Recently Apple sent their employees a letter asking them to come back to work at the office three days a week in late May 2022 (now delayed due to COVID resurging in the Bay Area, but employees must continue to work at the office two days a week). 

It is a seemingly reasonable request, and as part of the plan, employees can work fully remote for “up to four weeks a year.” A group of current and former Apple employees called “Apple Together” are protesting the company’s new policy, and sent an open letter to company leadership demanding more flexibility.

What can business leaders learn from this Apple employee response about their role and the best ways to manage organizations?

As a successful software company founder and business consultant for 30+ years, this type of employee reaction was unthinkable. The leaders in charge would have considered this change not as a request, but something employees should accept as a standard policy or find another job (what Netflix said to employees when they recently announced their new content policy).

Executives should reflect on their roles today as organizational leaders and answer the question clearly…Who is really running their organizations? Judging by the declining levels of customer service at most companies, the customer is no longer the most important factor in establishing goals and policies…it is the employees. How did this happen? How did we get to a place where the executives at Apple are “begging” their employees to come back to work?

There are several drivers of this mind shift. Perhaps the chief cause is a break down in the relationship between leaders and followers. Today, the employees are given powers that traditionally were reserved for leaders. It seems that a generation raised by parents who catered to their Millennial offspring seem to think they have executive powers. I am not blaming the Millennials. Yes, many are entitled and lazy… so are many Baby Boomers. I blame the adults. Throughout my career, I hired, managed and worked with hundreds of Millennials (Gen Y)…including my daughter. And they are not all lazy and entitled as many Baby Boomers think. 

But there is a large and influential percentage of this 26-41 year-old generation (born between 1981 and 1996)that somehow never got the message that they are not the boss of everything. The problem, however; is that this group has been conditioned by parents to believe they are equal decision makers. Parents abdicated their role as experienced decision-makers to those completely lacking in any life experience, which can unfairly set the children up to fail. 

As a result, we have the employees at Apple telling the executives that they are not coming back to work, and leaders are not clearly saying no. Why? Parents and business leaders should really be making firm decisions based on their vast experience and responsibility levels (personal and financial), and communicate the new policy like Netflix did recently. 

If Apple’s leadership team caves to their employees, it will be a recipe for organization mistrust. Traditional and working relationship of leaders and followers will be unproductively turned on its’ head. 

In my experience, most people, including Millennials, want to go to work, receive direction from a boss, master new skills, and meet expectations set by the organization to move both the individual and team forward. It is incumbent upon leaders to define the organization structure, decision-making authority, and goals with roles and responsibilities clearly defined. This process is how trust is built, respect is created and productivity and fairness can create more wins for everyone.

Yes, times have changed, but human nature really has not. The “old-school methods” which I practiced as a parent and as a leader were simple. In general, people want to do well. They want to feel like their work is important, and their boss cares about their success. They want feedback, and to grow by learning from their leaders. Being a parent or business executive comes with great responsibility to create a culture of dignity and respect, which includes knowing when to say no.  

If you want respect as a leader, listen to your team. Put yourself in their shoes in achieving the goals and expectations. I’ve discovered too often that what managers think takes ten hours to perform an assignment may in reality take 100 hours because of lack of clarity, resources, systems and team play. If a leader asks questions, the differences in expectations can be addressed to make real change, create real learning and ultimately build trust. 

Clear communications by leaders ensures success for a team, company, society and a family working together. When my brilliant daughter was 7 years old, she informed me that I was not the boss of her. As a single dad, I explained to her very nicely and logically that I was for now. Years later, I hired her at my Aspire Software company, and she was one of our best employees. She now works elsewhere, and is highly effective and respected.

Based on what I was taught by bosses, expecting more from your employees makes the good ones feel valued and challenged. Isn’t this what we want as managers? Someone must be the boss or the organization will be held back by mistrust and lack of honesty that are essential to learn and perform. 

What would you do if you were Tim Cook or a leader at Apple managing this pushback?

