Why Employers Forcing a Return to Office is Leading to More Worker Power and Unionization

Posted on by Dr Gleb Tsipursky

Angry and dismayed Amazon employees are pushing back against the recently-announced return to office policy by the Amazon leadership. Amazon’s policy joins other high-profile companies such as Disney, Starbucks, Tesla, Google, and others that are forcing employees back to the office.

Some are claiming they need to do so for the sake of productivity. For example, Elon Musk, the CEO of Tesla, claimed that those working remotely only “pretend to work” and are “phoning it in.” Others say you need to be in the office to innovate: Disney’s CEO Bob Iger demanded the return to the office because “nothing can replace the ability to connect, observe, and create with peers that come from being physically together.”

So what explains the situation?

As a globally-known expert in the field of hybrid and remote work, I have seen firsthand how working remotely, whether part of the week or full-time, enables worker power by facilitating autonomy, decentralizing power, and preventing micromanagement. Unfortunately, too many old-school managers like Iger and Musk prefer a rigid, top-down power structure; indeed, Elon Musk is well-known as an extreme micromanager.

Such an authoritarian approach is well-suited to the assembly line model of the early 20th century, but not well-suited for a modern knowledge economy. That’s why we’re seeing employees use worker power to fight against these authoritarian mandates, resulting in empowered labor unions.

It’s important to recognize that this turn to worker power is happening in the context of massive layoffs by tech companies, which are becoming less willing to offer perks like remote work to their workforce. In fact, there’s evidence that some companies such as Twitter are using return to office mandates to get workers to quit voluntarily, to avoid paying severance. Employers are increasingly getting the upper hand, as workers who feel anxious about the economy are reluctant to make demands for more remote work. However, such strategies may well backfire against employers in the long term if they spur increases in labor union organizing; even though individual employees might be anxious about their jobs, together they can press their case, especially given an unemployment rate of 3.4%, the lowest in over 50 years. And even tech workers are finding new jobs in three months or so, pointing to the strength of the labor market despite some shift toward employer power.

Three Case Studies of Worker Power and the Return to Office

YouTube contractors in Texas went on strike in protest of rules requiring such workers to report to the office. The workers, who are technically employed by Cognizant, were notified of the Feb. 6 return-to-office date in November. The vast majority of the contractors were hired during the pandemic and have always worked remotely. Workers say their pay, which starts at around $19 per hour, isn’t enough to cover the costs of relocating to and living in Austin. The workers’ strike came after they filed a prior month for union recognition, leading some to conclude the move was being made in retaliation. The workers are also seeking to have Google and Cognizant recognized as joint employers.

The New Mexico State Personnel Office ordered state employees working remotely to return to in-person work at the start of the new year. Many voiced their frustrations against the order, citing issues with commute, health, poor in-person work conditions, lack of child care, and low pay, among other things. State workers rallied against the state’s return-to-office order at the roundhouse in Santa Fe. Dan Secrist, president of CWA Local 7076, said the state’s return-to-office mandate has worsened problems it was intended to solve while creating new ones.

Tensions Between Employers and Workers Over the Return to Office

These cases illustrate the increasing tension between employers and workers, particularly over the return to the office. The pandemic has accelerated the trend toward remote work, and workers are now resisting the idea of returning to the office. Many workers have become accustomed to the flexibility and freedom that come with remote work, and employers who refuse to allow it are facing backlash.

Employers are forcing their employees back to the office to impose control over workers, but they are failing to recognize that remote work enables worker power. In fact, remote work is empowering workers by giving them more control over their lives and work. With remote work, workers can choose where and when to work, which gives them more control over their schedules and their work-life balance.

Employers who are forcing their employees back to the office are trying to reassert control over their workers, but they are finding that it is backfiring. Workers are pushing back against these efforts, and many are joining unions to protect their rights and interests. Employers who refuse to recognize this trend risk alienating their workers and facing the consequences.

Cognitive Biases in the Return to Office Increases Worker Power

The drive to return employees to the office to regain control over employees is a prime example of how cognitive biases can lead to poor decision-making. Cognitive biases are mental shortcuts that we use to process information quickly and efficiently. They can lead us to make decisions that are not based on facts or rational thought, but on our personal beliefs, emotions, and past experiences. In the context of the return to the office, employers are making decisions that are based on cognitive biases that are leading them to overlook the dangers of their actions.

One of the most common cognitive biases at play in this context is confirmation bias. This is the tendency to seek out and interpret information in a way that confirms our pre-existing beliefs or biases. Employers who are determined to bring their employees back to the office are more likely to seek out information that supports this decision, while ignoring or downplaying information that contradicts it. This can lead them to make decisions that are not in the best interests of their organizations by harming relations with employees, leading both to challenges with retention and resistance by employees through worker power.

Another cognitive bias that is prevalent in this context is the status quo bias. This is the tendency to prefer things to stay the way they are, rather than change. Employers who are used to having their employees work in the office may be resistant to change, even if remote work has proven to be effective and beneficial for their employees. They may be more inclined to return to the office simply because it is the way things have always been done, rather than because it is the best decision for their employees or their organization.

The dangers of cognitive biases in this context are significant. By ignoring the benefits of remote work and forcing their employees back to the office, employers risk alienating their workers, and they may also be creating a situation where workers are more likely to unionize. This is because when employees feel that their needs are not being met, they are more likely to band together and form a union to protect their interests.

In Conclusion

It is time for employers to recognize the value of remote work and to work with their employees to create hybrid or remote work arrangements that meet the needs of both parties. Employers who do so will enjoy a happier and more productive workforce, while those who refuse to adapt risk falling behind in a rapidly changing world.

Remote work enables worker power, and employers who recognize this fact will be better positioned to succeed in the years ahead. As a manager, it is important to listen to your employees and to work with them to create the best possible work environment for all. By doing so, you can create a strong and vibrant workplace culture that will help you succeed in the long run.

Why Employers Forcing a Return to Office is Leading to More Worker Power and Unionization

Posted on by Dr Gleb Tsipursky

Angry and dismayed Amazon employees are pushing back against the recently-announced return to office policy by the Amazon leadership. Amazon’s policy joins other high-profile companies such as Disney, Starbucks, Tesla, Google, and others that are forcing employees back to the office.

Some are claiming they need to do so for the sake of productivity. For example, Elon Musk, the CEO of Tesla, claimed that those working remotely only “pretend to work” and are “phoning it in.” Others say you need to be in the office to innovate: Disney’s CEO Bob Iger demanded the return to the office because “nothing can replace the ability to connect, observe, and create with peers that come from being physically together.”

So what explains the situation?

As a globally-known expert in the field of hybrid and remote work, I have seen firsthand how working remotely, whether part of the week or full-time, enables worker power by facilitating autonomy, decentralizing power, and preventing micromanagement. Unfortunately, too many old-school managers like Iger and Musk prefer a rigid, top-down power structure; indeed, Elon Musk is well-known as an extreme micromanager.

Such an authoritarian approach is well-suited to the assembly line model of the early 20th century, but not well-suited for a modern knowledge economy. That’s why we’re seeing employees use worker power to fight against these authoritarian mandates, resulting in empowered labor unions.

It’s important to recognize that this turn to worker power is happening in the context of massive layoffs by tech companies, which are becoming less willing to offer perks like remote work to their workforce. In fact, there’s evidence that some companies such as Twitter are using return to office mandates to get workers to quit voluntarily, to avoid paying severance. Employers are increasingly getting the upper hand, as workers who feel anxious about the economy are reluctant to make demands for more remote work. However, such strategies may well backfire against employers in the long term if they spur increases in labor union organizing; even though individual employees might be anxious about their jobs, together they can press their case, especially given an unemployment rate of 3.4%, the lowest in over 50 years. And even tech workers are finding new jobs in three months or so, pointing to the strength of the labor market despite some shift toward employer power.

