose that over time, we'll be able to see the measurable trends in productivity and performance. 

Now, I don't really have a view on the productivity issue - my concerns are much more around culture, trust, interpersonal relationships, sense of purpose and belonging, and so forth… all of which are critical contributors to team performance. But just to have a look at productivity, let's reach back almost a hundred years to research findings from another Aussie in the USA… 

Many years before me, Australian psychologist, Elton Mayo conducted a study and came out with a critical finding that was later coined, the Hawthorne effect. This was named after Hawthorne Works, the Western Electric plant near Chicago, where the study was carried out. It was designed to measure the impact of external changes in the environment to worker productivity in the plant. 

When trying to determine the effect of different levels of lighting intensity on productivity, they found something really interesting. When lighting levels were increased, productivity increased. When lighting levels were decreased, productivity increased. In fact, no matter what they did, productivity increased. 

What they found was the increase was not attributable to the external changes. It was solely attributable to the fact that the individuals were being observed by researchers with lab coats and clipboards. As long as the workers were under the scrutiny of the research, productivity increased. And when the study was completed, productivity dropped again - quickly. So the skepticism of many leaders about productivity may be quite well founded.

MANAGING THE FOUR OBSTACLES TO A SUCCESSFUL RETURN TO THE OFFICE

Are there any answers in all of this? Well, I want to finish by taking a look at a Fast Company article written by Dr. Tomas Chamorro-Premuzic with a snappy title, Hybrid Work Can Backfire If You Don't Have Strategies for These Four Obstacles. 

He kicks the article off with the statement:

“Competent and motivated people should be allowed to decide how and where they work.” 

Okay, this is probably true, but just ask yourself one question: as you look around your team and organization, how many people would you classify as competent and motivated? It's certainly not everyone - even in smaller companies. Your level of personal optimism will probably determine what percentage falls into this category for you. But it's clear that not everyone should be able to decide for themselves. So we need some principles and some guidelines. 

Now, the author goes on to say: 

“Activity is less important than productivity.”

Hallelujah! Absolutely true. The more you base rewards on results, the less room there is for the upwards managers in your organization to thrive on politics and bullsh!t. So in a strange way, work from home has democratized this a little bit. But there are still some obvious issues of performative work, for example: people attending a surplus of Zoom meetings, or scheduling emails to be sent out at all hours of day and night. 

Post-pandemic, companies have been forced to move to a new model. They're now facing increasing employee demands, and they're struggling with morale, retention, and brand reputation. So let's have a look at the author’s four obstacles to successfully implementing the new hybrid model. 

1. Unfairness

Now, with some people able and willing to spend more time in the office than others, it may lead to a lack of fairness. For example, if you give managers too much flexibility, different managers may implement different rules. But if you put blanket rules in place, they'll suit some people more than others. This has always been the case. Life's not fair, so get on with it. 

But it does raise an interesting question:  how do you craft a policy? One-size-fits-all simply won't work. But if you leave it to your leaders to decide, you're relying on their judgment, and this is going to introduce high levels of variability. This is a tricky issue for sure. 

2. The issue of unspoken rules 

Now, the policy may say one thing, but conduct and rewards may support another. This is the concept of allowing X but rewarding Y. The author says, "The point of hybrid work should be to improve work-life balance, not widen the gap between those who have responsibilities outside of work and those who don’t." 

You probably know where I'm going to go with this one… Leadership isn't about creating support groups to provide equal outcomes regardless of individual circumstances - unless of course you are completely disinterested in results. Individual differentiation is key to high performance, and this is just another manifestation of that principle.

3. Presentee-ism and proximity bias 

Turning up physically gives you an advantage. And once again, this has always been the case. We've learned that it's way harder to connect via technology. In-person dealings are infinitely more productive for a whole range of reasons. 

We all need to make choices whether we are driven, ambitious leaders, or just people who want to go in and earn a pay-check to support our families. But the individual choices we make always have had, and always will have their consequences. This didn’t have so much focus pre-pandemic! 

Some personal choices make it harder to compete in a career situation - and in my mind, that's okay. The person who's extremely driven and dedicated to their career probably should win that next promotion–as long as it's merit based and not just a function of physical commitment to the job, of course. 

Call me harsh, but I don't see any pressing need to try to counterbalance people's choices in an attempt to equalize everyone’s career outcomes. I've had young people say to me, “Oh, Marty, I'll never work as hard as you.” Okay, your choice, no worries - just don't expect the same outcomes. Don't expect the success. The world owes you nothing. If you want it, get out there and earn it. 

4. Cultural dilution 

This is my biggest worry too. It's hard enough to establish a consistent culture of performance without adding the complexity of physical remoteness. 

You've probably heard me say there's no single culture that defines most organizations. There are many cultures that reside in different teams and locations, and these are largely based on the standards and climate that the leader sets. Having people physically dislocated makes it much harder to establish and foster a constructive, high-performance culture. But for me, the antidote is to have more frequent, high quality interactions with people to reinforce the cultural norms.

Working remotely is in direct conflict with this objective. And there's one statement where I’m going to radically depart from the author of the article when he says, “Forcing people to come back into the office, conveying a sense of distrust or not attending to employees’ demands, probably poses a higher risk of damaging the culture.” 

Well, I guess we'll see how that works out over time, won't we? 

But I want to give Dr. Chamorro-Premuzic the final word. He concludes this article by saying:

“Ultimately it's up to leaders, managers, and employees to create the conditions that enable a strong culture, high levels of morale and well-being, and performance. Acknowledging that things are hard and having the humility to try things out, evaluate their impact, and correct as needed is probably as good as it gets.”

Well said! But in my view, we need to put organizational performance at the center - because without this, everything else falls apart. The trick is to work out how much the other factors play into that performance. 

Building a strong culture is critical, and may mean making some tough choices about what you support, tolerate, and reward. Every company's different, but my instinct is to not let your current employees hold you to ransom. A culture where people simply do as they please was never conducive to performance in the past, and I'd be very surprised if it's the secret to unlocking performance in our post-Covid future.

RESOURCES AND RELATED TOPICS:

• Ep. #35: Driving Value From Your People - Listen Here

• Ep. #60: Leading Remote Teams - Listen Here

• Ep. #178: Visibility in a Remote World - Listen Here

• Ep. #215: Results or People? - Listen Here

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