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.”