Three Case Studies of Worker Power and the Return to Office

YouTube contractors in Texas went on strike in protest of rules requiring such workers to report to the office. The workers, who are technically employed by Cognizant, were notified of the Feb. 6 return-to-office date in November. The vast majority of the contractors were hired during the pandemic and have always worked remotely. Workers say their pay, which starts at around $19 per hour, isn’t enough to cover the costs of relocating to and living in Austin. The workers’ strike came after they filed a prior month for union recognition, leading some to conclude the move was being made in retaliation. The workers are also seeking to have Google and Cognizant recognized as joint employers.

The New Mexico State Personnel Office ordered state employees working remotely to return to in-person work at the start of the new year. Many voiced their frustrations against the order, citing issues with commute, health, poor in-person work conditions, lack of child care, and low pay, among other things. State workers rallied against the state’s return-to-office order at the roundhouse in Santa Fe. Dan Secrist, president of CWA Local 7076, said the state’s return-to-office mandate has worsened problems it was intended to solve while creating new ones.

Tensions Between Employers and Workers Over the Return to Office

These cases illustrate the increasing tension between employers and workers, particularly over the return to the office. The pandemic has accelerated the trend toward remote work, and workers are now resisting the idea of returning to the office. Many workers have become accustomed to the flexibility and freedom that come with remote work, and employers who refuse to allow it are facing backlash.

Employers are forcing their employees back to the office to impose control over workers, but they are failing to recognize that remote work enables worker power. In fact, remote work is empowering workers by giving them more control over their lives and work. With remote work, workers can choose where and when to work, which gives them more control over their schedules and their work-life balance.

Employers who are forcing their employees back to the office are trying to reassert control over their workers, but they are finding that it is backfiring. Workers are pushing back against these efforts, and many are joining unions to protect their rights and interests. Employers who refuse to recognize this trend risk alienating their workers and facing the consequences.

Cognitive Biases in the Return to Office Increases Worker Power

The drive to return employees to the office to regain control over employees is a prime example of how cognitive biases can lead to poor decision-making. Cognitive biases are mental shortcuts that we use to process information quickly and efficiently. They can lead us to make decisions that are not based on facts or rational thought, but on our personal beliefs, emotions, and past experiences. In the context of the return to the office, employers are making decisions that are based on cognitive biases that are leading them to overlook the dangers of their actions.

One of the most common cognitive biases at play in this context is confirmation bias. This is the tendency to seek out and interpret information in a way that confirms our pre-existing beliefs or biases. Employers who are determined to bring their employees back to the office are more likely to seek out information that supports this decision, while ignoring or downplaying information that contradicts it. This can lead them to make decisions that are not in the best interests of their organizations by harming relations with employees, leading both to challenges with retention and resistance by employees through worker power.

Another cognitive bias that is prevalent in this context is the status quo bias. This is the tendency to prefer things to stay the way they are, rather than change. Employers who are used to having their employees work in the office may be resistant to change, even if remote work has proven to be effective and beneficial for their employees. They may be more inclined to return to the office simply because it is the way things have always been done, rather than because it is the best decision for their employees or their organization.

The dangers of cognitive biases in this context are significant. By ignoring the benefits of remote work and forcing their employees back to the office, employers risk alienating their workers, and they may also be creating a situation where workers are more likely to unionize. This is because when employees feel that their needs are not being met, they are more likely to band together and form a union to protect their interests.

In Conclusion

It is time for employers to recognize the value of remote work and to work with their employees to create hybrid or remote work arrangements that meet the needs of both parties. Employers who do so will enjoy a happier and more productive workforce, while those who refuse to adapt risk falling behind in a rapidly changing world.

Remote work enables worker power, and employers who recognize this fact will be better positioned to succeed in the years ahead. As a manager, it is important to listen to your employees and to work with them to create the best possible work environment for all. By doing so, you can create a strong and vibrant workplace culture that will help you succeed in the long run.

How to Innovate in Hybrid and Remote Work

Posted on by Dr Gleb Tsipursky

Some major companies have implemented return-to-work policies, but at what cost? Disney CEO Bob Iger demanded in January that all employees come to the office at least four days a week because, “In a creative business like ours, nothing can replace the ability to connect, observe, and create with peers that comes from being physically together.” Apple CEO Tim Cook expressed similar sentiments when he mandated that employees show up at least three days per week since, “Innovation isn’t always a planned activity. It’s bumping into each other over the course of the day and advancing an idea that you just had. And you really need to be together to do that.”

Yet is this true? On the one hand, research at MIT found that remote work weakens the cross-functional, inter-team “weak ties” that form the basis for the exchange of new ideas that tend to foster innovation. Along the same vein, a study by Microsoft concluded that remote work weakens innovation since workers communicate less with those outside their own teams.

On the other hand, McKinsey & Company research pointed to a different verdict. It determined that during the two-plus years of the COVID-19 pandemic, a record number of new patents was filed across 150 global patent filing authorities. Moreover, in 2021 global venture capital more than doubled from 2020, rising 111 percent. McKinsey suggests that this is because more innovative companies developed new ways of connecting remote workers together to build and sustain the cross-functional, inter-team ties necessary for innovation, thus widening the pools of minds that could generate new ideas. Deloitte similarly highlighted how adapting the process of innovation to remote settings offers the key to boost innovation for hybrid and remote teams.

My experience helping 21 organizations transition to hybrid and remote work demonstrates that innovation is eminently achievable. But it requires adopting best practices that address the weakening of cross-functional connections and the lack of natural, spontaneous interactions that breed innovation.

An excellent technique to replace those hallway chats involves collaboration software like Slack or Microsoft Teams. I suggest that you set up a specific channel in that software to facilitate the creativity and collaboration behind serendipitous innovation, and incentivize employees to use that channel.

For example, at a late-stage SaaS start-up that used Microsoft Teams, each small team of six to eight people set up a team-specific channel for members to share innovative ideas relevant to the team’s work. Likewise, larger business units established channels for ideas applicable to the whole unit. Then, when anyone had an idea, they were encouraged to share that idea in the pertinent channel.

We encouraged everyone to pay attention to notifications in that channel. Seeing a new post, if they found the idea relevant, they would respond with additional thoughts building on the initial idea. Responses would snowball, and strong ideas would then lead to next steps, often a brainstorming session.

This approach combines a native virtual format with people’s natural motivations to contribute, collaborate, and claim credit. The initial idea poster and the subsequent contributors aren’t motivated simply by the goal of advancing the team or business unit, even though that’s, of course, part of their goal set. The initial poster is motivated by the possibility of sharing an idea that might be recognized as innovative, practical, and useful to implement, with some revisions. The contributors, in turn, are motivated by the natural desire to give advice, especially since it is visible to and useful for others in their team, business unit, or even the whole organization.

This dynamic also fits well with the different personalities of optimists and pessimists. You’ll find that the former will generally be the ones to post initial ideas. Their strength is innovative and entrepreneurial thinking, but their flaw is being risk-blind to the potential problems in the idea. In turn, pessimists will overwhelmingly serve to build on and improve the idea, pointing out its potential pitfalls and helping address them. 

Remember to avoid undervaluing the contributions of pessimists. It’s too common to pay excessive attention to the initial ideas and overly reward optimists – and I say this as an inveterate optimist myself who has 20 ideas before breakfast and thinks they’re all brilliant. Through the combination of personal bitter experiences and research on optimism and pessimism, I have learned the necessity of letting pessimistic colleagues vet and improve my ideas. My clients have found a significant deal of benefit in highly valuing such devil’s advocate perspectives as well. 

That’s why you should praise and reward not only the generators of innovative ideas but also the two or three people who most contributed to improving and finalizing the idea. And that’s what the late-stage start-up company did. The team or business unit leaders made sure that they publicly recognized the contributions of the initial idea creators and the improvers of the idea, and also gave them a bonus proportionate to the value of their contributions. Indeed, several of these ideas ended up prompting patent applications.

While this technique helps address the problem of missing spontaneous interactions, what about the weakening of cross-functional ties? To help tackle that challenge, while also improving the integration of recently hired staff, we had the SaaS company set up a hybrid and remote mentoring program. 

The program involved several mentors. One came from the recently hired staff’s own team. That mentor assisted the mentee with understanding group dynamics, on-the-job learning, and professional growth.

