Does working from home put innovation at risk?

How leadership can succeed in the new world of work.

Teleworking has proved to be viable, and offers many benefits to people, the environment, and the economy. But it can also pose a serious risk to companies’ abilities to innovate. What is needed, therefore, is leadership that focuses on empowering rather than controlling employees.

As Covid-19 infection rates rise, more employees of many companies are again working from home. For some weeks now, specialists at Porsche Consulting have also been working on markedly more projects online than they did in the summer. That enables us to protect both ourselves and others. The requisite decisions are not always easy because transformational projects with our clients are especially well served by close and trust-based relationships, which are facilitated by meeting in person.

However, recent months have also shown that many projects can even profit from online collaboration. One example is the ability to increase team diversity by including colleagues from different international locations. Or, if the data for digital analyses are available, putting time that would otherwise be spent traveling to more productive use. Moreover, with or without any health protection concerns, it is clear that we will not be returning to the same state of in-person work that we had before the pandemic. And that is a good thing, because the results of recent months have shown even the skeptics that there are real benefits to working from home.

Benefits for people, the environment, and companies

One benefit lies in the greater degree of individual autonomy. Working from home often allows employees to combine their life situations with their work much more easily—whether that means caring for children or other family members or finding a better fit for their preferred rhythms or modes of work. Many colleagues have reported that they can work considerably more efficiently, without distractions or interruptions. Online meetings often assume a more businesslike and efficient quality. Travel and commute times are no longer relevant. Porsche Consulting’s travel expenditures from March to December 2020 are 70 percent lower than the figure for the same period of last year. This is of substantial benefit to the environment. So why not maintain these effects permanently wherever possible?

While the German Parliament debates the pros and cons of granting employees the right to work from home 24 days a year, many forward-looking companies have already recognized the economic advantages thereof and put considerably more wide-ranging programs into place. SAP and Siemens are two of the first major German companies to enable their employees to work remotely two or three days a week on a long-term basis. Google CEO Sundar Pichai has proposed a hybrid model that combines working at the office and at home or elsewhere. Talented new candidates on the job market will expect precisely this type of flexibility.

The question that company decision-makers should be asking is therefore not whether a large share of work will now be done from home, but rather how they should shape this new world of work in optimal ways.

This is important because managers who send their employees home to work with the expectation that everything will run just like it did at the office are taking a big risk—especially with respect to their company's abilities to innovate. Even before the coronavirus came into play, there were clear trends toward teams that work from different places and having employees assume greater individual responsibility. The pandemic has only accelerated this development in the world of work. One element above all needs to change here, and that is the leadership.

Trust as the basis for innovation

It is scarcely possible to monitor employees who are teleworking. Nor is it desirable. On the contrary—rigid processes based on a “command and control” principle tend to hinder creative solutions and a free exchange of information. Companies’ success in the future will hinge in large part on the extent to which their employees on all levels can devote their skills and expertise to generating competitive advantages. The classical model of transactional leadership, in which employees perform tasks and receive the agreed-upon rewards, is of little help here. Instead, what matters is creating an environment in which employees are motivated to do their best. That requires a transformative type of leadership that seeks to guide people as they develop—the guiding principle here being to “empower and engage.”

This type of leadership is all the more important when teams cannot meet in person or do so only rarely. The informal encounters that build trust—before and after meetings, in the cafeteria, or over coffee—are less frequent. But trust is the ground on which employees stand when they dare to speak uncomfortable truths or present unusual ideas. In short, without trust things also look bleak for the power of innovation.

Employees who trust their colleagues and leaders, and who are trusted by them in turn, are superbly equipped for the independent approach that the new world of work will require.

In order to create the space for encounters, leaders and companies should therefore develop ways that will continue to bring their employees together in the future. The informal exchanges that are so important for innovation cannot be forced, yet they can be fostered in targeted ways. Even if not all employees need a set place of work, modern spaces with an agreeable atmosphere can provide an attractive framework for chance encounters. And creative forms of exchange can also be found during a time when social distancing is required. Examples include a walk together, or a digital coffee break. The goal is to find solutions that fit the culture of the company and the team.

At Porsche Consulting we have been trying out many such ideas over recent months. For example, a platform like DEON has proved effective in working together with clients. It enables interactive collaboration comparable to that in a workshop space. Everyone can participate, share the results of their work electronically, and join forces to develop them further. We have also found new ways of exchanging expertise within our own company. One example here is the “Weekly Dose”—namely, knowledge that is presented in small doses. Every Friday, employees from a particular department present a topic during a thirty-minute Microsoft Teams call. Anyone who is interested can join in, comment, ask questions, or view the recording later. A side effect of this initiative is that a store of expertise gradually arises that is accessible to everyone.

Not least of all, I have learned some new things and acquired some new habits over the past months. Here are three examples from my work routine:

1. Look people in the eyes, smile, and pay attention—the polite forms of in-person interaction should also apply to electronic environments. For online discussions my camera is therefore always on.
2. With all due respect to efficiency, at times I specifically schedule a few minutes at online meetings to chat about non-business topics.
3. If possible, I like to hold meetings while taking a walk. These types of “walking meetings” are ideal for social distancing, and the exercise and fresh air enhance not only general well-being but also the ability to concentrate.

I am convinced that the coronavirus crisis also harbors many opportunities. A new form of working together and of leadership that focuses on people is just one example.