Remote working - three things that matter

Recent discourse on the impact of remote working often descends into ideological mud-slinging and one-sided narratives, and tends to revolve around the false dichotomies of employer-versus-employee, or new-versus-old ways of working.

The correct answer is that “it depends”. Three things matter:

1.???????Does remote working negatively impact productivity?

2.???????Does remote working positively impact employee wellbeing?

3.???????What is the effect of remote working on company culture?

Bonus question – what does this mean for real estate?

All views expressed are my own.

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1.?????????Productivity

High productivity means spending as little time as possible in order to achieve a certain output. For that to happen, workers need an optimal mix of direct communication (e.g. data) and indirect communication (e.g. non-verbal cues). Morale and wellbeing also play an important part, but more on that later.

?Now consider a sliding scale of:

?Email?-->?phone call?-->?video call?-->?in-person meeting.

?As you move from left to right, a) convenience decreases; and b) indirect communication increases*. In other words, you pay for this extra information is with your time and effort. When is it worth the price?

?Indirect communication is generally useless for highly-specific tasks that exist within fixed parameters (e.g. analysing tax legislation, or booking currency trades). Its value increases exponentially when dealing with novel situations that may include asymmetric information, such as commercial negotiations, or cultivating a new relationship, where your counterparty’s next steps and interests may not be obvious. What are they doing but not saying? Have they chosen to visit your office, or invited you to an expensive lunch? A person’s willingness to incur inconvenience also telegraphs how they perceive the relationship or situation.

?It's no surprise that law firms (operating in a highly-defined environment) were early adopters of remote work, and management consultants (operating in permanently novel situations) almost universally required their workers to be present onsite. Most companies and teams sit somewhere in the middle, and exactly where on the spectrum they are should be the starting point in today’s remote-versus-onsite productivity debate.

Based on my anecdotal observations, few businesses – especially larger businesses – are asking the right questions, let alone having constructive internal debates, and will therefore get this balance wrong over the next two or three years. Expect large over- and under-corrections, which has important ramifications for purveyors of real estate. We’ll come back to that.

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*Watch Sir Ian McKellen explain the difference between film and stage acting, which is a perfect parallel for the contrast between video calls and in-person meetings:?https://www.youtube.com/watch?v=QzOlVLDMLAQ

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2.?????????Wellbeing

Assuming, at a minimum, you pay your people appropriately and treat them with respect (both rarer than they should be), then employee wellbeing is largely down to two factors: a) autonomy; and b) purpose.

Autonomy in this context means allowing a worker the freedom to decide the conditions under which productivity is maximised. I often see statements along the lines of “if you trust your workers, let them choose”. This is trickier than it appears, because whilst workers are great at judging their own individual productivity, they often lack the information and context to judge group-level productivity. For example, senior associates in a law firm may work best alone in a quiet room, but group-total productivity rises if they are available to answer ad hoc questions from junior colleagues.

Secondly, trust is not binary, nor is it perpetual. I may trust in an employee’s work ethic, but I may not trust that he or she has the skills and experience to deal with a particular novel challenge that has just arisen. Observing an employee's hesitation or body language allows me to make a better call on how confident they feel about a new situation, and how hands-on or off I should be (though of course, nothing beats clear communication).

As a starting point I believe the prerogative sits with the manager to assess whether sum-total productivity increases proportionally with time spent in physical proximity – and if the answer is yes, then talk to your people and explain your methodology and thought process. It more than justifies their commute if everyone’s life becomes easier in the long run on the back of a more productive team.

Because the impact of someone’s work is often communicated indirectly (e.g. observing the audience’s reaction), the onus on managers to properly communicate a team’s purpose to employees and clients alike will increase tremendously as remote working continues to be proliferated. Most companies already suffer from poor communication, and the bar is only getting higher.

There is also another thing that comprises almost entirely of indirect communication – culture.

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3.?????????Culture

Culture is what people do when they are not being explicitly told what to do. In other words, it is the amalgamation of actions taken by a large number of individuals acting on their own volition. If these are broadly consistent, you have a strong culture (which is not automatically the same as a good culture).

Since a culture is by definition what happens outside of explicit rules and instructions, it is largely reinforced by repeated exposure to actions and non-verbal cues. These are difficult (but not impossible) to transmit without in-person contact - which has posed a challenge for multi-jurisdictional teams long before the widespread onset of remote working.?

An effective culture usually requires some kind of guidance, based on feedback from those who are expected to adhere to it (usually workers). In my experience this feedback carries the most weight after colleagues have spent a lot of time observing each other – which is easier when they spend a lot of time in the same place. On a forty-hour week with five days a week in the office, that is over five hundred hours per quarter spent directly or indirectly observing colleagues. Rolling out two or three days of remote working per week means it will take six months to build up a similar amount of data, which is a long time in a rapidly evolving business environment.

It is often said that primary responsibility for upholding a company’s culture sits with managers, which I agree with, on the basis that everybody is a manager of some kind. In most firms, even the most junior employee will experience managing external suppliers, customers or even competitors. If for example your firm has a strong culture of holding under-performing suppliers to account, then it is in a worker’s own interest to provide the necessary direct and indirect communication to propagate this image externally.

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4.?????????Conclusions

To be clear, none of this is an argument that remote working is net negative and should be limited. In fact, I think that there are huge potential productivity gains, particularly given nearly every job involves some amount of highly-codified work that would be done quicker in a quiet environment with minimal indirect communication (read: distractions). I am simply highlighting that the current debate has become both ideological and polarised, and tends to ignore the many unintended consequences which should form part of the decision-making calculus. It is in the mutual interest of both managers and workers to achieve high productivity, which in turn both requires and reinforces high employee wellbeing and a positive culture.

As for the impact on real estate, I will return to this in a future post.

#remoteworking #workingfromhome #management