We sat down with Phil Kirschner, Senior Expert at McKinsey & Company, to discuss the need for companies to adapt to new ways of work in the wake of the pandemic. He notes that remote work has highlighted issues with traditional work environments and that companies need to do the hard work of rewiring how employees collaborate and how business processes are executed. Phil suggests using metrics such as employee experience and engagement, as well as new measures like the average number of office visits, to track the success of these new strategies. They also dive into what Phil sees as the top challenge for workplace leaders, as well as how to approach employee experience to ensure success.
I’m a Senior Expert at McKinsey & Company, where I sit at the intersection of our Real Estate and People & Organizational Performance practices. I advise global clients - not only occupiers, but also companies that develop or operate real estate, service or invest in those places, and build or invest in the technology that enables them. And I help executives think through the leadership behaviors, work processes, capabilities, and employee experience requirements for addressing new ways of work.
In the olden days before Covid-19, I think we had been conditioned as a society to not pay that much attention to how knowledge work got done. And by that, I mean workers were given a lot of autonomy over their individual tasks and we all followed a set of seemingly normal and appropriate collaborative practices. The problem was, many companies did not pay that much attention to how their physical work environments did or did not contribute to how well work was getting done.
Then along comes the pandemic, forcing remote and fully distributed work on almost everyone unexpectedly, and shining a spotlight on many parts of our collective work and workplace experience that were never that great to begin with. For example, offices weren't designed or utilized very well. Most employees did not feel productive there, and they did not support a wide range of working styles. We had a terrible meeting culture, lots of inclusion issues across the board, and many people felt unheard or undervalued.
Having most knowledge workers working virtually for months or years has leveled the playing field a bit and has shown us, systematically, the errors of our ways before.
But what I have come to realize is that many companies took the band-aid approach to hybrid work. They forced the implementation of minimum viable tools and behaviors, so that we could replicate the feeling of our pre-Covid, not-quite-perfect work culture in a newly chaotic and stress-inducing environment.
So now we are at a fork in the road: employers are being challenged to do the hard work of actually rewiring how employees collaborate, how teams and leaders communicate, and how business processes are executed and visualized, in order to make distributed and flexible work legitimately easier.
In one respect, I think many business measures are the same, such as employee experience or engagement. However, since the nature of our work patterns has become so much more dynamic and fluid, we need to measure more frequently.
In addition, some new metrics have emerged as a result of remote work and increased flexibility, such as the average number of visits an employee makes to an office over a given period, or their level of mobility during work hours. These factors can have a significant impact on employee satisfaction, or even office experience, and must be monitored and adjusted as necessary.
People Analytics and HR functions have been able to provide insights into workplace diversity and equity for years. With the introduction of remote work and flexibility, we’re simply adding another variable to their analyses. By keeping a close eye on these new demographics, we can ensure that everyone is being treated fairly and given equitable opportunities for advancement.
Ultimately, it's important to treat our employees like customers, constantly adjusting and adapting to their needs and preferences. This requires a dynamic, iterative approach that is constantly informed by data and feedback.
For example, from an office perspective you can correlate the presence of certain people or events that could be more magnetic. And by doing so, we can create a work environment that supports and empowers our employees to achieve their best.
I think it’s the radical disparity in the perceptions about flexible, distributed, asynchronous working between leaders and frontline or junior employees.
There isn't going to be a fixed answer to the flexible or hybrid work problem. Leaders need to provide authentic, transparent, and humane responses to employees, such as saying "I don't know, let's all find out together". We need to avoid jumping to conclusions, and instead focus on doing the hard work of changing processes to give employees the flexibility they need, while providing employers with the comfort of knowing things are going the way they should.
Unfortunately, this kind of symbiotic - “help me help you” - relationship is not common in more authoritarian leadership structures, especially in larger companies that tend to have more rigid hierarchies. But every industry, every region, probably even down to every country has varying perspectives and approaches on this, so we recommend companies to run their own data-driven version of “race, test, learn, rinse, repeat”. Companies must be willing to fail and learn.
We recommend companies to run their own data-driven version of “race, test, learn, rinse, repeat”. Companies must be willing to fail and learn.
A successful workplace and employee experience strategy requires at least a committee with HR, IT and real estate all at the table, sharing information and aligning on the employee experience. But now I believe in having a dedicated Chief of Experience or similar role. A dedicated executive responsible for the experience, with actual budgetary authority and ability to influence things - whether it's the built environment, technical environment policies or workstyles.
In many companies, this role is filled by the CHRO, whose title continues to evolve. However, the problem becomes that during times of crisis or competition, HR, real estate, and other teams can be pulled in different directions thereby losing sight of the importance of the employee experience and impacting the teams’ ability to collaborate.
Before the Covid-19 pandemic, the future of work was largely defined by digitization, automation, and the growth of the gig economy. While these trends are still going strong, the pandemic has changed the way people work, and think about work.
Companies are seeing more attrition because employees are leaving traditional employment for freelance work, which is now more accessible and flexible. The younger workforce is even more likely to make retail-oriented decisions about their employment, choosing to work for companies that align with their values and offer the flexibility they need. This new landscape requires companies to continuously adapt and adjust their strategies to meet the changing needs of their employees.
I hear culture and connection invoked quite a lot as the reason why we have to come back to the office.
I think culture is really defined as a condition for growth. It's how things get done, and what people do when you're not looking - which has to do with various models of supportive, authentic and consultative leadership. And you can tell a lot by observing, such as:
I'm most impressed by companies that are both explicitly remote-first but also continue to build and iterate.
Annual company-wide events, for instance, can be really intense and socially oriented experiences that employees carry with them for months. The key is that we tend to remember the more memorable experiential things.
The office is like a retail store version of your culture, but it does not make your culture right.
Leaders need to realize that orienting hospitality, experiences and knowledge sharing around joint events, and not necessarily using a physical place can be instrumental in establishing and articulating your company's purpose.
I picture it to be extremely authentic and specific to a company. And I don't think it has to be called the “office.”
We have to think about the purpose of spaces and the reasons we gather, and ensure that we are designing and engaging with them accordingly. Keeping in mind that:
I don't think there's one defining purpose of the office; it has to align to the needs and perspectives of the occupants in that location.
I envision freshly lit, actively managed, community-oriented, diverse spaces for mixed use. It can't just be the box of offices that it used to be.
We must also be mindful that it's a huge change for those that used to build buildings, rent the boxes and sit back to collect a check. They are now in the active place management and hospitality business, whether they like it or not.