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.

Politicians are not the best role models. Often, they are self-serving individuals obsessed with their own job security.

Social media lets us watch them say one thing and do just the opposite. Rather than lead effectively, politicians simply call each other names. The world would be a better place if politicians remembered these 10 leadership principles.

1. Tunnel vision – do not surround yourself with people who only think like you. Add diversity to broaden your scope.
2. Likeability – you cannot always be the nicest person in the room.
3. Decisions – don’t let your ego get in the way of a good decision.
4. Trust – if your team does not trust you, then you are just a bully.
5. Followers – 20-30% of the people will follow anyone.
6. Communication – talk is cheap – action pays the bills.
7. Respect – it is earned over many years but can be lost in seconds.
8. Leadership – lying and creating fear is not leadership. It is chaos.
9. Courage – do the right thing. Make the tough decisions even if it means losing some of your status.
10. Integrity – stand up for what you believe. Be the role model you want your children to follow.

Let’s hope more politicians remember that they are role models for current and future generations.   

Does this sound familiar?…

• You have a “B” manager trying to hire “A” players.
• Managers make their hiring decision based on the first impression.
• Manager and candidate bond because of similar likes (i.e., sports, college football, etc.), rather than the candidate’s qualifications.
• The manager says: “Please sit down while I read your resume.”
• The manager hires based on “I’m a good judge of character.”

This happens every day — even in the best companies. Too often, well-intentioned managers are the weak link in your hiring process. And the cost is enormous, including lost sales, poor customer service, safety issues, lower employee engagement, etc.

Training, while important, may not be the solution because most managers resort back to their old habits. How to help hiring managers:

1. Job descriptions are sooo yesterday. They are essential, but not strategic. They provide only basic info — work history, education, and the job’s duties and responsibilities, etc. Have the manager complete a Job Outlook form. Prior to starting the hiring process, capture the hiring managers’ strategic thoughts about the open position in writing and with their signature.
2. Review your pre-hire assessments. Are you using yesterday’s tools for a vastly different business model (i.e., remote workers, Zoom meetings, work/life balance issues, etc.)?
3.  Understand that there are two types of onboarding. The formal one is where the candidate learns about the company’s vision, mission, procedures, benefits, and products. The informal onboarding is where the current employees teach the new person “the ropes.” If not aligned, it will directly affect the new employee’s success with the company.

Self-aware leaders know how their values, beliefs, and personal histories shape their perceptions of reality, leading to a better understanding of those around them. But learning how to be self-aware as a leader is a challenging process. Start with these steps.

Everyone alive has their own perception of reality. That much is hard to deny, as people can’t help but perceive the world through their own personal lens. Recognizing and appreciating the differences in these various perceptions can be difficult when we can’t perceive each other’s unique views, but this ability is foundational in developing self-awareness — a critical skill for today’s leaders.

Self-aware leaders understand how their individual values, belief systems, and personal histories shape their perceptions of reality. They regularly take inventory of themselves and those they’re tasked to lead. It might seem obvious, but self-awareness is all about self-reflection: weighing your behaviors in relation to your values and those around you. Without this critical skill, you risk allowing biases to sneak into your decision-making and might even instill fear and stress within your internal hierarchy. Without some level of awareness of self and the value of others’ uniqueness, it becomes impossible to build a diverse, innovative, and motivated team.

Recent struggles in nearly all industries over the last few years have certainly helped move the needle of self-awareness for leaders. No doubt you’ve found yourself on some kind of inner journey during these hard times, reflecting on what’s most important in life and making adjustments accordingly. It stands to reason that the same level of contemplation would benefit you in the workplace and inform and improve your interactions with employees and peers.

It’s easy for any of us to fall back into survival mode when faced with struggles such as inflation, supply chain delays, talent shortages, and so much more. But it’s also important to make sure that some of that self-reflection sticks with you through the hard times: It will make you a better leader.

How to Become More Self-Aware as a Leader

Learning how to become more self-aware is a challenging process for everyone who undertakes it. More often than not, you have to get out of your own way to make progress on this front. But it’s well worth the effort, as self-awareness can often lead to much more effective leadership and team management.

Here are three ideas to get started on your journey to becoming a more self-aware leader:

1. Embrace a learning mindset.

Ego is the enemy of good leadership. Though it might enable you to act more decisively, an overdeveloped or inflated ego can be a problem — even going so far as limiting your growth and blinding you to your natural limitations. Therefore, the first step to self-awareness is coming to terms with the fact that no leader knows everything or ever will know everything. Every leader will be wrong sometimes, including you. When you abandon your ego and embrace a learner’s mindset, you tap into your curiosity and begin to view every new challenge or experience as an opportunity to grow.

