IBM and Remote Work

IBM has decided to cancel its remote worker policy.
Extraordinarily bad idea. I’ll illustrate why.

IBM, remote-work pioneer, is calling thousands of employees back to the office – Quartz.com

IBM’s Current State: Unwell

Let’s frame the entire discussion right now. IBM as a company is not doing well. They’ve had 20 straight quarters of revenue decline, right up to Q1 2017 (which ended right as they made this announcement).

IBM stock tumbles as year-over-year revenue declines for 20th consecutive quarter – CNBC

Now, I like the Watson project. I almost can’t overstate its value to medical professionals and research teams. But even with Watson and cloud sales improving, IBM can’t pull themselves out of a LONG slump.

I find this very telling, in regards to their remote work termination.

The Reasons Given: Lofty and Shaky

Sources cited in the Quartz article talk about innovation and productivity gains. About IBM needing to be faster, more ‘agile.’

ibm photo

Used to use one of these…ahh, days gone by.
Photo by byzantiumbooks

“What IBM should value most, says John Sullivan, a professor of management at San Francisco State University who specializes in HR strategy, are better ideas. ‘It turns out the value of innovation is so strong that it trumps any productivity gain,’ he says, pointing to companies like Apple and Facebook that make around $2 million per employee (IBM makes about $200,000 for each employee). ‘[Remote work] was a great strategy for the 90s and the 80s, but not for 2015.’ He thinks that working together in person is one key to innovation.”

The comparison Professor Sullivan uses is, quite frankly, laughable. IBM already has to collaborate with ‘remote’ locations–its multiple worldwide offices! The marketing department alone has 6 offices across the U.S. ‘Working together in person’ is not possible.

(It’s also notable that the quote came from 2015…IBM had to go back 2 years to find it, apparently.)

Other sources appear to rail against remote work…Yahoo’s similar cancellation, Reddit’s demand that all employees relocate to San Francisco. The fact that Yahoo and Reddit both experienced severe trouble (and Yahoo’s ultimate collapse) are not mentioned.

The QZ.com author, Ms. Kessler, tries to show a bright side to the move. (The article itself is good; I always like seeing great writing.) But an upbeat article won’t make the truth go away.

Who made this ridiculous decision?

The Decision’s Sponsor: IBM’s New CMO

Michelle Peluso is IBM’s Chief Marketing Officer. She came on board in September of 2016. From the available information, it appears she set out to destroy IBM’s remote work policy from Day 1.

“In a video message, Peluso, formerly the CEO of fashion startup Gilt, explained the ‘only one recipe I know for success.’ Its ingredients included great people, the right tools, a mission, analysis of results, and one more thing: ‘really creative and inspiring locations.'”

Wait a minute. The only recipe she knows for success…from a fashion company? IBM is about as far from fashion as you can get. It’s not reasonable to presume the tactics used in a fashion company will work in a technology giant like IBM.

Another thing to point out…she’s the IBM Chief MARKETING Officer.

That’s not an HR position…she shouldn’t have anything to do with hiring & firing. She has no technical experience either. Yet she’s the one making a company-wide decision affecting thousands of technology workers?

This makes no sense at all! What’s the real reason behind IBM’s move?

Using Remote Work as a Scapegoat for Cost-Cutting

When we think about it,it’s pretty easy to see what’s really going on here. It’s all a cost-cutting effort.

  1. Declare an end to the remote work policy.
  2. Assign remote workers to a physical office. The office could be in a totally different city from your home. For example, say you work out of a Boston suburb. Your job is now assigned to the Austin office…and you have to show up.
  3. IBM has now created a circumstance where remote workers quit, since they can’t reach the office. If you don’t want to move? You’re fired.
  4. Profit?

The thing is, they’ve already done layoffs. Thousands of them, just in the past 12 months. It didn’t help their costs. This move won’t either…and in fact may do structural damage to the company.

What Happens to IBM Next?

Maybe some of the talent lost wasn’t so good. If so, a simple layoff would suffice. But a move like this sends a powerful message…a very, very bad one. To the world at large, and to the remaining IBM employees.

The remaining talent…the skilled engineers, good programmers, and so on…now know they can get dumped too. Nobody is safe from Peluso’s “improvements.” What will the skilled workers do in response? If I were any of them, I’d run for the exit as fast as possible!