COVID-19 has disrupted many areas of our lives, including our careers. Fortunately, you can take steps to strengthen and secure your career during these uncertain times. 

Due to the devastating impact of the COVID-19 pandemic on the restaurant industry, one of my coaching clients, Alex, who served as the Chief Operating Officer (COO) in a regional chain of 24 diners in the Northeast US, wanted to explore switching her career to a different industry. 

Alex turned to me as her executive coach and asked for my guidance. I recommended a 5-step decision-making process to her that addresses the dangerous judgment errors we make called. I coached her through the process to help her make the wisest and most profitable decision. 

Step 1

Identify the need to launch a decision-making process and gather relevant information from various informed perspectives on the issue at hand.

Alex had already decided to evaluate the decision to switch to another role and industry, so we were able to proceed with this step immediately. I asked her to gather information from various people with relevant perspectives. 

Step 2

With the data gathered, decide the goals you want to reach and develop a transparent decision-making process criteria to weigh the various options of how you’d like to get to your vision. Rank the importance of each criterion on a scale of 1 (low) to 10 (high).

With the data she had on hand, I asked Alex to come up with a list of critical goals, which should also address underlying issues. 

Among the goals identified were: 

• To make sure that within a year, she had a role that would pay her at least 75% of the salary that she was getting as COO of the restaurant chain, whether by staying at the chain or switching to another industry, per her accountant’s guidance.

• To ensure that she had substantial room for career growth if she did make the switch.

• Alex wanted to step into a role that was conducive to innovation. 

Alex then came up with several criteria relevant for the switch and ranked them on 

her priorities, with one at the low end and ten at the high end:

• Salary in a year (8)

• Innovation opportunity (5)

• Room for growth (6)

• Stability for the industry and the company in the foreseeable medium and long-term future (7)

• Ease of transition (5)

Step 3

Generate several options that can achieve your decision-making process goals. Go for five options as the minimum. Weigh these options, picking the best of the bunch. When weighing options, beware of going with your initial preferences.

Initially, Alex listed just one option for switching: it was obvious that she was already leaning towards the food delivery industry. However, I convinced her to add three more options to have five at the minimum. She took a bit more time deliberating and finally came up with five options: 

• Stay in her current position

• Food delivery industry

• Meal kit industry

• Food processing industry

• Grocery store industry

At this point, Alex was still leaning towards her favored option, which was to shift to the food delivery industry. However, I cautioned her to consider each one carefully. We went together through each option, and she ranked each option on each criteria variable. We made a table with options on the left and variables on the top to do so. Then, after ranking each option on the relevant criteria, we multiplied the ranking by the weight of the criteria.

Alex was surprised that the grocery store option was the best option. That’s because grocery stores boomed due to the pandemic and were hiring both workers and executives left and right, and the post-pandemic recovery looked like a good time to be in that industry. 

Step 4

Implement the option you chose. First, imagine the decision completely fails and brainstorm the reasons for the failure.

Next, consider how you might solve these problems and integrate the solutions into your implementation plan. 

Then, imagine the decision succeeded. Brainstorm all the reasons for success and integrate these into the plan. 

Alex imagined that the switch to the grocery store industry failed because of her lack of a proper network to source for job opportunities and her unwillingness to step down to a lower-ranking role. 

To address these, she decided to spend a month growing her network so that she could make new contacts. Alex also decided to get in touch with former colleagues and mentors who had stepped down from top leadership roles to gain insight into what they learned from the experience.

Finally, when she imagined that the decision to shift to a new role and industry was a success, she determined that this was mainly due to her efforts to efficiently transition to her new role and industry by building new core skills.  

Step 5

Evaluate the implementation of the decision. Develop clear metrics of success that you can measure throughout the implementation process. Check-in regularly and revise as needed. 

Alex was able to shift industries successfully. Within six weeks, she was able to get into a large grocery chain as Senior Vice President of Prepared Foods. While it was a step down from her role as COO, she was able to get a compensation package that was 85% of what she received as COO in her former company because she had joined a much larger organization in a booming industry.

