CURT NICKISCH: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Curt Nickisch.
Remote work, especially hybrid work, exploded far and wide during the COVID-19 pandemic. In the past five years, companies have made substantive changes in their IT, workplaces, and policies, and it’s had a huge impact on the lives of many workers. Today there’s a clear shift back in the other direction. More CEOs are telling workers to come back to work onsite across industries: financial services, government, even technology companies like Apple and Amazon that you’d think would be the most prepared to support effective remote work. Their argument? That collaboration, communication, innovation, and productivity suffer if you’re not present in the workplace.
Today’s guest says leaders face a much more complicated dilemma than the binary choice between remote work or return to the office. His research shows that, for some companies, it is optimal to work in-person, but remote work gives a clear competitive edge for many others. There are strategic choices to be made between different types of hybrid work, quarterly, monthly, and weekly. He’ll break down the specific management practices necessary to make those arrangements effective.
We’re joined today by Raj Choudhury. He’s an associate professor at Harvard Business School and the author of the new book The World is Your Office: How Work From Anywhere Boosts Talent, Productivity, and Innovation. Welcome, Raj.
RAJ CHOUDHURY: Thank you so much. Great to be here.
CURT NICKISCH: Now we had you on the show speaking with Alison Beard back in October 2020, which seems like a lifetime ago. What has been the real change and shift that you have seen in these last five years?
RAJ CHOUDHURY: I think the first thing that we have observed is a very stable pattern where about 25 percent of the days workers work in the economy in aggregate are now being performed in a remote way. Before the pandemic, this was about 5 percent. This is a 5 percent to 25 percent jump. The really interesting pattern has been across multiple data sources that I’ve looked at, it’s been a very stable 25 percet. Yes, we see all these Amazon stories and other stories in the media, but the aggregate number is very stubbornly around 25 percent.
My interpretation is that we see the stories on one side of the spectrum, and not that Dropbox is shutting down their offices, or there are many other companies like Nvidia, Microsoft, Citibank sticking to a very stable pattern. The other thing that I think has changed in the last five years is now we know a little more about the plane that we were building while flying.
CURT NICKISCH: One thing I like about your book is just how realistic you are about some of the challenges. You even point out that, for some companies, they really should be in the office. When is it something where getting people back full-time in-person gives you that strategic advantage? What situations are we talking about here?
RAJ CHOUDHURY: The unit of analysis should never be, in my opinion, the company, or neither the person. It should always be the team. The team should assess based on what the team does, the nature of their work, their tasks, whether the project is an early stage project, or a mature project, or a project that’s winding up. And also, based on where people on the team live. They need to decide the frequency of in-person and the venue of in-person.
The critical element here is that whatever the team decides, whether the team decides to meet every week in the downtown office, or to meet quarterly at a retreat or an offsite, it needs to be backed up with the appropriate management practices. You cannot expect work from anywhere to work if you are still focused on management practices from the 1980s, and if you’re still onboarding like you would do in the 1990s. You need to really not only update your technology, but more critically, you need to update your management practices.
CURT NICKISCH: What are some of the clear obstacles that companies need to address, the challenges that workers have when they’re working remotely or using hybrid work?
RAJ CHOUDHURY: There are three challenges in my opinion. The first one is isolation, that people might fall through the cracks. They might be the only person in that geography with no team members around, no one to tap the should. The second challenge is communication because, as you allow work from anywhere and tap a more national or even a global labor market, you’re going to encounter time zones; the team might be distributed across multiple time zones. The third challenge is socialization. How do we develop the social ties that are critical, especially for new hires and younger employees?
CURT NICKISCH: Help me understand the difference between isolation and socialization.
RAJ CHOUDHURY: Isolation is just not having someone to ask a question. Socialization is where you’re developing the deep social ties within the team where they develop trust. You’re also developing the broad social ties across other departments and other teams, where you need to know someone in accounting or someone in finance in case there’s a problem.
CURT NICKISCH: And your research shows that all three of these are real. These are often things that you hear cited by opponents or people who question the effectiveness of hybrid work. But your research shows that these are valid concerns that need addressing.
