ALISON BEARD: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Alison Beard.
Over the past few months, I’ve taped this show from lots of places, the basement bedroom of my Boston home, my mother-in-law’s closet, and by far the least comfortable but best for sound quality, the bottom of a Holiday House bunkbed.
Like many people whose offices shut down during the COVID-19 crisis, I’ve had to get creative about when and where I do my job. And what I’ve learned is that I and all of my colleagues, and probably many of you, really can work from anywhere. Once there’s a widely distributed vaccine, who knows. We could be doing it from California or London or Tahiti.
Our guest today was studying the rise of all or majority remote workforces well before the pandemic started. He’s talked to lots of organizations that are letting all or most of their employees work from anywhere. He’s analyzed the costs and benefits, and he has some advice on how to do it well, not just during this crisis, but into the future.
Raj Choudhury is an associate professor at the Harvard Business School, and the author of the HBR article, “Our Work From Anywhere Future.” Raj, thanks so much for being on the show.
RAJ CHOUDHURY: Hi, Alison. Thanks for inviting me.
ALISON BEARD: So how do you define work from anywhere as a business strategy? And why is it different than work from home?
RAJ CHOUDHURY: Sure. So work from anywhere, in my mind, is an emerging form of remote work, which offers what I call geographic flexibility. Tshe traditional form of remote work is what we call work from home, where the worker is getting control over how she spends here time. So it’s less commute. You can work in the morning, work at night, whatever suits you, and then you can have also control over your workspace, so you can work in your PJs, or work formally, like whatever suits you.
Work from anywhere offers all of that, but goes on step ahead, and it’s a really important step. And that step relates to now having flexibility in terms of where the worker wants to live. So it could be a town or a city that the worker prefers, or in some cases even change the country, and live in a location where the firm may have no offices. So it’s really about living and working anywhere the worker prefers.
ALISON BEARD: And we’re not talking about gig or contract workers here – these are people who are full time employees of their companies or organizations?
RAJ CHOUDHURY: Correct. And for the cutting edge companies, these workers are every single worker. It starts from the intern who just joined yesterday, to the CEO himself, or herself, working from anywhere. So yes, these are all full-time permanent workers.
ALISON BEARD: And when did you start to see this model emerge? You know, did companies start doing it experimentally with a part of their workforce? Or has it been more led by startups who just kick it off that way?
RAJ CHOUDHURY: So what I observed back in 2015, so this is way before the pandemic, I was doing research with the United States Patent Office, and I found this really interesting program that they called TEEP. It enabled workers to work from anywhere. And they actually started that program back in 2012, if you can believe, so they were really way ahead of the curve in thinking about this.
And I got really interested in understanding how that affected the productivity of workers. As I was doing that work, I started talking, I want to say about a couple of years back to these smaller companies. And they were also pushing work from anywhere to this absolutely new frontier by being all remote.
I think what the pandemic has done is, it has accelerated this phenomenon by at least a decade. So personally, I’ve been working on research with this extremely large Indian IT company, TCS, which has publicly stated, and that’s what I’m studying, that it’s going to be within three years, three to four years, 75% remote.
So every employee would be 75% working from anywhere, only coming to an office for 25% of his or her time. And anecdotally I’ve read about Twitter and Shopify and Facebook and Siemens and the State Bank of India, so it seems to be an increasingly sort of popular phenomenon. And then several startups have reached out to me in the past few months saying that they are doing this model. They have adopted this model. And they are even cranking up on the all remote dimension of it.
ALISON BEARD: And obviously this is something that’s primarily applicable to knowledge work, work that can be done offsite.
RAJ CHOUDHURY: Correct. So I think that is possibly one of the scope conditions for now. But having said that, you know, I think innovation has no bounds. Even for more manufacturing or quasi-manufacturing jobs, there’s this whole phenomenon, which is having digital twins, where maybe a pair of employees enjoy the flexibility of teaming up such that one person in that pair is in the physical manufacturing location one week, and the other person is doing the design on the computer from somewhere else, and then they switch roles the following week, so each one of them working in that manufacturing setting still gets some geographic and temporal flexibility.
ALISON BEARD: So I can see the benefits for the employees having, you know, not only the flexibility to dictate your own schedule, but also where you live and even how much you travel. What are the big benefits for the companies? Why are organizations doing this?
