Over the past few weeks, the debate on remote work has become more intense. Of note, Tesla CEO Elon Musk told employees they could continue their hybrid work arrangements if they spend at least 40 hours a week in the office. This was, of course, a tongue-in-cheek way of telling employees they wouldn't be working from home anymore. In fact, Musk emphasized that those 40 hours must be at the main Tesla office and not at a satellite location.

Musk isn't alone, as other founders and managers have voiced a similar sentiment. 

Over the past two years, remote work has become more and more controversial. For most startups, it was clear that if a job offer included the requirement to be in the office full time, the likelihood of a candidate accepting was nearly zero.

At the same time, many managers I've spoken with believe that employees will ultimately return to in-person work, as working from home (though quite productive and time-saving for many employees) hurts innovation and harms average-performing employees.

Musk's announcement is targeted at those who don't want to return to the office; a way to navigate the cultural adversity of remote work in a tough economic situation. One of the main models of cultural evolution within a firm is the attribution-selection-attrition (ASA) model. This theory holds that the personal characteristics of those who work for an organization are likely to converge over time, leading to the consolidation of organizational culture. Musk is essentially accelerating this theory as he has announced his set of values (the office is where work is done), ensuring that those who disagree with it leave, and that those who apply for jobs at Tesla believe and accept it.

It's easy to see how this may start a whole process of realignment of not only Tesla but the entire U.S. economy. Organizations that believe work can be done remotely will attract employees who want to work from home, and those that believe work must be done in the office will attract employees who prefer to be in the office. If Musk's strategy works, it will create a cohesive culture of people who believe in working hard from the office. While some may think this to be a toxic hustle culture, others may think it's a great recipe for building a cohesive team that's culturally aligned.

So, how do you decide what's best for you as an employer? Let's break down the options.

Stagnation

The risk in this approach is that firms may lose out on top performers who prefer to work remotely. Given the shortage of skilled labor, this may become a real issue. But it's also part of a broader issue: cultural stagnation or cultural lag. As you go down the ASA model, you create an echo chamber of people around you who strongly believe that the model they currently employ is the correct one. But what if it's not? For managers who grew up in a world where everything happened in the office, letting go of this "attachment" will be difficult.

To avoid stagnation, multiple questions must be answered: How critical is the office for day-to-day activities? Are there any activities that can be done remotely? Do I need my employees to be in the office every day? Can we still maintain the culture we want, even if some employees spend some time working remotely? 

Divergence 

Some managers are taking the same stance as Musk, while others are acknowledging that they don't know what the right approach is. This last group is choosing to allow for a new culture to emerge; one that is hybrid and, thus, more flexible. But there's a risk here as well, of cultural divergence, when pockets within the organization have different sets of values, i.e., those who come to the office and develop a social life around it, and those who work remotely and have a virtual relationship with their teams.

To avoid divergence, firms must find different activities that can drive team cohesion and value alignment, such as arranging regular in-person meetings. Airbnb, for example, allows its employees to work remotely, but every team has to meet quarterly (also in remote locations) for at least one week at a time. Startups will also have to be much more careful and hire people based on cultural fit, knowing that it's going to be harder to align values afterward. 

In the short term, the risk for divergence is stronger, but in the long term, stagnation is a bigger threat. As new technologies arise, and new cohorts of workers come into the workforce with different values, the inability to change will be a much harder challenge to overcome than the inability to execute. As firms decide how to handle the impending recession, while trying to retain employees who have become used to working in a hybrid setting, the question is going to become more important than ever.