RAJ CHOUDHURY: Oh, absolutely. I’ll just give you a quick example. So, on the communication problem across time zones, along with a couple of colleagues, just Jasmina Chauvin and Tommy Pan Fang, we did a study to document actually how time zones constrain synchronous communication. We used daylight savings in that experiment to tease out the exact effect of how being two time zones away versus three time zones away effect how people change their communication patterns.
The effect was very strong for routine workers. When they experienced greater time zone gap because of daylight savings, they just reduced the number of synchronous calls that they were having. This was, of course, a pre-pandemic dataset. There was no Zoom, but they were having calls on Skype. Then for the non-routine workers, people who were in R&D or product development, the volume of synchronous calls didn’t go down, it just shifted to later hours. I think many of us have experienced that, where we have done team calls at 10:00 PM or 11:00 PM at night because our colleagues are in different time zones.
An additional thing we find there is that workers from certain countries were especially disadvantaged because of that, given the norms of when people work. Women also were especially affected by that. That just told me that, when you have a distributed team because of work from anywhere, there needs to be concerted effort to solve that problem.
CURT NICKISCH: When it comes to hybrid work, I know one question on a lot of people’s minds is is there some kind of optimum number of days in the office a week or month, versus days from home? Because that’s the conversation you can hear from a lot of people. How many days do you have to be in the office?
RAJ CHOUDHURY: The first thing I’ll say is that, to me, the question should be not phrased as days in office, it should be days in-person, because office is just one place where we could be in-person.
I think the evidence, the scientific evidence there is evolving. We have a study that’s published, and our study was conducted in a sample of HR workers. What we did is, for nine weeks, every day we ran a lottery to determine whether each worker in our sample would work from home or work from the office. Then at the end of the nine weeks, we collected lots of outcomes.
So this is a randomized control trial. We find that workers who were in-person for 25 to 40 percent of the days, they did the best. They did better than people who were more in office or less in-person. The interesting thing is, because of the randomization, the 25% in-person doesn’t mean 25% every week. If you think about 25%, it could mean a day a week. It could also mean a whole week every month, which is also 25%. It could also mean a couple of weeks every two months.
That opened my thinking to saying that, yes, there is some number. I think my honest suggestion is every team should run their own experiment to figure out what is the sweet spot. And once they know the sweet spot based on where people live, they can decide how frequently to meet and where to meet.
CURT NICKISCH: You lump some of these different arrangements into some clear groups. Quarterly hybrid, monthly hybrid, and weekly hybrid. Can you break down those models for folks who don’t know?
RAJ CHOUDHURY: The weekly hybrid is I guess what is traditionally called hybrid, which is where you go to a company office typically, for two days or three days every week of the month. I think there, the most important thing is to ensure that everyone in the team is showing up on the same days. Because if you and I are on the same team, and you go to the office Monday, Tuesday, and I go to the office Thursday Friday, then that’s a complete breakdown of the system. Then we never see each other.
The monthly hybrid model is where we work from anywhere, but we get together one week every month in some predetermined location. That allows for what I call regional work from anywhere. A person could live in Connecticut, but take the train down to New York and stay at an Airbnb one week every month. That’s essentially four Airbnb nights.
The other model which many teams are practicing is the quarterly hybrid model, where now you can nationally work from anywhere. You can live anywhere in the U.S., and you need to go and spend a quality week or 10 days with your team every quarter. That retreat can happen not in a fixed place – the location can travel around from coast to coast, making it fair and easy for everyone to attend.
CURT NICKISCH: I’m sure a lot of people immediately jump to the economics of this. They start thinking about the costs of travel, of bringing teams in, or doing a retreat quarterly to different places. They start thinking about having offices that might only be used one week a month, for instance, under a monthly hybrid. How real are those costs, just in relation to the benefits?
RAJ CHOUDHURY: Yeah, it’s a great question. I think for decades, we’ve thought about the costs of hosting workers as a fixed cost. We invest in creating an office, the leasing costs, and whatnot. I think this work from anywhere phenomena and this movement is a great opportunity to convert the costs of in-person to a variable cost.
