Facebook, Fujitsu, Nationwide, Otis, Siemens, Twitter, and other major companies have announced that large portions of their workforces may or must work remotely from now on. It saves money and may increase productivity, managers say. Many employees prefer it. A recent survey by Korn Ferry found that 64% of workers feel that they’re more productive at home. 

But a group of hyper-successful contrarians—Apple, Amazon, Goldman, Google, and others, have pointedly not offered the indefinite WFH option. They want employees back physically together. Considerable evidence supports their stance. It also shows that when employers offer indefinite WFH, they’re messing with something more powerful than they may realize.

Some closings are imperative for public health. But employers who have a choice should keep in mind that the costs of WFH are high and may not be obvious.  The stiffest penalty may be lost creativity and innovation. Every company is desperate for good ideas in this environment, and it would be hard to design a worse policy for finding them than unnecessarily requiring or encouraging employees to stay apart.

FACE-TO-FACE MATTERS

Creativity and quality of teams’ ideas were rated by peers on a scale of one to five. The results show strikingly what a deeply human experience it is to be creative in a group. The more that group members faced each other, the more creative their output was. The more they looked into each other’s eyes, the more creative they were. The more willing they were to confide in one another, the more creative they were.

Facing each Other, looking into the eyes, confiding—all those behaviors reflect and build trust. The researchers measured trust within the groups and found that it was crucial to the whole process. Their conclusion: “There is no substitute for face-to-face interaction to build up this trust.” 

Those high-achieving contrarian employers have understood all this for years. For example, Google’s free top-quality cafeteria meals aren’t merely a perk. They’re a way to bring together employees who might otherwise never see each other, and to make them wait in lines, where they’ll talk. Long, narrow cafeteria tables increase the odds of sitting next to or across from—and thus talking with—strangers. Such chance interactions are where successful innovations often originate. Gmail, Google News, and Street View came from engineers chatting at lunch.

Apple’s Steve Jobs obsessed over face-to-face meetings. There’s a temptation in our networked age to think that ideas can be developed by email and iChat,” he told WalterIsaacson, author of a bestselling Jobs biography. “That’s crazy. Creativity comes from spontaneous meetings, from random discussions.” When asked by Fortune to recount the birth of the iPhone, Jobs said the earliest ideas arose from informal gabbing: “We all had cell phones. We just hated them, they were so awful to use.” That “watercooler talk” is the “one part of the iPhone mythology that everyone tends to agree on,” author Brian Merchant reports in his book ‘The One Device’.

MISSING SPARKS

Shaking hands is literally an electric experience: Brain imaging shows that we energize the region associated with reward sensitivity—that is, we feel rewarded—by shaking hands, or merely by seeing other people shake. 

There is a similar physical response when we converse with someone face-to-face. The pupils of our eyes constrict and dilate in parallel with the other person’s. Neither of us is aware it’s happening, but it builds trust. When we’re physically together, we unconsciously mimic one another’s posture, gestures, and tone of voice, which builds trust and empathy.

HIDDEN COSTS

Togetherness is in our deepest nature. Michael S. Gazzaniga, a leading researcher in cognitive neuroscience was asked what’s being lost as millions of workers remain at home, he says: “The feeling of connection and being a member of a team, and all the incidental conversations and nonlinguistic cues that get people on the same page and aligned, as well as the serendipity that is the source of most innovation.”

Companies adopting large-scale indefinite work-from-home policies will certainly save some money—an important consideration now—and they may get along just fine for quite a while. The downside will accumulate only slowly and will be harder to appreciate fully. What these companies gain can be quantified much more easily than what they lose. But while they may take time to show up on the P&L, the losses could be much greater.

Excerpts from Fortune Magazine August/September 2020

ENTREPRENEURIAL CHARACTERISTICS

A series of interviews were conducted with distinguished entrepreneurs. They were asked what characteristics they felt were essential to success as an entrepreneur. Good health was a characteristic mentioned by every entrepreneur interviewed. Entrepreneurs are physically resilient and in good health. They can work for extended periods of time, and while they are in the process of building their business, they refuse to get sick.

In small businesses, where there is no depth of management, the leader must be there. You may not be able to afford a support staff to cover all business functions, and therefore you will need to work long hours. We all know people who use part of their sick leave each year when they are not sick. Entrepreneurs are not found in this group. At the end of the eight-hour day, when everyone else leaves for home, the entrepreneur will often continue to work into the evening, developing new business ideas.

Self-Control

Entrepreneurs do not function well in structured organizations and do not like someone having authority over them. Most believe they can do the job better than anyone else and will strive for maximum responsibility and accountability. They enjoy creating business strategies and thrive on the process of achieving their goals. Once they achieve a goal, they quickly replace it with a greater goal. They strive to exert whatever influence they can over future events.

