Does Your Hybrid Strategy Need to Change?

This fall, companies are once again pushing workers to return to the office, continuing the debate over how many days employees should work together in person. This debate continues to miss the point. One-size-fits-all mandates can succeed only if work is a universal task executed by a homogenous workforce. Of course, we know neither is true. Instead of threatening employees, CEOs should empower and enable their managers — especially those on the front line — to gain a deep and nuanced understanding of the work their teams do, the working style of their team members, and how that work best gets done. They must also consider the impact of generative AI, which will change all of these factors. Our research, experience working with company leaders, and surveys of workers around the world show how considering these factors can lead to better outcomes for everyone. Companies Are at a Crossroads We can empathize with CEOs. Leaders must justify office rents despite record-low occupancy levels and build a culture of collaboration in a place with empty halls. They are grappling with quiet quitting, quiet cutting, pressure from city governments to restore the vibrance of business districts, and the impact of generative AI. But the answer to these pressures is not return-to-office mandates that essentially use face time as a performance management tool — think badge-swipe monitoring, which has elicited notable backlash. Monitoring the time employees spend online doesn’t work, either. A recent survey of 18,149 desk workers and executives conducted by Slack revealed that 32% of employees’ time is spent on performative work, and 63% try to keep their status active online even if they’re not working at that moment. The inclination to associate physical presence or time active online with productivity is a symptom of a broader issue, as many of today’s leaders struggle to embrace ways of working that are radically different from how they grew up. They proved themselves in a culture where commuting to the office to work from 9 to 5 was the norm, and where anyone who tried to work flexibly was marginalized — such as those on the “mommy track.” The most successful organizations will recognize that there is too much complexity to set rigid, top-down mandates, and that the managers who are at the rock face of the work, the team, and the customers are best positioned to make such decisions when they are empowered with the right skills and tools. CEOs and executive teams who focus on the following four actions can make work work better for everyone. Recognize the Needs of the Work When we asked more than 1,500 office-based workers when they wanted to be in person, we learned that they want to come to the office to do tasks and activities they consider best done there. For instance, participants were eight times more likely to prefer being in-person for affiliation and development, compared with doing work that requires focus or tackling administrative tasks, which are better done remotely. But where employees feel most effective doing certain types of work is only one side of the coin. We also explored how much time they spend doing these tasks. We found that individual contributors spend 37% of their time on work they believe is done most effectively in person; for managers and executives, this jumps to 49%. But this is on average across organizations. It is important for leaders to spend time investigating what those preferences look like based on the nature of work and people across their organization. It becomes even more critical to recognize which types of work are best done in different settings in the age of generative AI. When doing focus work, our survey data suggests that 65% of employees want to be remote — but some of this work can be greatly enhanced with the use of generative AI. A field experiment that our BCG colleagues conducted with the support of a group of academics from HBS, MIT, Wharton, and the University of Warwick found that for tasks that involve creative ideation, GenAI generates output that should be considered as a final draft (versus a first draft that humans need to take time to edit). This means that for some employees, the mix of work that they do may start to shift, as they hand over some of the focus work they would have preferred to do remotely and pick up other tasks beyond the frontier of generative AI’s competence. As a result, their work models may also need to shift, depending on what these new tasks are. Recognize the Needs of the People In our survey, roughly 90% of employees who identify as female, caregivers, LGBTQ+, or as having a disability consider flexible work options an important factor when deciding whether to stay in or leave their job. That is 30% higher than employees who did not identify with these categories. In other words: If you care about diversity, equity, and inclusion, you need to get your working model right. We saw a particularly wide gap when it comes to gender: Female employees are 1.5 times more likely than their male counterparts to prioritize flexibility. And this is not just a working-mom phenomenon. We found only a marginal difference (3%) among women when comparing caregivers with non-caregivers. Our biological cognitive differences also indicate preferences toward certain work environments. In some situations, groups of people doing the same job may have similar cognitive profiles. For example, a team of software engineers is more likely to be “analytical/tough-minded” and therefore might work best when allowed to maintain focus and prefer to have routines in how they do their day-to-day work. But teams with high cognitive diversity will need more options to maintain optimum performance and happiness. We found outliers in our survey, for example — those who prefer to do interactive work remotely, and