Thousands of companies will happily slurp up IBM’s talent. Not only do they gain highly-skilled workers, they cause IBM damage. In trying to bolster its own innovation, IBM has sent a shockwave through its own halls.

In terms of short-term effect, here’s what I predict. Any IBM department which must reabsorb formerly-remote workers into their on-site workflows, will slow down. Workflows must change, space must be made, relationships built or rebuilt. The day-to-day of people moving about will drag down productivity.

Of course, this causes the opposite of what Peluso claims she wants. Unless she was only after destroying the remote work policy…in which case, anything that happens afterward is not her problem.

Could IBM Reverse the Remote Work Decision?

Is such a decision reversible? Yes, and that’s the best move. Reinstitute the remote worker policy. Do it companywide, right away.

But, even if they did so tomorrow, the damage is done. It would help them in the long run. But they’ve already burned their most important bridge…the one to their talent.

Even if invited back, some of the remote workers cut by this move will not return. (Nor should they; IBM has declared they don’t trust or want you.) That means IBM has to spend more time/money training new people…wasting all the time/money they already spent on the departing workers.

IBM now has to re-home thousands of workers, paying power costs, growing the needed office space, and raising pollution in every city affected.

crowd photo

“This is my office.” “No, this is my office.” “It’s my office too!”
Photo by markhillary

The sad thing is, IBM once enjoyed incredible boosts from their remote work policy. Not just in productivity, but in ACTUAL cost savings. The article even mentions this!

“And by 2009, when remote work was still, for most, a novelty, 40% of IBM’s 386,000 global employees already worked at home (the company noted that it had reduced its office space by 78 million square feet and saved about $100 million in the US annually as a result).”

Hundreds of millions in savings. Now destroyed, rendered moot.

A Bad Move by a Troubled Company

I give credit to the Captain Capitalism blog for pointing out the Quartz article. The man is brusque, but he knows his economics. Take heed.

My final word: IBM has destroyed a remote work policy that brought them provable gains, because a fashion exec says it’ll save the entire company. The IBM decision-makers are either voluntarily ignorant, or they think they’re above the market.

20 straight quarters of declining revenue says they are wrong.

What do you think?

Office Presence Not Required

You need their talent. Just not the office space.

How many of your employees really need to be in the office?
Answer: A lot fewer than you might think.

Thanks to technology & our connected world, millions of jobs currently worked in an office, don’t need to go in. I argue (and I’m not alone in this) that half of your office personnel does not need to be in said office, to do their job.

Which half? Ah, that’s the question. My answer is: Those who are not location-based.

What’s that mean? Essentially, it means those employees whose labor is defined by output, not by physical presence.

Here’s an example. In the Ford assembly plant back in the day, you had hundreds of line workers. Each attached a part, turned a bolt, and so on. By this division of labor, Henry Ford built the Ford Motor Company into a titan.

Now, an assembly line worker must be physically present. They cannot attach a part from home. But what about a Marketing specialist?

Their work deals in leads, content, emails, and conversations. The output is almost totally on the Web. Thus their physical presence is not necessary. They can do the job anywhere.

leaving office for productivity

(This is a short example. I’ll expand on the notion in future posts.)

So the question now becomes, Which employees don’t need to be in the office, to do their work?

Let’s take four examples: HR Manager, Operations Manager, Website Developer, and Marketer.
Overall, none of these people actually need to work from within an office.

I’ll go through their roles, and illustrate why.

Four Roles Defined By Their Output

Let’s examine these four office roles. What do they do?

HR: Recruits for positions. Planning staff development. Handles office policies.
Manager: Keeps track of employees. Produces reports. Oversight on materials or processes.
Website Dev: Maintains website. Creates tools and patches. Secures the backend.
Marketer: Works on marketing campaigns. Coordinates with Sales. Creates & publishes content online.

A bit oversimplified, but you understand where I’m coming from here. Each employee in these roles has certain tasks to accomplish. The thing is, these tasks are all defined by one thing: OUTPUT.

The results of the role’s work are in some form of output. Not a physical effect, but an operational result. Let me illustrate the type of output each role generates.

