HBR professor Tsedal Neeley has focused for years on a pair of essential business imperatives: how to go global, and how to become truly digital. More recently she has established herself as an expert in the nitty gritty aspects of the new workplace – how to hire and retain talent, how to collaborate in a hybrid world, how to think about the new role of the office. In this episode of “The New World of Work” Neeley says she believes the office will never be what it once was and that we should think of it more as a “tool” in how we do business. And she urges companies to move now to adapt to the new imperatives of leadership and technological innovation. As she puts it, “Either you adapt, or you die.”
HBS professor Tsedal Neeley specializes in how companies can scale, go global, and achieve digital transformation. She published a very timely book last year, Remote Work Revolution: Succeeding from Anywhere, and is co-author of the forthcoming The Digital Mindset: What It Really Takes to Thrive in the Age of Data, Algorithms, and AI.
HBR editor in chief Adi Ignatius sat down with Neeley in this episode of our video series “The New World of Work” to talk about:
- Thinking of the office as a tool, and identifying what that tool is good for
- How some companies have successfully achieved digital transformation, and what awaits those that can’t or won’t
- We’re not going back to the “old normal,” and employees’ expectations of work have changed, probably forever.
Neeley thinks the future of work is not going to be a choice between in-person, remote, or hybrid. You need to “be fabulous in all of them and learn how to connect with people and work well with people” in order to achieve your goals, she says.
“The New World of Work” explores how top-tier executives see the future and how their companies are trying to set themselves up for success. Each week, Ignatius interviews a top leader on LinkedIn Live — previous interviews included Microsoft CEO Satya Nadella and former PepsiCo CEO Indra Nooryi. He also shares an inside look at these conversations —and solicits questions for future discussions — in a newsletter just for HBR subscribers. If you’re a subscriber, you can sign up here.
ADI IGNATIUS: Tsedal, welcome.
TSEDAL NEELEY: Thank you so much for having me, Adi. I’m thrilled to be with you.
ADI IGNATIUS: Well, I love our conversations and I can’t think of anyone who’s better positioned than you to talk about the future of work. Let’s start with the topic that we’re all trying to figure out, and that’s the “Great Resignation” or the “Great Reshuffle”, whatever you want to call it. We’re all feeling the impact. How is all of this affecting the way we work and how will it affect us going forward?
TSEDAL NEELEY: It’s interesting because the “Great Resignation” captures the great recognition that people have had, that they want more from their work. They want better work arrangements. They want better wages and salaries. They want better managers. If you’re a mediocre or poor manager, watch out, people are leaving.
We are in the middle of a global cataclysmic pandemic that is continuing. We’re on our way to two full years of this, and so people are looking at their lives and their priorities and they’ve experienced different ways of working. The “Great Resignation” is, as a former marketing manager put it, a great repudiation of suboptimal work arrangements. And so companies are being forced to be better as cultures, as places for people to go to. That’s what the “Great Resignation” is about.
ADI IGNATIUS: Implicit in that is that power has shifted in some ways from the employer to the worker. Is that a temporary phenomenon linked to the pandemic and linked to the way we’ve handled the economy and incentives? Or do you think everything has changed permanently?
TSEDAL NEELEY: I actually think that the pendulum does swing over time, and we don’t know how long this will last. But you are so right that we are both seeing the fiercest labor market of our lifetime and employees making demands in terms of how they want to work, where they want to work. So they do hold the power today.
By the way, after World War I, after World War II, you saw similar worker unrest. People begin to introspect and ask for more. This one is very different. It’s extremely global. And of course, with the presence of social media and other fast-reaching mechanisms, it’s spreading very quickly. So workers, I truly believe, do have the power. We don’t know for how long, but in order for companies to be able to deliver on their products and services and even their growth goals, they have to think very deeply about what to do.
We saw, Adi, how many in the banking industry started to pivot from, “This is an aberration. It will never change. We want butts in seats in the offices,” to, “Actually, we’re postponing yet again.” So we’re seeing a shift, a major shift, even from those who’ve resisted the most.
ADI IGNATIUS: Let’s stick on this topic of talent. You mentioned that after the war, that was another period where workers had relative power. Back then, we were probably still thinking of management as a top-down exercise. We’re in a different place where we’ve defined good management means being empathetic and taking stakeholders’ perspectives, including your employees’ perspective, far more seriously. To what extent should employees have a voice, have agency, be able to decide how they work, when they work, where they work?
