I recently wrote a post about how SaaS and mobile technology have completely changed the landscape for enterprise productivity. It’s just another example of how “software is eating the world” – in that case, untethering the means of “doing work” from traditional modalities (like a perpetual license OS and hardware stack). What I want to talk about today is how we’ve effectively untethered productivity not only from how it used to be done, but also, increasingly, where.
In the last several years, we’ve seen tremendous growth in cloud-based productivity software: everything from CRM to marketing tech to bread-and-butter tools like word processing and spreadsheets. This is opening up new use cases that just weren’t possible before, driving prices down, and drastically changing the way many organizations collaborate. But it has also had another effect whose impact has just begun: changing the way companies think about localized office environments, versus remote working.
In the same way that industrial-era concepts like “punching the time card” or “being on your lunch break” don’t really fit the reality of the world many of us live in today, the traditional office-worker model is quickly tracking towards obsolescence. The arguments for it are mostly driven by executives’ traditional cultural choices rather than business requirements – not unlike wearing a suit and tie to the office used to be. In the same way, I believe we’re living in the twilight days of the centralized office working model.
I’m an IBMer, which means that I work from home pretty much exclusively. Nor am I an outlier – the vast majority of folks I interact with at Big Blue do the same. Many people are really surprised to hear this, which I chalk up principally to IBM’s reticence to talk about itself; but according to IBM HR, roughly 40% of IBM employees globally now work remotely, meaning either at home or at a client site. In the software and consulting divisions, these proportions are much higher.
For IBM, this distributed working model was probably never really a choice. The company’s massive consulting business is, of course, an inherently “remote working” operation. On the software side, IBM makes so many acquisitions that it would certainly be inefficient, and likely impossible, to consolidate personnel and material into office parks. For a company of nearly half a million employees (more when you count contractors), a widely distributed working model is probably the only realistic option for today’s IBM.
The “Office Space” model
It almost goes without saying that the traditional model of employees commuting daily to an office park campus is environmentally wasteful, inconvenient (particularly for those with families) and expensive for the company, which must maintain expensive real estate. It’s also unsurprising that the model is repeatedly shown to be unpopular with employees: a recent study showed that a full 79% of U.S. workers would like to have the option of working remotely at least part of the time. The reasons why employees typically enjoy working remotely are pretty obvious: it’s easier to adapt to home life and gives employees more of their time back from commuting, thus helping them to be more productive and generally happier.
Nevertheless, like other traditional organizational choices that stubbornly remain “default” options, these and other drawbacks of centralized working models are rarely directly compared to remote alternatives. For example, the challenges to effective collaboration for remote teams is cited as a drawback to offering remote options, while simply assuming that centralized teams are able to collaborate as a matter of course. As we all know, this is often not really the case.
The benefits to firms of letting employees work remotely are pretty obvious too. The most obvious is that they can save on investing in office space (where employees don’t want to be anyway). But also important is that it untethers talent searches from a specific geographic area. When location isn’t a decisive factor, your company can recruit the best talent available anywhere. In an era of social talent searches and hiring, this is a natural next step.
Effective collaboration is the future
We’re quickly moving into a world where effective team collaboration, not butts in cubicles, is one of the most important factors in creating great products. This has made smart hiring all the more important – it’s not just about finding the right skill sets, but also the right attitude and aptitude to tackle new and unfamiliar challenges, adaptability and experience. The explosion in the popularity of human resource analytics and recruiting software bears this out – new types of work have necessitated new ways of locating the right talent.
When Marissa Mayer famously banned remote working last year for Yahoo’s 12,000 employees, she specifically cited challenges to collaboration and productivity as reasons for doing so. In particular, Mayer consulted the company’s VPN logs to find out whether remote employees were logging in, and found that many were, in fact, were abusing the system. That, of course, was a symptom of a much larger problem at Yahoo: rock-bottom morale, an organizational mess and strategic confusion. Unfortunately, the working model itself was blamed, and not the larger morass of issues Yahoo faced. Today, Yahoo says it has improved (kind of), but how much of that is due to where employees do their work is pretty unclear.
