Is Going to the Office a Broken Way of Working?

https://www.newyorker.com/culture/office-space/is-going-to-the-office-a-broken-way-of-working

Is Going to the Office a Broken Way of Working?

Earlier this month, a technology entrepreneur named Chris Herd posted a thread on Twitter. “I spoke to 10 x Billion $ companies who canceled return to the office due to the delta variant,” he began. “A few predictions on what else is going to happen.” His first salvo was titled “Office Death,” and claimed that “by the time people can return to the office a lot of companies will no longer have space to return to.” His next prediction was about “City Flight.” He stated that workers would continue to flee cities and would quit if their employers forced them back into urban offices. The thread continued with sixteen more tweets.

In 2018, Herd, who is thirty-one, started a financial-technology company based in northern Scotland. He soon realized the difficulty of attracting talent to his location, and organized his business to operate without a physical headquarters. Impressed by the benefits of his office-free operation, Herd pivoted into a new company, Firstbase, which supports a remote-work infrastructure. In 2019, he began tweeting strident objections to office work, with loud claims about the superiority of alternatives. When the pandemic hit, the audience interested in these discussions exploded in size. In early 2020, Herd posted a long thread of predictions about remote work’s rise during the next decade, and it hit a nerve in a way that his earlier tweets had not. His follower count grew from about a thousand to over forty-five thousand, and his threads became must-reads for anyone who closely followed these topics. Many commentators have been discussing the need for a more flexible approach to when and where work happens in a post-pandemic world. Herd, it turns out, is proposing something altogether more radical.

When knowledge work became a major economic sector in the twentieth century, the necessity to have employees work together around stationary machinery, as in the classic factory model, was curtailed. There remained, however, secondary forces that preserved co-location. Knowledge work requires collaboration and access to information, both of which are conveniently served when individuals are physically near shared conference rooms and filing cabinets. Meanwhile, during this point of transition, companies had already become familiar with the industrial idea of managers’ monitoring employees as they toiled in the same space, going so far as to adapt the standardized nine-to-five work shift into the white-collar world. The result was the rise of what we might call the office-as-factory model: the idea that, whether the work is physical or cognitive, we should gather in the same building to work together under close supervision during the same hours.

The arrival of personal computers in the nineteen-nineties, followed by the spread of high-speed Internet in the two-thousands, upended this status quo by obviating the need for individuals to be in the same building to collaborate or access information. These technological innovations led to an incipient telecommuting revolution that began to pick up speed in the first decade of the twenty-first century. This revolution, however, eventually lost its momentum as managers experimenting with remote-working arrangements realized that dispersing the efforts that used to take place in the office was more complicated than simply giving employees video-conferencing software and an e-mail address. The resulting frictions led large companies such as Yahoo and Best Buy, which had introduced more flexible work arrangements in the first decade of the two-thousands, to pull workers back into their cubicles by the beginning of the second. It’s also why now, after seventeen months of pandemic-induced building closures in the United States, so many large companies are looking to return their workers to the office just as soon as coronavirus infection rates make it feasible. It seems that even in our current moment of disruption, the office-as-factory model remains entrenched. It’s here that we return to Chris Herd, who has a decidedly different take.

As Herd told me when we spoke, people are sometimes surprised to learn that he’s against the idea of remote-only companies, in which employees never collaborate in person. “The quality of your work is increased by having time together,” he said, “because you have a better sense of shared empathy and coördination.” The problem, he clarifies, is the belief that the best way to support these interactions is by signing a long-term lease on an office building that you force your employees to use every week.

In Herd’s vision, which he calls a remote-first strategy, relevant teams gather less frequently—he suggests once a month as a good interval—in varying locations that suit the work that’s being done. Because these meetings are relatively infrequent, there’s no need for employees to live in the same region. He used his own company as an example to illustrate this point. “We are all over the place: we have people in Belgium and the U.K., in the U.S. from the East Coast to the West,” he said. “Our tech team is meeting in New York next week. Our sales team is meeting in London the week after.” He even imagines a future in which specialized resorts will arise in locations conducive to brainstorming or strategy formation, where teams will work with the help of professional on-site facilitators. These semi-frequent off-site gatherings might sound expensive to those steeped in the office-as-factory mind-set, but, Herd suggested, they’re cheaper than maintaining a permanent space for everyone, and such meetings would support much of what’s lost in a purely virtual strategy.

The bigger advantage of Herd’s approach, however, is that it significantly increases the size of the pool of potential hires. “A remote-first company can access the best talent in the world,” he said. “An office-first company can only access those who live within a certain radius of their building.” Again and again in our conversation, Herd emphasized the power of this factor. “In a knowledge-based economy, your value is the talent you employ. If other companies employ better talent, they are better than you.”

It’s these two features of remote-first work—its decreased overhead and increased access to talent—that lead to the most striking element of Herd’s theory. This style of work, he claims, is not simply an interesting, if slightly esoteric, alternative for those looking to try something different from the office-as-factory model; it’s inevitably going to replace the office model completely—a transformative process that is, in fact, already under way.