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TSEDAL NEELEY: I actually think it’s something that needs to be co-created. Employees on their own can’t have full agency, but they can have some, articulating what are their preferences and interests.
I’ve had a chance to work with so many companies in the last couple of years. The first thing that companies have been doing, and rightly so, is surveying their workforce, to truly understand. And you have to do this anonymously by the way, because you don’t want people to tell you what you want to hear. You want to know the truth. And understanding what people’s preferences are, and it has to be balanced with the work of the organization. What do we need to do really well? How do we need to make sure we’re serving our stakeholders? And once you understand that, you have to come up with a policy that works for the work, as well as employees.
The agency can truly come when it comes to work arrangements. Whenever you look at surveys, across companies, across industries, around work arrangements (and I love the title of this series, “The New World of Work”), it is consistently this way. You have about 15 to 20% who want to be in the office. They want in-person work, and we need to make sure we’re paying attention to this. Young people, people who are early in their careers, they want to be in the office. You have about 30% who often want remote-only work, and this is typically aligned with certain demographic groups, but remote-only and remote-first is the manner that they want to move forward with. And then you have all the rest who want hybrid work, which is kind of the mix between the in-person and the remote.
And so the question is, what will you do in your organization to be able to accommodate some of these preferences? And even [be] open for talent purposes, [to how] looking outside of your typical spaces or even localities can get you excellent talent in ways that you haven’t discovered. Diverse talent in the US, global talent outside of your country.
So you have to rethink, reset the way that you’ve attracted talent and retained.
ADI IGNATIUS: So we used to think that the key to building and sustaining a culture was physical interaction and it wasn’t just the planned meetings but those serendipitous unplanned meetings that created spark. None of that is provable. All of that is plausible. We certainly believed in it and many of us still do. Where do you come down? I mean, there isn’t data exactly to prove or disprove, but you’ve been studying truly global companies that don’t have a single headquarters and have many, many people who are working remotely, and yet I’m sure they would say there is a culture, there is a defining ethos. For those of us who think it’s either everybody in the office or somehow we’ve lost the magic, help us out. There’s obviously a middle ground.
TSEDAL NEELEY: Yes. What you will hear over and over again is that some kind of in-person interaction with the serendipitous—or some people call it the water cooler conversation or the cappuccino conversation or the tea-kettle conversation—is a way in which to build connection, to build relationships, and to advance work goals. But the reality that this pandemic has uncovered for many people is that the in-person culture is not a panacea. When you look at the Future Forum’s data (this is Slack’s think tank), looking at Black and brown professionals, the in-person culture was actually very difficult. In fact inclusion was a problem. The sense of belonging was a problem for many people. Remote work has kind of shifted and changed [things], because people were taking these psychological commutes in order to be able to fit into their organizations. So the in-person is not always a panacea and it’s not always working for everyone. It’s really important to understand.
But on the other hand, when you have these micro in-person moments with people, it is true that you have the opportunity to deepen your relationship, and in the end it shapes work. So when you’re in this remote environment, it all happens very differently. When you’re in a hybrid environment, it all happens differently.
My position has always been—after about 20 years immersed in virtual work, global work, remote work—that these things happen differently and we need to learn how to do them. The serendipitous, you can’t get it in a remote environment, but you have to create it. I call this structuring unstructured time, for example. We need to be awesome when we’re in person, we need to be awesome when we are remote, we need to be awesome when we are in hybrid mode. We have to be multimodal workers. And this is what our new reality is about. It’s not this or that. It’s all of it and well. Does that make sense to you?
ADI IGNATIUS: It makes total sense. We need to take it all seriously and need to be awesome and every expression of interaction and be very purposeful about what we’re doing in these various environments. Are there examples of companies who you think are getting the hybrid experience right?
TSEDAL NEELEY: There are. And it’s interesting what you learn from the companies that are doing it well. And I will tell you, people will say all or nothing is easy, in-between or hybrid is the toughest one. So we have to acknowledge that it will require work, it will require a culture change.
What have we learned? One thing that we’ve learned is you have to get the technology right. I’m sure there are people on this watching and listening to us today who’ve been on hybrid calls where you could barely see the people in the room, you could barely hear what’s going on, you feel a bit disconnected because the technology is suboptimal. If we want hybrid, we’ve got to start there first, and we need to invest in the right technologies to capture people, and then we have to make sure that we have the right practices.