However, we also included two mentors from other teams. One was in the same business unit as the junior staff, while another came from a separate unit. The role of these mentors involved getting the new employee integrated into the broader company culture, facilitating inter-team collaboration, and strengthening the “weak ties” among company staff to help foster collaboration.

Six months after these interventions, the SaaS company reported a notable boost in innovation across the board. The channels devoted to innovation helped breed a number of novel projects. The mentor-mentee relationships resulted in mentees providing a fresh, creative perspective on the company’s existing work, while the mentors from outside the team helped spur productive conversations within teams that bred further innovation and collaboration. 

If a late-stage start-up with 400 employees could adopt these techniques, so too can major companies like Disney and Apple. Certainly, some tasks may best be done in person, such as sensitive personnel conversations, intense collaborative discussions, key decision-making and strategic conversations, and fun team-building events. But otherwise, the more tasks you can do remotely, the better. 
Unfortunately, Disney and Apple have adopted a traditionalist perspective on how to innovate, which ironically hinders innovation, as they are already losing talented people due to such return-to-work mandates. The future belongs to companies that best make use of the most creative people around the globe – those who have options about where to work – while minimizing their time wasted in rush hour commutes. Doing so requires adopting best practices for hybrid and remote work instead of being stuck in the past.

How to Innovate in Hybrid and Remote Work

Posted on by Dr Gleb Tsipursky

Some major companies have implemented return-to-work policies, but at what cost? Disney CEO Bob Iger demanded in January that all employees come to the office at least four days a week because, “In a creative business like ours, nothing can replace the ability to connect, observe, and create with peers that comes from being physically together.” Apple CEO Tim Cook expressed similar sentiments when he mandated that employees show up at least three days per week since, “Innovation isn’t always a planned activity. It’s bumping into each other over the course of the day and advancing an idea that you just had. And you really need to be together to do that.”

Yet is this true? On the one hand, research at MIT found that remote work weakens the cross-functional, inter-team “weak ties” that form the basis for the exchange of new ideas that tend to foster innovation. Along the same vein, a study by Microsoft concluded that remote work weakens innovation since workers communicate less with those outside their own teams.

On the other hand, McKinsey & Company research pointed to a different verdict. It determined that during the two-plus years of the COVID-19 pandemic, a record number of new patents was filed across 150 global patent filing authorities. Moreover, in 2021 global venture capital more than doubled from 2020, rising 111 percent. McKinsey suggests that this is because more innovative companies developed new ways of connecting remote workers together to build and sustain the cross-functional, inter-team ties necessary for innovation, thus widening the pools of minds that could generate new ideas. Deloitte similarly highlighted how adapting the process of innovation to remote settings offers the key to boost innovation for hybrid and remote teams.

My experience helping 21 organizations transition to hybrid and remote work demonstrates that innovation is eminently achievable. But it requires adopting best practices that address the weakening of cross-functional connections and the lack of natural, spontaneous interactions that breed innovation.

An excellent technique to replace those hallway chats involves collaboration software like Slack or Microsoft Teams. I suggest that you set up a specific channel in that software to facilitate the creativity and collaboration behind serendipitous innovation, and incentivize employees to use that channel.

For example, at a late-stage SaaS start-up that used Microsoft Teams, each small team of six to eight people set up a team-specific channel for members to share innovative ideas relevant to the team’s work. Likewise, larger business units established channels for ideas applicable to the whole unit. Then, when anyone had an idea, they were encouraged to share that idea in the pertinent channel.

We encouraged everyone to pay attention to notifications in that channel. Seeing a new post, if they found the idea relevant, they would respond with additional thoughts building on the initial idea. Responses would snowball, and strong ideas would then lead to next steps, often a brainstorming session.

This approach combines a native virtual format with people’s natural motivations to contribute, collaborate, and claim credit. The initial idea poster and the subsequent contributors aren’t motivated simply by the goal of advancing the team or business unit, even though that’s, of course, part of their goal set. The initial poster is motivated by the possibility of sharing an idea that might be recognized as innovative, practical, and useful to implement, with some revisions. The contributors, in turn, are motivated by the natural desire to give advice, especially since it is visible to and useful for others in their team, business unit, or even the whole organization.

This dynamic also fits well with the different personalities of optimists and pessimists. You’ll find that the former will generally be the ones to post initial ideas. Their strength is innovative and entrepreneurial thinking, but their flaw is being risk-blind to the potential problems in the idea. In turn, pessimists will overwhelmingly serve to build on and improve the idea, pointing out its potential pitfalls and helping address them. 

Remember to avoid undervaluing the contributions of pessimists. It’s too common to pay excessive attention to the initial ideas and overly reward optimists – and I say this as an inveterate optimist myself who has 20 ideas before breakfast and thinks they’re all brilliant. Through the combination of personal bitter experiences and research on optimism and pessimism, I have learned the necessity of letting pessimistic colleagues vet and improve my ideas. My clients have found a significant deal of benefit in highly valuing such devil’s advocate perspectives as well. 

That’s why you should praise and reward not only the generators of innovative ideas but also the two or three people who most contributed to improving and finalizing the idea. And that’s what the late-stage start-up company did. The team or business unit leaders made sure that they publicly recognized the contributions of the initial idea creators and the improvers of the idea, and also gave them a bonus proportionate to the value of their contributions. Indeed, several of these ideas ended up prompting patent applications.

While this technique helps address the problem of missing spontaneous interactions, what about the weakening of cross-functional ties? To help tackle that challenge, while also improving the integration of recently hired staff, we had the SaaS company set up a hybrid and remote mentoring program. 

The program involved several mentors. One came from the recently hired staff’s own team. That mentor assisted the mentee with understanding group dynamics, on-the-job learning, and professional growth.

However, we also included two mentors from other teams. One was in the same business unit as the junior staff, while another came from a separate unit. The role of these mentors involved getting the new employee integrated into the broader company culture, facilitating inter-team collaboration, and strengthening the “weak ties” among company staff to help foster collaboration.

Six months after these interventions, the SaaS company reported a notable boost in innovation across the board. The channels devoted to innovation helped breed a number of novel projects. The mentor-mentee relationships resulted in mentees providing a fresh, creative perspective on the company’s existing work, while the mentors from outside the team helped spur productive conversations within teams that bred further innovation and collaboration. 

If a late-stage start-up with 400 employees could adopt these techniques, so too can major companies like Disney and Apple. Certainly, some tasks may best be done in person, such as sensitive personnel conversations, intense collaborative discussions, key decision-making and strategic conversations, and fun team-building events. But otherwise, the more tasks you can do remotely, the better. 
Unfortunately, Disney and Apple have adopted a traditionalist perspective on how to innovate, which ironically hinders innovation, as they are already losing talented people due to such return-to-work mandates. The future belongs to companies that best make use of the most creative people around the globe – those who have options about where to work – while minimizing their time wasted in rush hour commutes. Doing so requires adopting best practices for hybrid and remote work instead of being stuck in the past.

Are Productivity Paranoia and Lack of Trust the Real Obstacles to Hybrid and Remote Work?

Posted on by Dr Gleb Tsipursky

Do bosses trust employees to be productive when working out of the office? 

Microsoft released a new study, where it found that 85% of leaders say that the “shift to hybrid work has made it challenging to have confidence that employees are being productive.” More concretely, 49% of managers of hybrid workers “struggle to trust their employees to do their best work.” This lack of trust in worker productivity has led to what Microsoft researchers termed productivity paranoia: “where leaders fear that lost productivity is due to employees not working, even though hours worked, number of meetings, and other activity metrics have increased.”

That data aligns with a new report by Citrix based on a global survey of 900 business leaders and 1,800 knowledge workers – those who can do their job remotely. Half of all business leaders believe that when employees are working “out of sight,” they don’t work as hard. And 48% of the business leaders installed monitoring software on the computers of their employees to check on their work. No wonder only 49% of employees say that they trust their employer.

The perspective of this traditionalist half of business leaders align with Elon Musk’s demand that all Tesla and SpaceX employees be “visible” in the office and work full-time in-person – including knowledge workers. That’s based on Musk’s belief that remote workers are “phoning it in” and only “pretend to work.” 