RAJ CHOUDHURY: So the way I frame this to the companies that I do research with or talk to is that the biggest reason to embrace work from anywhere is, it becomes a way, a mechanism to attract and retain the best talent. The way I think CEOs and senior managers should think about work from anywhere is, if this becomes a more prevalent form of flexibility, then the best employees, for their own individual reasons, will start demanding this. And if you are a company that does not offer work from anywhere, there’s a real risk of losing your best employees.
On the flip side, if you are one of the early adopters of this model, you could attract a lot of talent which would not traditionally move to where you’re located, because of dual careers, because of immigration, because of cost of living. So you could really, really change the talent game by embracing work from anywhere. And then the other thing I’ll just add is that, so while talent is the reason you should do it, there should be no doubt, there’s also benefits in terms of saving real estate costs. But multiple CEOs have told me that that is not the reason they’re thinking about it. It’s because of talent.
ALISON BEARD: And are there knock on benefits? You know, obviously it helps with recruitment and retention. But when people are given this kind of flexibility, are they more efficient or engaged or creative? You know, does it trickle down to the bottom line, too?
RAJ CHOUDHURY: Yeah, so that is what I studied in the US Patent Office context. And I’ll cut a long story short. There was a 4.4% increase in productivity when workers moved from the traditional work from home regime to a work from anywhere regime. But I’m not going to claim that you’re going to see that productivity increase everywhere. But what I’m reasonably more confident about, having talked to a series of companies, is it makes it easier to attract talent and retain talent.
ALISON BEARD: There must, though, be some significant challenges and even downsides, though. Right? You know, I think we’ve all learned over the past few months that digital communication, emailing, Zoom, Slack, is great, but it’s definitely not the same as sitting in an office with people. So, what are some of the big challenges that organizations face and employees face when they move to work from anywhere or start with work from anywhere, and how do they overcome them?
RAJ CHOUDHURY: It’s not really challenges or constraints. It’s about what kind of organizational transformation needs to happen to support work from anywhere. So I think the bottom line is, if you’re listening, and if you are a senior manager or a CEO, you should think about how your organizational processes relating, so how your organization processes as they relate to four or five things need to change. And what are those processes? They relate to how you communicate. They relate to how you share knowledge. They relate to how you socialize. They relate to how you measure productivity. And then finally, they relate to how you manage data privacy and regulation. So it is really an organizational transformation project.
ALISON BEARD: Culture seems like one thing that would be really hard to create, communicate and maintain in an all remote workplace. So how have you seen companies do that successfully?
RAJ CHOUDHURY: So the first thing I’ve learned along the way is that as part of making every employee believe that he or she shares that same organizational culture, what managers have told me is, it’s very important to have the socialization processes really robust. And what all remote companies argue, and I’ll give you a specific example, is that their model actually facilitates such communication better or such socialization better compared to a physical company.
So the argument is very simple. What they say is that, think about a physical campus. And think about many, many people working on that physical campus with lots of buildings. The argument they make is that it’s very unlikely that you’re going to have a serendipitous watercooler conversation with someone who’s on a different floor in the same building you work with, or work in. And if that person, that other colleague is in a different building, then probably you’ll never meet that person.
So instead, what the all remote companies have done is to redesign the process of socialization. And they’ve created these virtual watercoolers, which essentially bring together people across the organizational hierarchy, so some junior folks, some middle managers, and maybe even the CEO herself. And that session is engineered by someone, so maybe it’s my job at the firm to organize these watercoolers every Monday morning or every Friday afternoon, and I bring together this random group of people to talk about the company culture. So they can talk about what’s going well, what’s not going well. And the final thing I’ll say, Alison, is what these all remote companies have told me is that in their view, and I’m not an organizational culture scholar, so I’m not going to pretend that I know everything here, but in their view, culture is less about physical artifacts like the gym or cafeteria, but it’s about shared values.
And so as long as you can live your values in the all remote model, and I’ll give you a quick example. So GitLab, which is all remote company, has this proclaimed value of transparency. So what they’ve done is, they have a document called the GitLab Handbook, which documents everything about the company, how you set salaries, how they hire, and they have put that document up online for anyone to view. So in their view, that is living their value of transparency.
ALISON BEARD: And it seems as if, if you’re starting out a company, and hiring people who are ready an excited about this work from anywhere model, it’s a little bit different than if you’re a traditional organization that’s transitioning to one where you have some people, maybe still working in the office, and conducting business as usual, and others not doing so. So how do those organizations that have tried to transition, how have they made it work? How did they bridge that gap?
