Published in the San Diego Union-Tribune, September 2, 2019
I am currently the CEO of a software company that has employees in New York City; Guatape, Colombia; Sydney, Australia; La Jolla and Downtown San Diego. This is called a distributed workforce, meaning that it operates with a “work from anywhere” arrangement. Oy!
The question to the court is simple: Does this make any sense and is it effective? Rather than give you my own opinion, I will turn to Prithwiraj Choudhury, an associate professor at Harvard Business School, who actually has studied this issue. The bottom line seems to be that the work from anywhere model, similar to those offered at Akamai, NASA and Github, is 4.4 percent more productive than the work from home model. Work from home implies that you must be located relatively close to the office. You are expected to show up there periodically for meetings, etc. Anywhere is geographically agnostic.
Now in my little startup, the geniuses I need happen to be located in Sydney, so there was no discussion. The time difference makes me crazy, I like Monday 9 a.m. meetings, but that would mean my technology team would have to get up at 2 a.m. The medium geniuses where I need brute force rather than algorithmic brilliance are in Colombia. The rest of the management team finds a desk and delivers.
Surprisingly, it turns out that many American companies have been slow to adopt the “anywhere” model. It was hard enough for them to let people work from home one day a week even though many benefits have been documented. Choudhury goes on to expand on the possibility that using this model, employees could move to lower-cost cities, could live on ranches or in the boonies or frankly in a trailer. All you need is an Internet connection. Their cost of living would be less; their company impact would be more.
But one of my co-founders, a cyber/crypto security zealot, points out the risks of “hacking.” So if you adopt this anywhere approach, you need some major smart information technology guys to make sure you protect what you think you have created.
Choudhury did his research at a delightfully stodgy, you-would-never-think-this-place-would-adapt organization — known as the United States Patent and Trademark Office. What he found was that as the distance from the home office increased, so did the productivity. Whoa, think about that sentence. As the USPTO transitioned to full work-from-anywhere, the effect of this policy not only kept employees happier, but also created positive financial outcomes. Choudhury says, that “based on a patent’s average value, this productivity gain could add $1.3 billion of value to the U.S. economy each year.” The study showed that the 600 examiners in the study drove 84 million miles less over a 24-month period.
Now the fishhook. “Work from anywhere isn’t for everyone.” (Not sure you need to teach at Harvard to know that.) The key is to figure out what amount of this concept will work in your company. My little software company uses big data and machine learning to create our solution. Choudhury would describe us as one that creates our product using “sequential interdependence” — which is a fancy way of saying our work flow “involves a series of tasks performed by different employees.” This is in contrast to a company that has “reciprocal interdependence,” which requires continued and constant interaction (face time) with a large group of co-workers.
Now of course, no good idea goes unpunished. A byproduct of “anywhere” is that if you believe in the value of corporate culture, then you need to get all (or most) of the employees together a couple times per year to cross-pollinate and build a cohesive company culture. Airfare from Australia is the same cost as a small house in Chula Vista.
One orthogonal concern is that your employees will take advantage, Choudhury says, “It’s trust — it’s the fear that people will shirk.” So you can see how important it is to empower the distant workers, while at the same time also holding them accountable — not so easy.
The upside from this kind of thinking is that “People will gravitate to a location where they want to live, rather than where they have to live.”
Senturia, a serial entrepreneur who invests in early-stage technology companies, writes weekly about entrepreneurship in San Diego. Email ideas to [email protected].
Go where the talent is. Do not make it come to you.