Netflix CEO Reed Hastings speaking at the Mobile World Congress on Feb. 27, 2017, in Barcelona, Spain.

Does Netflix CEO's 'Pure Negative' Comment on Working from Home Have Merit?

October 22, 2020 Digital Workplace
By Dom Nicastro

Has your organization adapted to working from home yet? Many say yes. One prominent CEO likely wishes the remote shift never happened.

Netflix CEO Reed Hastings calls remote working a “pure negative.” He'd like his workforce to return to the office “12 hours after a (COVID-19) vaccine is approved." Hastings' anti-remote stance in an interview with the Wall Street Journal last month raises the question: if working from home is such a negative experience for an organization, how does working in an office make it that much better?

The leader of the wildly successful streaming service said debating ideas is harder in the remote-working world, adding, “I don’t see any positives. Not being able to get together in person, particularly internationally, is a pure negative. I’ve been super impressed at people’s sacrifices.”

If COVID-19 Taught the Workplace Anything …

Hastings’ comments weren’t welcomed with rousing “thumbs up” from many digital workplace practitioners. They say the shift to remote work because of the COVID-19 pandemic sets the foundation for a new workplace that embraces flexibility and employee empowerment. (Netflix did not respond to Reworked's request for commentary).

Lisa Bough, an IT practitioner, said she respectfully disagrees with Netflix's CEO, adding, “If we are not learning from our experiences, whether positive or negative, then we are blind to progress and innovation.”

Working from home has brought some new perspective that only a small group of individuals could have spoken to previously, Bough added. “There is much to be learned here," she said, "and because of that I believe what ‘working in the office’ looks like has changed from this point forward."

Hastings’ comments calling for a return to the office 12 hours after a COVID-19 vaccine is produced may be hyperbole. Maybe not, taking into account his vitriol of remote work at Netflix. However, companies that do require people to be in the office in the future will suffer in employee recruitment and retention, according to Bough.

“I believe organizations need to have enough flexibility to allow for team members to work from home when they choose to do so, but be in the office when required,” Bough told Reworked. "I believe the requirements are what needs to be defined. I see required in-office participation would be for certain team-building activities, project workshops, brainstorming sessions, design thinking sessions, etc. I think there is a fine line here, though, for the individual career paths.”

In other words, maybe the whole "if someone wants to move up, they need to be seen" theory needs to change, according to Bough. “Maybe that needs to change,” Bough said, “if someone wants to move up, they need to be heard or their work needs to be seen, versus them as a physical person. Another point to factor in will be employee engagement and performance. Not everyone can be at optimal performance when working (physically) alone. How do orgs accommodate for that? Peer shadowing, peer programming, mentorships, small work groups. This is where innovation needs to come in.”

Related Article: Is the Hybrid Workplace the Future of Work?

In-Office Demands Exposes ‘Glaring Weakness’

Erick Straghalis, president and chief strategy officer of StitchDX, a Boston-based digital experience agency, said because talent is widely distributed, limiting your potential workforce by demanding they work in an office is short-sighted. This is especially the case in today’s environment where a “thoughtful digital workplace strategy enables workers to remain productive, connected and engaged from virtually anywhere.”

Providing flexibility in how employees work gives organizations the advantage in each scenario, Straghalis added. “Leaders who demand their employees work from the office, when they can do the same job from anywhere, are exposing a glaring weakness — a culture where control and capitulation are valued more than trust and talent,” Straghalis said.

Some large organizations are on board with remote. Heyward Donigan, CEO of pharmaceutical company Rite Aid, said, “We have adapted to work-from-home unbelievably well. … We’ve learned that we can work remote, and we can now hire and manage a company remotely.”

Big Companies Aren't All Sold on Remote

On the other hand, Hastings is certainly not alone in his thinking. Jamie Dimon, CEO of JPMorgan Chase, said in a virtual conference in September, “We’ve seen productivity drop in certain jobs and alienation go up in certain things. So we want to get back to work in a safe way.”

Rajat Bhageria, CEO of Chef Robotics, said of remote work, “We tried it. … It’s just not the same. You just cannot get the same quality.”

Google engineers reported more difficulty managing workloads while working remotely, according to internal Google data reported this month by The Information. A little more than half of engineers felt satisfied with their ability to manage their workloads, according to the report.

Google, like many companies, allowed most of its 200,000 employees to work from home as COVID-19 began to spread in March and four months later announced employees can work from home through summer of 2021.  

Mental Health, Inequality Challenges

Nicholas Bloom, professor of economics at Stanford University, wrote in a column this month that remote work comes with a series of challenges, including slumps in productivity and innovation, mental health concerns and a lack of strong internet or no internet access at all for some employees. And with employees’ personal work network comes natural security and compliance concerns.

