A Corporate Report Card
For our Special Anniversary Issue we revisit two hot-button topics of the year: Remote Work and Corporate Culture. We asked: How did corporations do? What would their report card look like?
Remote Control: The Condition of the ‘Teleworking Class’ under COVID
The travails of the emerging teleworking class blazed into public consciousness a couple of years before the pandemic when Professor Robert Kelly, an expert in relations between the two Koreas, had his ever so serious live remote BBC interview from home gatecrashed by his two toddlers. The incident, meme-ified, mocked by late-night comedians, discussed on daytime television and watched and re-watched by the rest of us some 43 million times, offered viewers a hilarious contrast between the professionalism and gravitas of an academic talking to a BBC reporter thousands of miles away about his specialist subject and the playful, strutting antics of a four-year-old blithely indifferent to the mores and customs of the world of adults.
But for those of us who have been remote workers for years, the clip of Kelly’s embarrassment in 2017 also exemplified – albeit in concentrated, side-splitting form – the myriad challenges and benefits we experience. Home’s interference with work sits aside the greater freedom to be with family. The liberation afforded by job autonomy is inseparable from a certain loneliness due to rarely if ever seeing co-workers in the flesh. Our better angels of self-discipline are forever at war with the dark forces of procrastination.
At the time of 'BBC Dad,' teleworking was still something of a novelty. During the pandemic, however, hundreds of millions of employees around the world have been thrust into more or less the same conditions as Professor Kelly. Each of these remote workers will almost certainly have their own stories to tell akin to his, even if they, thankfully, didn’t occur while being broadcast live on one of the world’s most-watched news channels.
Despite so many being thrust entirely unprepared into telework, there is quite robust evidence of an increase in productivity from remote workers. As a result, there is much discussion in the press, but also by bosses, managers and staff, of teleworking becoming ‘the new normal.’ We’re never going back to the office, some predict.
Or are we?
Much of this discussion is speculative or anecdotal, with articles often largely based around comments from the heads of a handful of high-profile firms. Facebook has announced that after the pandemic, workers will have the option of working from home permanently if their line-managers approve, and CEO Mark Zuckerberg reckons that within the next five to ten years, half of the company’s staff will be teleworking. Likewise, Twitter boss Jack Dorsey said his staff 'can now work from home forever' 1.
But not all organizations are embracing change. We might expect Silicon Valley firms to be loving this sort of disruption while not at all surprised to learn that the heads of commercial real estate firms like WeWork are dead set against the idea. Yet tech firms like Google and Amazon are of much the same mind as the WeWork boss. Amazon said in March of its white-collar, non-warehouse staff that there will be a 'return to an office-centric culture as our baseline.' And Google has brought its timetable for a move back to the office ahead by months due to the success of vaccine rollout. Microsoft, for its part, is taking something of a hybrid approach.
Financial institutions have long been suggested by business scholars as one of the sectors most able, if not the sector most able, to transition to teleworking. But in February, Goldman Sachs boss David Solomon called remote work 'an aberration that we are going to correct as soon as possible' 2 despite the firm enjoying record quarterly revenues in the first quarter of 2021 – more than double those of the same time last year (prior to the pandemic) – and a return on equity rate not seen since 2009 3.
In order to move beyond such hot takes and assess what is genuinely most likely to happen and how employees have really been affected, we need to have a much more evidence-based approach.
Thankfully, with COVID-19 delivering the largest experiment in the feasibility of remote working ever, there have been reams of data produced across multiple disciplines.
A great deal of research 4 had already been performed pre-pandemic by management scholars on the subject. The findings had largely suggested genuine benefits both to employees and the enterprises that employ them. But these researchers themselves recognized 5 that there was likely some selection bias in their studies, as the subjects of their research were unavoidably those who were already able to and interested in remote working. In addition, in many cases, remote work was performed only infrequently or occasionally. Would the reported benefits of teleworking still show themselves in a situation where it was extensively practiced for an indefinite period?
