S1 E2 Hybrid work: Out of office

The Economist This is where I might spend most of his time in the home of the 21st century. In the late 1960s, America's favorite news anchor, Walter Cromkite, presented a series of programs imagining the future. This equipment here will allow him to carry on normal business activities without ever going to an office away. In one episode, Cromkite leads the viewer on a tour of a home office. The room is a studiously neutral space with high ceilings, a grey carpet and empty bookshelves. The star attraction is a big modernist desk on top of which sits a bank of computer monitors and control boxes. There's a sleek black information terminal. This console provides a summary of news relayed by satellite from all over the world. Another screen for checking on the weather and the stock market and a device for video calling. Now if I want to see the people I am talking with, I just turn the button and there they are. The CBS anchor man didn't get everything about the future right. His working from home attire is a suit and tie. There's an awful lot of bril cream. As I work on this screen, I can keep in touch with other rooms of the house through a closed circuit television system. The image shows a woman and child changing bedsheets. It's apparently easier to imagine zoom than a world in which women go to work. But Cromkite is pressient about one big thing. With equipment like this in the home of the future, we may not have to go to work. The work would come to us. 50 years later, in the early months of 2020, the work did suddenly come to us. Nearly four years on from the start of the pandemic, offices are open again, but they're not the same. There are fewer people in them. More work is done online, on messaging platforms and on video conferences. Bosses are wrestling with fundamental questions. From how many days people have to be in the office, to the ways in which we define and measure work itself. I'm Andrew Palmer. From the Economist, this is Boss Class. Episode 2. Out of office. I completely understand why someone doesn't want to commute now and have every day. Doesn't mean they have to have a job here either. The King of Wall Street has strong opinions to go with his strong New York accent. We'll figure it over time, but it's got to work for the company and more importantly the clients. If it doesn't work for the clients, it does not work. Jamie Diamond has been the CEO of JP Morgan Chase, America's biggest bank, for the past 18 years. He manages 300,000 employees globally. In an interview with my boss, the editor of the Economist, they spoke about the hottest topic in management, hybrid work. Jamie Diamond is not totally against working from home, in the same way that atheists are not totally against religion. 60% of his workforce are in the office five days a week, the bank's managing directors among them. Over M.D.'s are full time. I don't know how you can be a leader and not be completely accessible to your people. I do not believe you can be a leader and not be accessible to your people. 10% of employees are fully remote and 30% are in the office three days a week. He's not exactly burning with enthusiasm about this hybrid cohort. I tell people, acknowledge what doesn't work. It doesn't work for younger kids and apprenticeships. It doesn't really work for creativity and spontaneity. It doesn't really work for management teams. My management team meets and we're here all day, we're going back and forth. So there are real flaws. Certain jobs you can track productivity, other jobs. It's very hard to do that. To the extent it works, I'm okay with it. If it doesn't work, I don't mind getting rid of it either. And we're not going to make that decision because we're pandering to employees. That is not the way to build a great company. Jamie Diamond's skepticism about working from home is typical of many managers. In a Microsoft survey on hybrid work, just 12% of managers said they had full confidence that their team was productive. Among employees, 87% said they were productive. This is a remarkable gap. Employees say they're working well in a hybrid environment. Many managers suspect they're shirking from home, watching reruns of the office when they could be in a real one. It's also a dangerous gap because if firms try to prize people away from home, they risk a big backlash. Nick Bloom is a professor of economics at Stanford University and was researching remote work well before COVID made it common. If you want to statistic on hybrid working, he's your man. When you survey people, we've done tens of thousands of surveys now across countries. They say it's worth about the same as 8% pancreas. A manager hearing that might think, "Who cares?" Employees would probably rate a lifetime supply of ice cream pretty highly too, and that's not an argument for stuffing them full of cornedos. But hybrid is different. It's less discretionary than a perk. Before the pandemic, 5% of all hours were worked from home. Nick Bloom says it's now 25%. Hybrid has become an established pattern of work among knowledge workers. If you're