For example, a best practice for a hybrid meeting is that everyone shows up with their laptops and they open their laptops so that people can see all the chats that are coming in and they can see you, you can see them. People feel more connected as opposed to being set aside on a screen somewhere. The other best practice is you have to make sure that you articulate the rules of engagement in these conversations. How will we communicate and how will we make sure that everyone has a chance to contribute to a conversation? You have to explicitly have these conversations, and then of course managers and leaders who are running this meeting need to make sure that everyone gets to participate and not the dominant people or the people that are in the room. Everyone needs to be able to come in.
You need the tool sets, you need the skill sets, and you need the mindsets for these to work really well. And some companies are far ahead in this area because they embraced it long ago. The other thing that we’re seeing is many companies, many organizations, many groups are kind of in this wait-and-see mode, “We’ll wait until this thing goes away and we’ll go back to normal.” When you do that, you never prepare and you never develop the skills necessary to do this well.
ADI IGNATIUS: And implicit in that is that we’re not going back to the old normal.
TSEDAL NEELEY: I don’t think we’re going back to the old normal. Work has been disrupted. Workers have been saying that they’ve changed and they’ve experienced a completely different way of operating and productivity has not only remained high, but it’s gone up for many, many organizations. So I think we need to accept the fact that the world turned upside down and introduced a different way of working, and if we don’t embrace and accept and adapt, we are going to be not only behind today.
You mentioned our upcoming book, The Digital Mindset. We are right around the corner from an even bigger disruption to work where data and technology and other things will completely change how we operate. So if we think that it’s about in-person versus not, I don’t think we completely get the fundamental shift that’s taking place, not only in work, but how work is unfolding. And soon, we are going to have data and other technological devices and mechanisms that will further change work. So doing some adaptation today is actually preparing us for what’s down the road in the next three to five years.
ADI IGNATIUS: That’s well said. I’m going to start turning to some audience questions and there are a lot of good ones coming in. This is from Ontario, Canada, asking about employee engagement. And you’ve touched on this, some, but what are the best companies doing to keep a staff that previously was in office, but’s is now remote, to keep them engaged? And how are they connecting with employees who were maybe hired during this pandemic period and haven’t even physically met their employees in person?
TSEDAL NEELEY: That’s such a great question. When I talk to companies, next to worrying about, “Our culture, our culture, what about our culture?”, employee engagement is probably right there as what people worry about. So we have to make sure that we decouple the notion that employee engagement only happens when we are in person. That is absolutely not true. Employee engagement is about having a great manager who’s creating the conditions for people to develop cohesion as groups and work. So you need the frequency of contact. You need the informal contact, like the virtual experiences with others that are important. You need to make sure that people have terrific jobs that they’re proud of, that they’re connecting to, including higher purposes.
The point that you make though, Adi, and the numbers that I’m seeing across the board is about 18% to 20% of new employees in many companies, especially large companies, have been hired in the last couple of years in the middle of this pandemic with very little in-person contact. I call these people remote natives. So remote natives need not only to be engaged, but they need to be onboarded really well. And so this is where leaders, managers, human capital leaders and organizations have to ensure that remote natives have the opportunity to develop relationships with people. They can’t walk around. So you’ve got to give them a list. You have to make sure that you’re onboarding by giving people onboarding buddies so that they’re never alone, so that at the end, they can do work, but also feel like they have a real grasp of the context and you have to create that very deliberately. It won’t happen otherwise.
ADI IGNATIUS: Let’s say 10 years from now, if we’re looking back on this period in the workplace, are we going to say, “Yeah, we had no idea what we were doing and were just stumbling along,” or do you think we’ll say, “Yeah, that was the moment where we really began to figure out the new paradigm for collaborating effectively together?”
TSEDAL NEELEY: 10 years from now, I think that we will have two groups. One group will be the group where people have adapted. They have looked around, they’ve understood that they have to be more digital, that they have to develop new skills to connect and to work, that they have to understand that they need to develop a little bit of technical skills in order to participate in a digital economy that’s only been accelerated by this pandemic.