It’s just as important to make the same allowances for your team. Every so often, it’s good to let go and allow team members to innovate on their own. You’d be surprised at what employees can learn and accomplish without your involvement in every decision. They might even find some great answers to team problems. This isn’t to say you should wash your hands of all duties; it’s still important to lead with good intent and explain any risks and limits they need to work around. But trust team members to develop their own ideas and solutions. Be self-aware enough to know that good ideas can come from everywhere.

2. Enlist the help of someone you trust.

Sometimes, even the best of us get too close to a situation to see it clearly, especially when it comes to self-reflection. It can be difficult to “observe” yourself. It’s common for biases and insecurities to sneak in and skew our perspective. You might overlook or overly focus on your faults. These are only a few reasons why all great leaders need mentors. A mentor can be a boss, a respected colleague, or even a friend if they’re able to reflect on you with a kind and critical lens. Even when you’re the mentor offering support to mentees, enlisting the help of a mentor or coach can be beneficial to you professionally and personally. The people you trust and respect most are often able to offer unbiased observations of your behaviors and pose challenging questions about your decisions.

As mentors themselves, self-aware leaders use their understanding of emotions, personality differences, and individual needs to inspire and motivate each member of their teams. A mentor offers the same opportunity for you to learn how to receive and provide feedback in a manner that’s both constructive and empathetic — not patronizing or disrespectful. By asking a mentor to help you in self-reflection, you’re opening yourself up to criticism on a regular basis. It’s not necessarily comfortable, but it will allow you to glean how to do the same for the variety of people on your team with greater tact and compassion.

3. Take a practical view of personality assessments.

A lot of leaders view assessments such as the Myers–Briggs Type Indicator or the DiSC assessment as “The Truth.” If the test says you’re an INFJ, then you’re an INFJ — and should approach all situations or challenges as such, no matter the context. The problem is that the letters only tell you who you are now, not who you can be. Though personality tests are no doubt informative and often helpful in self-reflection, round out your understanding of yourself with other assessments, including the Leadership Circle Profile. A systematic development assessment such as the LCP can offer more direction on how to expand your mindset and become a more self-aware leader.

The LCP stands out from other assessments because it measures both your creative competencies and reactive tendencies, giving you a snapshot of your root behaviors and mindset. This focus can help you figure out what might be getting in the way of your intended leadership impact and identify any deeply held perceptions (or misconceptions) of your leadership ability. Perhaps you’re unaware of your aggressiveness or self-protection, but there’s a way to find out. With that information, you can move forward to make the necessary adjustments and become the best “you” you can be.

The self-awareness of leaders is often directly tied to success. “Knowing thyself” is a critical leadership skill that helps foster trust and build a culture where individuals across multiple backgrounds, ethnicities, genders, and ages can thrive — including you. As a leader, you can learn to connect with yourself and others in new ways that can benefit you, the company, and employees all at once. Don’t be scared to let go of your ego and explore something new about yourself; you might be surprised by what you discover.

Like many businesses, family-owned enterprises have had their share of challenges in the current economic landscape.

As each continues to make its way through the many obstacles presented by the COVID-19 pandemic, the 2021 EY and University of St. Gallen Family Business Index reveals just how vital family enterprises are for the global economy’s health. The resilience of these family businesses becomes even more evident as they continue to lead in job creation and opportunities within their communities.

Paul Dickerson, CEO of CREDO and a longtime leader of his family business SWEPCO, explains that most family businesses are resilient because they take the long view, focusing on decades and generations rather than meeting Wall Street’s quarterly earnings report. “Most are well diversified and global, keeping their debt low. Their offices aren’t lavish, but their factories are first-rate. Cash is king, and family enterprises reinvest earnings back into the company.” Dickerson’s family enterprise is an 88-year-old manufacturer of protective coatings and high-performance industrial lubricants with plants in the United States, Canada, and Europe.  

The family businesses represented in the Index collectively generate $7.28 trillion in revenue and employ 24.1 million people worldwide. That constitutes the third-largest economic contribution in the world (after the United States and China) by revenue — despite the global economy shrinking by 3.5% in 2020. This revealing trend magnifies how family businesses are vital to the future health and growth of every country’s economic well-being and post-pandemic recovery — and the trend shows no signs of slowing.

A Pandemic Brings Out the Best

For all the challenges COVID-19 presented, family businesses had the opportunity to showcase their agility, commitment to innovation, and sense of social responsibility by pivoting during the pandemic.