like most people in this cohort, you probably don't miss the commute and do like the flexibility that comes with working from home. On the home days, let's say Monday, Friday's, the idea here is it's more reading, writing, individual work. If you have a meeting, let's say a cross-office, or you want to catch up, sure set up a Zoom or a Teams call. But did this two hours where you're allowed to read? I think it's, or you know, prepare a report or a presentation for next week. It is totally reasonable for that employee to say, "Go play tennis and then make up for it in the evening." Effectively, you're allowing them the flexibility to say, "I'd rather watch two hours less TV at night and play tennis than you know, work during the day." In some ways, you treat them like students. If you remember for all of us around the grads, you know, no one is telling us to work during the day. If you want to go to the park in the day, we have to work in the evening. I can almost hear Jamie Dimon's eyes rolling. Students, those people who sleep in libraries and drink their own body weight in alcohol every week. This is tricky territory for managers. Mechanically forcing everyone into the office, risks driving away existing staff, and making your organisation less attractive to prospective recruits. Not getting together, risks hurting culture and collaboration. I'm not about to tell you what the right balance is for your firm. For that, you'd need to ask someone with irrational levels of certainty, a trained economist, say. But what questions to ask? That's where journalism 101 can help. CUB reporters are taught to answer the five W's of journalism. Who, what, when, where, and why. The economist adds a sixth, which structural reforms can help, but will park that one. So let's grab a notepad and a pork pie hat and start with who. Who should be working in person, who remotely, and who a bit of both? If you're a security guard or a burglar, you'll have to leave the house to work. But for many jobs, there isn't a single right answer. It will vary from firm to firm industry to industry. A company whose clients want in-person relationships will think differently to one whose clients want an FAQ page, and a banker will have a different view of how to be a CEO than a coder. My family just didn't have a lot growing up in São Paulo in Brazil. So I got a chance to somebody, you know, from my school had funded some scholarships for programming, quote, unquote. Lidianne Jones is the CEO of Slack. The messaging service whose not brush noise went from cute to maddening during the pandemic. And I was like, well, computers, they had heard of it, but I had never used it. So I got a chance to do this after school program to learn basic and some of these other languages. That's the moment that I first ever interacted with computers. And it was amazing, you know, it was just like, wow. My first interaction with computers was a bit less wow. I spent a week laboriously copying code into a Commodore 64, hit go and got an error message. And one of the things that I've taken from that is that early as a teenager, I didn't even know what I wanted to be when I grew up like most of us, right? But I thought if I did really well, I could be a bank teller because that's all I had been ever exposed to. I'm meeting Lidianne Jones high up in the London skyline in the offices of Salesforce, the firm that bought Slack in 2021. But her base is in Boston and she clearly disagrees with Jamie Dimon's argument that leaders have to be in person to be fully accessible. A big chunk of my team is in San Francisco. So one could argue I am also a remote hybrid worker given how much I'm moving. And it's not stopped me from being connected to my teams all over the world. One of my goals is to be a approachable accessible leader regardless of where I am. So what I have seen is quite a few employees will send me a note not only talking about who they are but also the ideas that they have. How many emails and notifications are you getting from employees with ideas? And how do you physically manage your time to be able to respond to everyone? We have us ask me anything channel, so we get a few questions there that goes to all of our leaders a week. But direct messages, I get a few dozen a week, which is great. Sometimes it's someone's idea, sometimes they just want to introduce themselves. Sometimes they'll share our customer's success, which I loved here because we learn a lot from our customers are using the product. It's difficult for some post-pandemic managers to accept that accessibility can feel very asymmetric. Managers are potentially on call for longer, thanks to teams that have become more dispersed and work more flexible hours. Employees have greater expectations of being left to get on with their work. Slack's answer is to set time aside for head down work. We do focus Fridays for people to force themselves not to be in meetings and catch up and do deep work. It's been really fascinating to see how these focus times have really accelerated, not only our thinking but also our productivity in general. What if she needs to interrupt someone's focus time? The only rules that we have is if it is a customer related, meeting that a customer wants to have or a customer issue, then we'll break the rule because it's of course we're here to support our customers. But other than that, I thought I was not going to be able to ever do focus Friday because I'm really guilty of like can we just chat about this? But I have found that it's forced me to be more disciplined. 