  • HR – Reliable employees
  • Manager – Improved operations numbers & satisfied employees
  • Website Developer – Optimized websites and tools for customer use
  • Marketer – Qualified leads going to Sales

Do they need to be in the office to produce these types of output?

No. So long as they have computers and a phone, none of them require it. They only come to the office because of the old “corporate standard.” That standard is rapidly dying…and it should. We are in the beginning of a new age of work.

If they’re not in the office though, how do you know they’re working? You will if they go to a place which maximizes their output.

What’s the Best Location for Maximum Output?

Since their roles are defined by output, these employees should be in a location where that output is maximized. Optimal environment for productivity, right?
Where would they go other than the office, to do their work? Most would say ‘Stay Home,’ and that is by & large the best option. However, others do exist. They could move between home and a coffee shop. Go to a co-working space. Even station themselves at a customer site.

Where SHOULD they go to work? Depends on the person, and the role they fill. I used to think ‘Home’ was always the first answer. But after giving it more thought, I would say a better answer is…

Employees should work from the place best suited to their productivity, depending on the person & the role.

co-working photo

A co-working space…great for maximizing output! Photo by karpidis

Let’s go through the four locations I mentioned already. Each has advantages & disadvantages to remote employees, depending on the role.

  • Home: All (but especially Manager & HR). Why? Potential for dealing with company IP (Intellectual Property). You don’t want to download and read through confidential data in a coffee shop.
  • Coffee Shop: Developer, Marketer. While some of their data is confidential, it’s not as mission-critical as material controlled by Management & HR. Use of a VPN will secure the developer’s backend data, and the Marketer’s leads.
  • Co-Working Space: HR, Developer, Marketer. These employ security and office-grade services. A useful tool when needed, and they provide an office-like environment if desired.
    (I don’t include Manager here because I’ve read stories of Managers in a co-working space, who felt the need to ‘manage’ the people around them!)
  • Customer Site: Developer, Manager (if acting as a consultant or advisor). I’ve worked with developers who chose to work at a customer site, while they worked on that customer’s project. It allowed them immediate access to their customer contacts on time-critical projects. The important thing to remember is, they were not assigned to the customer site. They chose to go there because they knew it would maximize their productivity for the project.

Finding Out the Best Location: Conduct Trials

How do you find out the best way to maximize your employees’ output? Look to the developer example I just gave. He ordinarily worked between an office and his house. But in the short-term, going to the customer site allowed him to shorten the project time by one full week.

Employees usually know what they need to do their best work. To find this out, conduct trials with your employees. Have them work from home for 1 week. Encourage them to try out a co-working space for 2.

You can run the trials by department, by role, or both. That depends on your feelings & those of your employees. Once the trials are done, have each employee report back on where they think they’re most productive.

Important: Do not share these reports with others. If you give employees the option to work remotely, but share around their reasons for doing so? You could end up embarrassing some employees, which can lead to irritation and possibly losing them.

Remote Work Effects: Productivity Boosts

What effect would moving employees like the Head of HR or Lead Marketer outside the office have? Well, consider where they are now, and what the move was meant to do. A remote employee has now chosen a location where they feel they’re the most productive.

The natural result? A productivity boost.

Since they are where they’re most productive, you’ll see improvements in their day-to-day productivity above their prior output. Not only that, but over the long term, both they and the business see gains. More efficient use of time (e.g. no more commute), lower operational expenses (office power, materials not used as much), and higher customer satisfaction (productive employees feel happier overall, which carries over into their customer-facing activities).

This multiplies across each remote employee. Think of half your office, doing their best work in an environment maximizing their output. Your bills go down by a huge number (I recall a case study where one office saved 30% on expenses via remote work). Your output gets a boost. Your customers are happier.

You still need their talent…just not their presence.

Home Office Upstairs

I know what you’re thinking. How do MANAGERS benefit when their workers aren’t in the office?

We know a few benefits the workers themselves get from it. But managers? Part of their job is making sure those workers do their job. If I can’t call someone into my office, or go drop by their desk…how do I know they’re actually working?

(Believe it or not, that sort of perspective actually creates a benefit for remote workers. I’ll explain shortly.)

The answer is, it’s easy to know. Plus, you as a manager can derive as much value from remote work as your employees. Let’s find out what kind of value, shall we?

