Blog

• A Harvard Business School professor who has studied remote work for years says companies risk making big mistakes in a rushed moved to new employment models after Covid.
• He referenced GitLab, a 1,300-employee company that has been fully remote since it was founded and built rigorous processes from Day One to make it work.
• GitLab’s CEO says hybrid work models, which many companies now say they will favor in the future, can turn out to be “horrible.”

How to begin building a remote work model that won’t fail

Click to expand

UP NEXT

If you work for a company that is planning to make work-from-home permanent after the Covid-19 crisis, a big mistake could be in the making. That’s because, according to Harvard Business School professor Prithwiraj (Raj) Choudhury — a remote work expert who has been studying the phenomenon since well before the coronavirus — work-from-home is not the right model, even if it was a pandemic-induced short-term requirement. The new employment normal needs to be work-from-anywhere, or it is more likely to be a failure.

Load Error

“Remote work is more than work-from-home, and the form of remote work I am most excited about is work-from-anywhere, where the employee has the choice to live anywhere,” Choudhury said at a recent CNBC Workforce Executive Council virtual event.

The Harvard professor, who recently wrote a cover story for the Harvard Business Review on his research, points to several key ways companies that think they are doing the right thing in a migration to remote work may get it wrong.

For starters, any firm that is looking at real estate savings as a primary driver is making the decision for the wrong reason. Yes, there are cost savings to be had, but it is the ability to hire talent globally and allow talent to choose a location based on their own preferences — whether a lower-cost locale or to be closer to family — which should be understood as the much bigger driver.

“You really need to be convinced of why you are embracing this model. … This is the way to attract and retain the best talent. There are real estate costs and other benefits, but those are secondary,” he said, and he added that the competition among employers for the best talent, based anywhere, will be intense on the other side of the pandemic.

© Provided by CNBC
The migration to remote work will require a fundamental rethink of organizations, and

Choudhury says there is one key group of employees that need to be first-in-line in the migration to work-from-anywhere for it to work: C-suite executives.

“This model can only work if senior managers adopt it, because if the C-suite and top managers are all in a physical building, then middle managers will all be drawn to that building to get face time.”

The C-suite needs to think of itself as remote work team, like any other — in fact, as a “shining example” he said — embracing features of remote work like Slack channels and codifying knowledge using new methods of sharing and access. Remote work will not percolate down effectively throughout the organization otherwise, according to the Harvard professor.

Short of a full-scale transformation of how an organization works, including all of its communication, collaboration and productivity procedures and systems — which he said could be a “multi-year” project — companies trying to implement remote work permanently will struggle.

“You can’t keep doing things the way you did in the physical world. … You have to invest in a multi–month, maybe multi-year, organizational project, and most importantly, convince senior managers.”

Some aspects of the reorganization come to the fore more easily: labor, tax and privacy laws that vary by geography, as well as salaries. But it is the deeper dive into the way an organization communicates and collaborates that will trip up companies.

“Lots of old habits need to change,” he said.

An asynchronous environment, with teams and managers and their direct reports in multiple time zones, means asking questions and receiving answers in entirely new ways, and having trust in a process that is not in real-time and in-person.

“The asynchronous way of working lends itself to blameless problem solving” Choudhury said.

As an example, instead of employees working on a project on their own and only coming to the team when the slides are ready to be presented, asynchronous sharing of information can result in the consistent input of new information, team members reacting more quicker, and making innovation richer.

“Remote really outperforms existing models,” Choudhury said. “Research shows if you have a globally distributed team they have ideas that recombine to create innovation.”

The fully remote 1,300-employee company

One company that the Harvard professor has studied is GitLab, an open source software firm that has been “office-less” for nearly a decade and has grown to 1,300 employees located in 66 countries. Gitlab has codified its remote-work best practices in a book that can be downloaded. Since the pandemic outbreak in March, it has been downloaded tens of thousands of times.

The idea that people miss an office environment is misguided, said Sid Sijbrandij, co-founder and CEO of GitLab, at the CNBC Workforce Executive Council virtual event. He has learned not to trust those who think there is some special magic about a physical office.

When GitLab first came to the U.S., the company was told that renting office space would be a requirement because people wouldn’t work remotely. But quickly, its U.S.-based workers began doing exactly what all of its other workers around the world were already naturally inclined to do — and which the expert advisors said they would not — stop coming into the office as long as they had all of the tools and opportunities to succeed offered remotely.

Employees don’t “long to be in the office,” or miss commutes or office furniture. What they do miss when it is not recreated remotely is the same communication and connections that are fundamental to work.

“You have to create camaraderie, and if you create those circumstances, you don’t need an office,” he said.

Many companies are working towards a permanent, flexible work arrangement, allowing employees to shuffle between days in office and at home. Sijbrandij is doubtful about the prospects for this approach.

“Hybrid can be horrible,” he said.

The logic is understandable — productivity is up with employees working remote, and some of those employees have relocated away from major metro areas, but there is a segment of the workforce that still wants to work in the office. He says it is those elements of connection and collaboration the employees think they can only get in an office setting which draws them back, but it can be recreated remotely in ways that are better than hybrid models.

“If you try to do hybrid you will have an A team and a B team, those in the office and those deprived of information and career opportunities,” the GitLab CEO said. “Two ways of working is very, very hard and companies should not do it lightly. It’s ok to say ‘back to the office or all remote, but hybrid can turn out really bad.”

What to leave behind in the office

According to the GitLab CEO, there is plenty to leave behind in the office, for good.

First, stop measuring inputs as a way to gauge employee productivity. GitLab managers are not allowed to ask employees how long they worked on a project, unless they have reason to expect the employee has been working too many hours.

“Rewarding people who come early and leave late is a habit to break,” Sijbrandij said. “Same as ‘brb, getting coffee.’ We don’t care when you are working. We care about output and we’re very meticulous about measuring that,” he said, noting that GitLab has hundreds of indicators it tracks, but hours punching in and out are not among them. “We reward results, not time in seat,” he said.

Darren Murph, head of remote at GitLab, said that raises and promotions have been based on subjective factors for too long. “That no longer works in remote. It has to be documented and for each role it will be different and it is the burden of managers to figure it out.”

Getting employees to share in a remote environment early, and without fear, is also critical to the work environment being successful, he said, and firms forced into remote work by the pandemic haven’t learned lessons like this yet. He said employees will probably struggle if transparency is not a core value, especially in terms of feedback in the creative process.

“Ship fast … and ask for feedback,” Murph said.

Asking for feedback can lead to embarrassing moments, but it puts organizations on the right path.

“You need to have a low level of shame,” Murph said. “You need to encourage people to share thoughts early and often.”

The common perception that organizational serendipity, and incubation of innovative ideas, isn’t possible in a remote firm is wrong. But Murph said a remote company does need to have a culture that is detailed, written down, and shared.

GitLab now has an 8,000-page handbook with all of its processes and documents, and one of the critical lessons it learned was to begin codifying the information as early as possible. Its handbook evolved in a similar way to the concept of compound interest in investing, which dictates that the earlier you start investing, the greater your returns will grow over time.

“The earlier you write it down, the more impacts on the organization going forward,” Murph said.

This year has proven that work can be done from anywhere, at any time. Heightened connectivity is critical, and the growth of 5G elevates organizational connectivity to revolutionize work across entire industries, around the globe. Join the CNBC @Work Spotlight event on December 10 to hear from business leaders prepared to propel into this new, transformative era of work and innovation.