Straight out of the gate, as soon as it was increasingly clear that much of the West would embrace some form of ‘lockdowns’ or extreme restrictions, it was necessary to estimate how many jobs could feasibly be performed at home. A pair of economists from the University of Chicago, Jonathan Dingel and Brent Nieman, developed a classification methodology in April 2020 that quickly became the template for all subsequent variations on the question. The classification involved surveys covering over a thousand occupations and asked questions such as whether respondents used email less than once a month, dealt with violent people, worked outdoors every day, spent the majority of their time walking or running or operated vehicles or other mechanized devices. They found that 37% of jobs in the US could theoretically be done at home. These jobs tended to pay more than those that cannot be performed remotely and represented 46% of all wages – a theme that we will see runs right through pandemic teleworking research.
Within a couple of months, however, scholars found the Dingel and Nieman projection to be largely accurate, but there was much more variation in the developed world and across and within sectors than they could have investigated.
By the end of 2020, with months of experience of trying to iron out the hiccups of teleworking, businesses had a much clearer sense of what worked, what didn’t and what was likely to continue after the pandemic.
Perhaps the most regressive aspect of remote work during the pandemic is how it coincided with a near total shutdown of daycares, crèches and schools, exacerbating the infamous ‘double shift’ that women with young families tend to perform, even as remote work enhanced the flexibility to deal with family demands. A number of papers had found that as COVID lockdowns spread, the number of calls to police and helplines regarding domestic violence experienced a large increase 6 against baseline. Such calls in Germany jumped by about 20% 7 in the week after implementation of the first lockdown. As a result, a group of Canadian sociologists wanted to disentangle the causes of this robust finding. They interrogated a large random sampling of households, via Statistics Canada’s Labour Force Survey, and uncovered both good and bad news 8. They conclude that while the pandemic has affected rates of domestic violence, it was primarily driven by increased financial worries and not remote work arrangements, and in addition by the effect of lockdown cutting some women off from the disapproval of friends and family toward the perpetrators of domestic violence.
Such financial stresses would be reduced by low-cost provision of childcare services. While COVID-related shutdowns of daycares have only exacerbated this problem, once the pandemic is over, a reconsideration of the ability of employers or governments to reduce the burden of childcare provision should have a positive effect on the reduction of the financial stress that exacerbates domestic violence in a remote work situation.
Along these lines, Australian and Chinese psychologists report 9 identifying four key remote work challenges after engaging in structured interviews with Chinese employees working from home in the early days of the pandemic: work-home interference, ineffective communication, procrastination and loneliness. Work-home interference describes either work’s interference with the demands of home, or vice versa. Home’s interference with work is almost entirely a result of the unusual situation of the pandemic with respect to closure of schools and daycares, which once again hit female workers hardest.
"In turn, they found from their qualitative investigation that the four remote work challenges can be ameliorated or exacerbated by the degree of social supports offered to the worker, the amount of job autonomy, monitoring and workload and finally by the individual factor of capacity for self-discipline."
Greater social supports, such as when their organization provided online platforms to encourage social interactions among workers, or simply greater interactions with managers and other workers, far and away had the greatest impact on amelioration of remote work challenges. Such supports did not just result in fewer reports of loneliness, which is perhaps expected, but also fewer complaints regarding the three other major challenges, enabling better navigation of work-home interference and nudging workers away from procrastination. This makes sense too with respect to the challenge of ineffective communication – notoriously a teleworking difficulty when the channels of communication are restricted to email, videoconferencing and telephone calls rather than informal ‘water cooler’ moments, spontaneous interactions and the channel of body language that is easily stripped from many digital mediums.
The researchers caution that greater monitoring – such as daily reports or clocking-in/clocking-out applications – can decrease procrastination and the ease challenge of workload amongst workers with lower levels of self-discipline and may even be welcomed as a useful external scaffold to avoid ‘cyberloafing’ (such as checking social media instead of paying attention to the task at hand). However, they caution that for workers with higher levels of self-discipline, such monitoring can be a distraction and actually increase the perception of work-home interference and of a reduction in job autonomy.