administrative or focus work in person. Some of their preferences are likely linked to cognitive characteristics such as introversion/extraversion. Leaders struggling with how to think about getting the best out of employees with different cognitive profiles would do well to remember that your people are just as diverse as your customers. Just as successful companies obsess about their customers and the decisions they make, it may be even more important for them to obsess about their employees. By doing so, they can reveal the root of the emotional and functional needs involved in making decisions about their careers — and create work environments that fulfill these needs. Rethink How Work Gets Done “Place” is just another tool for getting work done. As HBS professor Tsedal Neeley has observed, “I talk about using the office as a tool, the same way we use various technologies as tools to communicate and engage. If you see the office as a tool, you determine what specific uses it has for collaborations that require people to be physically present together.” Yet 62% of our survey respondents told us that they do not have a say in their work model policy. Instead, it is dictated either by company-wide guidelines or by their manager. Of all participants, 39% reported that their company decides where they work. In these companies, 24% of employees were unhappy with their work location policy; this figure decreases to 14% if the manager decides, and to 6% if the team decides. The closer to the executors of the work the policy gets set, the more satisfied employees are. Companies like Cisco and Dropbox are redesigning their office space to make it more amenable to collaboration. Such moves are consistent with their respective work model policies, which enable employees to do focus work remotely and encourage employees to come together for key events such as all-hands meetings. As Cisco’s CEO Chuck Robbins put it, in today’s world you have to offer a compelling “return on commute” to get your employees bought into coming into the office. Redesigned work models also need to consider the ways in which we communicate. For example, we worked with Verizon to improve the way they run meetings, such as scheduling 25- or 50-minute meetings with a 5- or 10-minute lagged start time to give people breathing room. We also identified meetings that could be replaced by asynchronous modes of work (such as email, chat, shared documents, or offline review) and clarified what “required” and “optional” meant. In our experiments, 90% of participants reported overall meeting effectiveness had improved and 78% felt they wasted less time sitting in meetings where their live participation wasn’t required. Leaders will also need to monitor the impact of new technologies that they introduce. The generative AI experiment mentioned above also revealed that overreliance on generative AI can lead to a loss of collective diversity of ideas. As leaders seek to benefit from the value creation opportunities of generative AI, they’ll need to consider where and how people collaborate most effectively to ensure they retain their creativity and innovativeness. Invest in Building a New Managerial Muscle The orchestration of these factors needs to come from managers — those at the front line, working with the teams. They are closest to the needs of the work, the people, and how that work gets done. However, this orchestration requires two new managerial muscles. The first is one that was not needed before Covid, when work was done in the office by default, nor during Covid, when remote work was predominant for many office-based professionals. Managers now need to facilitate discussions with and align their teams on where, when, and how work gets done. They need to hold weekly retrospectives on what worked, what didn’t, and what to change in how they work the next week. The second muscle is one that managers arguably needed before Covid, since working with distributed teams isn’t new. Managers need to build their ability to create connection and culture as well as develop, inspire, mentor, and coach across distributed and hybrid teams. They must also meet employees’ emotional as well as functional needs. A recent BCG survey on employee expectations about leadership at work conducted across nine countries revealed that the top four qualities characterizing great leaders are recognition, people coaching and development, empathetic listening, and care. Building these new managerial skills requires work, but the rewards are worth it: better performance, engagement, and retention, to name but a few. And just like any muscle, it needs investment of time and practice to strengthen. However, every organization can take positive steps starting from within: Identify your best managers — the ones who are already doing some of these things. Determine the specific habits and behaviors that set them apart, then follow a “best teach the rest” approach to help others learn how to develop similar capabilities. This is beyond simple training; it is about teaching, coaching, role modeling, and rewarding new ways of working every day. In short: Instead of setting top-down mandates and expecting frontline managers to enforce them, leaders ought to focus on empowering those managers to co-create ways of working with their teams that are best suited to the needs of the people and the work they do, as well as the digital and GenAI tools at their disposal. While it may be easier to follow the crowd and issue blanket return-to-office policies, the potential upside of implementing thoughtful changes based on the four categories above is not only worth it — it will soon become an imperative for businesses that want to create and sustain work and talent advantages into the future.

Does Your Hybrid Strategy Need to Change?

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