“The issues with remote work that always come up are creativity, culture and mental health,” Bloom said in an interview with Reworked. “I think the organizations that have committed to remote-first, I bet within five years they will change their mind.”

The most important drawback to remote? It’s harder to be creative and innovative at a distance, said Bloom, citing his research and conversations with workplace executives. Company culture, and a “culture of motivation,” also could suffer in remote settings. And, according to Bloom, a “surprising number of executives have raised mental health concerns. As employees, we’re very aware of it. And even executives are saying it’s very detrimental."

Bloom also cited inequality issues, saying wealthier people in wealthier areas are more likely to have good broadband and space and can work effectively from home. “Only about half of the population can work from home, and they're definitely the wealthier, more educated half," Bloom told Reworked. "Working home in itself is a very valuable perk. It's probably as valuable as healthcare, or a generous pension plan, and we’re only giving it to the better-off.”

Related Article: Six Takeaways from Digital Workplace Experience 2020

Remote-First Is Right Approach 2021 and Beyond

So if Hastings and other top executives see remote work as negatives, how will other organizations fall in line when COVID-19 subsides and the onus will be on workplace leaders to design “how we work” policies in 2021 and beyond?

Dion Hinchcliffe, chief technology officer at Round Hill, Va.-based digital advisory firm Optimal Disruption, said in his keynote address last week at the Digital Workplace Experience conference that despite challenges, companies should be working toward a “remote-first” culture. It’s one that embraces a hybrid model that’s more distributed, more “physical-optional” and stresses digital employee experience. (Editor’s note: Reworked produced this conference).

That’s not to say Hinchcliffe lobbies for a remote-only culture once COVID-19 subsides.

“What we have now is not what people want to do the rest of their lives. I guarantee it,” Hinchcliffe said. “We like remote work. It’s productive, but we're missing so many of the elements of human engagement and connection that we have in the physical workplace. It can be brought back a lot with technology, but there's no substitute for the human experience. So I think that we're going to go back to a more hybrid model than we ever had before. And that we need to be remote-first in our approach. That's where we're putting the bulk of our investment, and we still support an in-person workplace.”

A hybrid model is emerging because lots of roles do not need or require little face time, according to Pooran Prasad Rajanna, founder and CEO of software sales solution 1Page, based in Berkeley, Calif.

“They can contribute irrespective of time or place, with the least amount of face time: product development, project management, testing, accounting, etc.,” Rajanna said. “But some jobs can't and might need face time: management, strategy, sales, marketing. They will find a way to huddle online as long as possible, but meet quite often more than others.” Ultimately, Rajanna added, if one can manage chaos at home, work from home is a “blessing in disguise.”

Old and New Research Supports Remote

Bloom’s two-year study (pre-COVID-19) of Chinese travel company Ctrip found that working from home made employees 13% more productive and 50% less likely to quit. “The downside of that study is these are not Netflix employees,” Bloom said. “These are people making telephone calls and making bookings but they were significantly more productive at home than in the office.”

Bloom conducted new research on working from home through COVID-19 that found an overwhelming majority of employees said working from home is better than what they expected before COVID-19:

Specifically, Bloom’s research found:

  • 19% said, “Hugely better — I am 20%-plus more productive than I expected.”
  • 21.2% said, “Substantially better — I am to 10% to 19% more productive than I expected.”
  • 20.8% said, “Better — I am 1% to 9% more productive than I expected.”
  • 26.2% said, “About the same.”
  • 6.9% said, “Worse — I am 1% to 9% less productive than I expected.”
  • 3.1% said, “Substantially worse — I am to 10% to 19% less productive than I expected.”
  • 2.7% said, “Hugely worse — I am 20%-plus less productive than I expected.”

Bloom’s research came in partnership with Jose Maria Barrero of ITAM Business School and Steven Davis of University of Chicago Booth School of Business and Hoover Institution, who surveyed 12,000 working-age U.S. residents to examine how and why working from home will stick after the COVID-19 pandemic. They also found workers desire about 40% of working days from home, and firms are planning about 20% to 25% of working days from home.

"What generally works is pre-scheduling (remote vs. in-office days) so people can plan their lives around it," Bloom said, adding most of the remote-work challenges can be addressed if employees are in the office three days a week. "You don’t need to be in the office five days a week," Bloom said. "I think that’s what most companies will go to: three, maybe four days a week in the office, depending on the job and how progressive they are.”

Not a Hard-Line Choice

Remote vs. in-office is not an all-or-nothing thing, according to Bough. She questioned what executives in organizations like Netflix actually need from their workforce.

“Do they need to see people?” Bough asked. “While that might make them feel better, having someone in the office who isn't making progress does not help their end goal. Do they need to see/understand progress and work completed? Yes. Do first-line leaders — aka managers — need to understand what their teams need both as teams and individuals? Yes.  … All of this feeds into an individual organization's decision matrix on how to approach 2021.”

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