She decided on the following as her metrics of success:  

• Expand her network by adding six contacts/month specifically from the grocery store industry 

• Identify and work on four core skills that she needs in order to thrive in her new role and industry

• Develop mentors within this new industry

Conclusion

Changing jobs or even industries during this post-pandemic recovery might be critically important for achieving your career potential. Use the best decision-making steps so that you and your career can thrive, not just survive.

You’re thinking about selling your business to get that great big pot of gold that will let you ride off into the sunset of retirement. In your mind, it’s a great exit strategy. Now the big question is: will your business attract buyers?

When positioning your business for a sale, don’t make the mistake of focusing solely on your financial statements. Of course, profit is important, but focusing on EBITDA—earnings before interest, taxes, depreciation, and amortization—and industry multiples isn’t always a winning strategy. Your off-balance sheet assets matter, too.

According to the Ocean Tomo 2021 data on intangible assets, 90% of the value of S&P 500 companies is comprised of intangible assets. This trend has almost tripled over the last 35 years as our economy has shifted away from manufacturing to the service industry. This statistic applies to privately held businesses as well, not just big public companies.

Every business has intangible assets

Intangible assets aren’t physical and don’t appear on your balance sheet. They might include intellectual property, such as patents, trademarks, and copyrights. Or your company’s brand recognition. Of course, not every business has intellectual property or brand recognition, but every business has intangible assets that provide great value.

The top three intangible assets that drive value are:

1. Human capital. The quality and depth of your employee teams are critical drivers of your business’s value. This includes leaders who have a vision for growth and the skills to execute your strategic plan. Employees whose skills, certifications, and experience exceed those of your competitors also add tremendous value. So does a positive corporate culture that creates high employee retention.

When evaluating the value of your team, an investor will want to understand your strategy to identify and attract new talent, your plan to continuously develop your employees, and how you retain your people.

Employees are so critical to a company’s success that there are “acqui-hiring” deals in which a buyer is primarily motivated to purchase a company for its talent rather than its product. This strategy to acquire employees has dominated the technology industry; as our labor market continues to tighten, this motivation has spread across other sectors.

A valuable organization has the right people in the right place at the right time—with the right skills at the right price!

2. Customers. A well-diversified customer base, with a high retention rate that provides recurring revenue, will always be the gold standard of value drivers.

Maintaining customer diversification is often the Achilles’ heel of growing privately held businesses. While it’s always fun to go after the big whale of a client, most investors will label a business as “too risky” if more than 15% of revenue comes from one customer.

High customer retention rates are the result of impeccable customer service protocols, and every investor will analyze your data as part of their valuation process.

Keep in mind: all customer revenue isn’t equal in an investor’s eyes. A business model that produces recurring revenue via auto-renewal subscriptions, service contracts, or hard contracts will always be more attractive to investors than transactional or project-based revenue.

3. Suppliers. A strong, reliable supply chain is critical to the success of any business. Investors will dive deep into your supply chain strategy and management to confirm it protects the flow of information, resources, and materials your company needs to produce its products or services.

As we’ve witnessed during the pandemic, healthy supplier relationships that avoid disruption can mean millions of dollars in value. Your business is truly only as good as your supply chain.

Suppliers are your ally and can be the secret sauce that maintains your competitive edge if you take care of them. For example, if your business has an exclusive agreement with a supplier, you’ll most likely have better pricing and delivery times than your competitors do—which will make your company more desirable to investors.

The bottom line

These top three intangible assets—human capital, customers, and suppliers—are interdependent. Strong supplier management that’s strategized and managed by top-tier employees supports customer expansion and retention. You can drive the value and marketability of your company enormously by focusing on these three intangible assets.

Be strategic and develop your intangible assets; document and defend them. They matter.

Business schools teach about business model innovation to make more money. Engineering schools teach about technical innovation to make a better product. Very few institutions teach impact innovation.

Finally, we’ve reached a point where impact leaders can come together to foster a culture of impact innovation. 