Why should a company take a 20-year lease if teams are meeting all over the country at their own convenience? I think one interesting thing, they could meet at a co-working space, they could meet at a conference. The sales team that I’m studying, they go to sales conferences all over the country. They have decided to stay back for a couple of days after each sales conference to do a deep in-person social bonding time.
The other interesting thing that’s happening is now there are companies which are having this Airbnb model for working spaces. I don’t want to evangelize any company, but there are at least a couple of companies that I know of that are doing really well. Where you can go to their website and find office space around the city, or the state, or the country that you could book for a few hours or a few days. I think there are lots of models where now real estate costs are becoming a variable cost instead of a fixed cost.
CURT NICKISCH: For quarterly hybrid, monthly hybrid, weekly hybrid, are there certain kinds of companies or industries that really speak to one of those models over another? What questions should leaders be asking themselves when they are trying to decide between these different formats?
RAJ CHOUDHURY: I think it boils down to, again, the characteristics of the team. When we talk about industry or company, there are multiple kinds of teams in any company. Even in financial services, which has been extremely conservative with this model, there are technology teams in financial service companies. So if you mandate a every week hybrid model, or a five-day in-person model, you’re going to lose your tech talent in a bank or in an investment bank, because they have lots of outside options in the tech world.
I think the prudent thing to do, in my opinion, is not do a top-down, one size fits all, all company mandate. But rather, put some broad guidelines, like I said, 25% in-person days, or 40% in-person days. Then allow teams or departments to choose what model works best for them.
CURT NICKISCH: Let’s go through each of those challenges then and talk about what managers need to consider. Let’s start with isolation. This idea that you’re bringing in workers who are, because they’re where they are and because where their managers or team members are, they feel like they’re flying a little blind and don’t have what they need to really succeed.
RAJ CHOUDHURY: So for this isolation problem, there are two kinds of solutions. One is focused on knowledge codification. That now, we need to change the culture of the company from listening and speaking to reading and writing. If I’m the only person in my team in, I don’t know, Idaho or in Boston, and I don’t have a way to tap a shoulder and ask a question, my alternative is to go to a source of knowledge and read it up.
That’s what the GitLabs of the world have done very successfully, and there are hundreds if not thousands of such companies now, what I call the all remote companies. Git Lab, which is about 3000 or 4000 people. There’s a company called Deel, which is about 12,000 people. Zapier, which is 800 or 900. There are many, many more, and they don’t have any headquarters, any regional office. They’re just completely office-less. But they all do retreats. They do team retreats and they do company retreats.
CURT NICKISCH: Explain the codification part, the reading and writing instead of speaking and listening. I thought this was very interesting in the book. You actually gave examples of companies that asked people this when they hire, whether they are the type of person to take the time to document processes because that’s the only way the system works.
RAJ CHOUDHURY: That is correct. And it’s a cost of living where you want to live. I think my learning has been, among many others, that this way of working really benefits introverts. Because if you think about meetings and who speaks at meetings, it’s usually the manager and a few extroverts. There are many people sitting in the room, quietly nodding their heads. But those people might thrive in an environment where they’re writing up their work and reading other people’s work.
The final thing I would say here is now, with generative AI, it is so much more easier to codify knowledge in real time. There are many solutions. I visited a company in San Francisco a month back, they have a product which transcribes every Zoom call, every call that you can have. It’s much easier. Then you can prepare a summary of the call. It benefits companies in many ways. If I’m a new employee who’s joining a project that’s three years old, I now have a repository to read up quickly and generate a summary of what’s happened on this project before I joined. I think knowledge codification is hugely beneficial. It was a hard task, because no one likes to read and write. But now with gen AI, I think the work has become much easier.
CURT NICKISCH: What about the communication challenge to hybrid work?
RAJ CHOUDHURY: The communication challenge to work from anywhere, especially if people are living across multiple time zones, is that you cannot do a synchronous call for everything. There are many solutions and I’ll just highlight two again.
One is where you have to embrace some form of synchronous-asynchronous mix. Where you have to try to at least allocate some part of the communication to asynchronous, where the manager cannot expect a response just in that moment. You have to trust that people will respond to your question in Slack whenever they wake up in their time zone.