99% of the time, whatever it is that I think I need, can wait. She would be gung-ho about this way of working, you might be thinking. She runs a platform for virtual communications. Slack lets its teams decide how often they need to get together. But Jones is clear that in-person interactions still make sense. Just from a team culture perspective, we did an employee survey and people want flexibility, they also want connection. And I'm hearing that quite frequently from customers as well, like everybody is feeling this need to shake hands and give a hug and hear about people's personal lives. Hugging seems like an unlikely reason to endure the commute. Let's break for coffee and a cuddle, a words I never want to hear. But there are other reasons. I think especially younger employees that are coming out of their college education, this is a time where you identify role models, build a network, determine who your mentors are going to be. So there is a starving need for connection. This is surely right. The office is where people learn from peers, mentors and bosses, where they debate and socialize. There's research to suggest that being in person leads teams to give each other more feedback and helps to build corporate cultures. Hi, I'm Ratchena Shahnbogue, the economist business affairs editor. I hope you're enjoying listening to Boss Class. The rest of the series will have plenty more nuggets of advice on how to manage better. New episodes will be available on Mondays, but only to subscribers. If you're one of them already, thank you. If you listen on Apple or Spotify, you'll be able to link your podcast app to your subscription by clicking on any of the locked episodes, starting with the next one, coming on Monday, October 30th. For information on how to access subscriber-only episodes on a different podcast app, check out the FAQs page in the show notes. If you don't yet have a subscription, you can sign up for the Economist Podcast Plus. You'll get unlimited access to all our shows for just a couple of dollars a month. Register before October 31st to get half off a year-long subscription. You'll find the link to sign up in the notes for this podcast, or by searching online for Economist Podcasts. We're back to our five W's, why do people come to work, and where should they sit when they get there? I'm Bob Cicero, I'm an America's hybrid work leader at Cisco. Bob Cicero may well have the best name of anyone I have ever met. We're meeting in Cisco's offices in Penn 1, a skyscraper in the middle of Manhattan. No one is hugging. This is what we call our first town collaboration center, post-pandemic. We need to renovate Retrofit, the office, to the way that we were going to work in the future. Now, from Cisco. There are a few people on the tour, but most of the talking is left to Cicero, while it would be. When we start thinking about this space, we really boil it down to basically, you're going to collaborate, learn, socialize, right? Having decided that they'd focus on making it a space for employee collaboration, Cisco took a step that would cause many managers to spit out their coffee. And the 100% of this space is free-addressing as we take a walk. No free-addressing, what does that mean? No one has an office anymore in the company. Free-addressing is a nice way of saying hot-desking, which is a much more loaded term. Free-addressing spells liberty and roaming. Hot-desking conjures up a zombie landscape of deskless people, shuffling around with the cactus and photos of their kids. I think the last of us, but with chinos. Cisco's office is much less apocalyptic. There's a ton of space. Hot-desking is often thought of as a way to save money, but if the goal is to build culture and connections, scrimping won't work. This office is normally home to 1,700 people across three states, but only about 150 work there on any given day, and they can all choose where they sit. And importantly, when Cicero says no one has a fixed desk, he means no one. So as we go into the back, you'll see where we had leader offices before, there are combination of hot rooms and quiet rooms, because when you move into this new world of free-addressing, where no one has their own assigned space, we thought that people would touch five to six different seating settings a day. There's a lot of data anonymized, everyone hastens to add, on everything from air quality to how many people are in the office and where they are. All this information is available to employees on their mobile phones and at home, and on a huge screen in the office's entrance room. But it's not all about wizzy tech. Some of the details are surprisingly