For a long time, it was thought that separating the money-making tasks from the doing good tasks was a good idea, but this has been proven wrong. The combination of the two is precisely where today’s opportunities lie and will be the inspiration for the world’s next wave of business innovation. 

So, how does an established company pivot to embrace these new opportunities? For many companies, this can be a tough thing to do. Gary Pisano’s book Creative Construction: The DNA of Sustained Innovation offers some solutions. He argues that every company wants to grow, and the most proven way is through innovation. He begins with the simple reality that bigger companies are different. Demanding that they “be like Uber” is no more realistic than commanding your dog to speak French. 

Bigger companies are complex. They need to sustain revenue streams from existing businesses and deal with Wall Street’s demands. These organizations require different management practices and approaches — a discipline focused on the strategies, systems, and culture for taking their companies to the next level. Big can be beautiful, but it requires creative construction by leaders to avoid the creative destruction that is all-too-often the fate of too many.

One strategy is to seek out a “revolutionary” group within your organization — people you identify as having a better direction or some crazy ideas — and protect them. Separate them from the main organization and create a think tank overseen by senior management. Don’t let this group become pulled back to convention by the rest of the organization. The best creative constructors think as much about their organization’s innovativeness as they do about what innovations they implement. As we move into an impact economy, this approach can help unlock the necessary thinking and skills needed to reimagine the companies and customers of the future. As Pisano says, “Whether we rise to society’s great challenges through transformative, life-changing innovation depends on us, and only us. The need for creative constructor leaders has never been greater.”

Business leaders should not simply stick the sustainability label onto their businesses but instead embark on a conscious process of creating a framework in which innovation can thrive. A real leader should also tap into the energy source of younger generations and unleash it. Importantly, this needs to be a planned strategy and not approached in a naive, free-for-all manner. 

Ultimately, impact leaders should be tuned in to the world around them in an intimate way, seeking seemingly unrelated issues that may offer a single solution. Take Dr. Jane Goodall as an example. She recognized the relationship between human poverty and effective wildlife preservation at an early stage. If people remained hungry, endangered animals would always be at risk — whether from illegal trading or as food. Impact leaders tie together social impact, cause, and business to create companies with which everyone wants to do business.

Google recently announced its new post-pandemic hybrid work policy, requiring employees work in the office for at least three days a week. That policy goes against the desires of many rank-and-file Google employees.

A survey of over 1,000 Google employees showed that two-thirds feel unhappy with being forced to be in the office three days a week, with many threatening to leave in internal meetings and public letters, and some already quitting to go to other companies with more flexible options.

Yet Google’s leadership is defending its requirement of mostly in-office work as necessary to protect the company’s social capital, meaning people’s connections to and trust in each other. In fact, according to the former head of HR at Google Laszlo Brock, three days a week is just a transition period. Google’s leadership intends to enforce full-time in-office work in the next couple of years. Ex-Google CEO Eric Schmidt supports this notion, saying that it’s “important that these people be at the office” to get the benefit of on-the-job training for junior team members.

Google’s position on returning to the office for the sake of protecting social capital echoes that of Apple, which is requiring a three-day work week. Similarly, it is also facing employee discontent, with many intending to leave if forced to return. 

By contrast, plenty of large tech companies, such as Amazon and Twitter, are offering employees much more flexibility with extensive remote work options. The same applies to many non-tech companies, such as Nationwide, Deloitte, 3M, and Applied Materials. Are they giving up on social capital?

Not at all. What forward-looking companies discovered is that hybrid and even fully remote work arrangements don’t automatically lead to losing social capital.

However, you do lose social capital if you try to shoehorn traditional, office-centric methods of collaboration into hybrid and remote work. That’s why research findings highlight how companies that transposed their existing pre-pandemic work arrangement onto remote work during the lockdowns lost social capital. Yet studies show that by adopting best practices for hybrid and remote work, organizations can boost their social capital.