RAJ CHOUDHURY: So I’m going to say it’s still an ongoing process, because the large organizations which have transformed are still transforming. I can conceptually tell you what the risk is, and maybe how to think about that risk. The risk is for these organizations, which are transforming from being a physical organization to a remote organization that embraces work from anywhere, they will probably offer what I call a hybrid remote approach, where you might be able to work remotely three days a week. Then the risk is that the people who are working remote might be cut off from the information and social networks that the in office folks enjoy. And that has been a consistent finding in the prior research on this topic, which is to say that the remote workers in a hybrid remote organization could feel professionally and socially isolated.
So you don’t want to create two sets of workers, physical workers, and remote workers, who are not intersecting in terms of their information and social networks. The way to prevent that risk is to say, we will embrace remote as at least a majority remote model, where a majority of employees will work remotely, or will work remotely for the majority of their time. And very, very importantly, remote work will be done by not only the junior folks, the middle managers, but also by the senior managers and the C suite, because the real risk is, if everyone is working remotely, but the C suite is still working physically from some office location in New York or Detroit, then everyone is going to show up, all the middle managers will show up to that location to get face time. So I think the signal that needs to be sent is, this is the new way we work. Everyone does the same. Senior managers do it. C suite does it. And we are all doing to support the processes to make this work.
ALISON BEARD: So let’s talk a little bit about managing an all remote workforce. How difficult do leaders tell you that it is when you have people in multiple cities, multiple countries, multiple time zones? How is it practically for them?
RAJ CHOUDHURY: So I’ll highlight a couple of things. I think the first thing that hits people is that if you are spread out across time zones, it’s very hard to do what I call synchronous calls. Because imagine a team with an employee from Japan, someone in Africa, and then someone on the East Coast of the U.S., and someone has to stay up in the middle of the night to do that team call. And if it’s a weekly team call, it’s going to be a real, a chore, for someone.
That is the first thing which hits people, and which means that you need a different model of communication. And in the HBR article, what I talk about is that you need to think about asynchronous communication, where not everyone has to be at the same time on every call. You have to think about that asynchronous communication model really, really hard.
The second thing which I have observed is that when you think about how productivity’s being measured, or how communication is being done, it’s really hard to change some of those things, because these are ingrained habits. So managers in many cases would walk the floor and try to assess whether people are slacking off or working. Now, you don’t have that opportunity. So managers need to be now coached in how to trust employees. And that’s a difficult habit to change if you’ve done this for 20 years in a certain way.
If you have essentially been calling up people and expecting answers at that very moment, then it’s very hard to type your question into a Slack channel and then go to bed, trusting that your teammate will wake up in Japan the next morning and answer it the first available opportunity. So it’s a lot of coaching about expectations of how work gets done.
And the last thing I will say is that what I’ve seen really not so great is this sort of proclivity to saying, I can’t see them as a manager, so I’m going to now monitor every minute they spend in front of a screen and every click they have. And I think that is just, that Orwellian approach is really counterproductive, because you can do it in the short term, but if you just keep doing it, then your best employees will leave at the first available opportunity. So the solution really is to rethink, again, how you measure productivity. Should it be done based on the number of hours you stare at a screen? Or should productivity be measured based on output? Should it be measured based on customer feedback? Y ou could rethink how you measure productivity of employees.
ALISON BEARD: You also mentioned data privacy and regulation. So what are some of the challenges there and how do companies overcome them?
RAJ CHOUDHURY: Yeah, so let’s talk about regulation first. So I think it’s a really interesting area and something which is top of mind for the CEOs I’ve spoken to, because if the workforce is now indeed working from anywhere, and distributed across multiple countries, then you need to conform to the labor laws in every single context that you operate in. So that might relate to how you hire, the benefits policies might be different for different employees based on their location. The vacation policies might be different. Whether or not you can fire people might be different. How you set salaries and whether you pay salaries in U.S. dollars or euros or local currency. So there’s a lot to think about. Right?
But also, I’ll give you one other example. In many cases, some old regulation just goes out the window. So many Indian IT companies, for instance, where working from these special economic zones, so these special buildings in India, which enable them to get a lot of equipment by not paying duties and the taxes are different. But now, if no one is working from those buildings, and everyone is spread out in their homes, then how do we think about these special economic zone regulations? So the solution there is to be really ahead of the curve, to work with the regulators, to work with the folks in government, and to change the regulation or just understand the regulatory landscape.