simple. At one point in our tour, we're sitting around the table in a meeting room. There's a big screen at one end of the room for people to dial in remotely. I've been in meetings like this. If you're working from home, half the people around the table are obscured. Someone is making a very lucid point from just behind the man with the enormous head, but there's something subtly different about the table in this room. It actually looks like a rectangle though. It's actually a trapezoid. The table is wider at the end where the screen is, and tapers very slightly towards its other end. You'd hardly notice it, but the effect is impressive. If you're calling in, you can see everyone around the table. Everyone has a face in the meeting, but we're not going back and forth in our chairs to have a camera view. And so there's this sort of aha moment where people are like, "Oh, a simple five degree angle?" That's all we need to accomplish this. It's been fantastic for everyone from experience point of view. As for why it's useful to come into the office at all, Cicero has this to say, "There's sort of this notion of return on commute. So everyone's going to wake up in the morning and figure out, "Is this worth it? If I'm going to spend three hours my day, what am I going to accomplish in the office that I can accomplish at home?" Our view is, you don't want to commute to compute. If you're doing a head-down email all day working on documentation, etc. You're better served probably doing that at home, right? That depends a little bit on your home. If you share a small flat with someone who just loves playing the Morakas, you may want to do all your work at the office. But if you do stare at home, the question that really keeps managers awake arises, what are you actually doing? If you think about it, go back to 2019 when I'm in the office. So, Andrew, if you're managing me, you can see me at my desk. Am I typing away as my screen on? Am I looking at the screen? Is it like Excel or is it the Champions League or whatever, or Netflix? So, I wouldn't say watching me and managing my walk around is particularly fantastic. It's maybe a five out of ten. But you've got a rough sense that I'm doing something rather than totally goofing off all day. I want to tell Nick Bloom that from goof to great would be a nice title for a business book. I suppress the urge. The problem is when I'm at home, you have no way of seeing what I'm doing. And so, in a sense, that's called input management. You have no ways to manage the inputs when I'm at home, whereas you're doing the office. So, what do we need? Well, what we need is good output or performance management system. Bear with us. Performance management systems can be truly transcendental. So, the kind of Navanna is, for me as an employee, you have a 360 degree review process. You speak to my colleagues, my managers, the people that walk below me, you look at data, performance, you interview, the clients, I'm working with my customers. You get a pretty holistic and numeric sense of how I'm doing with various grids and performance evaluations. Let's say every six months, I'm assessed as a feedback system. That's good performance management tools. Those are critical for what from home. Let's look at a firm that's trying to put this into practice. practice. Tripp.com Group is China's largest online travel agency and a pioneer of hybrid working there. Employees are required to come in three days a week and have the option to work from home for the other two. The current policy we believe maximise the need for our team work, team beauty, as well as giving enough time for our employees so that they have uninterrupted time working at home. Dean Sun is the company's CEO. It's the morning in London when we speak, the late afternoon in Shanghai, but her day is a long way from being over. When I'm not traveling, I try to be in the office any time between 6 to 7 o'clock and my meetings are back to back until 6 to 7 o'clock. And between 7 to 9 I try to spend a couple of hours with my family, having dinners with them, have children read books when they're young, help them with their homeworks. In the evening when 9 o'clock to 12 o'clock in the midnight I start my overseas meeting through Zoom, through phone call because at that time New York Stock Exchange opened and Europe is still in session. Dean Sun seems like one of those exhausting people who regard 5am as a lion. Still, Alicia gets to relax at the weekend. I try to run half marathon on the weekend. You get the picture, not the kind of person to lie around on the sofa, or to think highly of those who do. So how does she make sure that her employees are not goofing off? Any company that is adopting the work at home policy needs to be very careful to make sure the productivity is ascertained. So we use many measures. If it is based on the core center revenue, we use these measures. For the developer team, the project, the timeliness of deliverables, we also can measure these. And also for legal team, for example, lots of time they spend in the office is reviewing the document and