26 September 2023

Can companies with remote management succeed?

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The question has been dividing business leaders, James Heskett* considers both sides of the debate.


Despite reams of material written about remote work in recent months, we know very little about the impact of remote management on performance.

Perhaps it’s too soon.

Until we can assess longer-term performance under home office and remote management, we can’t be sure of the impact.

Nevertheless, leaders have to make decisions about reassembling a management team in an office without full evidence.

Greg D. Carmichael, CEO and chairman of Fifth Third Bancorp in Cincinnati, is one, according to a recent Wall Street Journal report.

In calling all of Fifth Third’s employees back to the office he remarked that, “We can’t be a great company working remotely … We can get the job done, but it’s tough to flourish.”

The comment refers to Fifth Third’s management core.

Like many service organisations, it will continue to deliver its services through branches as well as the internet, but not through employees managing from home.

Mat Ishbia, president and CEO of UWM Holdings, shares the sentiment.

As he puts it in the same report, “We are better together. If you have an amazing culture, and great people that collaborate and work together, you want them in the office together.”

“Just how large an organisation can get while still being managed remotely in an effective way is a question.”

I assume that Matt Mullenweg, founder of Automattic, the parent company of WordPress, which powers about a third of websites, would disagree.

His company operated last year with about 1,200 employees working asynchronously (that is, not on the same schedule, handing off work each day from one employee and one time zone to another) in 75 countries with no headquarters.

The strategy requires, among other things, that remote managers get together for four weeks each year for team-building events, and the support of the latest and best communications technology.

Just how large an organisation can get while still being managed remotely in an effective way is a question.

But Sid Sijbrandij, CEO of GitLab, an open-source software developer and provider, believes that “all-remote scales even better than the traditional model … the benefits of all-remote: writing down your processes, stimulating cross-company informal communication, they get more pronounced at scale.”

Carmichael’s comment raises questions about the limits to which his decision to bring management back to the home office is applicable.

Is it limited to businesses and organisations in which collaboration is important? Does it apply more to large than small organisations?

“We can ask how far this rejection of remote management extends.

“Is it idiosyncratic to one organisation?”

Does it make more sense for a workforce that is older with fewer obligations (childcare, etc.) outside the office?

Does it recognise the social needs of many (not all) humans to relate in person to those with whom we are working?

We can ask how far this rejection of remote management extends.

Is it idiosyncratic to one organisation? All banks operating in a conventional format? All companies relying heavily on collaborative work? All companies with great cultures? Or is it applicable to all companies?

*James Heskett is a contributor at Harvard Business School Working Knowledge.

This article first appeared at hbswk.hbs.edu.

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