Musk’s demand for improving productivity via full-time in-office work for knowledge workers is something to which other traditionalist leaders aspire. Indeed, a survey done by Microsoft shows that 50% of the bosses of knowledge workers intend to force them into the office by Spring 2023. According to a Future Forum survey, this skepticism toward work from home tends to come from older leaders in their 50s and 60s. Leaders under 50 are much more accepting of hybrid and remote work and focus on how to do it well.

Is the belief of this traditionalist, older half of the business leadership that workers are more productive in the office based on the facts? Not at all.

Already before COVID, we had peer-reviewed research demonstrating that remote work improved productivity. A NASDAQ-listed company randomly assigned call center employees to work from home or the office for 9 months. Work from home resulted in a 13% performance increase, due to a combination of fewer sick days, and a quieter and more convenient work environment. Those working from home had improved work satisfaction and a 50% lower attrition rate. A more recent study with random assignment of programmers, marketing, and finance staff found that hybrid work, similarly to remote work, reduces attrition by 35% and resulted in 8% more code written.

COVID resulted in the proliferation of studies of remote work productivity. For example, a survey by Mercer of 800 HR leaders in August 2020 reported that 94% found that the staff at their companies were more or equally productive working remotely compared to working in the office prior to the pandemic shutdowns. A two-year survey by Great Place to Work of more than 800,000 employees showed that the shift to working remotely in the pandemic boosted worker productivity by 6% on average. 

A study using employee monitoring software confirmed that the shift to remote work during COVID improved productivity by 5%. In a University of Chicago research paper, scientists found that nearly six in ten of their survey respondents reported higher productivity when working remotely, while only 14% proved less productive. On average, remote work productivity was over 7% higher than in-office productivity. 

That shouldn’t be surprising. A major benefit from remote work comes from doing away with the daily commute. Workers on average devote approximately 35% of their saved time from not commuting to their primary job, according to research at the University of Chicago. Given that people spend an average of nearly an hour per day on commute travel alone, and additional time on other commute-related tasks, this adds up to substantial additional time worked.

Indeed, a research study from Harvard University published in the National Bureau of Economic Research finds a large increase in the amount of time worked by remote workers compared to in-office workers. Evaluating the impact of the lockdowns in 16 large cities in North America, Europe, and the Middle East on knowledge workers, the researchers found an increase in the average workday of 8.2%, or 48.5 minutes.

Another benefit stems from greater flexibility to do work tasks at times that work for us. We know from research that all of us have different levels of energy throughout the day when we are best suited for various activities that don’t necessarily match the typical rhythms of a 9-5 schedule. By doing specific work tasks at various times, we can get more done.

And more recent research showed that remote work productivity actually increased throughout the pandemic. Stanford University researchers doing a longitudinal study comparing productivity at different time periods found that remote workers were 5% more efficient than office-based ones in the summer of 2020. But this number improved to 9% by summer 2022. Why? Because all of us learned how to be better at remote work.

And really, are workers all that productive in the office? Studies show that in-office employees only work between 36% and 39% of the time. What about the rest of their time in the office? They’re shopping on Amazon, checking social media, and may even be searching for new positions, especially if their bosses are forcing them to come to the office full-time.

This extensive evidence is widely available to anyone who Googles remote work productivity and looks at all the results on the first page. Leaders are taught to make data-driven decisions. 

So why do so many leaders continue to ignore the data and stubbornly deny the facts? The key lies in how leaders evaluate performance: based on what they can see. 

As the Harvard Business Review points out, leaders are trained to evaluate employees based on “facetime.” Those who come early and leave late are perceived and assessed as more productive. 

According to the MIT Sloan Management Review, even before the pandemic, the focus on presence in the office undermined effective remote work arrangements. Thus, researchers found that remote employees who work just as hard and just as long as those in the office in similar jobs end up getting lower performance evaluations, decreased raises, and less promotions.

This tendency did not change much in the pandemic for the older managers who learned how to lead long before the era of remote work. That’s because of the anchoring bias, a dangerous mental blindspot – a cognitive bias – that comes from our tendency to be anchored to our initial information about a topic. 

Thus, if leaders are taught to evaluate productivity based on simple presence in the office, they will tend to stick to that information. They’ll do so even when presented with new evidence about higher productivity among remote workers. 

A related mental blindspot, the confirmation bias, caused these traditionalist leaders to ignore information that goes against the beliefs to which they’re anchored, and seek information that confirms their anchors. For example, they’ll seek out evidence that in-office workers are more productive, even when there’s much stronger evidence that remote workers exhibit higher productivity. In other words, these leaders trust their own gut reactions, internal impressions, and intuitions over the facts, thus failing to develop self-awareness of how their mental processes might steer them to make bad decisions.

The consequence of this trust in false impressions of which type of work is more productive is leading to the unnecessary drama of forcing workers back to the office. And those older, traditionalist bosses who do so will continue to lose workers as part of the Great Resignation. A Society for Human Resources survey in June 2022 found that 48% of respondents will “definitely” seek a full-time remote position for their next job. To get them to stay at a hybrid job with a 30-minute commute, employers would have to give a 10% pay raise, and for a full-time job with the same commute, a 20% pay raise. Given the significant likelihood of a recession in the near future, which will limit the ability of employers to offer pay raises and lead to a focus on actual productivity over false gut-based intuitions, we can expect a greater shift to more hybrid and remote work going forward.

Another problem of this false belief is proximity bias. That term describes how managers have an unfair preference for and higher ratings of employees who come to the office, compared to those who work remotely, even if the remote workers show higher productivity. The face-to-face interactions between managers and employees lead to managers having more positive impressions of these employees due to cognitive biases such as the mere-exposure effect. This mental blindspot describes our predilection to have more favorable attitudes toward whatever we see more often, whether people or things, without any basis for this favorable attitude other than mere exposure.

To succeed in our increasingly hybrid and remote future will require retraining managers in evaluating performance and addressing proximity bias. Companies will have to teach them to trust the data over their own gut reactions. They’ll also have to learn a new approach to performance evaluations, one customized to hybrid and remote work.

Instead of observing presence in the office and giving an annual performance evaluation informed by proximity bias, leaders will have to measure deliverables at much more frequent intervals. Ironically, even before the pandemic, we had extensive research that demonstrated the importance of transitioning away from large-scale annual performance reviews. Now, leaders who want to successfully navigate the disruption caused by hybrid and remote work will need to provide brief performance evaluations at their regular weekly one-on-one meetings with their team members.

What will that involve? Leaders would ask each of their team members to determine three to five SMART (Specific, Measurable, Achievable, Relevant, Time-Bound) goals for each week. 

Prior to the upcoming one-on-one each week, the employee would send a brief report of a paragraph or two on how they did on the goals for that week, what kind of problems they had and how they solved them, and a brief self-evaluation. Then, at the one-on-one meeting, the leader and team member discuss the report and determine goals for next week. The leader also coaches the team member on solving problems and approves or revises the self-evaluation, which gets fed into a continuous performance evaluation system.

This approach helps leaders accept and appreciate the reality of which of their team members is more productive while addressing the pitfalls of proximity bias. It also helps team members know where they stand and addresses their fears around lack of career mobility due to proximity bias from their supervisor. And most importantly, it builds up trust between leaders and their employees. A Gallup survey showed that 75% of employees leave to a significant extent due to a poor relationship with their boss.

In short, by aligning performance evaluations with best practices for hybrid and remote work, companies will boost productivity, improve retention, and address proximity bias, while building trust between bosses and staff. My clients have already reaped substantial benefits from doing so. 

For example, the Fortune 200 high-tech manufacturer Applied Materials has developed a culture of “Excellence from Anywhere” to address proximity bias and focus on the outcomes rather than where work is done. Another client is the University of Southern California’s Information Sciences Institute, which carries out basic and applied research in machine learning and artificial intelligence, networks and cybersecurity, high-performance computing, microelectronics, and quantum information systems. It has taken a leadership position in hybrid and remote work by offering flexibility and focusing on building trust through a transparent and collaborative process of determining the future of work. 

