Rethinking Work: Measuring the Pandemic’s Impact on Company Culture
This article was originally published on Forbes here.
The pandemic has clearly shifted the way that startup employees work with their companies. What was once viewed with some suspicion — employees who would rather work from home than alongside their colleagues — suddenly became the new normal. We’re now at the point that companies are trying to find the optimal balance between remote work and working in the same location, be it an office or another venue. How should we balance the increased productivity of work-from-home with the limitations that come from not working in the same location? Should we embrace a fully remote model or is a hybrid model preferable? When should we bring teams together?
We wanted to understand how our portfolio companies are managing this transition. We surveyed our portfolio company CFOs on this topic and found a very different outlook for work patterns than before the pandemic. Our discussions with portfolio company management teams also uncovered a company cultural shift from one of observing the process of employees working to measuring the outcomes of an individual or team.
This recalibration towards measuring outcomes appears to be a harbinger of a potentially profound shift in startup culture overall. While work-from-home brings with it a surprising degree of productivity, we are also beginning to see the negative impact it is can have on employees as they spend more time working in isolation. The relationship between companies and their employees can become more transactional if managers do not take steps to avoid this commoditization of relationships. This comes at a time when the pandemic also has caused many employees to rethink their relationship to work. The new equilibrium that companies are trying to find balances the efficiencies and convenience of work-from-home with the recognition that in-person meetings are still valuable.
Measuring the new normal
The companies that participated in our survey include a mix of early and late-stage companies. The survey size was n = 17, the median company has 158 employees, and they are primarily headquartered in major technology hubs such as the San Francisco Bay Area.
The most striking finding with regards to work-from-home has been its apparent productivity.
The findings among our startups are consistent with the findings of much larger studies on this topic such as one published earlier this year by Nicholas Bloom and his colleagues, “Why Working From Home Will Stick”. This better-than-expected productivity has opened the way for significant numbers of employees to work remotely.
Expectations for a return to the office
As companies experiment with their plans to be back in the office, we’re finding that the decisions around doing so are based on assumptions around when an in-person meeting is more productive. More than half of those surveyed expect their teams to physically work together in the same place two to three days per week.
Companies have also learned over the last 18 months that personal interaction is still important and necessary. One of the areas where employee productivity is most readily measured — namely, in sales — lends itself particularly well to comparisons before and during the pandemic. A company that we spoke with found that the sales representatives hired during the pandemic took longer to ramp up to their standard quotas than those hired before the pandemic. On average, they required nine months to ramp to quota versus six months for those hired prior to the pandemic. They concluded that the longer ramp time was due in part to the lack of in-person onboarding and sales kickoff meetings. The newer salespeople didn’t receive the type of warm embrace that their predecessors had, which appears to have impacted how quickly they grew into their roles.
In my own career, I had previously worked doing sales and business development for several startups. My experience has been that salespeople do their best when they believe in what they are selling. Could it be that belief is established more firmly when we meet in person rather than via Zoom?
We also found that companies are pushing to meet in person when it comes to key events (such as sales kickoff meetings) or when a specific department is trying to achieve a specific objective (such as problem-solving around software releases).
The implications of the new normal
In our discussions with management teams, it’s clear that they are trying to find the right balance between remote work and office work. One trend that we believe will remain is a shift in the relationship between companies and their employees. We believe the shift towards measuring outcomes will continue, particularly as larger numbers of employees are permanently remote. The challenge is mitigating the risk of the relationship becoming transactional and creating a meaningful company culture in this new era.
With this shift to remote work, we may also see a rise in employee engagement tech. Marketing and customer support technologies track customer journeys and complaints in real-time, and measure areas of frustration. Could we see a rise of similar real-time technologies geared towards discovering points of frustration or complaints among employees? Companies will put more emphasis on improving systems of engagement, learning, and community for their employees. They already work with employees on developing their career paths via internal reviews. Could permanently remote work spawn the advent of real-time employee engagement software or bolster processes to assist in employee development as they progress along their career paths? While this era will be known for many things, one of those will be as an era of experimentation that will reset the norms for startup culture and work customs for years to come.
