As Australian organisations move into the pandemic recovery phase, they are grappling with what changes are here to stay and what to leave behind.
We have glimpsed the opportunity – for productivity, resource flexibility and staff engagement – showed to us by remote working by default. And we have missed the connection and other benefits of co-location with colleagues. Where to next? The way forward is complex and there is no playbook for shaping and navigating our options.
It would be easy to revert to the old normal. It would also be tempting to wait to see how the operating environment evolves and how others respond. But reverting to old ways squanders the opportunity to bank the benefits of what we have learned. A wait-and-see approach is also problematic; we cannot leave a vacuum for our future intentions, otherwise people will fill it themselves. Employees are hungry to hear and be part of the way forward, with many employee surveys experiencing a surge of response rates.
This provides a golden opportunity for organisations to build back better; that is, to find ways of working that build on the best of before and bank the benefits of the experiment.
But doing it is not easy. The challenge is intricate and making even modest changes can be hard because they challenge the way organisations, leaders and teams have been set up. Rather than just managing change resistance, it will require some “rewiring” to embrace a different normal.
For many, the way forward is to work out what matters most, to shape experiments from which we can learn, and to be explicit in what we expect of roles, work and management to help people navigate the inevitable uncertainty.
Faced with complications and uncertainty, principles work better than hard plans. And because we’re all feeling our way through, collaboration is helpful.
Nous Group recently hosted a roundtable bringing together executives responsible for people and culture and chiefs of operations at a range of Victoria-based organisations, given Victoria has had the most experience of remote working. We wanted to explore how these organisations intend to build back better after COVID-19.
We started the discussion by polling participants for the big driver they are most preoccupied with today. Some 80 per cent of participants nominated “optimising engagement and productivity”, ahead of “reducing our operating costs”, “repurposing our offices” and “accessing top talent”.
With all that in mind, we have distilled four key questions every organisation needs to consider.
1. What does the remote working experiment mean for how and where we work?
Working from home will continue to be a major force, with 61 per cent of Australians seeking a mix of home and office-based work, and 34 per cent keen for more than half of their work to be at home. These findings from McCrindle echo findings from a LinkedIn survey and also a staff survey from an event participant. Twitter, Square, Facebook and Shopify are all considering a long-term work from home solution for employees after COVID-19.
Importantly, many employee surveys show employees report being just as productive working from home, if not more so. Pre-COVID research showed the productivity potential of remote working – a 13 per cent productivity increase. (The lead author of that research, Stanford economist Nicholas Bloom, said he did not see the COVID-driven pivot to remote working as a productivity driver because “working from home with your children is a productivity disaster”.) In the research, employees could work from home if they had a home office. We all know colleagues (or may be ourselves) working in bedrooms or shared spaces, with varying quality of home office set up.
If we have been productive in 2020, imagine how productive we could be if we banked the lessons of the COVID experiment with appropriate workspaces at home and normal childcare and school arrangements?
So if remote working is here to stay in some form, we need to reimagine the role of the office. Offices are emerging primarily as sites for connection, peer learning and collaboration, so may change significantly. One participant talked of renaming the office the “collaboration hub”. Regional hubs have been mooted, but employee support so far appears limited.
There are significant implications for office size. As office leases come up, organisations are looking at how much space they need. One expert cited in The Economist forecast a reduction of at least 10 per cent in the stock of office space in big cities. And a study has found cost savings of $10,000 a year for organisations per remote employee. “Our lease agreements are up in 2024,” one roundtable participant said. “We could swing back to where we were before, but if we want to optimise our property portfolio, we have to make a choice.”
Office design needs to be rethought. Survey data has revealed employees see different types of tasks as being suited to different environments: home is ideal for individual work and even self-development while offices are the preference for coaching, development and collaboration, according to one participant’s survey.
If we are doing individual work mostly from home, are we saying goodbye to the rows of desks we have become accustomed to in offices? These are challenging questions, yet many executives are having to make a call on some of these issues now, as office leases come up for renewal.
2. How can we balance productivity and individual autonomy?
If we have uncovered the productivity and staff engagement benefits of working from home when we have do it, how can we maintain these benefits while enabling employees to make choices about their work location based on work priorities, home context and other variables? If the team wants to collaborate in the office but an individual team member wants to work from home that day, how would that work?
The reality is that for the foreseeable future, we are looking at a hybrid model of work, with some employees working from home and some from the office on any given day. This brings challenges for managers and for organisations.
The remote working experiment forced managers to do a version of a “trust fall” with their teams; trusting that if they cannot see them and monitor them, they are still doing the right work at the right pace and achieving the right outcomes. These managers have had to look at outcomes, rather than inputs like face time, to monitor performance.