On data privacy, it’s of course, a top of mind issue again, because you know, you don’t want the employee to be working from anywhere and taking pictures of his screen and sharing it with a competitor, where the customer data is on the screen. But —
ALISON BEARD: Unprotected Wi-Fi hotspot…
RAJ CHOUDHURY: Exactly. And so at a high level what I’ve seen is, companies using predictive analytics to prevent these kinds of things happening. They’ve moved from what they’re calling the perimeter-based IT security, which is, I’m only secure if I’m working in the company office space, to what they call the transaction based security model, where every click is not being observed for the purposes of productivity, per se, but is being observed through a data analytics black box to find any anomalies in terms of data privacy. So if you find some anomalies, for instance, employee works on a home computer, and it’s a new sort of IP address, right, then that can be flagged off, and then some action can be taken.
ALISON BEARD: So you also talk in your article about, in addition to the benefits for individuals and the benefits for organizations, benefits for society. Would you explain those to us?
RAJ CHOUDHURY: Sure. And that is what is more exciting to me in this whole research agenda. So what is really exciting to me is that work from anywhere could be an effective way to address this problem of reverse brain drain. So as a scholar of geography of work and a scholar of geographic mobility, I’ve been studying migration and reverse migration for a while now. And the problem is that given the agglomeration of companies into these hubs, such as Silicon Valley or New York or Bangalore or Beijing, a lot of talent has moved from these smaller towns, and even the rural areas, to these larger cities. And this, of course, has an effect on the, on things like pollution and traffic congestion in the large cities, but it has also a telling effect on the local economies of these smaller towns.
So personally, I feel, and I’ll give you an example of a project I worked on last year and this year, where work from anywhere can be a mechanism for talent now to move back to these smaller towns from these larger cities. So the setting that I worked on, the research setting is Tulsa Remote, which is an organization in Tulsa, Oklahoma, funded by a private nonprofit foundation. And they instituted a program back in 2018 where they tried to move talent back to Tulsa, and they exclusively focused on remote workers, because Tulsa didn’t have those companies where these talented people could work in large numbers. But they realized that if the person is working remotely, then you don’t need a company there. And they were extremely successful in attracting such talent back.
And now they are, I believe, in their third batch of doing this, and this is a wonderfully diverse set of people, moving from all over America to Tulsa, Oklahoma. And I feel that model could be replicated across towns and cities of America, across towns and cities all around the world, to really solve, or at least partially solve the problem of reverse brain drain.
ALISON BEARD: And looking ahead to a post-pandemic world, there will be many companies that will consider either all remote or a hybrid model like the one you just described. So how do they decide whether it’s feasible and advisable for their particular organizations?
RAJ CHOUDHURY: So I think whether or not it’s advisable, of course I’m biased, and you know, I’m an evangelist on the subject. But I really, really genuinely believe that geographic flexibility is here to stay, and for multiple reasons. As I mentioned, you know, we’ve been struggling with the problem of dual careers for decades without any good sort of organizational answer to it. We’ve been struggling with immigration, which is tightening in many countries. And so work from anywhere really creates now a way to work around these problems, because you don’t need to move the employee to the location where the firm is.
It’s also going to really be unleashed by the Millennials, who have been for many years demanding this flexibility to travel around the world. So there’s a whole phenomenon, until COVID, and of course COVID has put a spanner in the works, but I imagine after we have a vaccine and travel is again OK to do, there will be again a reversal to that phenomenon, which is, they travel around the world as digital nomads, and you could be working for Google and Facebook, but you’re really traveling around the world. And there were companies who would help you do that. So there was a company called Remote Year, which would help you travel across three or four countries in that year, get you the visas, find you the place to live in, and actually countries like Estonia and Barbados have their own separate category of visas for digital nomads.
So I feel this inherent desire or craving for geographic flexibility is here to stay, and I feel it’s really prudent for a CEO or a senior manager to think about how to embrace it and how to support it.
ALISON BEARD: Raj, thanks so much for being here.
RAJ CHOUDHURY: Thank you, Alison.
ALISON BEARD: That’s Raj Choudhury, associate professor at Harvard Business School, and the author of the article, “Our Work from Anywhere Future.” You can find it in the November/December 2020 issue of Harvard Business Review, or at HBR.org.
This episode was produced by Mary Dooe. We get technical help from Rob Eckhardt. Adam Buchholtz is our audio product manager. Thanks for listening to the HRB IdeaCast. I’m Alison Beard.
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