Was Collaboration Better During Enforced Work from Home? Maybe Not

It is common to hear technology business or policy leaders argue that remote work has not harmed productivity. Leaving aside the issue of whether remote work productivity changes can be measured, collaboration--deemed by most to be vital for knowledge workers--might have gotten far worse because of Covid. 

People like the freedom to work from home, no question.  

That might have happened despite reports that suggest information, knowledge and office workers now are spending more time with electronic forms of communication. But “communication” is not necessarily “collaboration.”

If collaboration is defined as “people working in teams or with others,” then collaboration seemingly has suffered. 

According to Gensler, “high-performing people at top companies tend to do individual work and collaborative work in equal measures—45 percent each, according to our research--with the remaining 10 percent made up of learning and social time.” 

For better or worse, those balances were changed during the period of enforced work from home policies. “While at home during the pandemic, people reported working in individual focus mode 62 percent of the time and 27 percent in collaboration, a disparity that negatively impacts company creativity and productivity,” Gensler argues. 

Before the pandemic, U.S. workers spent an average of 43 percent of their work weeks collaborating either virtually or in person. That number fell to 27 percent for workers who worked from home in 2020, for example. 

source: Gensler, Fortune 

 

So people might report--and likely actually are--spending more time on conference calls, sending or reading emails and messages. But they are collaborating--working with other people--less. 

As many firms explore “hybrid” work models, mixing in-office and at-home days during the week, it might prove hard to capture the fluid collaboration that used to happen, Gensler argues. A hybrid model might capture some of the “formal and structured” collaboration that happened pre-Covid. 

But it will be harder to capture the informal collaboration that is not scheduled and formalized. By design, most “focus” or “do it on your own” work will make more sense “at home.” Team work might logically make more sense “in the office.” 

The problem is that not all moments when collaboration can be helpful can be scheduled in advance. 

source: Gensler, Fortune 

Most reports on “productivity” rely on subjective reports--what people believe has been the case--rather than on more objective metrics. The reason is simply that there exist few “hard” or “quantitative” measures for productivity output. Mostly, people are forced to rely on measuring inputs. And, by definition, inputs are not “outcomes.” 

Gensler found that students are overwhelmingly of the opinion that enforced remote learning has been worse than in-person learning. Whether learning actually (objectively) has suffered is not clear. Students believe their learning has suffered. 

 source: Gensler 

Professional educators, on the other hand, tend to believe remote learning has worked rather well. Students do not agree. 

 source: Gensler 

One potential implication for business leaders is the effect of remote or even hybrid work models on the extent and quality of personal relationships that are considered important for just about any organization. Some 3,000 persons surveyed by Gensler--about 83 percent of whom were students--finds a perceived decline in every type of relationship, compared to pre-Covid and pre-remote learning modes. 

 source: Gensler 

As “soft” as most productivity “data” might be, the “quality of relationships” angles might be even more difficult to capture. And it is likely that future work modes will matter, as enforced remote work has mattered. As most full-time remote workers have traditionally felt they are at a disadvantage to co-workers “at the main office,” so some workers with more “remote” than “in person” experiences might also eventually see disadvantages. 

Most organizations can function for a short time under duress, without compromising long-term effectiveness. It arguably is a different matter if durexx continues for a long time. The reports we all hear about worker “burn out” or “Zoom fatigue” are of that sort. 

Up to this point, collaboration has been “synchronous,” bringing people together in real time. It is unclear whether “asynchronous” collaboration will work as well, or better, than synchronous modes. 

Over time, enforced isolation might start to have implications for organizational effectiveness, even if emergency, “short term” performance metrics do not seem impaired. 

Other business metrics, such as the ability to inculcate company culture, or create internal relationships important for young worker advancement, might also be suffering. It simply is nearly impossible to measure such processes. 

Most business leaders hope that hybrid work modes will provide the best of both worlds: happier employees and sustainable productivity. We simply do not know yet whether that is possible or likely. 

Always difficult to measure, we will have to make do with best guesses about long-term productivity from hybrid or remote work.  

Loosely-Coupled Value Chains and "Becoming a Platform"

Loosely-coupled value chains create new business problems for firms used to operating in tightly-coupled value chains. The big business problem is the “permissionless” ability to participate in the value chain. 

App, content or marketplace suppliers do not “need the permission” of the access provider to conduct business. And that lessens the connectivity provider’s ability to construct a direct business relationship with any app layer supplier, as well as the app provider’s need for any such relationship. 

Even in the case of multi-access edge computing, where there arguably is a greater value to integrating 5G access functions with edge real estate, “convenience” or “time to market” or “cost” is more often the driver of collaboration than “necessity.” 

