Back to Office: Building a Culture that Accelerates Innovation
We are challenged with conflicting evidence: Employees put in more working hours and rate themselves as more productive from home. But company productivity and profitability are suggesting otherwise.
Individual activity, except in factories or warehouses, does not equate to value creation, let alone to profitability. So it can be true that individual workers engage in more activity at home while not creating the same value as they pre-work from home. There are many activities that are less effective remotely. Studies show that onboarding, planning, training and innovation are more effective in person.
Innovation Thrives with Proximity
Pre-pandemic and post-pandemic there is considerable evidence to support that innovation thrives with proximity.
A Journal of Economics published study in 2021 that concluded commuting negatively affects inventor productivity, with every 10 km increase in commuting distance leading to about a 5% decrease in patenting quantity and a 7% decrease in patenting quality. The negative effects were stronger for top inventors whose productivity is within the top 10% among all inventors.
Indicators of innovation across the economy peaked in 2019 and have declined — newly issued patents were down in 2022 7.3% year-over-year and 11.1% from 2019 levels, providing strong evidence that companies across industries are submitting a waning volume of new patent applications. My own anecdotal conversations with senior leaders suggests that patents filings are down as much as 90%.
Some corporate innovation strategy teams have abandoned internal innovation or intrapreneurship and are focused solely on acquisition. This is a strong indicator that internal innovation has dropped off, sometimes so greatly companies have abandoned their efforts.
Accelerated Change Requires Constant innovation
In time of accelerating change, innovation is not just about patents and technical advancements. Business models, customers, tools, and societal norms are changing fast. Businesses that adopt AI, leverage data, and update their collaborative tool kit are going to quickly outcompete those that don’t. In other words, companies that are constantly innovating on their products, business models, and business processes are simply going to outcompete those that do not.
Co-location Accelerates Innovation
There are a number of reasons why innovation thrives with co-location. Rapid iteration on ideas, ease of gathering diverse perspectives, permanence of work products, psychological safety, better communication, the sharing of ideas from different arenas, peer to peer learning, and many, many more. But simply bringing people back to the office will not necessarily drive innovation.
How do we as leaders grow the business, accelerate innovation and more importantly without losing the people that make the business so great?
Focus on People
I do not support mandates or five day a week requirements. Going to the office everyday is brutal, few people truly thrived. And there is a lot of work that empirically benefits from being at home. Individual contribution, especially work that benefits from long stretches of uninterrupted focus, does not benefit from co-location. But, leaders are not wrong in thinking their people need to come back together.
But how and why people come back matters. Because we are not going “back to the office” in 2019 but “going into the office” in 2023, we are creating a new way of working. It is a culture change. Recognizing that each company has built its own culture of remote work and each person has developed their own at-home rhythms and preferences, bring people together requires a culture change approach.
Build a Culture of Innovation and Acceleration
In designing any transformation, LUMAN leverages our holistic approach. As with all things we begin with purpose
Purpose:?A meaningful statement with a transformation and measurable outcome that becomes the anchor for an enrolling vision of the future and clear metrics of success.
People: Ultimately the office should provide environments where people and teams are supported to be in their genius. So you need to learn what that looks like — recognizing that different teams and individuals will need different options. And because people have had the experience of personalized workspaces, they have no reason to expect anything less from the office. You will need to take the time to learn what motivates people back to the office and what barriers they face. Any innovation has an adoption curve. Start with the most motivated teams and individuals.
Process: Define the types of activities that people are going to use the office for. Work sprints need different space utilization and different skills than design workshops, planning, or training.
Platforms: Technology can enhance the human experience and enable valuable behaviors. Platforms include tools that enable seamless remote and co-located collaborations — smart whiteboards, office management tools, and calendaring tools. Unfortunately, this moment is probably going to expand, not contract the tools set.
Planning: A company wide roll out benefits from a coordinated approach and an iterative change approach. Planning as an activity benefits from co-location. Integrate all your planning cycles into your “back to office” strategy.
Propagation: Building innovation culture and capacity in the office requires ongoing development. Whether you are insourcing or outsourcing training, learning is a great in-office activity and it is required if we want to develop the skills needed to collaborate and innovate well.
If you are ready to leverage return to office as an opportunity for culture change rather than an exercise in?carrots and whips, be in touch. If you have a case study in making hybrid work — work, I would love to learn from you. The modern world of work has never returned from a global pandemic. We are all learning here. Let’s learn from one another.