When the pandemic first hit most of us were surprised at the effectiveness of distributed virtual workforces. We also learnt how relentless Zoom calls and lack of demarcation between work and home can lead to burnout and other mental health issues. However, as we gradually emerge from COVID 19 it seems that most office-based companies intend to reap benefits of reduced real estate cost and employee flexibility by adopting some version of hybrid working. Whilst such a move has clear upsides, there is a ticking time bomb that is not receiving enough consideration. Unless we have a radical rethink on how to protect corporate culture it will whither to the point companies will be destroyed. The impact will affect the very nature of work for future generations. What can leaders do now to halt the decline?
Back in February 2020, a son of a friend of mine was excited to join a financial services company straight from college as a software developer. The company was located downtown of a vibrant city and he was looking forward to both learning new skills and forging new relationships in the office, over lunches and drinks after work. Five weeks later and before he was able to make any meaningful relationships he, like many others, was working from home. Meetings switched immediately to Microsoft Teams and were largely camera-off affairs. When he needed help, rather than chat to the person sitting beside him he was told to schedule a meeting. As the pandemic eased, as soon as he was allowed to do so, he returned to the office but he discovered that he was alone – his colleagues preferred to continue to work from home. After two and a half years he still has not an inkling about the company culture, has become disengaged and is now looking for a new job.
Because of COVID, employees of companies worldwide have experienced the flexibility of working from home and the elimination of painful and expensive commutes and are now choosing to work from home and are prepared to move to companies that allow them to do so. They are prioritising convenience and flexibility over comradeship and culture. This is not only impacting the minority who are looking for an office-based experience (especially those new to the company) but is putting entire companies at risk over the long term. It is hard to see how corporate culture is going to survive. Given weaker culture, less and less people are going to engage with the companies and work will become increasingly transactional.
Interestingly most of us did not feel the way about our families as we emerged from the pandemic. We did not decide to move to a hybrid model for hanging out with our friends. We have returned to the traditional model of hanging out face to face. In this case we have prioritised camaraderie and relationships over “flexibility”. What does this tell us about what we really think about work?
Leaders, especially those driving transformation need to focus more than ever on building culture. When your team is physically in the same location it makes it far easier to drive engagement and culture. Observing the informal rituals, having conversations in the corridor, even seeing how people are dressed inform people of the culture. Leaders of transformation have more opportunities to impact the culture when people are in the office. For example the characteristics of the physical office space drive behaviour more than most give credit for. At one point in my career in addition to my role as Chief Transformation Officer, I oversaw the real estate and facilities for DBS. It was during that time I discovered how powerful physical space can be as a driver of positive change. People tend to behave based on the physical environment around them – you behave differently in a library and a supermarket.
Left untended desired culture will decay over time. When people are not physically together the culture half life reduces dramatically. As people leave and new people join the culture will be lost and engagement will drop. As people feel less engaged they will look for higher pay and flexibility elsewhere. Companies will not be able to attract talent. There will be no engaged army for future transformation. Companies will erode and ultimately whither.
Leaders need to act now. They should understand the drivers of decay. Some of the factors are as follows.
- Starting health of culture
- Attrition rate
- How much effort leadership puts into maintaining and developing culture. Taking a culture by design approach is key. Scott Anthony and I wrote about this in HBR.org and the approach is detailed in our book.
Leaders have 3 choices.
- Do nothing. Believe corporate culture is a thing of the past and accept that work will be increasingly transactional.
- Insist people come into the office and work on the employee experience so that more employees will prioritise camaraderie and culture over flexibility and reduce the risk of people looking to other companies that provide flexibility and offer higher pay.
- Continue with hybrid working and work ten times harder on developing culture using a “culture by design” approach.
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Paul Cobban 