Return-to-Office: A New Competitive Strategy

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How many days each week is your company asking you to be back in the office?

That's become a polarizing question — and the answer is seen as a marker of whether the company or employees come first.

Apple Inc., for instance, says it wants workers in the office on Mondays, Wednesdays and Thursdays starting in September — a plan that sparked an employee backlash. Citigroup Inc. has also asked employees to be in the office three days a week. Some companies, including Goldman Sachs Group Inc. and JP Morgan Chase & Co., hope to revert to an everyone-on-site model. Bank of America Corp. wants all vaccinated employees in the office in early September — it will figure out what to do with the unvaccinated later. Ford Motor Co., Salesforce.com Inc. and Twitter Inc. say they will extend work-from-home privileges indefinitely.

While plans still vary widely, most firms are contemplating a hybrid arrangement like Apple’s — a set schedule of companywide remote days and office days.

But one-size-fits-all policies covering every employee are a mistake. Leaders deciding how to organize work should make more nuanced choices that reflect the needs of both employees and company. It's more complex than simply picking one scheme for the whole firm, yet the payoff for that complexity will be well worth it.

Think of this model as “strategically hybrid” — a schedule that reflects the specific ways individuals and teams interact to create value. Optimizing a company in this manner can help sharpen its competitive position. It can increase productivity and speed in some areas, while doubling down on creativity, collaboration and the full human experience in others. Taken together, these choices — precisely because of their difficulty — will be hard to replicate and can form the foundations of a durable advantage.

The following questions should drive these choices: 

  • Where do we want to prioritize efficiency, speed and coordination — recognizing that the answer often points toward remote work?
  • Where do we want to prioritize creativity, complex problem solving and spontaneity — which are more likely to happen in person?
  • For culture-building activities, what is the right mix of in-person and virtual interactions?
  • If employees in different jobs or roles have their own preferred location for work, how much flexibility will we provide? And are we prepared to lose people if we can't accommodate their preferences?

To illustrate what I mean by being strategically hybrid, consider the return-to-work choices of two hypothetical firms.

Trendy Store and ClassicClothes.com are retailers. Each sells casual clothing primarily to young women. Trendy Store’s competitive strategy is to be store-centric and fashion-forward. ClassicClothes.com’s strategy is to sell a curated collection of established brands online.

The different strategies driving the firms’ return-to-work plans can be seen department by department.

Finance. Trendy Store's finance division performs routine activities and its productivity rose while working remotely. Post Covid-19, these employees will continue remotely, coming to the office two days a month for business reviews. Because ClassicClothes.com adjusts prices on its website dynamically, its finance group consults hour-by-hour with the merchandising department to make pricing decisions. This team will return to the office to make that cooperation easier.

Procurement. Trendy Store’s large group of fashion-forward designers will return to the office every day to collaborate on the tactile, three-dimensional work of designing clothing — a process that can't be replicated adequately online. Because ClassicClothes.com sources its goods from established brands, its merchandisers can continue to work remotely.

Sales/Customer Service. Trendy Store needs it sales staff to come to the store to serve customers in-person. ClassicClothes.com, whose customers order online, will allow its customer-service team to continue working remotely.

Note that across every department and function, each company’s choices are guided by its overall corporate strategy. In some cases, these choices may become even more fine-grained. Writing in Harvard Business Review, Lynda Gratton argues that managers should make return-to-work decisions not only by function or department, but also on a person-by-person basis, factoring in variables such as the length of an employee’s commute, the availability of space for a home office, the strength of the employee’s existing network within the company and his or her tenure with the firm.

There are significant potential downsides to the strategic hybrid approach. Building a strong, cohesive corporate culture will be harder in such a workplace. Organizations must ensure that their diversity and inclusion goals are not inadvertently set back in this process. Allowing some people to continue working from home and requiring others to return to the office risks fostering jealousy, resentment and complaints about fairness. The strategic reasons for those decisions must be communicated clearly and firmly.

Providing every employee with their ideal arrangement can't be management's primary concern. Yes, demand for talented professionals is high and some people may leave for another job if presented with a return-to-work policy that doesn’t fit their post-Covid lifestyle. But that risk will probably shrink over time. It's going to be a rare company that declares: “Work wherever you want, whenever you want — you choose!”

Becoming strategically hybrid requires recognizing the kinds of in-person collaboration that create value while balancing the concerns of stakeholders to enhance the company’s competitive advantage. Ultimately, success is a key part of job satisfaction, and making intelligent trade-offs is the essence of leadership.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Nitin Nohria is a professor and former dean of Harvard Business School.

©2021 Bloomberg L.P.

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