A strong culture doesn’t depend on proximity but intentionality.
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By Gustavo Razzetti
December 15, 2022
We got the return to the office debate all wrong. Letting Elon Musk lead the conversation is not healthy for the future of work. His mandate that his employees should work at least 40 hours from the office or “pretend to work somewhere else is misleading. Remote work is not a perk and those working from home are not slackers.
Musk’s ultimatum has given other leaders permission, calling for measures that aren’t needed. Morgan Stanley’s CEO - and many others - recently announced employees must be in the office five days a week.
What these leaders can’t demonstrate is why returning to the office is important. They fail to build a case with facts – stating that “it’s better for the culture” is not enough.
Thinking in binary terms – remote versus in-office – creates a divide rather than a healthy debate. Leaders are missing a game-changing opportunity. When done well, hybrid work really works. Let me build my case with facts and examples, not opinions or media tantrums.
A couple of months ago, the CEO of a large global financial services company reached out for help. He couldn’t convince people to go back to the office. I was surprised to hear that his frustration was disconnected from business performance. All key metrics – from sales and profit to employee engagement and product innovation – were better than ever.
So, why the obsession with wanting people back in the office?
The leader felt strongly that culture was suffering but couldn’t articulate a solid argument to make his point.
A strong culture doesn’t depend on proximity but on intentionality.
Why was pre-pandemic employee engagement as low as 35% if that were the case? In other words, just one out of three employees felt enthusiastic about and committed to their work and workplace even though (almost) everyone was working at the office.
Correlation doesn’t mean causation. If your company culture suffers from a lack of belonging, innovation, or collaboration, that’s not a consequence of where people work from but something else. Physical presence won’t guarantee strong human connection in the same way that remote work won’t magically improve your business results.
Returning to the office feels like going back to how things used to be. That’s the issue with the return to the office debate. The problem is not where people work. Rather than looking back, we need to adventure into the future.
This is a unique opportunity to rethink the workplace, focusing on the work and not the schedule. The future of work is flexible. It’s about integrating the best of both worlds: in-person and remote.
Hybrid work is not about rigid location arrangements – how many days at the office or remote – but the freedom to work from anywhere, anytime. As I explain in my book Remote Not Distant, hybrid is a spectrum with many possibilities. Instead of worrying about where people work, ask: how can people do their best work?
Hybrid is here to stay. Don’t believe what the Elon Musks of the world are saying. We’re not going back to the pre-pandemic workplace. A recession might slow the transformation, but hybrid is not going away. A recent AT&T study found the hybrid work model is expected to grow from 42% in 2021 to 81% in 2024.
Data shows that flexible work really works. Employees want to choose not only where and when they work but also how. Spotify, Airbnb, Allstate, and Target – to name a few – have been thriving since they adopted a work-from-anywhere policy.
This is a common misconception from those who think in binary terms. Even fully-remote companies like GitLab bring their teams together at least once a year.
Airbnb’s work-from-anywhere policy establishes that teams will meet regularly: most employees will connect in person every quarter for about a week (some more frequently).
Slack follows a similar pattern. Most teams have large gatherings once a quarter to bring everyone together and go out for a meal—nothing beats the emotion of eating together.
Smaller teams at Slack have monthly or weekly in-person meetings, depending on each team’s agreement. For example, the sales group meets more frequently to allow junior team members to learn from more seasoned professionals.
“If the office didn’t exist, would we invent it? And if we invented it, what would it be invented for?” Brian Chesky, Airbnb CEO, recently challenged leaders to let go of the idea of the office as we knew it.
The office is the new offsite, as I explain in my book. It should be a space for building interpersonal relationships, collaboration, and doing meaningful work – not shallow work.
Indeed, the number one job website in the world, redesigned its workspace with designated areas for casual collaboration, adding game rooms and more conference space. Movable walls allow people to adjust the space to their changing needs. Data shows that Indeed employees primarily use the office for hosting visitors, attending work events, and social interaction rather than sitting in front of a computer for most of the day.
Often, by trying to come up with the new 9-to-5 workday, organizations are missing the mark. The type of work should dictate their hybrid model.
As I explain in the 6 modes of collaboration in remote teams, not all projects require working at the same time or in the same place. Most people can do their job without adhering to a fixed schedule.
Dropbox’s mission is to design a “more enlightened way of working” so there would be no full return to the office. As Melanie Rosenwasser, Chief People Officer, told Fortune, “Any future of work strategy we chose, we wanted to ensure that employees had control over not only how they work, but where they work.”
Formal interactions among team members have not been deteriorated because people work remotely. Actually, there's a slight increase of about 7% for those working mostly remotely than those fully in the office.
However, the patterns shift significantly when it comes to informal interactions. Employees that work mostly at the office have more impromptu encounters. That's neither a surprise nor a bad good news. It's an opportunity for organizations to become more intentional. In the same way that companies were able to recreate their formal interactions (meetings, one on ones, etc.) when the pandemic force them to go fully remote, organizations should be as intentional to create spaces and opportunities for informal interactions in a hybrid workplace.
