The cost of working from home.

Now that we are at the seven-month mark of the great "Work From Home" experiment, we can now get some data and insights on the benefits and the costs of this change. 

Approximately 50% of employees are now working from home.

A Stanford researcher estimates that 42 percent of the U.S. labour force is working from home full-time, and an economist from Massachusetts Institute of Technology estimates that nearly half of the workforce is now remote. 

Some great news. 82% of companies saw productivity levels either hold steady or increase.

Recently Microsoft commissioned research to better understand the benefits and limitations of WFH. The study surveyed thousands of workers and leaders across Europe and asked people about their experiences with remote working as well as about their expectations for the future.

Senior executives have seen that remote teams can be highly productive, with 82% saying they saw productivity levels either hold steady or increase as people shifted to remote work.

Employees cite many positive lifestyle benefits with the top five reasons they like to working-from-home being: 

1. They can dress more casually
2. They can personalize their workspace to suit their needs. 
3. They had more time for hobbies.
4. They can bring their whole self to work (kids in the background) 
5. They can work with pets in their space. 

In addition to these benefits, there are additional cost savings on commuting and lunch dining costs.

With the economic challenges brought on by the Covid-19 pandemic, companies have been quick to embrace "working from home" reaping the cost savings by opting out of expensive real estate leases. While these austerity measures affecting space promises to have a positive impact on the organization's bottom line, there is a growing realization that there are going to be trade-offs for everyone working remotely.

While many have claimed to have seen productivity increase with "work from home", many have also noted that innovation and creativity have been negatively affected. One reason for this drop is that the opportunity to create the conditions for creativity and innovation using remote digital interactions is challenging to say the least.

It's not that innovation and creativity can't be done remotely, it's just that the innovation process and the conditions for optimizing creativity need to be completely rethought for our virtual "work-from-home" new world.

Now the not so great news.

So while there are certain advantages that employees see as benefits to working from home, business leaders are reporting a decrease in innovation around core products and services. The spirit of innovation at companies has declined sharply as their workforce has been dispersed this year. 

In a related study published last year, 56% of executives found their businesses to be more innovative in terms of goods and services. However, that number has fallen to 40% this year. This drop-in innovation is a concern for both governments and companies that want to stay competitive and thrive.

Here are some of the possible causes that are contributing to this loss of innovation in the "work from home" world.

Loss of social bonding and cultural erosion.

No doubt isolating employees at home is leading to cultural erosion. The Microsoft study points out that employees report feeling more isolated from company culture, less attached to teams, and less collaborative. As members begin to feel psychologically disconnected from each other, teams can come unglued rather quickly.

The issue here appears to be a lack of a sense of intent and common mission or cause, which at work is primarily motivated by clear and consistent leadership, team relationships and by seeing how your activities affect others. All of these are more readily achieved when individuals work physically together and are more difficult when they work virtually.

Back in March, BlackRock Inc.'s Chief Executive Officer Larry Fink said he worries that working remotely results in a lack of bond between a company and employee. A type of cultural erosion.

“The most difficult issue for all of us is the retention of a culture,” - Larry Fink, Chief Executive Officer, BlackRock Inc. 

And fellow Wallstreet leader, JPMorgan's CEO Jamie Dimon said that he sees prolonged remote work inflicting serious social and economic damage. Most likely around innovation competitiveness. 

Loss of water-cooler moments.

Larry Fink also commented that he was initially skeptical of his ability to work from home and that at the time he thought it had made him more productive. But today he is more concerned. He worries that as organizations work remotely through video conference calls, big ideas and impromptu "water-cooler moments" will be missed.

When people are physically together five days a week, it's easy to have several casual collisions that lead to spontaneous solutions and ideas. These seemingly none productive casual connections little things add up to having a big impact on team culture and innovation.

Loss of flow. 

The most effective companies protect the "think" time of their workers. In recent years, the word 'flow state' has become more common, and for good reason. It explains when a person can devote his or her full attention to the task at hand. Total immersion in the innovation and creative process contributes to superior performance and ideas, not to mention employee morale, however, it's hard to be in a state of flow when you are on constant video conference calls.

Here are some ideas that might help you and your teams adapt to online innovation development. 

Re-ignite your organization's purpose.

It's time to review and then rearticulate your company's purpose if need be - to make sure it is more clear and concise than ever.

Build-in more casual "water-cooler moments" and think of them as productive.

Find a way to support serendipitous "water cooler" casual connections. What about a virtual always open channel "water cooler" channel on your Teams or Slack where people could just have less formal interactions? Put then put a time code in place for "water cooler connections" - this shows people that it's OK to do this and it is valued.

How about "a virtual walk the corridors (or outdoor chat walks)" and let your teams more casually meet and to connect the dots that ideas need?

Lighten up on the check-ins and add time blocked "think time".

Let the innovation team percolate for a while. Stop the daily or twice daily video check-ins. Actually, maybe let them take a week with no check-ins. You will be amazed at the quality of thinking by just easing off. 

Make mornings blocked "think time" for your teams and make afternoon time for meetings. It has been proven that most people are more creative in the early part of the day.

Smaller teams. 

How about two or three people teams and not 15. In a physical setting, you can have larger idea teams. There is more space to hive off and jam on ideas. It's much harder in a virtual setting online. Large groups in this setting are just too hard to manage. When I was an advertising Creative Director, we often only had a creative team of two people many three working on multi-million dollar ad campaign ideas. This is because in a micro group is easier to gain trust and flow. Coming up with ideas is like playing tennis - you volley ideas back and forth - creating flow. I believe four is still the max for a tennis game for the same reason. 

Put better teams together. 

Be a better matchmaker. A healthy team dynamic is another major factor in great innovation teams. Sure - putting a diverse skill set is important - but so are compatible creative styles. Try to determine the styles of your team - their creative chemistry. And ask them who they would like to work with, they most likely have a good idea whom they work best with.  

“Getting the right people and the right chemistry is more important than getting the right idea.” ― Ed Catmull, Creativity Inc.

Train your managers to also be Creative Directors.

61% of managers said they have not effectively learned how to delegate and empower virtual teams. Managers must be trained with the expertise they need in this new virtual innovation environment. They should not be just productivity watchers, they need to have new skills to better manage innovation in a virtual setting. They need to be creative directors and drive bravery. Protect creativity time. Better understand each team member's strengths and creative style in order to put better teams together.

Here's a thought. Send each a copy of Ed Catmull's Creativity Inc. It is chocked-full of great insights into running creative innovative teams. 

Stop thinking that increased productivity means success. 

Sure, productivity looks great on a spreadsheet showing all your people are busy or billable, but it can be hurting your innovation capability. To measure the true costs and benefits of working from home on your businesses you will need to move beyond only looking at productivity or financial saving metrics and also consider the quality of thinking moving you will need to move your company forward.

To successfully manage your remote teams you will need more than just video platforms and collaboration technologies. It will require innovating your present approach to working. You will require your innovation managers to have new skillsets in order to create conditions for optimizing innovation pursuit.

For those companies that do adapt to new approaches, they have a better chance of developing impactful game-changing innovations, and discovering the benefits of working from home that far exceed the costs.