In both organizations, leaders had to overcome their personal discomfort and push back against their intuitions to help themselves grow as leaders well-positioned to lead their teams in hybrid and remote settings. Any leaders who want to survive and thrive in the post-pandemic environment will need to do the same, or they will be outcompeted by more fit competitors in the future of work.

Are Productivity Paranoia and Lack of Trust the Real Obstacles to Hybrid and Remote Work?

Posted on by Dr Gleb Tsipursky

Do bosses trust employees to be productive when working out of the office? 

Microsoft released a new study, where it found that 85% of leaders say that the “shift to hybrid work has made it challenging to have confidence that employees are being productive.” More concretely, 49% of managers of hybrid workers “struggle to trust their employees to do their best work.” This lack of trust in worker productivity has led to what Microsoft researchers termed productivity paranoia: “where leaders fear that lost productivity is due to employees not working, even though hours worked, number of meetings, and other activity metrics have increased.”

That data aligns with a new report by Citrix based on a global survey of 900 business leaders and 1,800 knowledge workers – those who can do their job remotely. Half of all business leaders believe that when employees are working “out of sight,” they don’t work as hard. And 48% of the business leaders installed monitoring software on the computers of their employees to check on their work. No wonder only 49% of employees say that they trust their employer.

The perspective of this traditionalist half of business leaders align with Elon Musk’s demand that all Tesla and SpaceX employees be “visible” in the office and work full-time in-person – including knowledge workers. That’s based on Musk’s belief that remote workers are “phoning it in” and only “pretend to work.” 

Musk’s demand for improving productivity via full-time in-office work for knowledge workers is something to which other traditionalist leaders aspire. Indeed, a survey done by Microsoft shows that 50% of the bosses of knowledge workers intend to force them into the office by Spring 2023. According to a Future Forum survey, this skepticism toward work from home tends to come from older leaders in their 50s and 60s. Leaders under 50 are much more accepting of hybrid and remote work and focus on how to do it well.

Is the belief of this traditionalist, older half of the business leadership that workers are more productive in the office based on the facts? Not at all.

Already before COVID, we had peer-reviewed research demonstrating that remote work improved productivity. A NASDAQ-listed company randomly assigned call center employees to work from home or the office for 9 months. Work from home resulted in a 13% performance increase, due to a combination of fewer sick days, and a quieter and more convenient work environment. Those working from home had improved work satisfaction and a 50% lower attrition rate. A more recent study with random assignment of programmers, marketing, and finance staff found that hybrid work, similarly to remote work, reduces attrition by 35% and resulted in 8% more code written.

COVID resulted in the proliferation of studies of remote work productivity. For example, a survey by Mercer of 800 HR leaders in August 2020 reported that 94% found that the staff at their companies were more or equally productive working remotely compared to working in the office prior to the pandemic shutdowns. A two-year survey by Great Place to Work of more than 800,000 employees showed that the shift to working remotely in the pandemic boosted worker productivity by 6% on average. 

A study using employee monitoring software confirmed that the shift to remote work during COVID improved productivity by 5%. In a University of Chicago research paper, scientists found that nearly six in ten of their survey respondents reported higher productivity when working remotely, while only 14% proved less productive. On average, remote work productivity was over 7% higher than in-office productivity. 

That shouldn’t be surprising. A major benefit from remote work comes from doing away with the daily commute. Workers on average devote approximately 35% of their saved time from not commuting to their primary job, according to research at the University of Chicago. Given that people spend an average of nearly an hour per day on commute travel alone, and additional time on other commute-related tasks, this adds up to substantial additional time worked.

Indeed, a research study from Harvard University published in the National Bureau of Economic Research finds a large increase in the amount of time worked by remote workers compared to in-office workers. Evaluating the impact of the lockdowns in 16 large cities in North America, Europe, and the Middle East on knowledge workers, the researchers found an increase in the average workday of 8.2%, or 48.5 minutes.

Another benefit stems from greater flexibility to do work tasks at times that work for us. We know from research that all of us have different levels of energy throughout the day when we are best suited for various activities that don’t necessarily match the typical rhythms of a 9-5 schedule. By doing specific work tasks at various times, we can get more done.

And more recent research showed that remote work productivity actually increased throughout the pandemic. Stanford University researchers doing a longitudinal study comparing productivity at different time periods found that remote workers were 5% more efficient than office-based ones in the summer of 2020. But this number improved to 9% by summer 2022. Why? Because all of us learned how to be better at remote work.

And really, are workers all that productive in the office? Studies show that in-office employees only work between 36% and 39% of the time. What about the rest of their time in the office? They’re shopping on Amazon, checking social media, and may even be searching for new positions, especially if their bosses are forcing them to come to the office full-time.

This extensive evidence is widely available to anyone who Googles remote work productivity and looks at all the results on the first page. Leaders are taught to make data-driven decisions. 

So why do so many leaders continue to ignore the data and stubbornly deny the facts? The key lies in how leaders evaluate performance: based on what they can see. 

As the Harvard Business Review points out, leaders are trained to evaluate employees based on “facetime.” Those who come early and leave late are perceived and assessed as more productive. 

According to the MIT Sloan Management Review, even before the pandemic, the focus on presence in the office undermined effective remote work arrangements. Thus, researchers found that remote employees who work just as hard and just as long as those in the office in similar jobs end up getting lower performance evaluations, decreased raises, and less promotions.

This tendency did not change much in the pandemic for the older managers who learned how to lead long before the era of remote work. That’s because of the anchoring bias, a dangerous mental blindspot – a cognitive bias – that comes from our tendency to be anchored to our initial information about a topic. 

Thus, if leaders are taught to evaluate productivity based on simple presence in the office, they will tend to stick to that information. They’ll do so even when presented with new evidence about higher productivity among remote workers. 

A related mental blindspot, the confirmation bias, caused these traditionalist leaders to ignore information that goes against the beliefs to which they’re anchored, and seek information that confirms their anchors. For example, they’ll seek out evidence that in-office workers are more productive, even when there’s much stronger evidence that remote workers exhibit higher productivity. In other words, these leaders trust their own gut reactions, internal impressions, and intuitions over the facts, thus failing to develop self-awareness of how their mental processes might steer them to make bad decisions.

The consequence of this trust in false impressions of which type of work is more productive is leading to the unnecessary drama of forcing workers back to the office. And those older, traditionalist bosses who do so will continue to lose workers as part of the Great Resignation. A Society for Human Resources survey in June 2022 found that 48% of respondents will “definitely” seek a full-time remote position for their next job. To get them to stay at a hybrid job with a 30-minute commute, employers would have to give a 10% pay raise, and for a full-time job with the same commute, a 20% pay raise. Given the significant likelihood of a recession in the near future, which will limit the ability of employers to offer pay raises and lead to a focus on actual productivity over false gut-based intuitions, we can expect a greater shift to more hybrid and remote work going forward.

Another problem of this false belief is proximity bias. That term describes how managers have an unfair preference for and higher ratings of employees who come to the office, compared to those who work remotely, even if the remote workers show higher productivity. The face-to-face interactions between managers and employees lead to managers having more positive impressions of these employees due to cognitive biases such as the mere-exposure effect. This mental blindspot describes our predilection to have more favorable attitudes toward whatever we see more often, whether people or things, without any basis for this favorable attitude other than mere exposure.

To succeed in our increasingly hybrid and remote future will require retraining managers in evaluating performance and addressing proximity bias. Companies will have to teach them to trust the data over their own gut reactions. They’ll also have to learn a new approach to performance evaluations, one customized to hybrid and remote work.

Instead of observing presence in the office and giving an annual performance evaluation informed by proximity bias, leaders will have to measure deliverables at much more frequent intervals. Ironically, even before the pandemic, we had extensive research that demonstrated the importance of transitioning away from large-scale annual performance reviews. Now, leaders who want to successfully navigate the disruption caused by hybrid and remote work will need to provide brief performance evaluations at their regular weekly one-on-one meetings with their team members.

What will that involve? Leaders would ask each of their team members to determine three to five SMART (Specific, Measurable, Achievable, Relevant, Time-Bound) goals for each week. 