Why Have Organizations Failed to Appreciate Hybrid Work

Leaders often fail to adopt best practices because of dangerous judgment errors called cognitive biases. These mental blindspots impact decision making in all life areas, including business to relationships. Fortunately, recent research has shown effective strategies to defeat these dangerous judgment errors, such as by constraining our choices by focusing on the top available options, for example by using this comparison website.

One of these biases is called functional fixedness. When we have a certain perception of appropriate practices, we tend to disregard other more appropriate alternatives. 

Trying to transpose existing ways of collaboration in “office-culture” to hybrid and remote work is a prime example of functional fixedness. That’s why leaders failed to address strategically the problems arising with the abrupt transition to telework in March 2020. 

Another cognitive bias, related to functional fixedness, is called the not-invented-here syndrome. It’s a leader’s antipathy towards adopting practices not invented within their organization, no matter how useful, such as external best practices on hybrid and remote work. 

Defeating these cognitive biases requires the use of research-based best practices. It means adopting a hybrid-first model, with most coming to the office at least once a week and a minority fully remote. To do so successfully requires creating a new work culture well-suited for the hybrid and remote future of work.

Virtual Coworking for Hybrid Work Collaboration

One critically-important best practice is virtual coworking, which gives much of the social capital benefits of in-person coworking without the stress of the commute. Virtual coworking involves members of small teams working on their own individual tasks while on a video conference call together.

This experience replicates the benefit of a shared cubicle space, where you work alongside your team members, but on your own task. As team members have questions, they can ask them and get them quickly answered. 

This technique offers a wonderful opportunity for on-the-job training: the essence of such training comes from coworkers answering questions and showing junior staff what to do. But it also benefits more experienced team members, who might need an answer to a question from another team member’s area of expertise. 

Occasionally, issues might come up that would benefit from a brief discussion and clarification. Often, team members save up their more complex or confusing tasks to do during a coworking session, for just such assistance. 

Sometimes team members will just share about themselves and chat about how things are going in work and life. That’s the benefit of a shared cubicle space, and virtual coworking replicates that experience.

The Virtual Water Cooler for Hybrid Work Social Cohesion

Another excellent technique for a hybrid or fully-remote format is the virtual water cooler. It aims to replace the social capital built by team members chatting in the break room or around the water cooler.

Each team established a channel in their collaboration software – such as Slack or Microsoft Teams – dedicated to personal, non-work discussions by team members. Every morning – whether they come to the office or work at home – all team members send a message answering the following questions: 

1) How are you doing overall? 

2) What’s been interesting in your life recently outside of work? 

3) What’s going on in your work: what’s going well, and what are some challenges? 

4) What is one thing about you or the world that most other team members do not know about?

Employees are encouraged to post photos or videos as part of their answers. They are also asked to respond to at least three other employees who made an update that day. 

Most of these questions are about life outside of work, and aim to help people get to know each other. They humanize team members to each other, helping them get to know each other as human beings, and building up social capital.

There is also one work question, focusing on helping team members learn what others are working on right now. That question helps them collaborate together more effectively.

Then, during the day, team members use that same channel for personal sharing. Anyone who feels inspired can share about what’s going on in their life and respond to others who do so. 

The combination of mandated morning updates combined with the autonomy of personal sharing provides a good balance for building relationships and cultivating trust. It fits the different preferences and personalities of the company’s employees.

Hybrid and even fully-remote work don’t have to mean the loss of social capital. These work arrangements only lead to weakened connections if stubborn, traditional-style leaders try to force old-school, office-centric methods of collaboration onto the new world of hybrid and remote work. No wonder Eric Schmidt says “I’m a traditionalist” when advocating for in-office work.

Conclusion

Google, Apple, and similar traditionalist companies are refusing to adopt best practices for hybrid and remote work such as virtual coworking and virtual water coolers, and then blaming hybrid and remote work arrangements for the loss of social capital. The people leaving Google and Apple due to their inflexible work arrangements are moving to more forward-thinking, progressive companies that use best practices for hybrid and remote work to build social capital and recruit excellent staff. Such companies will seize competitive advantage and old-school companies will be left in the dust in the war for talent.