I’ll start with the immediate benefits for employees. Bear with me; there’s a method to my madness.

Immediate Benefits to Working Remotely for Employees

1. Remote Work Ends the “Someone’s Watching Me” Atmosphere

empty office photo

“Bob, you seen Alice?” “Working remotely Sir.” “What about Leslie?” “Remote.” “Joe?”
Photo by Iain Farrell

Do you do your best work when someone’s watching?

You’re sitting at your desk, typing away…and you feel it. The weighty sensation behind your head. That tickle on your neck. The invisible pressure of eyes. You turn your head, and sure enough, there’s your boss. Staring at you like some tenth-story gargoyle.

Distracting, isn’t it? Of course it is. No one performs their best under scrutiny. Yet when we’re working, we want to do good work. So “someone’s watching me” becomes a lingering sandbag. Flattening our productivity at random.

Not in the office? No chance of someone staring at you. No distraction.

2. Improved Co-Worker Communication

When working remotely, how do you check with a co-worker on their progress? Maybe you need some input on the new customer’s sales report. Frank will have that…but you can’t get up & walk over to Frank’s desk. You’re at home, and so is he. (For purposes of this post, I’m assuming you don’t live together.)

You’ll need to check in with Frank, and other co-workers, frequently. For remote workers, there’s plenty of ways to do that. Most are even faster than walking between cubicle rows.

In pretty much all remote-work situations, I advocate teams use project management software like Trello or Asana. Or chat apps like Slack. These platforms provide easy-to-use communications methods. Checking in with Frank only takes a short Slack message, a comment on Asana, an email, a phone call…take your pick.

More importantly, the inability to walk across an office makes each & every worker aware of the need to communicate. How’s that a benefit? The awareness actually leads to BETTER communication.

Since you have to check with co-workers, you’ll work out ways to do this quickly & clearly. Whatever gets you the needed information fast, so you (and Frank) can get back to work. Now you have new communication habits, short and frequent.

3. No More Commute.

Yes, this one’s obvious. But it’s definitely a benefit, for work as well as life.

Gaining back hours spent in commute results in longer/better-quality sleep. How many of you are chronically sleep-deprived? It wrecks your productivity…not to mention quality of life.

You also have more time available for work (and for life). How’s that anything but a benefit?

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Hold on managers. Don’t reach for the heart meds just yet. While these might sound like one-sided benefits, they’re not. In fact they benefit you too…in important ways.

I’ll demonstrate by clarifying another aspect of the very same benefits.

Immediate Benefits to Working Remotely for Managers

1. Focus Shifts to Work Progress

Since the “someone’s watching me” atmosphere isn’t possible anymore, what’s left? The work. For you and for them. Nothing gets in the way of (or distracts from) accomplishing the work.

You can still check in on employees easily. Use the same communications tools they use. Most have a “Presence” status indicator. It’s usually a colored dot indicating when they’re Available, Busy, in a Call or Meeting, etc. One glance and you confirm Frank is hard at work.

If you don’t see his status, well, there’s always the phone.

2. More Efficient Workflow (For You!)

With employee communication improving among each other, you’ll notice a curious, but appreciable absence from your workday.

What happens to all those times you’re working, and someone stops by to ask YOU a question? Something their co-worker knows already, or they could find out in a few minutes?

They stop happening.

Think about that. Dozens, maybe hundreds of micro-disruptions during your daily workflow…gone! (Or at least massively cut down.) You could gain hours of productive time back, without doing a thing.

3. Can’t/Don’t Want to Go in Today? Don’t!

I’ll tell you a not-well-kept secret. Managers can telecommute too.

You’re just as reachable as employees, using the same tools to get the work done. (I’ll review a bunch of those tools on the blog soon, don’t worry.) You also can focus on your work, and enjoy the same productivity boost.

Maybe you need to take your son to the doctor? No reason to head to the office, then back home to get him, and then over to the doctor’s. You’re just wasting time driving back and forth…time you could spend working.

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unhappy office photo

Photo by simon.carr

By the way, these are just 3 IMMEDIATE benefits to working remotely. More do exist, both in short- and long-term. I’ll go into detail on all of them in future posts.

For now…what’s one question you have regarding remote work? Please ask it in the comments. I want this blog to answer as many of your questions as possible.