What landlords miss but CEOs know: the office pendulum

When I hear words ‘returning to normal’, I am always tempted to say: there is no ‘returning’, only moving forward. We stayed at home too long to change behavior.  The norms have shifted over the last six months, and I am not just talking of social distancing but about the business practices and daily fabrics of work in tech and B2B services industries. Doctors’ offices, retail, restaurants and manufacturing may fare differently. But let us look at software companies and their interactions internally and externally - with clients, partners and service providers. Our daily habits, like complete acceptability of negotiating deals or making a job offer on video have changed. There is no ‘back to normal’, because the ‘normal’ has evolved.

Twenty years ago, many IT companies started implementing the work from home concept – easy access to phone conferences and laptops made it possible. Many of us took advantage of hiring the best experts even if they were in different locations or being able to take a furniture delivery at home without taking a day off. Working for IBM in late 90s and early 00s I had many employees that I hired without meeting face to face until a year or two after they started, and bosses that I saw in person just a few times a year. It did not get in the way of relationships – we are friends with many of them even today, two decades later - and it did not prevent us from doing good work.

But being fully remote had a few disadvantages. 

·      It destroyed the social aspect of work and team belonging that eventually slowed down innovation and impacted morale, especially for the new members of the team. An opportunity to make occasional business trips, bring in a new hire to a team meeting or have kickoffs or budget planning sessions followed by joint dinners helped a lot as long as it did not require waiting for months for that trip.

·      What would be a stop-by-the-door with a morning coffee meeting turned into a pre-scheduled 30 minutes call unless we learned to use messages and quick phone calls well, including know when it was a good time to catch a person up.

·      It removed occasional water-cooler meetings with people from different teams and created a cabin-fever feeling after a while. Adding social discussions to meetings and setting ‘catch-ups’ with those that I did not talk to on a regular basis helped but only to a certain extent. The voice-only still lacked personalization and body language communications that are important for building trust.

·      Last, it becomes difficult for the mix of remote and in-person within the same meeting. With five people debating face to face, overlooking the desperate soul on the phone trying to break in was a regular problem. Visiting half-empty offices was depressing, those who came in knew each other but remote people did not, it lacked a human communications spark.

 As always, the pendulum went all the way from one side to another. In February 2013 Marissa Mayer, a newly minted CEO of Yahoo, banned work from home, sparkling a vicious debate in the industry. Proponents brought up the cases of the US Postal Service discovering over-reporting of hours worked from home (and ignoring the differences in culture between software companies and government organizations), opponents accused Mayer of betraying working mothers and predicting difficulties in attracting talent.

 In 2017 IBM, the long-time proponent of flexibility and good work-life balance, a pioneer of work in a desperate attempt to intensify the changes and innovation in the company banned the work from home that it pioneered years ago. The pendulum made the full swing and we found ourselves again in crowded open-space offices, long commute hours and in-person brainstorming.

Comes in broadband, easy access to video chat tools and documents sharing … we were fully equipped to overcome some of the disadvantages of remote presence and start using it more often if not as a regular alternative to the office. But the business practices seemed to be stuck in that high-pendulum position until the COVID19 pandemics pushed it down.

·      A year ago, I spent a lot of time asking my team to reduce the travel to internal meetings – it was a hard battle, mainly because half-in room, half -on video mix was difficult. Today with everyone on zoom the teams are thriving.

·      A year ago, the customers would be hesitant to talk on video and would rather wait for a visit even for a brief, tactical issue. Today they do not allow outsiders to the offices and are happy to have regular calls on zoom even with the vendors they have not met before.

·      A year ago, our remote sellers outside of NYC did not participate in social events except for visiting for Christmas parties. Today we have monthly birthday celebrations, happy hours, showers and send offs on video. Not to mention the CEO roundtables, company-wide town halls and community events such as St. Patrick or and LGBT Pride.

As a community moved on and adopted new practices.

 My colleagues tell me they do not want to go back to two-three hours of commute per day to write code or answer the phone in a regular office even after we abandon masks and declare our world safe. 

My peer CEOs tell me they enjoy savings from travel and operating costs, like high morale and productivity. Most of them even consider going completely remote, others downsize offices to accommodate a few employees who lack working conditions at home. 

And according to McKinsey, 73% of the US companies are uncomfortable returning to “regular” out-of-office activities.

It is time for us to rethink what an office should be for a company that does not have production lines and does not need to bring clients to visit. Maybe we do go completely remote but accept that the office space’s function evolved from a factory to a club. From a place of production involving everyone at once to an occasional meeting space, an oasis to make a few calls between the meetings in the city or help onboard new employees. Sitting in headsets in a long row of desks becomes a thing of the past. There is a value in a hotel-like office space – those coming for a day get a desk or a room, but nobody gets a big empty space assigned to their name just because of a C letter in the title. The pendulum starts coming to the middle balance point occasionally stopping at some combination of meetings in person and working from home, rather than all the way to the other side. 

 I see people going through the various stages of grief for the office concept, slowly edging towards acceptance. There is still a lot of denial, anger and bargaining, like the belief that the changes are temporary and will go away once we all get vaccinated. NYC landlords are holding to the prices while their buildings empty out and those stuck into two-three years deals sublease low. They want to ignore that a couple of years is enough for the behavioral changes to take hold in the industry, employers start enjoying savings on operating costs and offices while employees do not have to spend time and money on a very unpleasant commute.

The change comes with its own price in the long-term.

Managers and executives need to accept it and rethink hiring, onboarding, communications, team building, onboarding, motivation and reporting, maintaining accountability, engagement and morale, implementing changes and celebrating wins. 

Local governments need to accept it and rethink taxation by location.

Real estate developers and landlords need to accept it and rethink layouts, space distribution between commercial and residential, not to mention getting at peace with new prices.

Last, we should be also mindful of generational differences.

Millennials and especially Z generation look for immediate feedback, lack experience and need more coaching, like mixing social and work more, are likely to have tighter living quarters and share with roommates. More senior employees usually require less help and supervision, separate social and work components of their lives and have adequate working conditions at home. The differences come clear in surveys and informal discussions.

So, companies that value a true diversity should factor these differences in the office and work planning. Full office is less comfortable for baby boomers and Xers, going completely remote deprives the next generations of some of the values they look for. We will need to create a mixed environment providing employees with a flexibility to decide how much they visit the office – which may differ by individual, not a role. And to plan for the right trigger for bringing everyone in occasionally to enrich innovation, rich exchange and enjoyable social events, to avoid creating a generational divide.

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As some state open up and others still record high number of #COVID19 cases, people in my network ask the same question: when do we return to the office? How will it happen? For someone with an office in New York City, this is not an easy question. Here are my thoughts on the subject - and I would welcome your input!

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