Nothing is more gratifying than reading emails in your boxers first thing in the morning. That is of course gratifying as far as work is concerned. Prior to the “information age,” work started for most people when they reached the office. Today, in the mobile age, work follows you everywhere your smart phone goes…which in the case with most people is now 24/7. The mobile revolution has untethered people from nearly every aspect of their lives – including work where around 67% of employers today allow their employees to work in some capacity from home. But some companies who used to promote this movement to home offices are now having second thoughts.
Over the past year, companies like Yahoo, Reddit, and now most recently IBM have decided that decentralization of their workforces are working against them and it is time to re-centralize their human resources. All of their explanations ultimately come down to engagement and innovation (or a lack thereof) leading to companies such as these who believe that better results come from more employees being together in offices compared to being spread-out in virtual reality.
This logic follows recent experts and studies who claim that working from home has diminishing returns and employee engagement will decline when employees work more than 20%-50% of their time from home. Perhaps. But then again, I don’t recall other former industry leaders such as AOL, Enron, Atari, Polaroid, Pan Am, Blackberry, and others blaming the orientation of their workforce for their failure to innovate to grow. Some people even claim this new movement is nothing more than a forced-elective layoff of employees – come home to Rome or be banished for good.
Over two decades ago, I worked with one the fastest growing and industry leading companies in the healthcare technology space. At the time, I was working at their corporate headquarters (HQ) and got to see large corporate America first-hand, deep inside the bowels of their operation. At the time I was young and decided to learn and absorb as much as possible. After a quick ascendancy within that company, I later reflected as to how fast that ascension would have been had I not been located outside of corporate HQ. Having now lived and operated in both realities, I would not have traded that time at the HQ for anything. But does that mean that I now agree with moving workforces in-house?
Since that time working intimately at corporate HQ, I have spent the majority of my career now working remotely in the field. For many people, this has become the new normal and preference for a growing number of technology professionals today. Recent studies have shown that fully 89% of employees now consider working at home as a fringe benefit and 25% have even indicated that they would accept a reduction in salary to work at home. In the end a work goal is a goal and if it can be properly measured, it can be managed in most settings.
Centralized work environments over the past few decades since I worked at HQ have changed and so have the people working outside of them. Decentralized concepts such as “hoteling” were first introduced to me a few decades ago with the known intent of telling employees to “get out of the office” and get to work. This started with salespeople and eventually spread to other employees as well. For those who remained, private offices were removed and cube walls were lowered so that any privacy you may have previously enjoyed was not part of the “community office” environment. Smaller private “conversation” rooms were also added but often lacked power outlets – once again sending the signal to “get out” soon. No longer were phones calls “quiet enough” and private in a designated workspace and no longer was your work space your own space…not when the three people across from you were now clearly only feet away from you in sight and sound. All in the name of collaboration and leading to a whole new set of issues and other problems. While some functions may have been losing resources, corporate accounting was trying to gain by reducing overhead costs.
Some companies like Google, Apple, and Facebook have recently reversed this trend by creating elaborate work campuses that provide nearly every excuse for their employees to NOT want to leave their centralized model. Certainly this has something to do with other technology competitors now calling their employees home. But there are two ways to attract a desired action: the carrot and the stick. From all recent accounts, Google, Apple, and Facebook have created carrots that resemble a modern day mecca for today’s top tech talent which is a far cry from the “come home or be banished” stick deployed by many other has-been companies. Moreover, are these elaborate campuses truly high functioning innovation labs or merely the next great recruiting tool to take top talent away from their competitors?
Clearly there are pros and cons with both a centralized and decentralized work model. I have worked in both and can clearly see the flaws and benefits in each. But are the stated reasons alone enough to justify a move back to centralization? I have worked in plenty of centralized work environments where there were just as many and even more distractions than what I had to manage at home. Did this make me any more productive? In my own experiences, what happened within these environments and cultures had far more impact on results then the location of the resources. For example, does anybody truly believe that Yahoo or IBM would look dramatically different today if their human resources had been centralized over the past decade? Or would companies like Blackberry, Polaroid, and Atari have been better off if their people were decentralized before their inevitable implosions?
The answer in my mind is clearly “no” on both fronts.
Come to think of it; when was the last time I looked at the stocks that I own and asked myself if the centralization of their human resources had ANY bearing on the ownership of their stock? Then again, when was the last time I ever considered owning a stock like Yahoo or IBM? I have worked enough in corporate America to know that excuses are often masked as misguided new initiatives and most of them are short-sighted and have nothing to do with long-term innovation. Steve Jobs spoke of this diffusion of corporate innovation many times and in the end, it all starts and ends with leadership…not where your people “have” to now work.
In summary, let me end with a tale of two companies. Company “A” was once a giant long ago but over time lost their lead and ability to innovate and grow. Company “B” later came along and addressed an evolving market need faster and more innovatively than company ”A” and eventually attracted and hired the best talent away from companies like company “A” and became the new giant in the market. After failing to grow for years on end, company “A” now decides that they need to centralize their remaining workforce to better innovate and compete with company “B” – after telling their employees for years that decentralization was a good thing and worked well for them.
Now which company would you want to own stock in and work for? There are a lot of former Yahoo and IBM employees and shareholders who have recently asked themselves this same question.