Changing The Culture

Reimagining The Post Covid-19 Workforce

Pandemic-style working from home may not translate easily to a “next normal” mix of on-site and remote working

Mckinsey Quarterly Report by Andrea Alexander, Aaron De Smet, and Mihir Mysore, reviews the new hybrid virtual model. Access full report here.

As the pandemic begins to ease, many companies are planning a new combination of remote and on-site working, a hybrid virtual model in which some employees are on premises, while others work from home. The new model promises greater access to talent, increased productivity for individuals and small teams, lower costs, more individual flexibility, and improved employee experiences.

While these potential benefits are substantial, history shows that mixing virtual and on-site working might be a lot harder than it looks—despite its success during the pandemic. These downsides arise from the organizational norms that underpin culture and performance—ways of working, as well as standards of behavior and interaction—that help create a common culture, generate social cohesion, and build shared trust.

To lose sight of them during a significant shift to virtual-working arrangements is to risk an erosion over the long term of the very trust, cohesion, and shared culture that often helps remote working and virtual collaboration to be effective in the short term.

Choose Your Model

Addressing working norms, and their effect on culture and performance, requires making a basic decision: Which part of the hybrid virtual continuum (exhibit) is right for your organization? The decision rests on the factors for which you’re optimizing. Is it real-estate cost? Employee productivity? Access to talent? The employee experience? All of these are worthy goals, but in practice it can be difficult to optimize one without considering its effect on the others. Ultimately, you’re left with a difficult problem to solve—one with a number of simultaneous factors and that defies simple formulas.

We can make general points that apply across the board. These observations, which keep a careful eye on the organizational norms and ways of working that inform culture and performance, address two primary factors: the type of work your employees tend to do and the physical spaces you need to support that work.

We’d recommend a fully virtual model to very few companies, and those that choose this model would likely operate in specific industries such as outsourced call centers, customer service, contact telesales, publishing, PR, marketing, research and information services, IT, and software development, and under specific circumstances. On the other hand, few companies would be better off choosing an entirely on-premises model, given that at least some of their workers need flexibility because of work–life or health constraints. That leaves most companies somewhere in the middle, with a hybrid mix of remote and on-site working.

Physical Spaces Needed For Work-Or Not

Let’s say 80 percent of your employees work remotely but do so only one day per week. In the four days they are on premises, they are likely getting all the social interaction and connection needed for collaboration, serendipitous idea generation, innovation, and social cohesiveness. In this case, you might be fine with the partially remote, large headquarters (HQ) model in the exhibit.

If, instead, a third of your employees are working remotely but doing so 90 percent of the time, the challenges to social cohesion are more pronounced. The one-third of your workforce will miss out on social interaction with the two-thirds working on-premises—and the cohesion, coherence, and cultural belonging that comes with it.

One solution would be to bring those remote workers into the office more frequently, in which case multiple hubs, or multiple micro-hubs, might be the better choice. Not only is it easier to travel to regional hubs than to a central HQ, at least for employees who don’t happen to live near that HQ, but more dispersed hubs make the in-person culture less monolithic. Moreover, micro-hubs can often be energizing, fun, and innovative places in which to collaborate and connect with colleagues, which further benefits organizational culture.

Productivity & Speed

While these potential benefits are substantial, history shows that mixing virtual and on-site working might be a lot harder than it looks—despite its success during the pandemic...

Metrics focused on inputs or volume of activity have always been a poor substitute for the true productivity that boosts outcomes and results, no matter how soothing it might be to look at the company parking lot to see all the employees who have arrived early in the day, and all those who are leaving late.

Applied to a hybrid model, counting inputs might leave you grasping at the number of hours that employees are spending in front of their computers and logged into your servers. Yet the small teams that are the lifeblood of today’s organizational success thrive with empowering, less-controlling management styles. Better to define the outcomes you expect from your small teams rather than the specific activities or the time spent on them.

In addition to giving teams clear objectives, and both the accountability and autonomy for delivering them, leaders need to guide, inspire, and enable small teams, helping them overcome bureaucratic challenges that bog them down, such as organizational silos and resource inertia—all while helping to direct teams to the best opportunities, arming them with the right expertise, and giving them the tools they need to move fast.

Once teams and individuals understand what they are responsible for delivering, in terms of results, leaders should focus on monitoring the outcome-based measurements. When leaders focus on outcomes and outputs, virtual workers deliver higher-quality work. No matter which model you choose for hybrid virtual work, your essential task will be to carefully manage the organizational norms that matter most when adopting any of these models

Managing The Transition

Organizations thrive through a sense of belonging and shared purpose that can easily get lost when two cultures emerge. When this happens, our experience is that the in-person culture comes to dominate, disenfranchising those who are working remotely.The difficulty arises through a thousand small occurrences. But culture can split apart in bigger ways too, as when the pattern of promotions favors on-site employees or when on-premises workers get the more highly sought-after assignments.

Some things simply become more difficult when you are working remotely. Among them are acculturating new joiners; learning via hands-on coaching and apprenticeship; undertaking ambiguous, complex, and collaborative innovations; and fostering the creative collisions through which new ideas can emerge. Addressing these boils down to leadership and management styles, and how those styles and approaches support small teams. Team experience is a critical driver of hybrid virtual culture—and managers and team leaders have an outsize impact on their teams’ experiences.

Managers & Leaders

As a rule, the more geographically dispersed the team, the less effective the leadership becomes. Moreover, leaders who were effective in primarily on-site working arrangements may not necessarily prove so in a hybrid virtual approach. Many leaders will now need to “show up” differently when they are interacting with some employees face-to-face and others virtually. By defining and embracing new behaviors that are observable to all, and by deliberately making space for virtual employees to engage in informal interactions, leaders can facilitate social cohesion and trust-building in their teams.

Keeping Track

Once you have your transition to a hybrid virtual model underway, how will you know if it’s working, and whether you maintained or enhanced your organization’s performance culture? The right metrics will depend on your goals, of course.

McKinsey research shows that winning performance cultures emerge from carefully selecting the right combinations of practices (or “recipes”) that, when applied together, create superior organizational performance. Tracking results against these combinations of practices can help indicate, over time, if you’ve managed to keep your unified performance culture intact in the transition to a new hybrid virtual model.

Approached in the right way, the new hybrid model can help you make the most of talent wherever it resides, while lowering costs and making your organization’s performance culture even stronger than before.