How working from home for more than two days a week can damage a business

Sarah Purches is among those who’d like to transition to remote work. Picture: Jake Nowakowski

Tens of thousands of residents of Sydney, Melbourne and other state capitals are enjoying the flexibility and time created by working from home.

Many are seriously considering buying houses in regional Australia where real estate prices are lower, the lifestyle is better and they can work from home just as efficiently as they can in the capital cities.

We are looking at a potential mass movement of families that threatens long-term housing values in capital cities, particularly in Sydney and Melbourne.

Each of those families is assuming that the working-from-home patterns created in the COVID-19 world will continue when the virus is brought under control.

Owners of central city office blocks shiver at the thought that such a development will make their buildings obsolete monuments to a bygone age. Nowhere is that the fear greater than the now completely deserted National Australia Bank head office in Melbourne’s Docklands. The thousands of workers who were based there are now working from home or in much smaller city premises.

At the start of 2020-21 year I strongly urge all families considering moving to regional Australia, and all CEOs who are planning their company’s long term work patterns, to take five minutes from their schedules and listen to the dramatic podcast hosted by The Australian’s technology editor David Swan.

For many Australians it will be a life-changing experience. David is yarning with Ben Waber, the president and co-founder of Humanyze. Like most Australians I had never heard of Humanyze nor of Waber’s grave warning to large organisations that if too many workers regularly spend more than two days a week away from the office it will greatly damage the long-term dynamic of the enterprise.

In other words many of those city workers who base themselves in regional Australia will need to commute at least three times a week.

Waber is not just peddling a viewpoint but has statistics and data unique in the world.

Humanyze was founded in 2011 out of the famous Massachusetts Institute of Technology Media Lab based in Boston. I will never forget one of the Media Lab’s co-founders Nicholas Negroponte taking me aside in the mid 1990s and explaining just how the internet would transform society.

What Waber and Humanyze are doing is analysing how Fortune 500 companies and other large enterprises make decisions in this world. Modern offices are full of movement sensors and endless email communications. Humanyze and Waber use data from created by these facilities to understand how people interact and collaborate at work. They then use that data to understand performance, retention, and decision-making processes.

Waber explains: “We started doing this work back in 2006. No one had looked at this kind of data before to understand organisational behaviour. I really assumed a lot of things about the data that turned out to not be that important - things like content or individual identity.

All those looking at living remotely need to ponder the Waber conclusions.

“By far the most important things were really the patterns of communication and how people spent that time.

“In a sense, looking at the patterns of networks within organisations and thinking about which team worked with each other team. How does that change over time? And you can think about, especially in larger organisations, how much those effects dominate any organisation.

“In the past you would collect the data with surveys or human observation. We showed that you get much higher levels of accuracy by using this real data –the digital exhaust that people generate just in the course of their normal work,” he says.

Waber concludes from the data that the strongest driver of how people collaborate is the office environment and when people are working remotely, the patterns they use are those that were formed in the office.

Of course people can still be effective remotely -- especially over a number of months. But longer term is different.

“There really is a lot of business that needs to be put on those face-to-face interactions and that if you can’t have them, you need to work really, really hard to figure out ways to recreate some of it virtually. But I haven’t seen a single company, my own company included, that’s done a great job fully replicating that,” Waber concludes.

“The data’s pretty clear that working from home one day a week has a pretty negligible effect on how people collaborate. Two days and you start to see a more significant effect. However, it’s not incredibly worrisome.

“Go beyond two days - it is a fairly significant impact.”

People usually spend about 45 per cent of their communication time with their top five collaborators and that can be done from any location.

But contacts outside the top five collaborators fall off dramatically in a working-from-home environment.

And that damages the dynamic of the enterprise and affects the training experience of young people.

The Waber data shows that in the shorter term, while the health crisis exists, it can be managed.

But longer term the damage created will mean those in the dynamic part of enterprises will need to return to commuting at least three days a week.

Not everyone will agree, but all those looking at living remotely need to ponder the Waber conclusions.

And city office block owners can look forward to better days.