Carlos DeAldecoa Bueno, president of Eximius Coffee, owns a coffee storage and processing plant and the largest liquor distillery in Texas. During the pandemic, he put the entire distillery operations on hold and shifted production and bottling lines to manufacture hand sanitizer. “Carlos donated $200,000 worth of hand sanitizer to first responders, nonprofits, and the community in Texas,” says Dickerson, “and shipped over 80,000 gallons (about 30,000 liters) of hand sanitizer throughout the United States.”

The Family Business Index revealed numerous scenarios of family-owned enterprises pivoting during the pandemic — including restaurants creating makeshift drive-through lines to serve families affordable meals during the food shortage to owners not drawing a salary to make sure their people had paychecks.

Building Success Across Generations

The success of family businesses often comes down to the planning and vision of the first generation, with the next generation building on that legacy while following its own approach. Of course, success takes time, and although the COVID-19 pandemic has made the next generation’s survival more difficult, the Index cites 75% of the family businesses are over 50 years old. However, youth is not necessarily an impediment to the growth or the scaling of a family business.

Most of the reasons a family business doesn’t survive are preventable with proper succession planning and a strong commitment by family leadership. But scaling a business beyond its founders is tricky. At 30, Tze Boon Ong (pictured above), chairman of the board at ONG&ONG, took over the family architecture business after the death of his parents. To survive, Ong believes it essential that each new generation have a hunger for not just keeping the company alive but looking to innovate, grow, and steer the business in a revolutionary direction. Ong says success for him will be “in making my role obsolete — then I know I’ve done my family company a service.”

Sustaining the Focus on Gender Diversity

The 500 largest family businesses have 4,418 board seats; family members hold 1,041. Of those, 17% are female and 83% male. The share of companies with female family members on boards is 31% and is on par with global industry benchmarks.

Gender diversity among chief executives is equally challenging to family businesses and non-family firms. Five percent (27) of the family businesses on the Index have female CEOs, comparable with industry benchmarks of 8% (41) of Fortune Global 500 companies. Moreover, female CEOs are marginally more likely to be family members than external appointments.

Change starts with intention, Dickerson says, and finding talented female business leaders and creating the conditions for success must be a stated business objective. “I encourage family leaders to have a courageous conversation and then make hiring, retaining, and promoting women leaders part of their 5- to 10-year strategic plan. Next, appoint a task force to promote female leadership in the business, family council, and other family governance structures.”

Beyond being the right thing to do, Dickerson believes it’s smart business. “In the war for top talent, neglecting 50% of the candidates (women) will be a huge disadvantage. We have a long way to go, but I believe there is room for optimism. As this generation of leaders retires, attitudes toward women in leadership will shift.”

What NextGen Brings to the Table

The average family business board member is 61 years old, but the next generation brings more age diversity and new leadership to boards. One in five businesses on the Index has a next-generation member (40 or younger) on the board or on the management team. This represents a significant opportunity for boards to diversify and extend their talent pool.

“Embrace the next generation of leaders and the entrepreneurial spirit they offer,” Dickerson tells his peers. “Tap into their vision for the business; they are the pathway to renewal and rebirth of the family business. Over time, the core business normally looks little like its founding one. And turbulent times often accelerate this transition.”

Dickerson advises family businesses to formalize their internship programs, utilize innovation sprints as a source of new ideas, and let NextGen run with the strong concepts developed and see what they can do.

More than Profit

Environmental, social, and governance (ESG) is no longer a passing trend, especially for the next generation of family-owned business leaders. Presently, the total valuation of ESG assets is around $30 trillion. That’s more than 25% of the managed assets in the entire market.

A good proportion of the family businesses on the Index report formal ESG metrics, including 53% (264) reporting at least once on the GRI Sustainability Disclosure Database. Fifty-one percent of those companies come from EMEIA (Europe, Middle East, India, and Africa), followed by 30% from the Americas, and 19% from Asia-Pacific. The United States has the highest number (42) of family companies that contributed to the GRI database.

Employees, customers, investors, and other stakeholders demand that companies play a more active role in addressing the world’s greatest challenges. As a result, NextGen family business owners will most certainly make ESG a top priority.

Stable and Agile: Families Find the Right Balance

The 2021 EY and University of St. Gallen Family Business Index reveals how important family enterprises are for the health of the global economy. Despite the pandemic, the largest 500 family businesses globally have proven their economic dominance and resilience. Longevity and stability have mattered as these businesses have managed their long-term business outlook with an ability to pivot in the short term. Being ready to value more diversity and skills from both the next generation of leaders and women leaders is a small step for them — particularly when talent is the key to addressing ESG, innovation, and future consumers.

“It is no surprise how family businesses can now attract top talent in the marketplace,” says Dickerson. “Many accomplished difference makers are tired of constant change in their firms; they long for stability, family comfort, and putting down roots.”