conducting negotiation. So during COVID we already train our team to make sure their productivity is ascertained by monitoring the number of the meetings they conduct, how fast they can get to the hotel. Tripp.com Group conducted trials of hybrid work in 2010 and again in 2021 before rolling the policy out to the whole company in 2022. The more recent experiment involves some people working from home for a couple of days a week and others staying in the office. At the start of that trial, the company's managers had all the usual worries about productivity. At the beginning because it's so innovative, the manager always wants to make sure the productivity is not impaired. Our company is very scientific, very data-driven. So when the data shows that the attrition rate is reduced and also the satisfaction rate from the employees also increased. Is employee satisfaction a component of productivity? It is of course, because if the employees are not satisfied, if they leave the company, you need to retrain your workforce and that takes time and your employees are not as productive as existing employees. So it needs to be, you know, every angle needs to be measured, not taking one segment out of context. The company has also thought hard about the days when its workers need to come in and when they compare at home. The default answer at many hybrid firms is to be a twat. People come into the office on Tuesday, Wednesday and Thursday. Jane Sun has established an intriguingly different pattern for Trip.com group, M-Tat. Monday, Tuesday and Thursday is when everyone is in the office. Wednesday they can kind of carry out what has it been discussed during Monday and Tuesday. Friday again they can carry out what needs to be done to wrap up the week. We need to be careful so that employees are not cheating a week as for days we can know something. So we believe the allocation for the days we need to be in the office is also very important. Could the suspicions many managers feel over hybrid working be alleviated simply by not being a twat? If Boss is worried that their employees see home days as extensions of the weekend, it might make sense not to have those days cluster around Saturdays and Sundays. While firms experiment and fine tune their working practices, other things are changing too and nothing changes more reliably than technology as Nick Bloom points out. Some people have this view, well we're just going to go back to 2019, it's just the process of time. That's only false. That's very false in the sense that technology now is progressing pretty fast for remote, hardware, software, video cameras, laptops, all kinds of stuff because there are so many people working from home. There may be holograms, virtual reality, augmented reality. I was just talking last week to a company that's putting many tiny cameras across the screen so that we don't have the brand new have a problem on zoom or teams that when you look into somebody's face on the screen, it looks like you're looking at their shoes because you're not looking at the camera at the top of your laptop. That's nothing. The camera on my work PC is at the bottom of the monitor, giving colleagues a real insight into my nostrils. Fortunately, the future should afford everyone a nicer view. We've got a series of prototypes set up of these magic windows. They're connected already so you and I are going to go into completely different rooms but they'll be connected in a way that will feel like we're back together and experiencing each other as if we are right now. We're sitting across the table from each other. Andrew Narka leads Project Starline for Google. Somewhat ironically, he's flown from Silicon Valley to New York to show me how Starline works. It's a communication medium that we think makes people feel exactly like they're together no matter where they are in the world. So think of it as digitizing and beaming us into each other's spaces. Let's walk over and see it. Here's the first room. Andrew, you're going to sit down. We're in a room right now with a large display and a set of cameras and this is a prototype of Project Starline. This is not meant to convey kind of the things that we think could be built with this technology, just the experience itself. I'll be down the hallway in another similar room. I'm good. Nice to see you too. You're very 3D. That's the first thing that comes through. There's a sense of depth and projection and everything, I mean, all of your facial expressions, you look slightly different. You're kind of digitized in some way but it's recognisably you and you feel like you're here like you're sort of two, like a meter away, something like that as opposed to on the other side of a wall. That's exactly right. We're trying to make it feel like you and I are again looking through that magic window. This was a really strange experience. On the screen, Naka is a life-sized digitized 3D version of himself. His hands move back and forth in space. There are shadows behind him. All of them computer generated. Then he reaches down to get something. I've got my apple here for you. I heard