In large, structured organizations, entrepreneurs are easy to recognize by the statements they make: “If they wanted that job done right, they should have given it to me.” A dominant characteristic of entrepreneurs is their belief that they are smarter than their peers and superiors. They have a compelling need to do their own thing in their own way. They need the freedom to choose and to act according to their own perception of what actions will result in success.

Self-Confidence

Entrepreneurs are self-confident when they are in control of what they’re doing and working alone. They tackle problems immediately with confidence and are persistent in their pursuit of their objectives. Most are at their best in the face of adversity, since they thrive on their own self-confidence.

Sense of Urgency

Entrepreneurs have a never-ending sense of urgency to develop their ideas. Inactivity makes them impatient, tense, and uneasy. They thrive on activity and are not likely to be found sitting on a bank fishing unless the fish are biting. When they are in the entrepreneurial mode, they are more likely to be found getting things done instead of fishing.

Entrepreneurs prefer individual sports, such as golf, skiing, or tennis, over team sports. They prefer games in which their own brawn and brain directly influence the outcome and pace of the game. They have drive and high energy levels, they are achievement-oriented, and they are tireless in the pursuit of their goals.

Comprehensive Awareness

Successful entrepreneurs can comprehend complex situations that may include planning, making strategic decisions, and working on multiple business ideas simultaneously. They are farsighted and aware of important details, and they will continuously review all possibilities to achieve their business objectives. At the same time, they devote their energy to completing the tasks immediately before them.

Accounting reports illustrate this characteristic. Accountants spend hours balancing the accounts and closing them out. For them, the achievement is to have balanced books. The entrepreneur only wants to know the magnitude of the numbers and their significance for the operation of the business.

Realism

Entrepreneurs accept things as they are and deal with them accordingly. They may or may not be idealistic, but they are seldom unrealistic. They will change their direction when they see that change will improve their prospects for achieving their goals. They want to know the status of a given situation at all times. News interests them if it is timely, and factual, and provides them with information they need. They will verify any information they receive before they use it in making a decision. Entrepreneurs say what they mean and assume that everyone else does too. They tend to be too trusting and may not be sufficiently suspicious in their business dealings with other people.

Conceptual Ability

Entrepreneurs possess the ability to identify relationships quickly in the midst of complex situations. They identify problems and begin working on their solution faster than other people. They are not troubled by ambiguity and uncertainty because they are used to solving problems. Entrepreneurs are natural leaders and are usually the first to identify a problem to be overcome. If it is pointed out to them that their solution to a problem will not work for some valid reason, they will quickly identify an alternative problem-solving approach.

Status Requirements

Entrepreneurs find satisfaction in symbols of success that are external to themselves. They like the business they have built to be praised, but they are often embarrassed by praise directed at them personally. Their egos do not prevent them from seeking facts, data, and guidance. When they need help, they will not hesitate to admit it especially in areas that are outside of their expertise. During tough business periods, entrepreneurs will concentrate their resources and energies on essential business operations. They want to be where the action is and will not stay in the office for extended periods of time.

Symbols of achievement such as position have little relevance to them. Successful entrepreneurs find their satisfaction of status needs in the performance of their business, not in the appearance they present to their peers and to the public. They will postpone acquiring status items like a luxury car until they are certain that their business is stable.

Interpersonal Relationships

Entrepreneurs are more concerned with people’s accomplishments than with their feelings. They generally avoid becoming personally involved and will not hesitate to sever relationships that could hinder the progress of their business. During the business-building period, when resources are scarce, they seldom devote time to dealing with satisfying people’s feelings beyond what is essential to achieving their goals.

Their lack of sensitivity to people’s feelings can cause turmoil and turnover in their organization. Entrepreneurs are impatient and drive themselves and everyone around them. They don’t have the tolerance or empathy necessary for team building unless it’s their team, and they will delegate very few key decisions.

As the business grows and assumes an organizational structure, entrepreneurs go through a classic management crisis. For many of them, their need for control makes it difficult for them to delegate authority in the way that a structured organization demands. Their strong direct approach induces them to seek information directly from its source, bypassing the structured chains of authority and responsibility. Their moderate interpersonal skills, which were adequate during the start-up phases, will cause them problems as they try to adjust to the structured or corporate organization. Entrepreneurs with good interpersonal skills will be able to adjust and survive as their organization grows and becomes more structured. The rest won’t make it.

Emotional Stability

Entrepreneurs have a considerable amount of self-control and can handle business pressures. They are comfortable in stress situations and are challenged rather than discouraged by setbacks or failures. Entrepreneurs are uncomfortable when things are going well. They’ll frequently find some new activity on which to vent their pent-up energy. They are not content to leave well enough alone. Entrepreneurs tend to handle people problems with action plans without empathy. Their moderate interpersonal skills are often inadequate to provide for stable relationships. However, the divorce rate among entrepreneurs is about average.