The other group [is] those who will lag behind, will be dragged. Hopefully some will be dragged and survive, but I am worried that those who are not adapting will actually lose or even disappear. I’ll give you an example, Adi. If I look at the last couple of years, and look at the companies and the organizations that have been thriving compared to those who’ve not, some that even have died, you see that the companies that have adapted have been experimenting with technology, experimenting with e-commerce, changing their narrative, changing their business model, being very flexible in terms of how they’re building their workforce and really infusing the digital mindset throughout their organization. Those who haven’t, you see in the narrative of their top CEOs: “This is an insurmountable thing, this is too difficult for us.” They’ve been struggling with digital and technology and you can see them falling behind or even going bankrupt. So I think 10 years from now, either you adapt or you die.
ADI IGNATIUS: I feel like we should just linger on that. That’s intense. That begs the question, and I’m going to ask a question from Victor from Rhode Island in the US, which is an interesting follow for what you just said. What are the implications then for higher education institutions, and I would include business schools here, as we prepare students for this new reality?
TSEDAL NEELEY: I think the implication is that we need to make sure that we are helping people meet the moment. Remote learning, for example, is just an example of the type of learning that’s going to move forward, synchronous, asynchronous. There’s no room to resist. We’re also going to be in a space where we’re going to see scale in ways that we never have before. So the use of video, the use of all sorts of technologies, synchronous and asynchronous, the reach is going to be large.
For students, unless people become multimodal in the way that I described, the in-person, the remote, the hybrid, not saying, “I love this, I hate this, this and that.” Be fabulous in all of them and learn how to connect with people and work well with people and advance your goals with people, whether you’re in-person, hybrid or remote, because ultimately, we are going to see the scaling of education and more and more people will participate in this development that I’m discussing. And either we are awesome or we’re going to be left behind. This is what I truly believe.
ADI IGNATIUS: In everything you’re saying, you’re talking about how we work remotely more effectively, how we do hybrid more effectively, but you’re not saying that we get rid of the office. Let’s talk about the office. Daniel from Toronto asks, “What role should the office play today?” What did we learn in particular in the last couple years? How do we make the office experience the best it can be for when we’re in the office?
TSEDAL NEELEY: I love that. Yes, I think the office is very important, but if we think about what we’ve learned from the early experiments with hybrid work and remote work with Cisco 1993, later on Sun Microsystems in ’97, acquired by Oracle, IBM and others, they’ve been experimenting with hybrid work and remote work for a very, very long time. And you do see massive shrinkage in their real estate over time. In fact, Sun Microsystems saved half a billion dollars in 10 years.
We should expect that office spaces might get smaller. And offices are tools. We need to think of offices as tools as we would any digital tools that will enable us to do remote work. And if we think of offices as tools, we think of them as tools for collaboration purposes and innovation purposes, we go there when we were about to do some ideation or some creative work, not just to do the things that we would do normally from home. To go into the office to stare at a screen all day the way that you would at home is not helpful. In fact, people resent that. The office is for connecting with one another, for innovative work, during certain phases, for onboarding people, you want people to come in more when you’re onboarding them if that’s possible. To treat the office as a tool and not a destination is a mindset shift that’s going to be really helpful in using the space in a way that’s productive for all.
ADI IGNATIUS: I like the idea that we should be purposeful about what the office is for. What do you think about the regularity of being in the office? Should we all be in one or two days a week together? Should employees decide when they come in, if at all? Workers, I think we all agree, should have more agency, more autonomy, but should we try to have people together with some regularity?
TSEDAL NEELEY: If possible, yes. And people have approached this in different ways. So what you want to make sure you do is you have what’s called anchor days, or days where everyone comes in, because you don’t want to mandate for people to come back to the office and the schedules are so spread they never see anyone. You have to make sure that you have certain days where everyone can come in. For some companies, actually, this has been five days a month, we want you to come in. For others, we’ll come in for two weeks or a week out of the month and the rest will work remotely. It depends how you do this. You can get agreement on this with your employees given the work that you need to do and the rhythm that you have to achieve. For some other companies, by the way, startups or smaller companies, they get together once a quarter and spend two or three days away from the office, actually offsite working on their bonding, relationship, their purpose, and making sure that they’re all aligned. They do it once a quarter, so there’s no regular “come in the office X amount of days”, but we get together quarterly. So there is no straight answer, but your point about bringing people together in some kind of cadence could be very helpful depending on the needs of the group.