Extending that, what I found is that some of these successful all-remote companies also practice brain writing quite effectively, which is the parallel of brainstorming. Brainstorming is when, of course, we are all in the same room or the same Zoom room and we’re sharing ideas. Brain writing is where we are sharing our ideas and commenting on each other’s ideas, but in writing. That, again, the research shows is helpful for many people because when you are brainstorming, you may not get the best idea in that very moment. But if you suggest an idea and I take my dog for a walk, maybe in that deep reflective moment, I’ll come up with a better response to your idea.
I’m not saying we should do away with brainstorming, I’m not saying we should do away with Zoom calls, and Team calls, and Google Hangout calls. But you know, we have to put asynchronous in the mix. Again, this is a learning curve and teams might find it hard initially to do. But like anything, our muscle memory develops on these management practices.
CURT NICKISCH: What about socialization then? That seems like one of the trickier ones that have confounded a lot of leaders who, for a long time, all they could think of was happy hours or some kind of activity like that to try to bring workers back in-person.
RAJ CHOUDHURY: Correct. I think what I’ve discussed at length in the book is this idea that it doesn’t matter if you’re meeting in an office, or an offsite, or a co-working space. That’s just the venue. The purpose of going to these in-person events in a larger group is trying to have serendipitous conversations. If you go to the office campus, you’re hoping to bump into some people and have conversations that are serendipitous.
We’ve had longstanding research starting from MIT Professor Tom Allen’s book in the 1970s which shows that these serendipitous conversations in the office typically happen within 40 meters of where people are sitting. It’s very siloed. It’s based on the floor and the people on your floor. If you’re on different floors, you’re much less likely to have a serendipitous conversation. If you’re in different buildings on the same campus, you should just forget about it.
CURT NICKISCH: Yeah, you might as well just be remote then.
RAJ CHOUDHURY: That’s right.
CURT NICKISCH: I thought that was really interesting in the book, is just the research that you showed how this idea we have that great ideas are exchanged and the water cooler is where work is getting done, this collaboration. Just the reality, from research, that if you’re not close to somebody else, you’re probably not going to talk to them, you’re not going to have communication. You might be looking at your computer all day anyway.
RAJ CHOUDHURY: Correct. In the book, what I mention, again, two solutions and the details are all there. The first one is what I call virtual water coolers, because in the physical water coolers, the in-person water coolers, they’re very siloed. I’ve never had an intern tell me that they had a water cooler conversation with the CEO. It just doesn’t happen, that’s the reality. But on Zoom or on Teams, you can have a virtual water cooler between the CEO and a group of interns. We ran this experiment where we found that, even having a 30-minute Zoom call with a very senior leader in the company had a positive performance outcome for these interns.
The other idea in the book is that it doesn’t matter where we go, the venue to me is a second-order question. We need to engineer serendipity when we are in-person. What I mean by that is my research shows that when we go to in-person events, and there’s a long tradition of this finding, that we tend to hang out with people who are just like us, who are the similar gender and similar ethnicity as us. We found this in one of the offsite studies that we did with Zapier. The only way that siloed interaction was broken in that study was when two people shared the same taxi ride from the airport to the retreat. Because if you’re in the back of a taxi with a person who’s a different gender, different ethnicity, you still open up and have a conversation. Then chances are, you make a new connection.
I think this debate about whether to go to the office or whether to go somewhere else, I honestly feel the bigger problem is how do we solve for homophily, our biases of interacting in silos. We need to engineer serendipity wherever we’re meeting.
CURT NICKISCH: Yeah. How do you do that virtually?
RAJ CHOUDHURY: In the virtual world, you can have an algorithm which will say that we will intentionally create pairings of people to do a virtual water cooler, which is very different from a Zoom happy hour. Because Zoom happy hours are optional, it’s typically the same group of people, extroverts and friends who show up. But a virtual water cooler can pair up someone, two people who are very different ethnicities and/or genders. Then they can come together and make a new connection.