In Herd’s explanation, a Darwinian business dynamic has come into play. If you and I run companies competing in the same space, and I have better talent and lower staffing costs, I’ll put you out of business. Repeat this enough times, with enough competitors, and the remote-first model will rise to dominate our market niche. Herd pointed to technology startups, a sector already known for its intense competition and survival-induced innovation, as an arena in which this evolution is currently occurring with particular intensity. He highlighted Hopin, a virtual-events startup founded in the summer of 2019, whose founder and C.E.O., Johnny Boufarhat, is an investor in Firstbase. When the pandemic hit, in March, 2020, Hopin had eight employees. Recognizing that conditions had suddenly become quite favorable for a company supporting virtual events, Hopin quickly grew to eight hundred employees and a valuation of over seven billion dollars, all the while keeping the company remote. “If you talked to their C.E.O., he would tell you they couldn’t have built the company the way they did, from eight to eight hundred employees in months, if they were in an office,” Herd said.

Because startups build their organizational cultures from scratch, they can sidestep the need to rework existing management structures and habits that depend on an office. This is an important advantage, as it’s exactly this difficulty that has consistently impeded widespread adoption of stronger remote policies in larger companies. Herd argues, however, that the knowledge forged in the startup crucible about how to make these arrangements work will inevitably migrate to larger corporations. “The innovation happens at startups operating at the periphery,” Herd said. “But what you are going to see are remote-working experts emerge who transition from the startups to bigger companies, and then from there to even bigger companies, passing on that knowledge as they go.”

Herd thinks that, within the technology sector, the big monopolies will be the last to make this change, as the competitive advantages of the remote-first model mean less when you have few competitors. But even these giants are vulnerable to the pressure of losing talent. This might even partly explain why Apple, which announced this past summer that employees would have to return to the office this fall, has delayed its reopening to January or later. The company cites the Delta variant as the reason for this shift, but when you consider the muted COVID rates in the ultra-vaccinated Bay Area—on the mid-September day that I’m writing this, there are only seventeen COVID patients in I.C.U.s in all of San Francisco—it’s reasonable to suspect that the widespread employee pushback against the original declaration may also be playing a role.

The final phase of the transition, according to Herd’s theory, is the further migration of this remote-first methodology from tech to other economic sectors. We’ve seen workplace trends spread from tech outward before (think: open offices), but Herd argues that this particular shift will be accelerated by the involvement of private equity. These firms, he predicts, will begin hiring away remote-first experts from big technology companies. They will then buy up companies in other sectors, deploy this expertise to help them successfully abandon long-term office leases, and hire better talent, allowing them to reap the rewards of the immediate profitability boosts that these moves generate. To return to our natural-selection metaphor, the vision prophesied by Herd is not one of a glacially slow incremental evolution toward a new species of work but, rather, an instance of punctuated equilibrium, in which the leap from startups like Hopin to blue-chip giants will occur seemingly all at once.

It’s important, of course, to receive this vision with a healthy skepticism. Beyond Herd’s obvious vested interest in the future trending toward the remote, it struck me that the need to jet to locations each month to meet with your worldwide team seems to introduce its own burdens. There are also clear and long-understood advantages to gathering pools of similarly skilled talent in the same city—be it tech-boom San Francisco or Renaissance Florence—as a catalyst for innovation. And the capital infusion into technology companies in recent years is so astronomical that staffing overhead can hardly be identified as a critical factor in predicting corporate survival. (Hopin recently received a four-hundred-and-fifty-million-dollar investment. The operation could likely lease a half-dozen office buildings without seriously denting its burn rate.)

All this being said, however, there’s an insistent economic logic to Herd’s prognostications that separate them from much of the existing advocacy for remote work, which tends to focus myopically on the benefits to the employee, and to sweep aside the challenges of making these arrangements work. Even if some of the details of Herd’s predictions aren’t accurate, his broad points demand to be taken seriously. The office-as-factory model is not fundamental, but was instead a temporary solution to support collaboration and information access in a pre-digital world dominated by management ideas from industrial manufacturing. The remote-first alternative has been technologically possible for a while now but has been held back by the difficulties of reorienting organizational culture away from the office. Once expertise in these new kinds of arrangements emerges in the world of tech startups, it might spark the spread of this model with sudden speed across the knowledge economy.

All of this was on my mind recently when my family gathered with some friends at a brewpub that had set up seats in the courtyard of a classic high-end office park, built next to a metro station in suburban Washington, D.C. All around us were empty windows plastered with “Space for Lease” signs. That same day, Herd had tweeted a simple declaration: “Remote resets broken ways of living.” As I surveyed the empty offices, evidence perhaps that Herd’s vision was already unfolding, I was struck by an urgent thought: I really hope that’s right.

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