American economist and commentator Thomas Sowell once famously said, "There are no solutions, only trade-offs." This sentiment couldn't be more relevant when it comes to hybrid working.
It seems like we've all been wrestling with the new ways of working ever since the pandemic ended. Some organisations have embraced a fully remote model, completely abandoning the traditional office. Others have pushed to bring their employees back on-site, whether through gentle persuasion or strict mandates. Yet, the reality for most businesses is that finding the right balance for hybrid work has been a constant struggle.
The search for equilibrium in hybrid working continues, with many organisations not just navigating its challenges but also striving to reap its rewards. From lower operational costs to boosted productivity, the advantages of hybrid work are hard to ignore. We've all read articles highlighting how this shift leads to reduced absenteeism, lower employee turnover, and an increased appeal to talent.
The underlying logic is crystal clear: when employees are given more autonomy to structure their work according to their preferences, their work-life balance improves, along with their engagement and intrinsic motivation.
Diluted Organisations
However, what many organisations are beginning to realise is that allowing too much autonomy also brings a fundamental drawback. The flip side of hybrid working is its tendency to disperse employees across time and space, often leading to a more fragmented organisation and a diluted corporate culture.
Within every organisation, there is a wide range of personal preferences and varying behavioural patterns. The more autonomy employees are given, the greater the likelihood that they fall into different "attendance rotations," resulting in sporadic encounters or, in some cases, none at all outside of scheduled meetings. This lack of regular, organic interaction can weaken the cohesion and camaraderie that a strong organisational culture relies on.
This is especially poignant where a towards greater agility has prompted organisations to adopt increasingly flatter structures. As traditional hierarchies are dismantled, many familiar formal structures have faded to give way to more personal responsibility. Consequently, cohesion within organisations is now shaped more by informal factors such as trust, relationships, and culture.
A lack of these informal factors becomes particularly problematic in organisations where extensive collaboration across various (project) teams is essential. As our increasingly complex socio-economic landscape demands greater flexibility, organisations are evolving into collections of self-managing teams. In these horizontal, cross-functional collaborations, regular personal contact is crucial for fostering effective teamwork and maintaining a healthy organisational culture. Without it, the bonds that drive cohesion, trust, and productivity may weaken, undermining the very agility and innovation that these organisations seek to cultivate.
This need for interpersonal contact and physical presence has prompted some companies to reinstate full-time return-to-office policies. Time will tell whether this is the right remedy, or if this decision will backfire, as hybrid working remains highly popular with employees. It’s one of the most valuable secondary benefits an organisation can offer without spending a dime, and it even has the potential to reduce costly office space overheads.
In an era of labour and skill shortages, companies that force employees back into the office may risk losing talent to more flexible competitors, making the balance between employee satisfaction and operational needs more critical than ever.
Not a Zero-Sum Game
The core idea behind hybrid working is that it’s not a zero-sum game but a compromise designed to capture the best of both worlds. Of course, achieving this is no easy task, especially because corporate decision-making is inherently complex, with limited resources and endless possibilities to consider.
In this context, it would be a missed opportunity to assume that good decision-making is about solving dilemmas by making a series of optimal choices. Unlike mathematics, where there is a single correct answer, decision-making in business often resembles navigating paradoxes, where different and often opposing alternatives must be integrated into one dynamic and overarching strategy.
This underscores the idea that multiple valid approaches can coexist, and success lies in harmonizing these seemingly conflicting paths. As marketing guru Rory Sutherland aptly put it: “The opposite of a good idea may be another good idea.”
So as organisations grow larger and more complex, decision-making increasingly involves finding the balance between conflicting alternatives and interests, rather than making hard, binary choices. For instance, can a publicly listed company or a large corporate enterprise still afford to choose definitively between profitability and social responsibility? These competing priorities are no longer mutually exclusive but must coexist and be managed simultaneously.
The figure above shows how the benefits of autonomy and proximity (physical attendance) have an inverse relationship, increasing or decreasing as an organisation becomes more dynamic (with greater self-management and complexity). At the intersection where the two lines cross, we find the theoretical optimal point, known as the "Dynamic Equilibrium."
In reality, circumstances are constantly evolving, and this balance inevitably shifts along with them. It’s a state of Dynamic Equilibrium, where organisations must continually adapt to stay aligned with their goals and stakeholder needs.
There’s certainly never a dull moment in the hybrid era!
Managing the Dynamic Equilibrium
Actively managing a Dynamic Equilibrium presents organisations with a unique opportunity to achieve the best of both worlds: enhanced performance and cost savings. The extent to which these benefits can be realized will naturally vary depending on the specific context, but by keeping the following points in mind, you'll be well on your way to maximizing these opportunities:
- Proactively organise attendance
Establish an active policy regarding the attendance of those who should regularly meet (like team members). Since top-down planning is often too slow and static to keep up with the daily dynamics, attendance will need to be organised bottom-up.
- Manage through Guiding Principles
Since self-organisation differs fundamentally from a top-down approach, there needs to be greater reliance on employees' self-sufficiency and responsibility. The success of managing a hybrid environment largely depends on the social contracts formed by shared values, mutual agreements, and guiding principles.
- Define autonomy and boundaries
Aim for a situation where teams and employees are given maximum autonomy to organise their workweeks, within predefined boundaries. This way, the organisation's goals are safeguarded without excessively infringing on individual freedoms.
- Activate Team Leaders
The best starting point for organising attendance is at the team leader level. Team leaders often have a good sense of what’s going on with their members and can serve as the bridge between individual and collective interests.
- Provide the Right Tools
Equip both team leaders and employees with the right tools to organize the above-mentioned attendance policy from the ground up. Experience repeatedly shows that the approach of “our people will sort it out among themselves” is often inadequate without the proper support.
Finally, it is important to understand that the aforementioned Dynamic Equilibrium is not an exact or static point. It is intended as an aspiration and a theoretical optimum to strive for.
Conclusion
Hybrid working presents organisations with unprecedented opportunities, but it often conflicts with the traditional principles of organizing and managing. To avoid "throwing the hybrid baby out with the bathwater," organisations must strike a delicate balance between granting enough autonomy and maintaining a necessary level of control. The ability to manage effectively without becoming overly directive is increasingly a critical skill in today’s complex hybrid work environments.
While there may be no simple solutions, the outcomes are clear: either you master the dynamics of hybrid working, or the dynamics of hybrid working will master you.
Are you also grappling with these challenges, or have you already found a smart way to resolve them? Let me know at: richard.stoop@procosgroup.com
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