Along these lines, the Dublin-based European Foundation for the Improvement of Living and Working Conditions (Eurofound, another EU agency) reported 10 in January 2021 that even as remote working during the pandemic has been broadly welcomed by employees for its offer of greater flexibility and autonomy, it has been a double-edged sword as workers feel their jobs bleed ever more into their downtime. Throughout the pandemic, a dark joke has spread widely: that employees feel less like they are working from home than that they are sleeping at the office. This had begun to be flagged as an issue amongst those who teleworked prior to the pandemic, and COVID has only increased the pressure on legislators to enact so-called Right to Disconnect (R2D) laws. They find that the percentage of Europeans working in their free time several times a week or even daily has jumped, with substantial numbers reporting working in excess of 48 hours a week, or with reduced rest periods of under 11 hours between working days. Burnout, depression and anxiety are not the only risk here, but also various physiological maladies such as eye strain, headaches and back problems associated with extended periods sitting in front of a screen.
Looking to the future, legal-political scuffles over right to disconnect may actually be the least acrimonious amongst potential technological terrains of struggle. Management scholar Paul Leonardi of the University of California - Santa Barbara, a specialist in digital transformation of work, warned in an October essay 11 that
"the digital tracking aspect of remote work during COVID has resulted in an explosion of what he calls 'digital exhaust.'"
By this, he means any work activity and output that is digitally recorded and stored. Any time a worker messages someone on Slack, assigns a project milestone on Trello or attends a videoconference via Skype, their activity is recorded as meta-data. Until the pandemic, most office-based workers conducted about 50% of their communications through such digital platforms, recorded only about a quarter of their meetings or documented how they were to perform a given task about 10% of the time, Leonardi notes. But other than notes to themselves on paper, remote workers in the time of COVID are now conducting almost all such activities through digital channels that are able to log every move they make (if not quite every breath they take).
What companies can do with this meta-data depends to a great extent on its size. A smaller organization may not have the resources to do much at all with such logs. Other firms however are able to put the various ephemera of digital exhaust together to construct a digital representation of employees. This can be used to track patterns of behavior, develop better understanding of who knows what, allocate tasks more efficiently and improve mentoring and coaching.
That’s the upside. Leonardi and his colleagues have also documented multiple downsides. The obvious concern is that workers feel they are being surveilled by not just their managers but also their peers. But this in turn causes them to deliberately leave digital breadcrumbs aiming to game the system, proving they are hard workers.
Because the volume of digital exhaust produced during COVID is colossal, some organizations are turning from human managers to algorithms to perform the capture of patterns in the digital exhaust. The largest and wealthiest of firms use artificial intelligence to assess these patterns within the digital exhaust and learn autonomously from the data. Will trade unions or legislators demand that employees have a right to see such predictions of their behavior developed by these AIs?
All this may appear to make remote working undesirable for employees, but this is far from the case. A qualitative April 2021 analysis 12 of a survey of some three thousand remote workers by a pair of University of Massachusetts workforce scholars concluded that a great many employees are, if anything, feeling let down at hints or explicit announcements that they must return to their offices as the pandemic eases up in the Global North. They highlighted how the same month, the CEO of Washingtonian magazine Cathy Merrill wrote an opinion piece 13 in The Washington Post saying that employees who 'might like to continue to work from home and pop in only when necessary' will avoid so much of office culture that is a necessary part of the job and so 'management has a strong incentive to change their status to "contractor.”' The op-ed kicked off a wildcat strike amongst her staff until she backed down 14. At the same time, a Morning Consult 15 poll in June 2021 found that 66% of American remote workers – and 70% of Millennials – wanted to return to work.
How do we reconcile these seemingly contradictory messages from employees?
There is no contradiction when we understand that workers wanting to continue to enjoy the increased autonomy and flexibility of working from home – for a couple days a week – is entirely compatible with how desperate they are to get back to the daily interactions with other human beings. Ironically, these are the very sort of things – helping colleagues, mentoring junior staff, celebrating birthdays – that Merrill was referring to. People want a return of the good, the bad and even the annoying bits. But not five days a week.