There is a challenge on the horizon for managers in an era of hybrid teams, with some managers already strongly preferring to go back to their previous ways of managing. One participant said she had heard cases of managers compelling staff to return to the office, creating rules in the absence of organisation-wide principles. If such managers pursue these preferences, we risk losing the benefits of what we learned in our COVID experiment, not meeting employee expectations and providing inconsistent employee experiences.
In a hybrid world of work there is concern about how we treat employees fairly, whether they are in the office a lot or a little. What new ways of working will serve us best in this environment? One participant offered a useful guiding principle: “You work flexibly where you are most productive and deliver the best work for our clients.”
The heightened autonomy of the past year will prompt some tough decisions for managers. Judgements will need to be made about the extent to which the autonomy will continue and the impact on the way offices are arranged, challenging things previously taken for granted. “We’re going to have to break some hearts,” one roundtable participant said, because the return to the office is unlikely to be a return to what employees remembers, at least for the foreseeable future.
2020 has given us a real-life pilot of putting people at the centre of decisions. We need to not snap back to the idea of performance and wellbeing being traded off; instead they are mutually reinforcing.
So, what made managers successful up until 2020 may not be sufficient to make them successful in 2021 and beyond. To manage hybrid teams well, put people at the centre of decisions and be explicit with employees about expectations while we navigate uncertainty, managers are likely to need some reskilling, along with a mindset shift.
3. How can we uphold engagement and culture?
Staff have made clear that strong social connection is a significant part of their workplace experience. In one survey of an organisation’s staff, the top reason for returning to the office was “seeing friends, colleagues and teammates”, nearly double the next reason, “easier collaboration with co-workers and customers”.
So how do you achieve that in a time of remote or hybrid working? Organisations are having some success in creating non-work-centric opportunities to interact. Participants mentioned innovative approaches to fostering spontaneous, playful connection, such as a Tinder-style app for local dog walking groups and online quiz games. Employees wary of the traditional function of People and Culture see this as a refreshing change.
The way organisations think about culture is itself changing. Wellbeing and caring for the whole person is now an imperative given people’s work and home lives are more entwined than ever.
A decentralised workforce also prompts a challenge for establishing and reinforcing workplace culture. Much of the acculturation of employees that took place in incidental experiences in corridors, workstations and lift wells now needs to be formalised. One participant questioned whether that was a viable ongoing approach. ”How do we build culture when we have two quite distinct workforces?” the person asked.
Onboarding new staff is a particular challenge, but organisations that have inducted groups of new employees via remote learning have reported promising results.
Many employees report feeling more connected with colleagues and leaders through the remote working period, but to what extent are we reaping the benefits of established relationships in which we had invested prior to remote working? If connection and productivity in remote working require a strong foundation of relationships, how do we continue to build that foundation?
4. What governance can guide organisations through the evolution?
The heightened uncertainty of the past year has tested the governance structures of many organisations, and those tests are likely to continue as organisations move toward a post-pandemic world.
“Normal” governance may not work for navigating the path ahead as decisions cross functional boundaries and role accountabilities. “Crisis room” decision-making and leadership served many organisations well at the height of COVID-19 but is not sustainable for longer-term objectives.
Yet in the absence of clear governance, people in organisations will make their own decisions about what the future looks like, whether that be snapping back to old habits or locking in the recent changes. Many employees are operating in a fog of ambiguity, unsure about fundamental questions like where they will work from month to month.
One participant explained the governance challenge her organisation was facing like this: “You’re constantly holding a picture of the future while also having to make a decision in the immediate.”
If our approach is to focus on what is most important, shape experiments and learn from them, who decides what is important and what are the experiments? What levers make experiments happen?
The right to make decisions about the future is unclear: Who works out the vision for the future, the role of the office, the policies for staff and the technology that will enable the vision? Many well-resourced organisations have given an executive carriage of this agenda. Some organisations have established governance to navigate the future of work, some developing a roadmap for the future and key priorities or pillars.
Yet even with some clear principles, priorities and a roadmap, the governance and authority to implement these can be more ambiguous and challenging. Anointed leaders must work with functional leaders to enable experimentation and a path forward. Many functions, such as finance, are not set up to work in this way; they are wired differently, so even modest changes can be difficult to negotiate and execute. It is a case of “aspiration meets operations”.
Working together can help organisations imagine the future
These changes are complex. While COOs and HR leaders need to think about it, CEOs need to get involved to coordinate stakeholders.
Inevitably there will be missteps along the way. “We are working towards a future state, not trying to bring the future now,” one participant said. “We’re not always going to get it right the first time.”
Working collaboratively with others experiencing these challenges can help you to learn about what works and what doesn’t as organisations seek to imagine the future.
Thanks to all our roundtable participants.
Get in touch to discuss how we can help your organisation prepare for what lies ahead.
Connect with Penelope Cottrill on LinkedIn.