Prior to the upcoming one-on-one each week, the employee would send a brief report of a paragraph or two on how they did on the goals for that week, what kind of problems they had and how they solved them, and a brief self-evaluation. Then, at the one-on-one meeting, the leader and team member discuss the report and determine goals for next week. The leader also coaches the team member on solving problems and approves or revises the self-evaluation, which gets fed into a continuous performance evaluation system.

This approach helps leaders accept and appreciate the reality of which of their team members is more productive while addressing the pitfalls of proximity bias. It also helps team members know where they stand and addresses their fears around lack of career mobility due to proximity bias from their supervisor. And most importantly, it builds up trust between leaders and their employees. A Gallup survey showed that 75% of employees leave to a significant extent due to a poor relationship with their boss.

In short, by aligning performance evaluations with best practices for hybrid and remote work, companies will boost productivity, improve retention, and address proximity bias, while building trust between bosses and staff. My clients have already reaped substantial benefits from doing so. 

For example, the Fortune 200 high-tech manufacturer Applied Materials has developed a culture of “Excellence from Anywhere” to address proximity bias and focus on the outcomes rather than where work is done. Another client is the University of Southern California’s Information Sciences Institute, which carries out basic and applied research in machine learning and artificial intelligence, networks and cybersecurity, high-performance computing, microelectronics, and quantum information systems. It has taken a leadership position in hybrid and remote work by offering flexibility and focusing on building trust through a transparent and collaborative process of determining the future of work. 

In both organizations, leaders had to overcome their personal discomfort and push back against their intuitions to help themselves grow as leaders well-positioned to lead their teams in hybrid and remote settings. Any leaders who want to survive and thrive in the post-pandemic environment will need to do the same, or they will be outcompeted by more fit competitors in the future of work.

Why Did Adidas Wait So Long to Drop Kanye West?

Posted on by Dr Gleb Tsipursky

“Adidas does not tolerate antisemitism and any other sort of hate speech… the company has taken the decision to terminate the partnership with Ye immediately,” according to its October 25 news release.

That statement conveys a principled and admirable stance against the antisemitism shown by the rapper formerly known as Kanye West after his antisemitic tweet on October 10 that he would go “death con 3 on JEWISH PEOPLE.” 

Yet Adidas waited much, much longer than other companies that cut ties with Ye. Even Ye’s own talent agency dropped him before Adidas. In fact, Adidas delayed so long that Ye taunted them on his October 16 appearance on the Drink Champs podcast, saying “I can say antisemitic things, and Adidas can’t drop me. Now what? Now what?”

Adidas faced particular pressure to drop Ye due to its dark past. A German company founded by a former member of the Nazi party, Adidas had an especially strong reason to drop Ye earlier than other companies. Adidas faced mounting pressure from the Anti-Defamation League and other organizations to drop Ye given its Nazi past. A Change.org petition set up by the Campaign Against Antisemitism urging Adidas to sever ties with Ye had gathered 169,100 signatures by October 25.

Yet Adidas refused to drop Ye until all the other companies dropped him. Instead of getting ahead of the problem and dropping Ye immediately after his October 10 anti-semitic tweet, or even his October 16 taunting of Adidas, the company had to be shamed and pressured into cutting its ties with Ye. As a result, Adidas seriously damaged its brand, harming its reputation among anyone opposed to antisemitism. After all, it appeared Adidas dropped Ye due to the pressure, rather than Ye’s antisemitism and other bad behaviors.

What explains the poor decision-making by the Adidas leadership? It’s a classic case of the ostrich effect: a dangerous judgment error where our minds refuse to acknowledge negative information about reality. It’s named after the mythical notion that ostriches bury their heads in the sand at a sign of danger. The ostrich effect is a type of cognitive bias, one of many mental blindspots impact decision making in all life areas, ranging from the future of work to mental fitness. 

The Adidas leadership buried its head in the sand. It refused to acknowledge the growing damage to its brand from Ye’s antisemitism, as well as his prior bad behavior, such as having models wear “White Lives Matter” T-shirts in early October. 

Such denialism in professional settings happens more often than you might think. A four-year study of 286 organizations that had forced out their CEOs found that 23 percent were fired for denying reality, meaning refusing to recognize negative facts about their organization. Other research shows that professionals at all levels suffer from the tendency to deny uncomfortable facts.

Adidas’ denialism likely stems from the cognitive bias known as the sunk costs fallacy. According to Adidas’ statement, the termination of the contract is expected to “have a short-term negative impact of up to €250 million on the company’s net income in 2022 given the high seasonality of the fourth quarter.” Presumably, the impact will be much higher in 2023, over half a billion at least. 

The partnership with Ye had a long history since 2013, when the company signed his brand away from rival Nike. In 2016, Adidas further expanded its relationship with the rapper, calling it “the most significant partnership ever created between a non-athlete and an athletic brand.”

In other words, Adidas invested a great deal of money and reputation into its relationship with Ye. That kind of investment causes our minds to feel strongly attached to whatever we put those resources into, and throw good money after bad. 

You’ll see this happen often in major projects that are working out poorly, such as Meta’s Metaverse project. Several high-profile industry figures recently criticized Mark Zuckerberg’s efforts. That includes Palmer Luckey, the founder of VR headset startup Oculus, which Meta acquired in 2014 for $2 billion. Luckey said “I don’t think it’s a good product” about Horizon Worlds, Meta’s core metaverse product. He called it a “project car,” a fancy automobile that the owner spends a lot of money on as a hobby. So far, Facebook’s shift to building the metaverse has been costly, with the company last year losing $10 billion on it, and Wall Street analysts expect it to lose more than $10 billion again this year.

Similarly, you’ll see sunken costs in major relationships. That can range from marriages that lasted much longer than they should have to brand partnerships like the one between Adidas and Ye.

The final cognitive bias relevant here is called hyperbolic discounting. This term describes our brain’s focus on short-term, highly visible outcomes over much more important and less visible long-term ones. Adidas didn’t want to take the short-term financial hit to its bottom line from cutting ties with Ye. However, Adidas failed to give sufficient weight to the long-term damage to its brand from failing to do so. 

Short-term financial damage is highly visible and painful, while the long-term brand damage is much less visible and less painful. Yet realistically, such brand damage is much more important to the long-term success of Adidas.

In my consulting, I’ve seen many executives struggling with the same three mental blindspots when they face top performers engaging in bad behaviors, ranging from incivility to sexual harassment and discrimination. Leaders deny it happened because they have so much invested in the top performer, whether a star salesperson or top data scientist, and they don’t consider the long-term consequences to the organization’s culture and employee morale. 

In fact, it’s easy for anyone to fall for these three cognitive biases when someone whom you value behaves badly. Fortunately, forewarned is forearmed: knowing about these three mental blindspots means you can watch out for these problems in your own professional and personal life.

Why Did Adidas Wait So Long to Drop Kanye West?

Posted on by Dr Gleb Tsipursky

“Adidas does not tolerate antisemitism and any other sort of hate speech… the company has taken the decision to terminate the partnership with Ye immediately,” according to its October 25 news release.

That statement conveys a principled and admirable stance against the antisemitism shown by the rapper formerly known as Kanye West after his antisemitic tweet on October 10 that he would go “death con 3 on JEWISH PEOPLE.” 

Yet Adidas waited much, much longer than other companies that cut ties with Ye. Even Ye’s own talent agency dropped him before Adidas. In fact, Adidas delayed so long that Ye taunted them on his October 16 appearance on the Drink Champs podcast, saying “I can say antisemitic things, and Adidas can’t drop me. Now what? Now what?”

Adidas faced particular pressure to drop Ye due to its dark past. A German company founded by a former member of the Nazi party, Adidas had an especially strong reason to drop Ye earlier than other companies. Adidas faced mounting pressure from the Anti-Defamation League and other organizations to drop Ye given its Nazi past. A Change.org petition set up by the Campaign Against Antisemitism urging Adidas to sever ties with Ye had gathered 169,100 signatures by October 25.