The solution that a majority of both staff and management are looking to after COVID is hybrid virtual working conditions: part of the week remote and part in office. The McKinsey consultants surveying 16 a similar sample of workers and managers in April 2021 as their November assessment found that most employers reckon a hybrid arrangement will enable them to maintain the productivity gains that most of them have seen during the pandemic while reviving the office culture and its benefits. More than half of employees appear to agree with their bosses and hope that their organizations will indeed adopt hybrid virtual working models. More than a quarter say they would even consider leaving their organizations if the leadership insists on fully returning to on-premises work. Employees with young children are the most appreciative of a flexible arrangement. Just 8% of them want a return to the pre-pandemic, on-site norm.
COVID-19 certainly let the teleworking genie out of the bottle. But the genie seems to be quite comfortable going back inside that bottle, at least part of the way. Or, to make the metaphor somewhat more apposite, the genie would be happiest spending perhaps three days a week back inside the bottle and possibly two days outside.
Maybe more if the genie decides to have children.
Don't Just Do it: Believe it
A company's wellbeing is measured and passed on by the integrity of its culture
"Since Nike’s early days in the 1960s, many employees have been guided by a simple ethos: work hard, party hard, get up for your five-mile run in the morning." 17
Once upon a time, corporate culture was seen as being just another way to get the most out of employees. Neuroeconomist Colin Camerer and management theorist Ari Vepsalainen wrote in 1988 18 that companies may deliberately develop a culture to help employees know what to do in new situations without needing to be micromanaged, thereby achieving improved efficiency.
There was and still is some truth in that. The right culture can be a profitable thing for a company to have. But culture also reflects a deeper connection, not just between company and employees, but peer-to-peer. Culture provides the thread of consistency between values and behavior that we all need for our own wellbeing, and it is a barometer gauging the wellbeing of the corporate body itself.
Edgar Schein's foundational work on organizational culture 19 divides it into a pyramid with three layers. The shallowest layer at the top represents visual symbols like posters and rules – whatever you can see when you walk into the room. The middle layer is made up of the values the organization claims to have. Most important is the base of the pyramid: the invisible assumptions and beliefs shared by the people who work there. Those assumptions, like the shared codes of society at large, govern behavior much more effectively than any rulebook.
Companies like Nike who adopted the 'Gordon Gekko' culture of hard-charging, money-focused machismo celebrated in the 1980s may have made money, but it gradually became clear to employees that this corporate success was often at their expense. The top of the pyramid was about success and wealth, but the beliefs and behaviors revealed at its base were about overwork and anxiety. The stresses of the workplace, even for wealthy, privileged employees, became clear through cultural moments like Tom Wolfe's Bonfire of the Vanities, a 1987 novel that chronicles the breakdown of an investment banker's life. As younger employees gained a sense of their economic power, first in technology and then elsewhere, they challenged the cultural assumption that they should sacrifice wellbeing and enjoyment now for money later.
Corporate culture evolved to promise a more pleasing lifestyle to workers, at least in those top two layers of Schein's pyramid. Silicon Valley employers adopted symbols and values of youth and fun in the pool-tables-and-juice-bars era of the '90s and '00s. But doubts grew about whether Google's Don't be evil motto was truly reflected in the base of the company's pyramid, its behaviors and deepest beliefs. Tech companies and brands today make more money than 1980s investment banks ever did, and society's suspicion of their motives is perceived keenly by their employees.
The development of a corporate purpose gives employees something to buy into that is bigger than their own enjoyment and bigger than the company's profits. A new generation of workers started to look for more from work than just money and perks. Purpose is not just a source of wellbeing itself 20, but also helps deepen relationships with co-workers – a strong predictor of wellbeing at work 21.
"Apple, Google, Amazon, Zappos have all built cult-like status with powerful corporate cultures that attract and retain people who all feel a sense of belonging to a “tribe with a purpose.” In Nike’s case, tribal identity is “We have the best-kept secrets.”" 22
"The waffle iron that co-founder Bill Bowerman destroyed while attempting to make rubber soles is kept on [Nike's] campus like a museum piece. That helps embed a sense of value, history and shared culture in what employees are doing. So, oddly enough, does an emphasis on secrecy and mystery… that attitude helps create intensely loyal employees." 23
A strong purpose and clarity are revealed in these quotes, but was this enough to build a culture that fostered employee wellbeing? Perhaps true culture is revealed at the points of tension. A corporate purpose too focused on itself and its own objectives can become destructive, obsessive and cult-like. And where scrutiny is lacking – Nike's culture explicitly endorsed secret-keeping – bad behavior can flourish. Despite the benefits to Nike of the loyalty that emerged from mystery, the symbols and espoused values at the top of the cultural pyramid can hide problematic assumptions and beliefs at its foundation.
