Future Work

Atlassian: CEOs Admit “Return to Office” Did NOT Raise Productivity

A new Atlassian report and academic research debunk the productivity myth of office returns, challenging top executives' views on work efficiency.

Elon Musk called "working remote morally wrong." 

Martha Stewart said, "America will ‘go down the drain’ if people don’t return to office." 

And last week, real estate developer Marc Holliday called work from home the biggest societal problem

Bigger than, as Stanford’s Nick Bloom pointed out, climate change, war, fractured politics, nuclear proliferation, or global poverty. 

The reason for these sentiments?

As another CEO, Stephen Schwartzman of Blackstone, said, it's all about productivity: “remote workers didn't work as hard, regardless of what they told you."

But as the real data comes in, we see a different story, and CEOs now admit that there’s no employee productivity boost from return-to-office mandates.

Atlassian Data Shows The Truth About Return to Office

Dr. Gleb Tsipursky had it right in June of last year when he wrote that "the forced return to the office is the definition of insanity.”

"Despite the overwhelming evidence that flexible hybrid work is more productive than forced in-office work for the same roles, top executives are stubbornly herding employees back to the office like lost sheep, expecting productivity to miraculously improve. This, my friends, is the very definition of insanity."

Because a new Atlassian report highlights that “Even Fortune execs who mandate a return to office admit that it doesn’t improve productivity,” as Jane Thier. 

The report titled "Lessons Learned: 1,000 Days of Distributed" reveals that seven in ten bosses of Fortune 500 companies who require in-person work say this rule has had no impact on productivity.

This aligns with our findings from our “Myths vs. Reality” report, which showed that 98% of hybrid and remote managers say productivity has remained steady or improved. 49% even said productivity has ‘significantly improved.’ 

Atlassian’s own data underscores this insight:

“After we implemented Team Anywhere, we saw no drop-off in work activity. In fact, hours worked went up. That doesn’t mean Atlassians are working significantly longer days, but that they are remixing the hours in their days to fit their lifestyles.” – Atlassian

A second report, the academic paper “Return-to-Office Mandates,” studied S&P 500 companies and their RTO mandates. 

The paper similarly concluded that return-to-office mandates created no upside ("no significant changes in financial performance or firm values.") but, as shared by Brian Elliott, a very demonstrable downside: "significant declines in employees’ job satisfaction."

It argues that executives didn’t tell people to get back to the office for improved productivity or value to the company, but to reassert power:

“Results of our determinant analyses are consistent with managers using RTO mandates to reassert control over employees and blame employees as a scapegoat for bad firm performance. Also our findings do not support the argument that managers impose mandates because they believe RTO increases firm values." – Yuye Ding and Mark (Shuai) Ma, Katz Graduate School of Business.

What’s the Issue With Productivity, Anyway?

Office or not, productivity remains a hot issue, as the Atlassian report shows: according to the data, productivity is the number one challenge executives face.

As I wrote in my newsletter about remote work and productivity, companies prioritize employee productivity because the more goods and services a company can create with the same resources, the lower its costs.

Lower costs mean lower prices, boosting a company’s competitiveness in the marketplace and making it more profitable. This is why executives get frustrated when productivity stagnates or declines.

But our definition and measurement of productivity are huge problems that must be solved.

For one, there’s a fundamental disconnect on how productive we are: while 87% of employees report that they are productive, a stunning 85% of managers believe the opposite, according to Microsoft research

This discrepancy is what Microsoft calls “productivity paranoia,” which, combined with executive nostalgia, led to CEO's anti-remote work sentiments and the big push for return-to-office. 

Another challenge is that we disagree on what productivity even is. 

As I wrote on AI in remote work, a ClickUp study found that 56% of people see themselves as productive when they feel accomplished, which is unlikely to be their manager's measure of productivity. 

How to Measure and Boost Productivity

Good models for productivity do exist. 

Take, for example, Qualtrics’ approach to measuring productivity, which combines the quantity and quality of work done with the amount of effort wasted.

Future Work Productivity Measuring

A model like this should make you reflect on working in an office. 

Yes, we could see people were ‘busy’ when we were managing by walking around, but were they productive?

The office may have helped efficiency to some degree, but it probably didn’t affect the completion and quality of tasks.