Yet Adidas refused to drop Ye until all the other companies dropped him. Instead of getting ahead of the problem and dropping Ye immediately after his October 10 anti-semitic tweet, or even his October 16 taunting of Adidas, the company had to be shamed and pressured into cutting its ties with Ye. As a result, Adidas seriously damaged its brand, harming its reputation among anyone opposed to antisemitism. After all, it appeared Adidas dropped Ye due to the pressure, rather than Ye’s antisemitism and other bad behaviors.

What explains the poor decision-making by the Adidas leadership? It’s a classic case of the ostrich effect: a dangerous judgment error where our minds refuse to acknowledge negative information about reality. It’s named after the mythical notion that ostriches bury their heads in the sand at a sign of danger. The ostrich effect is a type of cognitive bias, one of many mental blindspots impact decision making in all life areas, ranging from the future of work to mental fitness. 

The Adidas leadership buried its head in the sand. It refused to acknowledge the growing damage to its brand from Ye’s antisemitism, as well as his prior bad behavior, such as having models wear “White Lives Matter” T-shirts in early October. 

Such denialism in professional settings happens more often than you might think. A four-year study of 286 organizations that had forced out their CEOs found that 23 percent were fired for denying reality, meaning refusing to recognize negative facts about their organization. Other research shows that professionals at all levels suffer from the tendency to deny uncomfortable facts.

Adidas’ denialism likely stems from the cognitive bias known as the sunk costs fallacy. According to Adidas’ statement, the termination of the contract is expected to “have a short-term negative impact of up to €250 million on the company’s net income in 2022 given the high seasonality of the fourth quarter.” Presumably, the impact will be much higher in 2023, over half a billion at least. 

The partnership with Ye had a long history since 2013, when the company signed his brand away from rival Nike. In 2016, Adidas further expanded its relationship with the rapper, calling it “the most significant partnership ever created between a non-athlete and an athletic brand.”

In other words, Adidas invested a great deal of money and reputation into its relationship with Ye. That kind of investment causes our minds to feel strongly attached to whatever we put those resources into, and throw good money after bad. 

You’ll see this happen often in major projects that are working out poorly, such as Meta’s Metaverse project. Several high-profile industry figures recently criticized Mark Zuckerberg’s efforts. That includes Palmer Luckey, the founder of VR headset startup Oculus, which Meta acquired in 2014 for $2 billion. Luckey said “I don’t think it’s a good product” about Horizon Worlds, Meta’s core metaverse product. He called it a “project car,” a fancy automobile that the owner spends a lot of money on as a hobby. So far, Facebook’s shift to building the metaverse has been costly, with the company last year losing $10 billion on it, and Wall Street analysts expect it to lose more than $10 billion again this year.

Similarly, you’ll see sunken costs in major relationships. That can range from marriages that lasted much longer than they should have to brand partnerships like the one between Adidas and Ye.

The final cognitive bias relevant here is called hyperbolic discounting. This term describes our brain’s focus on short-term, highly visible outcomes over much more important and less visible long-term ones. Adidas didn’t want to take the short-term financial hit to its bottom line from cutting ties with Ye. However, Adidas failed to give sufficient weight to the long-term damage to its brand from failing to do so. 

Short-term financial damage is highly visible and painful, while the long-term brand damage is much less visible and less painful. Yet realistically, such brand damage is much more important to the long-term success of Adidas.

In my consulting, I’ve seen many executives struggling with the same three mental blindspots when they face top performers engaging in bad behaviors, ranging from incivility to sexual harassment and discrimination. Leaders deny it happened because they have so much invested in the top performer, whether a star salesperson or top data scientist, and they don’t consider the long-term consequences to the organization’s culture and employee morale. 

In fact, it’s easy for anyone to fall for these three cognitive biases when someone whom you value behaves badly. Fortunately, forewarned is forearmed: knowing about these three mental blindspots means you can watch out for these problems in your own professional and personal life.

Does Remote Work Contribute to Inflation? Let’s Look at the Numbers

Posted on by Dr Gleb Tsipursky

BlackRock CEO Larry Fink claimed in a recent interview with Fox that “we have to get our employees back in the office.” According to him, doing so would result in “rising productivity that will offset some of the inflationary pressures.” 

Fink did not provide any data in the form of statistics, surveys, or studies to support his claims. He insisted, without evidence, that in-office work would reduce inflation. So what does the data say?

A widely-cited July 2022 study from the highly-respected National Bureau of Economic Research (NBER) found strong evidence that remote work decreased inflation. Namely, because employees strongly prefer mostly or full-time remote work, they are willing to accept lower wages to work remotely. As a result, the researchers found that remote work decreased wage growth by 2 percent over the last two years. Notably, the decrease in growth occurred specifically in the mostly higher-paid, white-collar positions that could be done remotely, leading to wage compression that reduced wage inequality between blue-collar and white-collar work. Given that higher wages result in more consumer spending, leading to inflation, the study concluded that remote work reduces inflation.

Plenty of other evidence supports the finding that remote work reduces wage growth, such as a June 2022 survey by the Society for Human Resources. It reports that 48% of survey respondents will “definitely” look for a full-time WFH job in their next search. To get them to stay at a full-time position with a 30-minute commute, they would need a 20% pay raise. A hybrid job with the same commute would need a pay raise of 10%. A different survey of 3,000 workers at top companies such as Google, Amazon, and Microsoft found that 64% would prefer permanent work-from-home over a $30,000 pay raise. Indeed, companies that offer remote work opportunities are increasingly hiring in lower cost-of-living areas of the US and even outside the US to get the best value for talent. That’s a significant reason why one of my clients, a late-stage software-as-a-service startup, decided to offer some all-remote positions. 

This data shows that remote work decreases costs of labor and thus reduces inflation. What about Fink’s claims about productivity?

Surveys have long found that workers report being more productive working remotely, but we might feel some skepticism toward self-reported answers. It’s harder to feel skeptical of evidence from employee monitoring softwarecompany Prodoscore. Its President David Powell said, “after evaluating over 105 million data points from 30,000 U.S.-based Prodoscore users, we discovered a five percent increase in productivity during the pandemic work-from-home period.” 

And we have become better at working remotely over time. A Stanford University study found that remote workers were 5% more productive than in-office workers in the summer of 2020. By the spring of 2022, remote workers became 9% more productive, since companies learned how to do remote work better and invested in more remote-friendly technology. 

A July 2022 study in another NBER paper found that productivity growth in businesses relying on remote work like IT and finance grew from 1.1% between 2010 and 2019 to 3.3% since the start of the pandemic. Compare that to industries relying on in-person contact, such as transportation, dining, and hospitality. They went from a productivity growth of 0.6% between 2010 and 2019 to a decrease of 2.6% from the pandemic’s start.

Case study evidence backs up these broader trends, as reported in another NBER paper about a study at a real-world company, Trip.com, one of the largest travel agencies in the world. It randomly assigned some engineers, marketing workers, and finance workers to work some of their time remotely and others in the same roles to full-time in-office work. Guess what? Those who worked on a hybrid schedule had 35% better retention, and the engineers wrote 8% more code. Writing code is a standardized and tough measure of productivity and provides strong evidence of higher productivity in remote work.

The evidence demonstrates that remote labor costs less and is more productive, reducing inflation at both ends. What about ancillary costs?

Employees can save much money, up to $12,000, for full-time remote work, according to a Flexjobs analysis. That involves savings on transportation, such as gas, car maintenance, parking, or public transport. Workers also don’t have to buy expensive office attire or eat out at overpriced downtown restaurants. Workers need to pay somewhat more for cooking at home and higher utilities. Yet these costs are much smaller than the costs of coming to the office.

Companies save much money on real estate, utilities, office furniture, cleaning services, and related costs. An average office space per employee can be up to $18,000 annually, which means savings can add up fast. No wonder office occupancy is down, and companies are cutting their real estate footprint. For example, Amazon – which allows full-time and part-time remote work – recently paused its construction of five towers in Bellevue, Washington, due to remote work. 

