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Quartz, the cutting-edge NY digital news outlet, caught my eye last week (March 21, 2017) with this headline: “IBM, Remote Work Pioneer, Is Calling Thousands of Employees back to the office.”

This is a big change in direction for Big Blue. As recently as 2009, IBM had 40% of its hirelings working from home.

In fact, a number of companies have quietly begun shifting their home-based associates back to their corporate offices. This trend began to emerge publicly with Marissa Mayer’s startling decision to end Yahoo’s remote work policy back in 2013. Facebook now offers a $10,000 bonus to employees who live close to their office, and many other companies, like Best Buy and Reddit, no longer allow work from home. By September of this year IBM’s over 5,500 marketing people will have to work from physical offices in one of seven central locations: San Francisco, New York, Austin, Armonk, Boston, Atlanta, or Raleigh. Remote work will no longer be an option. (IBM already applies this policy to departments like security, procurement, most of IT, Watson, Watson Health, cloud development, and artificial intelligence.) Companies increasingly feel collaboration, creativity, and community are better fostered in a central office.

As an early successful adopter of the virtual office model with my first entrepreneurial firm, Corporate Rain, in the 1990s, I have always thought “What’s not to like?” After all, you save on office rent, office expenses, and commuting. And research indicates that remote workers are more productive and put in more hours than their office-based kindred. Also, for many people, it has been a partial solution to the work-life balance problem. According to the Gallop Poll, 25% of all American workers are presently laboring remotely.

That said, however, I am increasingly coming to a sense that for many companies, particularly large ones but also some of the small ones, there is a compelling rationale to centrally co-locate their office communities again.

For example, Best Buy reported that productivity had an average increase of 35% in departments that shifted to employees working whenever and wherever they wanted. However, there is a different set of benefits that ensue from central offices–and most of these benefits center around creativity and innovation.

Note John Sullivan, professor of management at San Francisco State University, a specialist in HR strategy–again quoting from Quartz. Sullivan says, “It turns out the value of innovation is so strong it trumps any productivity gain….[Remote work] was a great strategy for the 90s but not for 2015.”

Certainly established companies are searching for how to solve the conundrum of creativity and how to come up with the next transformational eureka out of their behemothic institutions.

They long to infuse entrepreneurial passion and disruptive imagination into their titanic old-line firms. Their hidebound strategies aren’t working, therefore renewed office centralization is increasingly favored as a tool to help create a more generative, communal, cohesive business ambience–hopefully one more like the entrepreneurial laboratory.

Jeff Smith, IBM’s CIO, advocates agile management based around “squads”. He says “…leaders have to be with the squads and the squads have to be in a location.”

There increasingly is a valuation of what many call “the watercooler effect.” (Steve Jobs certainly appreciated the value of how chance meetings and accidental conversations can lead to disruptive ideas.) Note a recent study by Kevin Rickman of George Mason University and Michael Pratt of Boston College, who found that increased offsite work can have very negative effects on the office environment. Mason and Pratt state: “If the office is going to become a collection of employees not working together, it essentially becomes no different than a coffee shop (though perhaps with better internet and worse coffee.).” That may be a bit overstated, but perhaps reflective of the most au courant new HR thinking.

When asked what percentage of Google’s workers telecommute, Patric Pichette, then CFO said, “Our answer is: As few as possible.”

4 Responses to “Bringing the Home-Based Worker Back to the Mother Ship”
  1. Richard Hunter says:

    I have found that even working as a consultant it is good to have a “desk” at the company I am currently working with. When working from home I would email work and questions to the company, then have to wait until the recipient checked email and responded – sometimes and hour, sometimes several hours or the next day. By being in the “office” when working on that project I can see if someone is out, in a meeting, or available; and judge my direction with that visual information.
    Until the day comes when working from home means having rapid visual affirmation and communication with all other pertinent personnel, I see it as failed HR experiment. Even when you are a one-man company, it is good to work in a shared office cooperative to be in the presence of peers. We are a social animal, or at least some of us are.

  2. tim askew says:

    Makes good sense, Richard. Thanks for sharing your personal experience. and thoughtful conjecture. Warm regards, Tim

  3. Patric Hale says:

    Nice article, as always, Tim. The “innovation vs productivity” issue, however, doesn’t need to be “either-or”. Innovation normally comes when people are stumped by “the market” and need to share experiences to find solutions, or the market presents them with “new ideas” or “new challenges” that must be addressed. A company can assign an afternoon (not Friday!) to have a group meeting to address these issues that would also be focused on “team building”. Ultimately, few people actually get paid “team bonuses”, nor are corporate functions “collective” in their pursuit. Most goals have always been individual. As the saying goes: “The things that get paid for are the things that get done!” So the “productivity” issue matches this corporate practice and will continue to do so until the rules change.

    The “Innovation day” (for lack of a different name) is the opportunity for people to share ideas that work that others haven’t thought of. Whatever works for the individuals separately become the collective and therefore benefit the company as a whole – one person at a time.

    I recall my time as the #2 person at CNN in London, where the amount of time that was wasted by people simply “stopping in to ask my opinion” when it was badly disguised schmoozing was great, along with the “meetings” to “brain storm”. I restructured those so every meeting had to have (1) An objective, that is, “how do you want the meeting to end?”; (2) what was the agenda? that is, whoever suggested the meeting had to propose and get sign in from a majority of the staff, and then was responsible for putting together the agenda; (3) had to set the timetable and then get reconfirmation from everyone, too; and finally (4) “monetize” the expected outcome of the meeting as much as possible. That is, how was the problem or opportunity going to make or save more money for everyone and the company as a result of the meeting; they had to forecast. These things had to be done before the meeting took place.

    Since we were a sales organization, and everyone was essentially compensated by commissions and/or bonuses, and I as manager the same by getting everyone to surpass their budget targets, the collective became a function of the individual and vice versa. Extra bonuses were given for the ideas that made everyone more money that surpassed budgets.

    As many of us – including you – who work “remotely” (I don’t like that term because it seems out of touch and out of mind), a formal office isn’t necessary for even this weekly meeting. Hotels, McDonalds, and Starbucks thrive on these kind of meetings, and the food expense is nothing compared to the fixed asset overheads.

    That’s my two cents, FWIW. Keep up the good work and let’s catch up over coffee soon – near your place or mine or somewhere in between….

    P

  4. tim askew says:

    Great case study, Patric, though somewhat at odds with my essay. Sometimes I think I should just have thoughtful readers like you write this weekly blog. 🙂 Tim

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