What’s Left After the Culture Crash?

Driving performance in a hybrid workplace is easy. Building the culture necessary to sustain high performance is not.

In March of 2020, as the coronavirus pandemic spread around the globe this time last year, 75 million U.S. workers packed up their laptops and headed home. As they did, many predicted that productivity would plummet, and that “the distractions of home — from child care to television — would wreak havoc on workdays.” Now, more than a year into the working world’s unplanned experiment with remote work, it seems the opposite is true.

In a massive survey of business leaders around the world, 94% said their employees were equally or more productive than they were pre-pandemic. Another study predicts that the increase in productivity produced by the large-scale adoption of remote work, combined with cost savings on office space and equipment, could provide companies a net benefit of $11,000 per employee per year — $500 billion per year in the U.S. alone.

Some of this increase can be attributed to panic productivity, “the adrenaline boost people got from the sudden shifts in the nature and location of their work” and the looming threat of layoffs prompting them to put in extra hours to prove their value. Consciously or unconsciously, employers have been benefiting from this anxiety. As we’ll discuss below, this temporary boost in productivity comes at a high cost.

But, for many, working from home offers real advantages. A 2015 Stanford study found, free from the long commutes or countless interactions with colleagues that characterize the office, workers were 13% percent more productive working from home. And, many companies “are discovering that processes and procedures they previously took for granted — from lengthy meetings to regular status updates — are less essential than once imagined.”

Given the benefits that U.S. companies can realize by reducing their physical footprint and moving to a hybrid workplace in which “a large number of office employees rotate in and out of offices configured for shared spaces,” it’s no wonder that 90% of organizations intend to allow their workers to work remotely at least some of the time.

Culture has crashed, productivity and team performance are next

Our research shows that teams fundamentally require two basic ingredients to function effectively: culture and productivity.

Productivity describes how efficiently and effectively a team gets work done. Culture, on the other hand, describes how it feels to be on the team — the trust, communication, and cohesion that enables high-performance. While it is clear that the shift to remote work hasn’t hurt productivity, it has absolutely decimated culture.

Team culture is built on the hundreds of small interactions team members have with each other throughout the workweek. At the beginning of the pandemic, team leaders worked to replicate those interactions. But, as the pandemic wore on, rather than serving as natural energy-builders, Zoom lunches and happy hours started to feel like a chore and eventually stopped showing up on our calendars.

In a recent interview, Microsoft CEO Satya Nadella said although productivity stats for many of the company’s workers had gone up, that wasn’t necessarily something to celebrate.

Although more meetings start and end on time, for example, “what I miss is when you walk into a physical meeting, you are talking to the person that is next to you, you’re able to connect with them for the two minutes before and after.”

Without energy-building interactions like the one Nadella described, companies are building a productivity bubble that is unsustainable. Underneath the increased productivity is growing isolation, burnout, and disengagement. Especially worrying is a sharp decline in workers’ mental health — a recent report revealed that 55% of U.S. workers have struggled with mental health issues during the pandemic.

The cracks are starting to show, and, eventually, the bubble will burst. Even before the pandemic, remote workers struggled with feelings of loneliness and isolation. Gallup found that more than two-thirds of workers report feeling burned out, with managers reporting more stress and burnout, worse work-life balance, and worse physical health than members of their teams. And, after reaching historically high levels in 2020, most likely due to the same forces driving the gains in productivity early in the pandemic, employee engagement dropped back to pre-pandemic levels.

As the adrenaline and fear of job loss wear off and economies begin to warm, employees will undoubtedly factor their employers’ and team leaders’ efforts to support team culture into their decision to stay in their current positions or seek opportunities elsewhere.

Sustaining productivity by investing in culture

It’s easy to understand why, in the rush to adjust to a remote or hybrid workforce, leaders have invested most of their effort in driving productivity — it’s difficult to demonstrate the return on investing in culture. But, team culture is the foundation that enables productivity and, ultimately, team performance.

Yes, it can be difficult to replace the small interactions team members would naturally have during meetings, in the breakroom, and around the watercooler, but leaders can encourage their team members to take a moment at the beginning and end of phone calls and Zoom meetings to check in with their coworkers. Team lunches and happy hours are exponentially more complicated to orchestrate in a remote or hybrid workplace, but it can be done.

While some may see these interactions as a waste of time, studies show that these interactions — even taking a moment to share the hottest office gossip — trigger the release of oxytocin, a powerful neurotransmitter key to social attachment and building trust between individuals. They also give team members an opportunity to hear about the personal and professional challenges their colleagues are experiencing, and to build cohesion by showing empathy for the needs and concerns of their peers.

When individuals on a team understand each others’ contexts, they avoid making assumptions and waste less time on the unproductive conflicts that would otherwise arise. When individuals value their membership in the group, they work harder than they would otherwise.

When team members feel safe to take risks and be vulnerable in front of each other, it creates a condition known as psychological safety. Google’s two-year study of its teams showed that psychological safety was the single most important factor impacting performance. Individuals on teams with higher psychological safety were more engaged. That engagement, in turn, leads to better performance. Gallup showed that business units with engaged employees experienced:

• 41% lower absenteeism
• 17% higher productivity
• 10% higher customer metrics
• 20% more sales and
• 21% greater profitability

At Google, people on high-psychological safety teams were less likely to leave the company, brought in more revenue, and were rated as effective twice as often by executives.

Building a team capable of sustaining high-performance in a remote or hybrid workplace is difficult, but not impossible — we have coached countless high-performing, geographically dispersed teams at organizations around the world. The team leaders we have seen succeed are always looking for, and leveraging their teams to find, creative ways to build and sustain culture. They put conscious, daily effort into fostering a shared sense of belonging and commitment to the team and organization.

With attention and intent, team leaders can repair and rebuild culture on their teams, creating a solid foundation on which they can turn short-term gains in productivity into sustained high performance.