Why the work from home productivity boom?

Many businesses learned during the COVID-19 crisis – when we were scrambling to allow our people to remain productive and connect with customers digitally – that we could do things much faster and with a lot less red-tape than we thought. We introduced work from home (WFH) in record time and digitised products at an unprecedented rate. The crisis showed us that people can work harder and that things can get done fast.

But there are a few problems with the increased productivity and rapid implementations that we saw during the crisis – we just can’t do it in a normal business environment. When faced with an existential crisis, managers and bureaucrats had to step out of the way. Post-crisis, when things get back to normal, managers and bureaucrats will, no doubt, flow seamlessly back into the system.

Many companies have reviewed their actions during the crisis and resolved to keep the good and remove the bad. The “good” involved faster implementations, rapid innovations, reduced bureaucracy, more esprit de corps, and a clear focus on what needed to be done. The “bad” called for rapid and often patchy governance, inadequate paperwork and documentation, and people doing work that was not in their job description or outside the hierarchy.

People’s productivity went up during the crisis, and that’s good. Many executives ascribe this to the need to pull together and to people working from home. But I think that it’s more about the imposed empowerment that was forced into the organisation. Without the usual chain of command, people were required to make decisions on the company’s behalf. They had a clear set of goals (survive!) and got on with it. They made changes and introduced innovations without going through the proposal-presentation-justification-approval-allocation of funds process.

People worked hard, but that rate of work came at a cost. On average, people worked an extra two to four hours a day. And because they were working from home, they had to deal with home-schooling, making meals, taking granny to the shops, and calming down the partner who had just lost their job. It’s unsustainable. No wonder 84% of South Africans say they want to get back to the office.

Let’s come back to the “normal business environment” I mentioned earlier. The vast majority of organisations have a clear hierarchy, well-documented policies and processes, clean-cut delegation of authority, and on average, one manager per ten workers. None of that was manifest during the COVID-19 crisis. And yet productivity shot through the roof, decisions were taken quickly, and ideas were implemented with astonishing speed. So perhaps it’s not about working from home. Perhaps it’s about removing the managers.

There are many examples of organisations that work in “abnormal” ways:

• Where there are no managers – not one
• Where employees take all the decisions – including budgeting and purchase of equipment
• Where it is forbidden to give anyone orders
• Where change happens on the ground, without an approval process
• And in many instances, where people set their own salaries.

Oh, and these companies are between 20 and 30% more profitable than their competitors.

Some examples of these types of companies are Buurtzorg (a home-nursing company with 12 000 staff and no managers), Morning Star (a tomato processing and packaging company that handles one-third of the USA’s tomatoes), and FAVI (a precision motor parts factory with 500 employees). Other examples are Haier (50 000 employees), Zappos, Palfinger, RedHat, and many more.

They are not operating in crisis mode, yet they operate without the strictures that were put aside by most organisations during the first few months of the pandemic, and which “normal” companies will reintroduce as soon as they can.

These “abnormal” companies have made fundamental changes to their operating model. They use self-management and self-managed teams, with perhaps, a few leaders. The leaders’ job is to interpret the environment and offer suggestions on where the company might want to go. (These are suggestions, and definitely not orders – whether they are implemented depends on whether the leader can sell the vision). The decision on what to do and how to do it is left to the teams. Leaders treat employees as if they are autonomous adults who can decide what’s best for the company.

I submit that WFH worked so well not because people were at home, but because they were allowed to manage themselves. And I predict that if WFH becomes a norm, then the way companies are managed will have to change dramatically.

Terry White, Executive Consultant at Netsurit.