Companies are investing more into support for work from home, such as IT and cybersecurity. And more forward-looking ones are providing remote work support for home offices. For instance, Twitter, Facebook, and Google provided a flat stipend of $1,000 for home offices. As another alternative, one of my clients, the University of Southern California’s Information Sciences Institute, researched the best options for home offices and provided a standardized and wide range of home office technology and furniture to its staff. Doing so improves productivity and is a wise long-term investment. And such expenses are much less than the costs of employees in the office. 

Thus, in addition to lower labor costs and higher productivity, employees and employers pay much less to have staff work remotely. All the evidence shows that remote work decreases inflation. 

Such information is readily available, and Fink could have assigned a summer intern at BlackRock to find the evidence but chose not to do so. He’s not the only one joining many prominent CEOs in driving employees back to the office. What explains this seemingly contradictory behavior?

As a behavioral science expert in decision-making around the future of work, I can tell you that I’ve observed many leaders exhibiting poor judgment, likely due to a combination of cognitive biases. One is called the belief bias, where our belief in the desirability of an outcome – such as Fink’s desire for workers to return to the office – causes us to misinterpret the evidence supporting this outcome. Another is confirmation bias, where we look for evidence that confirms our beliefs and ignores evidence that does not. 

Thus, while the facts clearly show that remote work reduces inflation, improves productivity, and reduces costs, it took many efforts to convince some traditionalist executives within my client organizations about the benefits of remote work. Their discomfort – due to these cognitive biases – undermined their judgments. It discussed cognitive biases and how to avoid trusting our intuitions in new contexts to turn them around.

Hopefully, prominent CEOs like Larry Fink and many others will recognize the dangerous consequences of inflation and the bottom lines of their companies driving employees back to the office. Otherwise, their companies and the economy as a whole will suffer. Their poor judgment should teach all business leaders to rely on facts and not wishful thinking in their public communication and decision-making.

Will a Return to the Office Harm Diversity or Improve it?

Posted on by Dr Gleb Tsipursky

JPMorgan CEO Jamie Dimon recently claimed that returning to the office will help improve diversity. And if he’s right, that’s an important argument for office-centric work. After all, extensive research shows that improving diversity boosts both decision-making and financial performance. 

Yet does office-centric work really improve diversity? Meta Platforms – the owner of Facebook and Instagram – decided to offer permanent fully-remote work options to its current employees and new job applicants as part of adapting to the post-pandemic environment. If Dimon is right, this shift should have undermined Meta’s diversity. 

In fact, Meta found the opposite to be true. According to Meta Chief Diversity Officer Maxine Williams, the candidates who accepted job offers for remote positions were “substantially more likely” to come from diverse communities: Black, Hispanic, Alaskan Native, Native American, people with disabilities, veterans, and women. Sandra Altiné, Meta’s VP of Workforce Diversity and Inclusion, said “embracing remote work and being distributed-first has allowed Meta to become a more diverse company.”

The numbers bear out these claims. In 2019, so before the pandemic, Meta committed to a five-year goal of doubling the number of Black and Hispanic workers in the US and the number of women in its global workforce. Frankly speaking, large companies usually tend to make bold promises, but underperform in executing on these commitments.

However – thanks to remote work – Meta’s 2022 Diversity Report shows that it attained and even outperformed its 2019 five-year goals for diversity two years ahead of its original plans. It substantially improved on other diversity metrics to which it didn’t commit in 2019: for instance, people with disabilities increased from 4.7% to 6.2% of Meta’s employees. 

Is Meta special in some way? Not at all. 

Do you think minority groups, such as African Americans, want more or less time in the office compared to white people? A Future Forum survey on this topic among knowledge workers – who can work fully remotely – found that 21% of all White knowledge workers wanted a return to full-time in-office work. 

What would be your guess as to how many Black knowledge workers wanted a return to full-time in-office work? The answer: only 3% of all Black knowledge workers would want to return to full-time work in the office. That’s a huge difference!

Another survey found that 38% of Black men and 33% of Black women wanted a fully flexible schedule. The comparable numbers for white men is 26% and white women is 25%. 

Plenty of other surveys show similar findings. For example, the Society for Human Resource Management last September found that half of all Black office workers wanted to work from home permanently, while only 39% of white workers did so.

What explains this enormous disparity? Well, unfortunately, Black professionals are still subject to discrimination and microaggressions in the office. They are less vulnerable to such issues when they work remotely much or all of the time.

In addition, Black professionals have to expend more effort to fit into the dominant cultural modality in the workplace, which is determined by traditional White culture. They have to do what is called code-switching: adjusting their style of speech, appearance, and behavior. That code-switching takes energy that could be spent better doing actual productive work.

Similar findings apply to other underprivileged groups. That includes not only ethnic and racial minorities or people with disabilities, but also women.

Since this data is widely available, why did Dimon make the false claim about returning to the office improving diversity? He might have fallen for the belief bias, a mental blindspot that causes us to evaluate truth claims based on how much we want to believe them, rather than the data. Another problem might be the confirmation bias, our mind’s tendency to reject information that goes against our beliefs.

While Dimon is absolutely wrong about diversity and remote work, that doesn’t mean it’s a panacea for underprivileged groups. Research shows minorities deal with bullying on video calls and harassment via chat and email, as well as other online settings. Another problem: surveys demonstrate that men frequently interrupt or ignore women in virtual meetings, even more so than at in-person ones.

How do you address such problems? Companies need to train staff – and especially managers – to conduct remote and hybrid meetings in a way that’s sensitive to diversity concerns. This will help your team build skills in avoiding such problems and especially help minorities feel supported as you build a more collaborative atmosphere.

For example, when bullying and interruptions happen in virtual meetings, managers need to learn how to address it in the moment. They can say something like, “Please let them complete their point before asking questions. Use the raised hand function so that we can come back to your suggestion afterward.” Similarly, managers also need to check with underrepresented staff about bullying in private team member communications, making it clear that any such behavior should be brought to their attention. In both cases, the manager needs to be trained to talk to the offender, explain why it’s inappropriate, and request that they change that pattern of behavior.

Stopping online harassment of minorities is not enough. One of the biggest challenges in remote work is decreasing connections among workers. 

For instance, research indicates that the number of connections made by new hires in the workplace decreased by 17% during the pandemic, compared to the period before the pandemic. Since the successful accomplishment of company goals often requires cross-functional collaboration, such loss of connections is worrisome. Fortunately, scholars found that connecting junior staff working remotely to senior staff during the pandemic worked very effectively to expand the network of junior staff. 

Research shows that one of the primary reasons minorities fail to advance stems from the lack of connections to senior staff in the form of informal mentoring and sponsorship. To address this program requires creating a formal hybrid and remote mentoring program, with a special focus on underprivileged staff. 

As an example, consider one of my clients, the University of Southern California’s Information Sciences Institute, which carries out basic and applied research in machine learning and artificial intelligence, networks and cybersecurity, high-performance computing, microelectronics, and quantum information systems. At ISI, we are implementing a formal mentoring program that will provide special support to minority groups. That means providing minority staff with two mentors, one from the same minority group and one representing the majority population. Doing so offers the minority mentee a diverse network of connections and experiences to draw on among both minority and majority staff. It provides mentees with the implicit knowledge and relationships they will need to advance, while the fact that each mentee has two mentors lightens the load on each mentor and makes the workload manageable. To help uplift the importance of the mentoring program, mentoring is included as part of the performance evaluation of each mentor. 

Creating a diverse, inclusive, and equitable culture in remote and hybrid settings requires recognizing problems and taking action to remedy them. An easy way to start advocating is to conduct internal surveys to determine those issues.

The best surveys will ask minority staff about their experiences with the problems outlined above and other diversity-related challenges. They’ll also request feedback about what the staff believe might be the most effective ways of solving these problems. Then, they’ll integrate the best solutions into plans to address the situation.

You have probably heard the famous phrase, “what gets measured gets managed.” Once you know the nature and extent of the problems, you can work to change them systematically, rather than only in one-off, ad-hoc situations. Measure the problem, create a plan to fix it, then measure how well you are improving it.

By following this path, and adopting best practices for diversity in hybrid and remote work, you’ll avoid Dimon’s failure to look at the data and patently false statements. Instead, like Meta, you’ll outperform your diversity goals and thus improve your company’s financial performance.

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