A common mistake is creating a hybrid work model that will work for everyone. The realities of each role and team are different – as should be their workdays.
When Citigroup categorized all jobs into three groups - resident, remote, or hybrid – it adopted a blanket approach implementation. For example, all branch-based or data center employees were expected to be fully in the office (“resident”).
In contrast, HubSpot defined three buckets (@office, @flex, and @home) but let employees choose which would work best for them. Rather than telling people how to work, HubSpot invited them to explore how to do their jobs differently.
The use of the office also varies by function. For example, Indeed’s engineering team spends about 50% of its time in collaboration spaces. In comparison, the sales team devotes just one-third to collaborating and spends 44% of its time in focus spaces.
Flexibility doesn’t mean that people can do whatever they want. Personal preferences are considered but team needs should always come first. Successful hybrid teams codify team agreements to avoid conflict and miscommunication.
Dropbox employees don’t need to adhere to a rigid nine-to-five workday. However, everyone is expected to be available for meetings between 12 pm and 4 pm EST. Employees can perform their individual work around this expectation.
Brian Chesky believes, "The office, as we know it, is over.” Airbnb’s CEO is convinced that the pandemic has permanently changed the way we live. This insight has helped the organization to not only recover from the 2020 travel collapse but to thrive.
In the first quarter of 2022, Airbnb booked a record-breaking 102 million nights and posted a revenue of $1.5 billion. The online homestays and experience marketplace grew 70% compared to the first three months of last year – the hybrid policy didn’t harm the business.
Elon Musk is a vivid example of arrogant, unaware leaders who think they know better. Don’t assume that what works for you will also work for your team.
What do GoTo, Mars, Fannie Mae, Mars, Slack, and many other organizations I interviewed for my book have in common?
They’ve all involved people in the process. Asking teams for input has helped them build a successful hybrid model. This doesn’t mean pleasing people – employees shouldn’t dictate but inform your approach.
Listen to your employees’ needs, concerns, and ideas. After conducting an internal survey, Allstate realized that 95% of its employees desired more flexible work. Additional focus groups helped the American insurance company understand that flexibility was vital for people to live their best lives.
Change is always messy. As Rosenwasser admits to Fortune, Dropbox’s hybrid policy did not unfold seamlessly. “The biggest learning for me was that this takes a substantial amount of time,” she explains.
Many employees left because they prefer to work in a typical 9-to-5 schedule. The company needed to overcome the loss of in-person connection – which is critical to building a shared identity.
Subsequently, by intentionally creating “mini-offsites,” Dropbox’s attrition rate fell to the lowest in its history. In addition, virtual social events keep people together and in-person volunteering days facilitate connection across teams.
No, remote workers are not lazier – nor are they less productive.
Stanford researcher Nick Bloom, who has studied “work from home” since 2004, has found that remote work translates into more time working. On average, of the 70 minutes saved by not commuting, employees spend 30 minutes on extra work.
Similar studies validate Bloom’s findings: Remote work either has no adverse effect on productivity or slightly improves it.
Jonas Wolter, a Data Analyst at RTL, was tasked to answer a simple question: “Do we have a reason to implement company-wide rules for office presence?” His employer, Europe’s leading entertainment conglomerate, wanted to use data to understand how remote work affects workplace culture.
The answer may be surprising, but it’s evident, Wolter told me during our interview.
In general, working in a hybrid or fully remote setting is not bad for the company:
There is even a slight positive correlation: the more teams work remotely, the more they identify with their company.
A Dropbox employee survey confirms that its flexible policy has positively impacted people. 78% of employees now feel more productive at work, and 72% state they have a better work and life balance.
To thrive in a hybrid workplace, organizations must focus on the quality of the outcome rather than the quantity (effort and output).
Hybrid work makes employers more attractive both for current and potential employees.
Allstate has always been an office-centric company. However, when the pandemic hit, the 90-year-old American insurance company saw an opportunity to experiment with new ways of working. Now, 75% of its employees are fully-remote (versus 20% pre-pandemic) and 24% are hybrid. The company even closed its headquarters for over 5,000 employees in the northern Chicago suburbs.
Since then, employee engagement has risen – as has the number of applications for job openings.
A study by Atlassian shows that Allstate is not the exception: 83% of employees who work at organizations with flexibility have a positive outlook on their company’s culture compared with 47% of those without flexibility.
Dropbox’s virtual-first play has also increased its employer reputation. Ninety percent of candidates cite its location-agnostic policy as a key reason for applying for a job.
Employee attrition is at its lowest level at Spotify – 15% lower in the second quarter of 2022 compared to the same quarter in 2019. The music streaming company credits the improvement to its work-from-anywhere policy.
Most companies promote diversity but fail to move the needle. It took a pandemic for many leaders to realize that a diverse environment is not about quotas but inclusivity. It’s about designing for participation – to make everyone (and their ideas) feel welcome.
