At CultureGene, Brett and his team help companies develop effective hybrid, remote-first, or remote companies. They have developed different tools and different programs to help companies depending on the size and scale of the business. Typically, they work with companies that are growing rapidly and need to stabilise their DNA and the foundation so that growth is built on solid foundations.
Watch the video or read the Q&A below!
James: There is no clear consensus on whether fully-remote, hybrid, or office-based cultures are best. What are the major benefits or drawbacks of these options from your perspective?
Brett: There are a number of elements to consider here. If you’re intentional about building the remote capability inside your company you can see how well it can go. Take companies like remote.com who scaled from a startup to over 1000 employees in four years in 60 countries. They are doing it well. Gitlab also went from 100 people in 2016 to 1800 now. So you can see remote first businesses can do it very well. But like anything, there are benefits and drawbacks. The benefits are that you have access to a wider talent pool, you can hire and find the best employees from anywhere. Some companies are saving money on office space and scaling quicker because of that. Studies have also shown that remote and hybrid employees are happier and they’re also more productive.
On the other hand, if you are not intentional about building a remote working capability, you can see many issues arise. Communication and collaboration challenges are common challenges. Cultural challenges can grow and the leadership often struggle to maintain high performance as a result. It can also be hard to track employee performance for remote or hybrid teams.
With an office environment, leaders know how to lead in this environment. We’ve done it before and we are designed as humans for synchronous communication, so it is naturally easier to collaborate. It’s easier to develop a company’s culture and it often happens by default. You also typically find it is easier to manage performance too. But the drawbacks are limited access to talent, often higher costs, and a general decrease in employee flexibility. This last one is the biggest threat to companies as employees want flexibility and autonomy.
So there is no easy answer and no silver bullet.
James: Frequently founders of remote companies realise they have performance problems, but struggle to identify where they originate from. How do you go about identifying the bottlenecks in a business that is fully remote? And then, how do you fix them?
Brett: Bottlenecks are happening ultimately because of remote work friction. And this happens because most remote companies operate like they would in an office environment. They aren’t being intentional about building a remote work capability.
The bottlenecks usually originate from collaboration and people management. When it comes to collaboration, if you aren’t defining your key processes then new employees have to work it out themselves. If you aren’t being deliberate about developing and documenting processes a lot of time is wasted either by the employee asking others in the business for help or taking more time figuring it out themselves.
If you aren’t balancing synchronous and asynchronous communication and working out what you should do when, and building rules and structure around this, then that is where the friction happens. If you aren’t being deliberate about building social capital and social connection as your business scales, then people lose connection, contact, and trust over time.
Remote work companies manage and lead differently, they are outcomes-based rather than input-based. To your point around performance, they have a way of ensuring that you know who’s performing even at a micro level. So it’s on the manager to be on top of performance so this can then be fed up to the leadership.
James: A lot comes down to the people you hire in a business, and different work environments need different people. Have you seen a typical leadership persona that works well in a remote-first business?
Brett: There is some research on this, Georgia Southern University did a study before the pandemic. They had 220 teams of 4 people. 110 worked remotely and 110 worked in an office. All the teams had to choose their leaders at the end of the project.
Those who had been in an office environment had leaders with the following characteristics: charisma, hierarchical, verbal, and delegators. Whereas those that had been remote had leaders with the following characteristics: coach, mentors, facilitators, project managers.
This is the crux of some of the leadership challenges that are happening right now, leaders who are strong in an office environment aren’t necessarily strong in a remote environment.
Ultimately, a lot of companies quickly pivoted from in-office to remote first during Covid, without changing the leadership team and it’s something we help our clients with, in changing the style of management in the organisation which is needed for high performance.
James: To monitor and track performance in a remote business, many default to micromanagement, which is never liked by employees. How can you avoid micromanagement in a high-performance, remote-first environment?
Brett: Micromanagement is very destructive. It’s bad in an office environment but even worse in a remote operation. They are either going to waste a lot of time showing you proof of work, or they will lie.
What I’ve seen is remote work companies use is an idea by Andy Grove who came up with a concept called task-relevant maturity. It’s the idea of how capable the individual is of doing the set of tasks they have to complete. As a remote manager, you can evaluate if a team member has completed those tasks before and what they might need support with. Essentially this is a powerful tool that allows you as a manager to get ahead of the bottlenecks before they happen. It’s a slightly different way of leading but I’ve seen it used extensively in remote companies.
James: It’s certainly easier to introduce these processes when you incorporate your company as a remote-first business from day 1, but when you’ve transitioned from in-office to remote, how do you go about transitioning your style of working without suffering major brain-drain from resignations and poor performance?
Brett: Typically if you were in the office before the pandemic and then you’ve decided to go hybrid or remote, the thing that we don’t fully grasp or appreciate is the extent to which the office helped us with our culture development. The office gives us physical proximity and learning by observation. When you’re in an office space you almost don’t need to be that intentional about your culture. You can catch up when it’s 50 or 100 people and start being more deliberate. If you leave that environment it can often feel that your culture has been obliterated.
Even in a hybrid environment, the office is not as effective as it was. So as a leader, you need to understand what you’ve lost and how to make up for it. So one example is losing the ease of collaboration in the office. That might mean being more intentional about key processes, making sure everyone is aware, and keeping those processes up to date.
James: Flipping the direction of the conversation a little, we’re seeing more and more of our portfolio head back into an office environment, or at least having more days in the office. How would you recommend managing that process?
Brett: When you say ‘some of the team’ want to be in the office, usually this is the leadership team that wants to be in the office and they are ultimately the ones driving this initiative. If they are, that is fine. However, you have to accept that some people are going to disengage as a result. There are some people who are now no longer willing to spend an hour travelling to the office every day. Ian Goodfellow was the Chief of ML at Apple. In 2022 Apple went from Remote to Office again and he resigned as a result. If a company like Apple can’t keep their best people in that transition nobody can. Ian went to DeepMind who had a more flexible work arrangement for him.
James: Different teams typically have different openness to office working. For example, engineering teams typically favour working from home and sales teams generally prefer office-based environments. Can companies create different rules for different functions in their businesses?
Brett: I’ve seen companies do this. It’s viable if you manage it properly. I believe that if you have a hybrid or remote first mindset then you can have people in the office and people at home without issue. It just requires a lot of thought around how you ensure information isn’t lost when some are in the office and others are at home. As long as everyone understands those processes to mitigate this then it can work.
This conversation has been edited for length and clarity.