you like apples. Yeah. I can see you're about to grab it from yourself. Reach out and hand it over. As I took the apple and bit into it, I realized that nothing would ever be the same again. Just kidding, I couldn't actually take the apple but it did feel like there was something there to take hold of until my hand closed around thin air. After a while, what became more noticeable was that I could actually maintain eye contact with Naka. I was looking at someone who felt 85% flesh and blood, 15% pixel, but I was definitely looking at him. That's very different from Zoom. There's a series of cameras. You see them all around this display that we're looking at. It's basically digitizing everything in this space. I'll show you with my hands. There's a space that's hovering around our seat. If you're in that space, these cameras are digitizing a 3D model of each of us. That model is sent out going over the internet and then back into each of our displays. The demo done, the two of us and the apple met up again in an adjoining room. I asked him what kind of computing power lay behind Starline. Think of it as maybe one of the highest end video games you've ever seen or highest end kind of CGI movie productions you've seen. There's a lot of really nice kind of horse power graphics behind this experience and we've been able to push those systems to the very limits to be able to produce the Starline effect for you. It's a real time Avengers movie. Real time Avengers in a way that feels completely like you're together with somebody you know well. Yeah. And no violence. And no violence. The technology is still being developed. The image breaks up at the edges. It's not clear how this would work on smaller screens. But my inner Walter Cronkai tells me that it doesn't matter Starline or something else is the future. The important thing is that working from home will get better over time. At the moment it feels like another rule of journalism is operating when people are pine about working from home. Simplify and exaggerate. It's either a slacker's charter or a chance to do focused work. It either works or it doesn't. It either hurts productivity or helps employees satisfaction. The truth is more complicated of course. More work hard at home one day and binge watch succession the next. Newcomers benefit more from time in the office than long serving employees. Offices matter to cultures but in person cultures can be toxic. Each firm will need to work out its own post-pandemic recipe. But the five Ws of journalism are the right questions to help you decide on the ingredients. Who has to be in the office and who can do their jobs well from home. When in the week should hybrid workers be making the commute? Where should they sit in the office, fix spots or hot desks? And the two most important questions, what is a meaningful measure of productivity for each role and why do you really want people to come in? You won't please everyone, but if you have thoughtful answers to these questions, you have the makings of a successful policy. Boss's view of hybrid will ultimately be conditioned by the view they hold of their employees. Are they driven or lazy? Do they crack on with the job or do they curl up on the sofa? But workers don't land in organisations by chance. They're chosen. If you don't trust your workers, how good are you at the most important decision a manager can take? Hiring. And it was a truly wild ride. We built a company that probably would have taken several years in several months. That's next time on Boss Class. To hear all seven episodes, you'll need a subscription to the Economist. If you have one already, thank you. I hope you enjoy the series. If you don't have one, you can sign up for our new podcast subscription. Podcasts Plus. Google Economist Podcasts for more information, including how to link your account if you're already a subscriber. For the best offer, go to economist.com/podcastsplus. You'll find the link in the show notes. Over the next five episodes of Boss Class, we'll hear advice from the founder of one of the world's largest fintech firms on how to form teams. If you have these smaller teams that have freedom around what's her doing, I think that makes you a lot quicker for a long time. We'll get insights on how to manage yourself in the age of AI from one of Silicon Valley's biggest names. There's going to be AI tools in every press activity, you know, a set of them, probably more than one, that if you're not using them, you're really much less professional than other people are. We'll learn the do's and don'ts of running meetings and eavesdrop on one of the economist's own editorial meetings. This is all being recorded for the management podcast so far as being a disaster. There we go. Episodes will be out weekly on Mondays. The producers of Boss Class are Sam Colbert, Lawrence Knight, Pete Norton and Sandrush Muelli with help from Daniela Raz. Our sound designer is Wade Ong Lin with original music by Darren Ong. The series editor is Claire Reed and John Shields is our executive producer. I'm Andrew Palmer. This is The Economist.