Workforce collaboration, whether in person or remotely, is a big challenge for companies of almost any considerable size – but it’s largely solvable. As they say, we have the technology. With email, instant messaging and telephones, there’s little excuse for not being able to reach someone anymore. Indeed, mobile connectivity itself is often blamed for elongating the work day and building pressure for employees to always be available, even at home.
But SaaS productivity tools are now driving this shift too. Case in point: the newly renamed “Google Apps for Work” suite, which Google claims over 5 million businesses are already using. (I suspect the real number is actually far more than that, with many workers using Google tools without permission from their company IT departments.) Cloud software is so widely embedded into our personal lives today that it’s only natural for people to want to use the same at work.
Microsoft has answered this challenge to its legacy turf with Office 365, as I wrote about before. In the company’s current pivot towards becoming a “productivity and platform” company under Satya Nadella, I think we can expect to see greater acceleration towards moving more and more aspects of “work” to cloud platforms – mostly because Microsoft sees its opportunity in being the company that owns those platforms. That’s where all the growth is.
These tools are incredibly important, because instead of being some sort of substitute for the “real” tools at work, they erase any meaningful distinction between doing your word processing, spreadsheets, presentations and more at the office or from anywhere else.
Software is unbundling the office
To sum up: we have cloud-based productivity applications (Google Apps, Office 365, and everything in between); the myriad of traditional communications options (email, phone, IM, etc.); and emerging platforms like Yammer and Jive, along with bigger social collaboration tools from IBM, Oracle, SAP and others. Many, if not most, of the most critical software tools being developed for enterprises today are designed for SaaS delivery by default.
All of this begs the question – what’s left in the office?
I most frequently hear three main arguments for centralized working models:
- It’s easier to measure employee productivity when they’re on-site
This is really a more polite version of the “working from home means you’re slacking off” stereotype, which was probably more widespread 15 or 20 years ago than it is now. It’s easily disprovable, however, and today borders on silly. Deadlines are either met or missed; products are shipped or not; messages and meetings are either responded to and attended, or they aren’t. For almost any variety of work done on a networked device, there is a measurable aspect that can be tracked and evaluated (and probably should be already, regardless of where the worker sits). More broadly, though, if you can’t trust your people to work conscientiously without managers looking over their shoulders in a cubicle, the biggest problem is not where employees sit. It’s who you’re hiring.
- Working in person is uniquely valuable
In some circles, there is a near-mystical value attached to face-to-face interaction. But anyone who has spent at least some of their career working in a traditional office format knows that, to put it charitably, not all face-to-face meetings and interactions are valuable for productivity either. Working remotely doesn’t exempt you from pointless meetings, of course – but it can make some of them easier to ignore. (Personally, I wield the “Decline” button ruthlessly on meeting invites.)
I would agree that some types of meetings can be better done in-person, but these are rare. Human beings are inherently social beings, and in-person interactions can be incredibly valuable for building teamwork and cohesiveness. But these are not arguments for banning remote working entirely. Instead, they’re good arguments for ensuring that remote teams still get regular opportunities to meet in person, while still preserving many of the advantages in the remote model.
- “Working remotely wouldn’t work for what we do”
Many, many leaders love to believe that their company’s work is the equivalent of using rocket science to split the atom while performing brain surgery. Needless to say, this is almost never actually the case. Without minimizing the complexity of what many of us do, I almost never encounter tasks that cannot be done perfectly well in a remote setting. In fact, extremely complex tasks often require a high degree of focus and uninterrupted concentration, which remote working is actually much better for.
Breaks with tradition take time
Obviously, evolving away from butts in cubicles in office parks will take time. The tradition of being “at the office” is deeply engrained in our work culture, and the idea of building a unique and cohesive company culture without it may seem perplexing. But adoption of the tools that decouple worker productivity from a company’s physical location is happening, making the default centralized worker model less necessary than ever. For companies that have not yet invested deeply in expensive physical plant, a centralized model may soon become an unsustainable cost. And no matter how engrained traditional models may be, it is the nature of unsustainable models that they eventually end.