But these inevitably emerge in what employees do and how they speak when the PR microphone is switched off. #MeToo started in Hollywood but soon pulled the covers off cultural problems across organizations in all sectors. Nike was one company where secrecy had allowed male employees to cover up their treatment of female colleagues.
"For too many women, life inside Nike had turned toxic… Finally, fed up, a group of women inside Nike’s Beaverton, Ore., headquarters started a small revolt…at least six top male executives left… Nike has begun a comprehensive review of its human resources operations, making management training mandatory and revising many of its internal reporting procedures." 17
After that exposé in The New York Times, Nike's president resigned, and its CEO apologized to employees. He promised to change the company 'from a place where the loudest voices carry the conversation to a place where every voice is heard' 24.
When a company says it cares about workers, is it telling the truth? The desire of many companies to demonstrate this to their employees is in part behind their recent adoption of political positions. An employer that wants to prove to female employees that its words are more than cheap talk may invest some of its reputation in standing up publicly for women's rights. Black employees and customers are a big part of the audience for a brand that declares that Black Lives Matter. And attracting and retaining LGBTQ+ employees is undoubtedly part of the motivation for companies sponsoring Pride or boycotting North Carolina over its anti-trans 'bathroom bill.'
But this could be more than just cynical posturing to impress new recruits. A culture, like a company, is made up of the people within it. The more women who reach senior corporate positions, and the more diverse a company's workforce, the more likely it becomes that these declarations are genuine reflections of what the firm's people want and believe.
Personal wellbeing requires alignment of values and behaviors 25. The wellbeing of a corporate culture needs the same thing: that the things the company says are consistent with what it does and what it believes 26. Another criterion creates an even stronger and more resilient company where employees can properly flourish. That is the fractal condition: the requirement that what the company believes and does, and what its employees believe and do, are consistent. This is simply a further extension of the benefits of consistency: from consistency within the person, to a rock-solid culture across thousands of people; all of whom know what to expect from each other, themselves and their company. Companies who show these forms of integrity were found in 2013 by economists Guiso, Sapienza and Zingales to be more profitable than their peers and to outperform them in the long term 27. A 2019 study by Mavis et al. 28, exploring how companies use rhetoric and narratives, found that 'strategic integrity' – when a company does what it says it will do – also boosts stock market returns.
We all grow up eventually. The selfish behaviors we openly exhibit in youth are replaced in adulthood with more polished and socially acceptable habits. If we are lucky and self-aware, we have the opportunity to age into a state of consistency and wisdom, where our values, beliefs, behaviors and words are all consonant. Corporate culture in the last 50 years has followed this same path. Has it reached its destination?
COVID-19 has offered a new challenge for companies. When staying at work presents a direct risk to employees' health, a promise to value employee wellbeing faces a stark test. Many companies have passed this test, asking staff to work from home even at the risk of lower productivity. Others have revealed the true beliefs underpinning their culture by requiring staff to come in to the store or office.
The integrity promised by this state of alignment is regularly tested by events. When Nike spoke out 29 in support of Colin Kaepernick taking the knee to protest police brutality, people burned their sneakers on TV. Police departments and mayors called for boycotts. Nike had the opportunity to moderate its words, and many companies in the past would have done so. This time, it did not.
"The brand knew better than to run scared then, and it knows it now. Two-thirds of Nike’s core customers are under 35… Young consumers have to know that the values of the brands they buy align with their own… Wearing Nike has become a political statement, a declaration of identity, a signal of solidarity." 30
Nike's Black employees and customers might conclude, at least for today, that the company has their back. But workers will keep challenging their employers to fulfil the wellbeing promises the culture makes. Cultures will continue to be tested, and every company will fall sometimes. But when you know your values, and you stand – or kneel – for them, your integrity will give you strength and peace.
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