Minorities, women, and introverts – to name a few – felt unsafe in the office. From microaggressions to not being heard, many felt left out.
Remote work is more psychologically safe and inclusive for many. Working asynchronously allows introverts to think before they talk. Being at home makes women and minorities feel safer in their “bubble.” As one interviewee told me, “I don’t have to confront some of the experiences I feel when I’m at the office. I close my laptop and I feel safe.”
Hybrid work has accelerated change for good.
Spotify credits beating its DEI goals to its return-to-office initiative. Roughly half of its new hires come from outside its main hubs (New York and Los Angeles). Among U.S.-based employees, Black and Hispanic representation increased from 12.7% to 18% from 2019 to 2021.
Globally, the number of women in leadership positions at Spotify has increased from 25% to 42%.
Allstate has experienced a similar pattern. As Carrie Blair, CHRO at Allstate, told Business Insider, "It's been a positive outcome that people don't have to be tethered to an office anymore because we have seen a 30% rise in diverse candidates applying for opportunities."
Why isn’t the media talking more about these success stories instead of Elon Musk’s tantrums?
The physical versus remote debate becomes even more intense regarding innovation.
The result of a recent study was conclusive: in-person meetings generate about 15% more ideas than virtual ones. However, the laboratory study felt shaky, sparking an intense exchange on LinkedIn. Not only did it conclude that the “vision field of a screen narrows people's focus,” but it also simply replicated traditional brainstorming in a virtual setting. It failed to facilitate the remote one differently.
I’ve facilitated between 3-6 virtual sessions per week for the past three years - and I’ve seen better results both in quality and quantity than traditional in-person brainstorming. However, that’s not because it’s remote but because my team and I apply different facilitation techniques and tools.
McKinsey has also recently acknowledged that remote teams could successfully innovate. When managed effectively, remote innovation teams avoid unnecessary distractions, experience uninterrupted workflow, and leverage time differences better.
However, seeing in-person and virtual innovation as two choices is not helpful. They should complement each other. Understanding when to use which - and, most importantly, how to combine both - has helped us drive fantastic results with our clients at Fearless Culture.
According to Atlassian’s study, when employees have flexible working options, 71% report their team is innovative compared with 57% without flexibility.
For in-person, however, I question the notion that “the office” itself is good for innovation. There are much better in-person experiences. For starters, the corporate office is not the real world – other options provide innovation opportunities closer to the people whose ideas will serve.
As a McKinsey report states: “Proximity to the customer, instead of to a physical office, can help organizations’ innovation talent avoid the corporate echo chamber and identify and test new ideas faster.”
Diversity and innovation go hand-in-hand. A recent McKinsey study found that more ethnically – and racially – diverse companies outperform their less-diverse peers by 36 percent. A flexible workplace makes it easier to attract more specialized and diverse talent.
Physical proximity or design studios don’t guarantee innovation. If not, ask all the corporations that invested in fancy innovation centers that never delivered on their promises – or investment.
Instead, innovators need a community of like-minded professionals. As one executive told McKinsey, “The pandemic made us realize that we never needed a swanky and costly innovation studio to do our work. What we want is community.”
Studies suggest that employees do expect from employers when it comes to wellbeing.
According to a Workforce Institute survey, three-quarters of employees have higher expectations for how their company supports their mental health. A report from Lyra Health shows that the number of employees who have opened up about their mental health at work has doubled in the last year, from 23% to 43%.
The shift to hybrid work gave Americans 60 million hours of their time back. Recent research by the Federal Reserve Bank of New York found that people reinvest most of that reclaimed time in their wellbeing.
Here’s how:
People have more time to spend in solitude or with their loved ones. Leisure time alone or with household members rose by 2.3 hours.
As Allstate has learned from its research, hybrid work has allowed people to live more balanced lives (which positively impacts the quality of their work). Less commute means financial and time savings. People are investing in taking care of themselves and their families.
Burnout also decreases in flexible workplaces. When people have flexibility, only 14% report burnout symptoms compared to 36% who have no flexibility, according to Atlassian.
According to the same study, team health has also improved. In 2021, 29% reported unhealthy teams; in 2022, only 5% of teams were considered unhealthy.
Intentionality beats proximity – how your team works matters more than where it works from. To thrive in a hybrid workplace, you must bring together the best of both worlds: remote and in-person.
There are infinite possibilities, but flexibility and freedom are vital ingredients. Involve your team in the conversation if you don’t want to miss opportunities. Listen to what employees have to say.
Article by Gustavo Razzetti, CEO of Fearless Culture
Gustavo facilitates courageous conversations that drive culture transformation. He is a sought-after speaker, culture consultant, and best-selling author of the book Remote, Not Distant.
Razzetti is also the creator of the Culture Design Canvas – a visual and practical method for intentionally designing workplace culture. His insights were featured in Psychology Today, The New York Times, Forbes, and BBC.
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