So one often hears advice for connectivity providers that they must move beyond the connectivity role. 

“In order to monetize 5G, operators need to move from a connectivity mindset focused on the underlying technology to providing a network as a platform that connects customers efficiently with their services (in the way they choose) by enabling multiparty B2B and B2B2X models,” argues  Sandra O’Boyle, Heavy Reading analyst.

It is reasonable advice. In fact, creating a platform or ecosystem is de rigueur thinking these days in most industries. 

But “platform business models” are very difficult to create in the communications services business, even when it remains true that connectivity is required for modern cloud-based computing.

Few words are as misused or misunderstood as “platform.” Only “digital transformation” comes close. A platform business model is based on an entity facilitating transactions between third parties, and making money by doing so. Older examples include eBay and Amazon, which do not “own” the products being bought and sold on their exchanges. 

Even used in the classic sense within the computing industry, operating as a platform means that third party apps can be built using the platform. To be sure, there is indirect value as the ecosystem of apps and peripherals compatible with the platform grows. But there often is no direct financial relationship between any of the third parties and the platform upon which they run. 

Newer examples of platform business models include Airbnb, which facilitates the renting of short-term lodging, without owning the rentable assets. 

 

source: Andreessen Horowitz 

A platform business model essentially involves becoming an exchange or marketplace, more than remaining a direct supplier of some essential input in the value chain. It is, in short, to function as a matchmaker. 

The platform facilitates selling and buying. The platform allows participants in the exchange to find each other. 

Platforms are built on resource orchestration; pipes are built on resource control. Value quite often comes from the contributions made by community members rather than ownership or control of scarce inputs vertically integrated by a supplier. 

To use an analogy, the whole business runs on electricity, but in few cases do we hear strategy advice to “partner” with electricity suppliers. 

It is true that network slicing creates bandwidth on demand and customized forms of bandwidth on demand that support potentially new revenue or value creation models for enterprise users of the network.

But that is not so much a case of “creating a platform business model” as it is creating additional value for connectivity services. 

O’Boyle says this adds “flexibility to support any service for any industry through any business model.” True, but not necessarily an instance of “changing” a connectivity business model. It is an instance of potentially increasing the value of communications, though. 

Perhaps the better way to characterize network slicing is less a shift away from a connectivity mindset and more an issue of whether connectivity providers can reposition at least some of their revenue opportunities in other parts of the value chain that do indeed benefit from network slicing. 

In other words, generating revenue as an app, marketplace or service provider--in addition to earning money as a connectivity services supplier--is the issue. Owning apps and operations that create value is the issue, rather than “becoming a platform.” 

Few connectivity service providers can genuinely hope to become a marketplace supporting transactions between users and suppliers of bandwidth and access, rather than making money selling such access directly to customers. 

In a strict sense, the former means the marketplace owner does not own the assets being bought and sold; the marketplace simply makes money when a transaction occurs. When the latter case--selling connectivity services to customers--remains the main source of revenue, a firm is not truly using a platform business model, no matter how sophisticated its products.

Digital Transformation is Hard Because Business is Hard

There are more ways to fail at digital transformation than there are to succeed, providing an entity is capable of, and has set, actual performance indicators for itself; been successful at training its employees; changing its culture and adapting its business processes to match. 

Of course, that is a general rule for business in general. Consider the failure rate of startups. After a decade, more than 80 percent do not exist. After five years, half of small businesses have failed. 

For the biggest of firms, leadership or existence also is fleeting. Consider that in the 92 years of the Dow Jones Industrial Average, there have been some 100 firm changes. About 63 percent of Dow changes occurred in the second half of a 92-year sample period. 

To be sure, most of the firms removed from the Dow did not go out of business immediately. Many survive, but as less-robust versions of themselves, as their markets have shrunk. The point is that no firm is successful “forever.” Decline is the bookend to birth. 

Likewise, the typical firm listed on the Standard and Poors 500 index remains on the list less than 20 years.  

All of that is simply to note that transformation in business or life is hard, and prone to fail, just as business success is hard to create and sustain over long periods of time.

As applied to any enterprise or firm, “transformation” would normally be measured quantitatively by revenue indices, though cost, profit margin, customer types, purchase volumes or other similar metrics might also be involved. 

In other words, a successful digital transformation should often change the business model. 

source: Four Week MBA 

In the end, successful transformation “should” be measurable in terms of new revenue, new product, new service, new market segments served, new types of customers or new charging models. 

source: Business Models Inc. 

Basically, transformation would be measured by percentage of revenue earned outside the legacy core business. That is a tall order. 

To be fair, many also would consider a “transformation” successful if it allowed an entity to run its legacy business more profitably, or supported higher growth rates in the core business. The metrics for such a change would be measurable in terms of revenue growth, profitability improvements or related indicators such as stock price appreciation. 

