As the U.S. begins to understand the post-Covid-19 world, this much is clear: We are in the early days of a dramatic, long-term shift in how work is done. In this emerging world, the work of leaders will less frequently occur face-to-face, and more of it will be done virtually, by audio, video, email, text, Slack, Teams, or whatever new technologies emerge. In Leading at a Distance, we present what we've learned from interviews with more than 100 CEOs, CHROs, and top business leaders about how companies are preparing for the new world of work. In the excerpt below, we take a look at the factors that have lead us to this point, and how they will influence the future:
"If there is an office in the future," wrote Charles Handy in a 1995 Harvard Business Review article on virtual work, "it will be more like a clubhouse: a place for meeting, eating, and greeting, with rooms reserved for activities, not for particular people." Admittedly, most organizations have not reached that point yet, but the way we work has certainly changed dramatically since Handy's predictions. Before the pandemic, some organizations instituted telecommuting and created "hoteling" options for employees who visit the office only occasionally. Now, as hybrid forms of work grow more common, most organizations are preparing to adapt to virtual work as the new normal.
History will look back on the pandemic as a dramatic accelerator of this trend. Most CEOs and CHROs we interviewed for Leading at a Distance take pride in the fact that they were able to move thousands of employees to working from home in a matter of days. The dramatic shift was made possible by the technology infrastructure that had been built up over recent years. No technology company saw its usage jump more dramatically than Zoom, whose market capitalization rose 10-fold to $160 billion between January and October 2020.
But even before Covid-19, there were reasons why some organizations were expanding their reliance on virtual work. In the war for talent, many organizations have realized that they need to hunt further afield for the very best talent and create the conditions that allow them to work from afar without relocating. Being able to hire people who live anywhere is also a major advantage for organizations pursuing increased diversity in their workforces. McKinsey and Leanin.org's Women in the Workplace study found that 70 percent of the companies reported that remote work will allow them to increase the diversity in their hiring practices. In addition, the report illustrated that remote work expands options for employees who are caregivers or who have disabilities that interfere with travel or long commutes.
The second reason for the increase in virtual work is the combination of technology advances and globalization. Multinationals have always had to develop systems to manage through distributed organizational structures and share information to keep things on track. However, as technology has increased people's ability to work together virtually, instead of having a separate team run each of a company's operations in different countries or regions, firms have increasingly used distributed teams to work together across locations and time zones to capitalize on shifts in the marketplace, innovate, and bring new products to market.
Using virtual collaboration can also be an important benefit to an organization's clients. Rather than simply drawing on local talent in one area, or forcing their professionals to travel to client locations, as had been done for decades, nowadays professional firms can tap into teams throughout the world to draw on their thought leadership and expertise -- at a much lower expense.
And of course, virtual work offers enormous potential savings on real estate, especially in high-cost cities. Some technology companies, such as Stripe, have offered bonuses for employees who relocate to less expensive cities to help minimize commercial real estate expenses. More companies are likely to follow suit and embrace the work-from-anywhere (WFA) trend.
Some leaders see demographics as another driver. "By 2025, 75 percent of the workforce will be from the millennial generation," says Bill McDermott, CEO of ServiceNow, in our conversation. "These employees didn't want to work from office cubicles before Covid-19, and the pandemic only accelerated the need for global businesses and organizations to address this workforce reality. It's essential to give workers choice and make digital businesses work for them; and this reality will persist after we emerge from the pandemic."
That's the good news. Despite those widely cited advantages to working virtually, our research found that many organizations that took the leap into the virtual world were not fully equipped for success. In a 2008 study we conducted of 50 global virtual teams, we found that many virtual teams were not performing to their full potential due to ineffective team leadership, lack of accountability among team members, lack of time to focus on the team, and lack of skills training. In fact, that study found that more than 25 percent of the virtual teams were not performing up to par, largely because organizations and leaders were approaching work as if the dynamics were the same as working in the same physical location.
Even though that study is more than a decade old and was conducted in a dramatically different context, our central finding remains true to this day: Far too many companies and leaders have not recognized or appreciated the need to operate differently when at a distance.
The abrupt shift to remote work during the pandemic revealed other challenges. Millions of professionals complained of Zoom/video burnout. Many recognized the widespread challenges managing the blur between work and family life, as well as the increased stress from the health risks and economic crises. The pandemic has been particularly hard on working mothers, who are now spending 71 hours a week working compared with about 50 hours for fathers, according to the Leanin.org study.
A 1989 book by sociologist Arlie Hochschild called The Second Shift found that women tended to assume most of the household and child care responsibilities, even though more women were working. Thirty years later, Covid-19 demonstrated that this remains true. As schools shifted to all-remote or hybrid setups, many parents found themselves also trying to be educators, creating tremendous stress and challenges. Yanbing Li, VP of engineering at Google Cloud, shared a phrase that captured this perfectly. "There's an expression in Silicon Valley," she said, "that with this pandemic, we're all in the same storm, but in different boats." Yanbing is right, that we all have different home setups, family demands, support systems, individual contexts, and financial circumstances. Even though many people are now not commuting to the office or traveling for business, we hear endless stories about people working harder than ever. According to one study, U.S. employees logged 22 million extra hours working during the first months of the pandemic. While technological advancements have made collaboration easier than ever before, people have experienced overload.
Finally, as organizations began planning for after the pandemic recedes, many are focused on what a hybrid solution may look like -- a workforce that is partially in the office and partially working remotely. This blended approach presents its own set of challenges. For example, in some company cultures, remote workers feel that their colleagues who are in the office more receive preferential treatment. Other organizations struggle to conduct effective meetings with some people sitting around the conference table and others beaming in on a video screen.
As companies shift to virtual work, it will be especially important for leaders to be mindful of potential biases and make sure that they are treating people equitably. In our interviews with senior leaders, we have even seen examples of some organizations creating a new role such as the head of remote work and culture, and others who are focused on virtual productivity and collaboration. If the current trends continue, these roles may well become ubiquitous.
For more from Leading at a Distance, please check out this excerpt on Fast Company.
Excerpted from Leading at a Distance: Practical Lessons for Virtual Success. Copyright 2021 by Spencer Stuart International Ireland Limited. Published May 25, 2021, by John Wiley & Sons. Reprinted by permission.