In the physical world, the taxi ride is one example of what we have called constrained co-location. That you need to find a way to create an interaction between two people who would normally avoid each other, or not come together because of the choice homophily playing through their subconscious. I think we need more research on how to make that possible in the office or at other physical venues. It’s just first-order design question about how to make in-person more effective.
CURT NICKISCH: Considering we’re at this moment where there’s a little bit of a shift back, at least in the news apparently, and this idea that people working from home are just slacking off, this idea that if you’re not in the office, you just can’t be gotten a hold of. They’re out of reach, out of touch. It sounds like you’re saying that a lot of these perceptions of remote work are pretty simple and aren’t really taking the full problem into account.
RAJ CHOUDHURY: I’m an academic, not like a journalist. I see these stories as journalistic stories, and there are other stories that need to be told as well. Like Airbnb’s story, like Dropbox’s story, and many other companies. But the data is very stable. It’s 25% remote days for now multiple quarters in the U.S. economy and other major Western economies.
The second thing is I think there are CEOs who have other incentives going on which are not spoken of. In many cases, I think RTO has been used as a tool to retrench people without paying full benefits. I think the incentives are often not about attracting and retaining talent. The thing is, the labor market has a long memory. It’s going to be very hard for companies to not change course at some point and not adopt flexible work practices, because at some point you’ll have to go after the talent that you need.
CURT NICKISCH: One thing that’s really intriguing is how much this work from home, remote work, work from anywhere shift – that’s also happening now at the same time that we’re having a huge shift in technology with artificial intelligence really changing work and a lot of the work that people do. What kind of interesting things do you think are on the horizon for how artificial intelligence is changing work, and then by default changing how much people need to be in person or how they actually work?
RAJ CHOUDHURY: One of the things I’m most excited about for my own research going ahead is this idea that now its possible to work from anywhere and adopt flexible work practices in blue collar settings. Now, with digital twins – which is a combination of sensors and AI and automation – what is possible is to create a virtual copy of a factory in real time, or a virtual copy of a hospital ward or a virtual copy of a warehouse.
So you have a replica of the physical operation on the cloud. And because of that you don’t need the engineers and the technicians to be physically there anymore.
CURT NICKISCH: And what’s the benefit to them being able to work from essentially a dashboard right?
RAJ CHOUDHURY: Correct. So the big benefit – I’ll give you the example from Turkey. The problem was none of these engineers and technicians wanted to live where the power plants are.
CURT NICKISCH: Which is often like in a remote river, in a canyon.
RAJ CHOUDHURY: Correct or in the mountains of Turkey. So all of them wanted to live in Istanbul, which is the large city, where the schools are good for their kids. Now all of them live in that city and there’s a huge digital twins headquarter in that city, where they run all their powerplants all over the country.
And there’s been lots of benefits because of that in terms of knowledge sharing between engineers. But their jobs have changed as well. So now instead of running a turbine or running the hydropower plant gates, they are looking at a screen, interpreting machine learning predictions. So they are becoming what I indigo workers. So they are mixing the white and the blue collar aspects and becoming indigo color workers.
CURT NICKISCH: That’s really fascinating. And you can see how the company can benefit because they’re ostensibly getting better workers, or are able to attract and retain superior talent because they’re able to let them live where they want to go.
RAJ CHOUDHURY: That is correct.
CURT NICKISCH: Raj, this has been really great. Thanks so much for coming on the show to talk about this.
RAJ CHOUDHURY: Thanks for having me again.
CURT NICKISCH: That’s Harvard Business School’s Raj Choudhury, author of the new book The World is Your Office: How Work From Anywhere Boosts Talent, Productivity, and Innovation. Whether you’re commuting or working remotely, we have over 1000 episodes and more podcasts to help you manage your team, your organization, and your career. Find them at hbr.org/podcasts, or search HBR on Apple Podcasts, Spotify, or wherever you listen.
Thanks to our team, Senior Producer Mary Dooe, Associate Producer Hannah Bates, Audio Product Manager Ian Fox, and Senior Production Specialist Rob Eckhardt. Thank you for listening to the HBR IdeaCast. We’ll be back on Tuesday with our next episode. I’m Curt Nickisch.