Others would measure results by measures of customer experience improvement. Relevant key performance indicators could also focus, as noted above, on operational or financial metrics as well as customer experience improvements. 

Some of us would tend to discount “customer experience” metrics in favor of operational or financial metrics, though.  CX metrics often are hard to quantify and more subjective than revenue, profit margin, revenue or account growth, churn rates, new account gains, average revenue per account and similar financially or operationally-focused indices. 

Perhaps the best example is Netflix. It transitioned from renting tapes to renting DVDs, to delivering online content, to producing content. Amazon transitioned from selling books to becoming an e-commerce platform, and now finds its profitability driven by Amazon Web Services. 

Though the logical strategic moves might be movement into related roles in a value chain, some argue that is almost never sufficient to achieve big transformations. Instead, changing a business model often requires a shift of organizational mission. 

Why IT Failure is So Common

Beyond IT, virtually all efforts at organizational change arguably also fail. The rule of thumb is that 70 percent of organizational change programs fail, in part or completely. 

There is a reason for that experience. Assume you propose some change that requires just two approvals to proceed, with the odds of approval at 50 percent for each step. The odds of getting “yes” decisions in a two-step process are about 25 percent (.5x.5=.25). 

In other words, if only two approvals are required to make any change, and the odds of success are 50-50 for each stage, the odds of success are one in four. 

Consider new drug approval rates. Consider a four-phase drug approval process, where the real mortality (58 percent to 87 percent failure) is the gate from phase one to phase two. Where there are three development phases and then an “approval” process of four stages, overall success rates range from 14 percent to 21 percent. 

American Council on Science and Health 

Other examinations of drug approval success rates suggest the odds of success are less than 10 percent for a four-stage set of hurdles, up to perhaps 11 percent.  

source: Seeking Alpha 

In the venture capital business, the odds of getting funding are less than one percent. 

souce: Corporate Finance Institute

In other words, change is hard because any complex process, with multiple stakeholders--with the ability to stop any proposal--is mathematically challenging.

74% of Digital Transformation Efforts Fail

“74 percent of cloud-related transformations fail to capture expected savings or business value,” say McKinsey consultants  Matthias Kässer, Wolf Richter, Gundbert Scherf, and Christoph Schrey. 

Similarly, almost half of all respondents experienced cloud technology as more, or much more,  complex than they initially expected, while 40 percent overran their cloud budgets, some to a significant degree, they note. 

source: McKinsey 

Those results would not be unfamiliar to anyone who follows success rates of information technology initiatives, where the rule of thumb is that 70 percent of projects fail in some way.

Of the $1.3 trillion that was spent on digital transformation--using digital technologies to create new or modify existing business processes--in 2018, it is estimated that $900 billion went to waste, say Ed Lam, Li & Fung CFO, Kirk Girard is former Director of Planning and Development in Santa Clara County and Vernon Irvin Lumen Technologies president of Government, Education, and Mid & Small Business. 

That should not come as a surprise, as historically, most big information technology projects fail. BCG research suggests that 70 percent of digital transformations fall short of their objectives. 

From 2003 to 2012, only 6.4 percent of federal IT projects with $10 million or more in labor costs were successful, according to a study by Standish, noted by Brookings.

source: BCG 

IT project success rates range between 28 percent and 30 percent, Standish also notes. The World Bank has estimated that large-scale information and communication projects (each worth over U.S. $6 million) fail or partially fail at a rate of 71 percent. 

McKinsey says that big IT projects also often run over budget. Roughly half of all large IT projects—defined as those with initial price tags exceeding $15 million—run over budget. On average, large IT projects run 45 percent over budget and seven percent over time, while delivering 56 percent less value than predicted, McKinsey says. 

Beyond IT, virtually all efforts at organizational change arguably also fail. The rule of thumb is that 70 percent of organizational change programs fail, in part or completely. 

There is a reason for that experience. Assume you propose some change that requires just two approvals to proceed, with the odds of approval at 50 percent for each step. The odds of getting “yes” decisions in a two-step process are about 25 percent (.5x.5=.25). 

In other words, if only two approvals are required to make any change, and the odds of success are 50-50 for each stage, the odds of success are one in four. 

The odds of success get longer for any change process that actually requires multiple approvals. 

Assume there are five sets of approvals. Assume your odds of success are high--about 66 percent--at each stage. In that case, your odds of success are about one in eight for any change that requires five key approvals (.66x.66x.66x.66x.66=82/243). 

In a more realistic scenario where odds of approval at any key chokepoint are 50 percent, and there are 15 such approval gates, the odds of success are about 0.0000305. 

source: John Troller 

So it is not digital transformation specifically which tends to fail. Most big IT projects fail.

