With roaring inflation and low unemployment, business leaders are struggling to get their people to return to the office -- in the U.S., in April, office occupancy rates seemed to have peaked at 43% according to Bloomberg. After all, why would employees want to burn through a $100 tank of gas twice a week and suffer in heavy traffic when they could work from home?
To be sure, people who make things or can only do their jobs by serving people in person must work in close proximity. However, for workers who do not need to be in-person, the survival of companies during the pandemic demonstrates that many businesses could operate without offices.
Indeed, I think businesses should consider whether the benefits exceed the costs of simply shuttering all their office space and allowing their people to work from home (WFH).
From an economic standpoint, it seems to be a no-brainer -- going to 100% WFH would reduce the company's costs of owning or renting office space. Employees would save the time and money of commuting. The vacated office space could solve a big societal problem. How so? If the zoning laws were changed, that office space could be converted into badly needed housing.
What is the point of people working in close quarters? To eat lunch together? As Bloomberg noted, the origin of the word company is two Latin words -- cum (with) and pane (bread). I realize that people enjoy socializing with each other in person -- but how much does a company's success depend on it?
As I see it, there are three kinds of meaning at work that need to happen in person rather than virtually.
1. Setting and achieving goals.
Whether you lead a startup or a large, publicly-traded company, you must work with others to set and achieve goals.
In theory, this could all be done through a combination of videoconferencing and business messaging technologies. However, the process of setting goals involves getting a read on whether your leadership team feels that the goals for their department will contribute to the company's success and whether the goals are achievable.
Moreover, once the goals are agreed to, business leaders need to know what people are doing to achieve the goals. For example, who is responsible for meeting the quarterly sales quotas and do they have enough leads that are likely to turn into signed contracts? Who is in charge of meeting production goals and do they have sufficient raw materials and staffing in the factory to achieve them?
Without observing what people are doing, business leaders have no idea whether people are really doing what is required to achieve the goals, whether the goals are hopelessly unattainable, or whether there are specific individuals who are falling short and can get the help they need before the deadline slips away.
2. Sustaining culture.
Culture -- what people do when the boss is not watching them -- is vitally important to keep people doing the right things. Culture -- such as restaurant technology company Toast's emphasis on going the extra mile for the customer -- flows from what made the company successful when it was getting off the ground.
Sustaining culture when a company hires people outside the founding team is vitally important. Business leaders must ensure that job candidates share the company's values. Test their cultural fit by asking them to describe what an ideal corporate culture would look like or what they think of the quality of the company's leadership team.
Once people are hired, business leaders must reinforce the values by holding public ceremonies to reward people who act according to the company's values. What's more, companies should give more responsibility to people who embody the culture and part ways with those who don't.
All these important conversations work much more effectively when people are in the same physical space. The proximity enables business leaders to observe changes in body language, the interactions between team members, and other subtle clues that are lost when people are working virtually.
3. Creating the future.
Finally, a company will not survive unless it can create a new future for itself as its core business lines mature.
To do this well, as I wrote in April, business leaders must lead a team that collaborates to do the following:
- Identify external headwinds and tailwinds
- Envision problems that will need to be solved in 10 years
- Assess the capabilities needed to solve these problems well
- Pick the new growth opportunities that best fit the company's strengths
People can do these things much more effectively in person than virtually.
While some of these reasons for people to work in-person should be done in an office, others could be done at a hotel or other temporarily rented space.