ADI IGNATIUS: Talk some more about why we might do that. I mean you were saying, “All right. If you’re going to bring people in the office, they should be sort of special moments. You’re working on a project. It’s an offsite situation.” Are there examples of companies that you’re seeing that are bringing people together and then doing spectacular things? I think a lot of us are struggling with, “Yeah, we want to make it great, but we’re not exactly sure how to make coming into the office—what we used to do routinely—how to make that a great experience now.”
TSEDAL NEELEY: If you think of the office as a tool, as I mentioned earlier, then you would decide, “When do we need to use this tool?” To say to people just come in three days a week just to be around, that’s less helpful. But to actually say, “We’ll come in the office to do these particular tasks, to work on these problems,” or, “Once a month, we’ll spend four, five hours together to do this.” You just have to be thoughtful about what you want to do when you bring people in. It could be the whiteboard shoulder-to-shoulder work that you might want to do. That’s the thing, Adi, you just need to think about the occasions that will bring people in and ask your team members. They will know. They will know.
This should not be something that managers and leaders go in a corner and think up, and show up and impose. You’ll get great ideas from people, and you’ll learn that a lot of young people want to be in the office more than others. And then you have to make sure that when the young people do come in the office, the others are around. By the way, when I say young I don’t mean just the youth. But those who are earlier in their career, they want more contact with others. But to have them come in when no one else is there to help them learn vicariously or shadow, it’s futile. So there’s some coordination that needs to take place there. Does that make sense?
ADI IGNATIUS: That makes sense. You talked a little bit about technology in the office. I don’t think any of us is satisfied with the technological resources we have now, particularly as we try to do a hybrid thing. It’s not delivering. Are you seeing technologies, and maybe some employers are using technologies that are bridging this gap, that are maybe in all of our futures once we have access to them?
TSEDAL NEELEY: It’s interesting because these are all existing technologies, but you have to make sure that they fit the room that you’re in. You’ve heard me say this many times before, Adi, to you and beyond, that remote work is not new, hybrid work is absolutely not new, global work is not new. There’ve been so many meetings where some people are coming in through video conferencing in global work environments. So there’s a lot of knowledge that we do have. In terms of technology, they are all existing technologies but they need to be used.
What I see is that people are not getting them. They’re not buying them. They’re not buying screens that are big enough. They’re not walking into their conference rooms with their laptops. They’re relying only on cameras. You need more cameras, you need more screens, you need more laptops. And most importantly, you need a clearly articulated process that everyone follows. If I show up with my laptop in order to participate in a hybrid meeting and five people aren’t, it’s not working. You just need to make sure that you have the right process in place for these hybrid meetings to work.
ADI IGNATIUS: The last question I’m going to ask, and we’ve been talking about this a lot in recent episodes, is about the metaverse. You know, on the one hand it’s a punchline. On the other, it is about using technologies. Using AR, VR, holograms, whatever, to interact more effectively, mostly when we’re not in the same room. Is that on your radar at this point?
TSEDAL NEELEY: I am curiously watching. You know, it’s interesting. And I don’t know if it feels this way to you and to the many people who are with us: that we are kind of at this pivotal space, cryptocurrency, the metaverse, the remote work revolution. There’s so much happening and so much changing. So I am paying a lot of attention. I’m very curious. We are already seeing augmented reality getting used in training and learning modes. We’re seeing a lot of things entering various sectors. And eventually it could be possible that the metaverse might be something much more salient. Probably not immediately, but over time.
There are two phenomena I’ll mention very quickly. One is the fact that people aren’t able to travel the way that they used to. Virtual touring of sites and spaces of manufacturing for example are becoming much more important. So are there ways to get those types of experiences for people using some of these emerging technologies, is an important question.
Another thing that I’m seeing is this do-it-yourself phenomenon. People want more control of the tools that they’re using, not only from a purchasing standpoint, and implementing standpoint, but they want to use their own portals. They don’t want to rely on third parties or other experts in-house. Do-it-yourself is another area that some of these emerging technologies may eventually support. I don’t see immediate changes, but I am paying attention with both eyes wide open and a lot of curiosity.
ADI IGNATIUS: Amazing. Tsedal, I want to thank you for being on the show. I can’t imagine anyone with whom I could have a better conversation about all these topics, so thank you again.
TSEDAL NEELEY: Thank you.