Darleen DeRosa - Leading at a Distance

Other companies are following this principle of changing how the business operates to adapt to the times. Sandeep Mathrani, CEO of flex space behemoth WeWork, for example, told us how he is adapting the business to the times. Before COVID-19, WeWork's main focus was its turnaround – streamlining the organization's overhead expenses and optimizing its real estate portfolio. But as the pandemic took control of the industry, WeWork's strategy shifted to diversifying its member base beyond the company's traditional start-up and enterprise customers. As a result the company moved to digitize its core workspace product through subscription and on-demand models while also targeting industries like higher education and life sciences, which, regardless of the pandemic, are in need of innovative space solutions.

Tim Cook, CEO of Apple, which invested an estimated $5 billion to create its space-age Apple Park campus in 2017, has been quoted 4 in the press that he was both surprised and impressed by employees’ ability to operate remotely. In 2020, the company created products, including new Apple Watches and iPads, that launched on time, even though most employees were working away from the office. He said that Apple will not return to the way they were, “because we've found that there are some things that actually work really well virtually.”

Of course, not every business leader is so sanguine about remote work. Netflix's Reed Hastings has called remote work “a pure negative.” 5 Jamie Dimon, CEO of JPMorgan Chase, who started working again from the bank's New York headquarters in June 2020, said he sees social as well as economic damage from longer stretches of working from home. During public appearances, Jamie indicated that he believes that remote work is no substitute for in-person interaction, and he has seen alienation among younger workers. As a result, the bank started bringing workers back to the office in significant numbers in the fall of 2020. Many other CEOs we interviewed for the book would agree, especially at companies that either design and manufacture physical products, like Nike, or that have notable apprenticeship cultures, such as Goldman Sachs.

In addition, many people find working remotely extremely taxing. There are more meetings, more time on Zoom, and greater demands for managers to check in with their teams. Workloads have also expanded, with more emails (+5%), more emails sent outside business hours (+8%), and many more meetings (+13%), all combining to extend the workday by an average of 48 minutes. 6 Jill Hooley, professor of psychology at Harvard and lead author of the classic textbook Abnormal Psychology , has studied managing depression in the workplace and the impact of remote work. “You hardly need me to tell you that we are dealing with very challenging times,” she told us. “Even the most successful business leaders may have family members or colleagues who have lost their jobs or who are dealing with other threats to their economic security.” She added that there are also the stresses that come from loss: “the loss of loved ones for some people, loss of our regular routines and favorite activities for everyone, as well as the stress that comes from loss of normalcy.”

Yet for many others, the move to remote work has been somewhere in the middle. Kathleen Hogan, of Microsoft, shared that “working remotely has ushered in the best of times and the worst of times.” There have been some real positives, such as productivity. At a personal level, Kathleen has not had to commute to the company's Redmond, Washington, headquarters and has had much more time to work – and to be around her college-aged son, who has been attending classes remotely. She added that for many of the company's leaders, such as those who work with enterprise customers and governments around the world, the velocity of business has accelerated dramatically, enabled by the fact that the norm of traveling to visit customers has been replaced by video meetings. One of the top officers of Microsoft said, “I've met with five governments today,” doing in days what typically took weeks. Similarly, Kathleen conducts best-practices sessions with peer CHROs, which she used to do in person. Those meetings would normally have taken so much time to schedule and now it's much faster to get them set and executed. “Last week I spoke with a half a dozen CHROs about what they're experiencing,” she said. At an organizational level, remote work at Microsoft has led to a level of flexibility she and other company leaders never thought was possible. “It's allowed us to tap into diverse talent, access and hire more people from different geographies, and be incredibly productive along the way,” she said.

At the same time, Kathleen shares the sentiment expressed by almost all the other leaders we spoke with: There is no substitute for being in person. “A big aspect of being with other people is the serendipity that often presents itself in life.” She worries about that loss both individually and organizationally. Employees seem to agree that there is something to be said for the hybrid approach. “While we continue to learn, our current research shows roughly 80% of our employees want to go back to the office, but with greater flexibility, while roughly 20% say they want to work from home all the time. Some thought the 80/20 rule would be in favor of people wanting to work from home given COVID and we are seeing the opposite.”

We interviewed Jamie Iannone, CEO of eBay, who agrees. There have been some massive advantages to remote work, but some serious disadvantages as well. One surprising benefit for Jamie was the way it accelerated his onboarding process when he joined the company in April 2020, after having been the successful candidate in a CEO search that was conducted predominantly virtually. “It's remarkable how efficient and effective we can be,” he said. “When I started, I wanted to visit all of our offices around the world. In normal times that would have been a multi-week process. Now it was achieved in a matter of days. And it was easy to customize my communications to the audience. I just changed my virtual background to that of our German office, UK office, Amsterdam office, and everywhere else I visited.”

Yet despite articulating many of the benefits, Jamie concluded that working remotely has been a slight net negative. He knows that connecting with people is a huge part of leadership and he misses managing by walking around, having the three-minute conversations in the halls, elevators, or cafeteria. For him, working remotely while coming into the company from outside – Jamie had been COO of Walmart's gigantic e-commerce business – has created challenges building new relationships. “It's relatively easy and efficient to translate a 3D relationship into 2D, but it's hard just to start and build a meaningful relationship in 2D.”

Let us share our point of view directly at this point. We believe that a minority of companies will attempt to go all the way back to how things were and revert to the formal in-the-office-everyday model they had pre-COVID-19. Similarly, we also believe that only a minority will shift toward full work-from-home or the even more permissive work-from-anywhere (WFA) model that lets people relocate and telecommute from less expensive or more idyllic environments. Yes, a few large tech companies have announced this shift. However, we believe most companies and organizations will wind up with some version of a hybrid model. On average, professionals will still have an office, visit clients, and conduct some business face to face, but they're almost certain to spend fewer hours in this mode than they did prior to 2020. As a result, everyone will be required to try to improve their remote leadership and working skills. Whether you're based in a high-rise or an office park 10 days a year or 100 days a year, you will need to get better at doing all the things your role requires on those days that you or your teams are working from the home office. The number of hours a year you are likely to spend leading virtually is probably going to spike in a permanent and meaningful way.