This is where remote-first companies like Atlassian are taking a very different approach. 

In conversation with Chris Heard, Atlassian’s VP of Team Anywhere, Annie Dean, shared how it all starts with setting and tracking goals.

Annie explained that everyone in the company knows the highest-level goals and how their team contributes to them – translated all the way down to personal performance goals

Atlassian managers, directors, and executives then get dashboards showing exactly how much progress has been made – reducing the need for anxiety about productivity losses. 

Atlassian's Atlas dashboard

This way of results-focused work also helps people feel they are practicing meaningful productivity, as they can tangibly see how their day-to-day work contributes to company growth.

This and having autonomy at work to create impactful outcomes, rather than just ‘being busy,’ are key to true employee engagement and a staple in successfully managing remote teams.

Contrast this with Fortune 500 companies, of which 87% say their teams do not have visibility into each other’s goals. 

Is ‘showing up in the office’ a good alternative for this kind of transparency? I don’t think so.

In fact, the paper referenced before shares that mandating people back to the office goes against these principles of transparency, trust, and autonomy:

“Using difference-in-difference (DiD) regressions, we find significant declines in employees’ ratings of overall job satisfaction, work-life balance, and senior management after a firm announced an RTO mandate.”

Atlassian’s Playbook for Hybrid and Remote Teams

Atlassian seems to have figured it out. So what can we learn from this remote giant with a $60 billion + market cap?
The report shares key approaches to making distributed work, work:

1. Set Goals: As shared above, set OKRs, update them frequently, and have everyone transparently track progress.

2. Work Effectively: Structure time around top priorities with:

  • fewer but effective team meetings for a maximum of 30% per week
  • 10-20% of collaborative work time where people are online at the same time
  • a lot of focus time with blocks of at least 90 minutes of uninterrupted work (and yes, timeboxing works, says about 70% of Atlassian employees.)

3. Treat Time like Money: Be smart about what needs to happen in real-time and make everything else asynchronous work or asynchronous meetings. Remote work best practices like documenting by default and team agreements facilitate uninterrupted, productive work.

4. Stay Connected: When you don’t see each other often, get together intentionally. Atlassian does this about three times per year through company retreats and other (regional) meetings. Its data shows that these moments, which The Art of Gathering prescribes to be intentional and meaningful, increase feelings of connection by 27% and last 4-5 months.

Future Work Atlassian Data

5. Have Great Offices: While Atlassian doesn’t require office attendance, it does have offices when and where they meet the company’s needs, where the real estate is of good financial value, and where changes they make lead to clear improvements.

The Role of Offices in Productive Teams

Future Work Newsletter Role of Office

A note on the last best practice, which may seem counterintuitive.

One of the things I’ve loved about Atlassian’s Team Anywhere story is that just because many employees work remotely doesn’t mean that the company doesn’t have offices.

In fact, Atlassian says that “offices are an important part of our strategy” and has 12 global workplaces. It lets data dictate whether to open more, close some, and improve what those offices offer. 

And that works: 26% of Atlassians who live within 2 hours of an office visit at least once per week.

Atlassian’s approach to making offices a place to soak in the company spirit, a place to meet colleagues, and a place to get shit done, is hugely beneficial to employees and the company.

Gen Z and The Office

A great example is young employees.

Many companies wonder how to engage Gen Z remotely and whether their learning and development are impacted with little or no office time.

Atlassian shows that when you give people a choice, they’ll find what’s best for them.

The report highlights that 60% of new graduates who live near an office come in weekly or more, making it their highest office attendance population at the company.

At the same time, Atlassian employees collectively saved half a billion minutes for people who don’t want or need to be in the office full-time. 

This is one of the reasons why remote workers are willing to forego up to $12,000 of salary to work from home.

The Bottom Line

Demanding people to work in an office doesn’t magically make them more productive.

In fact, we’ll probably work less due to commuting time and constant disruptions.

The Atlassian data makes a clear case for a trust-first and people-centric approach to performing together.

Our time on earth is short.

The hours we spend at work are long. 

'It's not enough to be busy; so are the ants. What are we busy about?” (Henry David Thoreau.)

Let's redefine productivity in a way that values people and the pursuit of meaningful work, fostering a future of work where we're not just busy but truly fulfilled.

Until next week,

Daan

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