"Covid" Does Not Drive as Many Big Changes as Argued

Public company executives often have convenient explanations for why revenue targets were missed. “Bad weather” is a common reference for retailers, for example. “Bad weather” kept consumers from shopping. Bad weather depressed demand for spring clothing.. 

But “Covid” provides a rationale for revenue misses as well as expectations for revenue growth. That is not misplaced. But all Covid effects are “at the margin.”

Covid is argued to have pushed forward some information technology spending that otherwise would have taken longer. That is expressed in the phrase “a year’s change in a few months.” 

“Covid-19 has proved a catalyst for investment in technologies that will help them navigate the post pandemic world, with a ramp in spending evident on cloud computing, DaaS Device-as-a-Service) and IoT, as well as investment in 5G and Wi-Fi6,” say researchers at Strategy Analytics. 

But many of the changes do not necessarily seem related to long-term transformation. About 33 percent of U.S. survey respondents said they would increase communications spending between one percent and five percent over the next couple of years. 

But that might be true most years: though most spend roughly the same amount, sizable percentages spend less or more. Also, less spending in 2020 might be expected to rebound in “more normal” years to follow. Mobile roaming charges, for example, were far lower in 2020 than in a “normal” year, as fewer people were traveling. A change between one percent and five percent would, in many cases, simply reflect a reversion to mean. 

With or without Covid-driven conditions, that is a reasonable belief. In the U.S. market, mobility spending alone grows about three percent a year. 

About 20 percent of respondents guessed that their IT spending would grow by more than 10 percent over the next two years. Again, that might be typical in any “normal” year. Gartner, for example, predicts global IT spending will grow nine percent in 2021 alone. Spending also increased about the same amount in 2020.

It is hopes for “digital transformation” that drive that investment, however, not Covid response. Global IT spending has grown since 2005, for example.  And Gartner has predicted four percent growth of IT spending in 2021, for example.  

Yes, some changes in spending were driven by Covid. But the fundamental longer-term changes, as shown by the Strategy Analytics survey, do not require Covid as an explanation. 

Covid had an effect, to be sure. With more remote work happening, demand for home broadband connections appears to have increased. But other changes, such as a shift to cloud computing; hardware as a service and internet of things adoption, are harder to analyze.

source: Strategy Analytics

Such transformations take time, and the sudden work-from-home demand would not have allowed enough time for executives to make many fundamental changes. The same goes with other investments in technology such as blockchain, artificial intelligence, virtual or augmented reality or edge computing. 

Those changes require many other shifts of architecture and business processes that simply cannot be turned quickly, in a couple of months. 

In fact, many IT teams arguably found themselves shifting spending towards buying of personal computers and remote work software licenses rather than anything else related to computing or communications architecture.

When Collaboration Becomes a Bug, Not a Feature

We all know the phrase “that’s not a bug, it’s a feature.” The reverse might also be true: “a feature can be a bug.” 

Consider collaboration, which virtually everyone considers a desired feature. During the Covid-19 enforced remote work period, that feature has become a bug. 

So much so that a major supplier of collaboration tools and platforms (Microsoft) notes that actual collaboration between people is improved when electronic collaboration drops. That is a byproduct of people being able to congregate again in workplaces. 

One byproduct of enforced work from home rules is that work team isolation increased, creating more silos within organizations. As the possibility of face-to-face interactions returns, use of electronic collaboration tools drops. But Microsoft researchers say that is a good thing, as it reduces the “silo” impact enforced remote work has caused. 

source: Microsoft 

“At the onset of the pandemic, our analysis shows that interactions with our close networks at work increased, while interactions with our distant networks diminished,” say Microsoft research. “This suggests that, as we shifted into lockdowns, we clung to our immediate teams for support and let our broader network fall to the wayside.”

There is a downside: similar companies almost certainly became more siloed than they were before the pandemic. 

“And while interactions with our close networks are still more frequent than they were before the pandemic, the trend shows even these close team interactions have started to diminish over time,” Microsoft researchers say. 

Younger workers (25 or younger) also reported more difficulty feeling engaged or excited about work, getting a word in during meetings, and bringing new ideas to the table when compared to other generations.

“Bumping into people in the office and grabbing lunch together may seem unrelated to the success of the organization, but they’re actually important moments where people get to know one another and build social capital,” says Dr. Nancy Baym, Microsoft senior principal researcher “They build trust, they discover common interests they didn’t know they had, and they spark ideas and conversations.”

I never thought I’d see the day when a major supplier of collaboration tools actually argues that less use of those tools would improve actual collaboration. If bugs can be features, features can be bugs.