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If you’re a tech leader striving for innovation, you’re shooting yourself in the foot by pushing for aggressive return to office (RTO) mandates. Yes, you heard it right. You might think that statement is counterintuitive and defies conventional corporate wisdom, but its validity is increasingly corroborated by both statistical insights and real-world evidence.
Tech companies lead the pack on flexibility
Let’s start with some baseline data. According to the Scoop Flex Report for September 2023, an astonishing 94% of Fortune 500 tech companies offer at least a hybrid or fully remote work model, leaving a mere 6% in the draconian era of full-time office work.
This finding is confirmed by a groundbreaking research paper — “The Evolution of Work from Home” — by economists Jose Maria Barrero, Nicholas Bloo and Steven J. Davis. Based on their survey, the tech sector leads the pack in flexibility, with an average of 2.6 work-from-home days per week.
What about the future? As part of the July 2023 Survey of Business Uncertainty, fielded by the Atlanta Fed, Barrero, Bloom, and Davis asked U.S. business executives about the work-from-home outlook at their own firms. The survey responses cover about 500 firms distributed widely across industries, states, and firm size categories. Specifically, they asked: “Looking forward to five years from now, what share of your firm’s full-time employees do you expect to be in each category (fully in-person, hybrid, fully remote) in 2028?” Executives anticipate modest increases over the next five years in both the fully remote share and the hybrid share.
Yet many tech companies — such as Amazon, IBM, and even Zoom — have announced top-down RTO mandates of several days per week recently. Such mandates are surprising, given recent findings on the importance of flexibility for innovation. Thus, even though tech leads the pack in flexibility, given the particular importance of innovation for tech, leaders in this sector need to seriously reconsider their increasingly inflexible policies.
The mismatch between innovation and RTO strategies
EY’s Technology Pulse Poll recently unearthed a startling insight: a whopping 78% of senior tech leaders assert that remote work positively impacts their ability to innovate. Now consider this against the background of another compelling statistic: 81% of tech executives have plans to make innovation-related acquisitions in the next six months.
Ken Englund, EY’s Americas Technology, Media and Telecom leader, acknowledged his surprise at such strong support for remote work boosting productivity. England believes several factors drive this positivity. Remote work expands talent pools beyond geographic borders. It also boosts employee satisfaction by removing commuting time, energizing workers. Do you see the incongruity with top-down RTO mandates?
The talent gap driving down innovation
The conundrum deepens when we scrutinize the talent acquisition landscape. According to the EY Work Reimagined survey, 84% of employers, across sectors, are convinced that offering work flexibility is their golden ticket to recruiting top talent. But here’s where the rubber meets the road: employers and employees are locked in a tug-of-war over work arrangements. While 47% of employers still fantasize about their employees gracing the office at least two to three days a week, a stark 50% of knowledge workers are willing to set foot in the office only once a week. The gap isn’t just a tiny fissure; it’s a gaping chasm.
Indeed, Englund cautions remote work isn’t without trade-offs. Firms must work hard to build cohesive cultures and apprenticeship opportunities traditionally facilitated by in-person proximity. As England summarized, companies have significant work ahead to recreate the “corporate glue” that binds distributed teams.
However, top-down RTO is not the answer, according to Englund. He believes the recent spate of forced mandates from tech companies signals a command-and-control mentality. That’s the real driver, with justifications of RTO as pursuing spontaneous innovation through random meetings in the hallways simply a fig leaf for a much more authoritarian motive.
Indeed, the opinions of 78% of senior tech leaders themselves suggest that such command-and-control RTO mindsets will harm innovation. And yet, so many are pursuing such mandates — though fortunately, far from all.
A case study in fostering innovation through flexibility
The company deploys a trifurcated strategy to stay ahead:
- Global talent recruitment: By not restricting work to a single geographic location, Atlassian has opened the floodgates to a reservoir of global talent. This ensures a plethora of diverse viewpoints, which in turn fosters unique problem-solving and innovation.
- Autonomy-driven employee engagement: Allowing employees to work remotely contributes to a higher level of autonomy. Autonomy often correlates with increased job satisfaction and engagement, which are critical ingredients for innovative thinking.
- Internal product refinement: Atlassian utilizes its own suite of collaboration tools internally before releasing them to customers, essentially transforming its entire workforce into a testbed for innovation.
Their “team gatherings” aren’t just sporadic meet-ups but strategically planned sessions to catalyze brainstorming and camaraderie. The company reports a 30% improvement in team cohesion lasting for four to five months after these gatherings, whereas conventional in-office interactions demonstrated no lasting impact.
The outcome of this approach is far-reaching. It doesn’t just signify a new way of working; it has manifested into a culture where innovation is ingrained. It’s a formula that not only leads to increased engagement but also provides Atlassian a distinct advantage over competitors who are slow to adapt to the new world of work. By encouraging diversity and promoting engagement, Atlassian isn’t just navigating the current business environment; they’re sculpting it.
The path forward: Disrupt or be disrupted
If the goal is to innovate, then the means to that end must also be innovative. That’s why I tell the dozen or more tech leaders who ask me every month how to determine what level of flexibility to offer to their teams.
It’s time to disband forced, top-down RTO policies and adopt flexible work models that empower your employees and enlarge your talent pool. Here’s how:
- Overhaul RTO policies: Convene a task force to revisit and re-engineer your RTO strategy. Make sure the new model aligns with your innovation goals.
- Make the office worth the commute: As I tell clients, the only good reasons to come to the office are for intense collaboration, nuanced conversations, socializing and team bonding, and mentoring and on-the-job learning. By contrast, individual tasks are much better done at home.
- Engage your workforce: Implement a democratic approach by engaging your workforce in the decision-making process. After all, they are the ones who will live this reality.
- Invest in technology: Robust collaboration tools can not only replicate but also enhance the office experience, making geographical location a non-issue.
- Cultivate a flexible-first culture: If increasingly flexible work is the future, as research by Barrero, Bloom, and Davis, why not make it your present? A flexible-first culture can be the catalyst for not only innovation through attracting a global talent pool but also boost diversity.
- Pursue adaptive leadership: Embrace a leadership model that is agile, empathetic, and inclusive. A one-size-fits-all strategy is doomed to fail.
To survive and thrive in today’s volatile tech landscape, it’s not enough to innovate in your products and services. You must also innovate in your workplace strategies. The future is flexible, and it’s time to bend before you break.