July 2020

Reimagining
the postpandemic
workforce
Pandemic-style working from home may not
translate easily to a “next normal” mix of on-site
and remote working.
by Andrea Alexander, Aaron De Smet, and Mihir Mysore

As the pandemic begins to ease, many companies are planning a new combination of
remote and on-site working, a hybrid virtual model in which some employees are on
premises, while others work from home. The new model promises greater access to
talent, increased productivity for individuals and small teams, lower costs, more individual
flexibility, and improved employee experiences.

While these potential benefits are substantial, history shows that mixing virtual and
on-site working might be a lot harder than it looks—despite its success during the
pandemic. Consider how Yahoo! CEO Marissa Mayer ended that company’s remote-
working experiment in 2013, observing that the company needed to become “one
Yahoo!” again, or how HP Inc. did the same that year. Specific reasons may have varied.
But in each case, the downsides of remote working at scale came to outweigh the
positives.

These downsides arise from the organizational norms that underpin culture and
performance—ways of working, as well as standards of behavior and interaction—that
help create a common culture, generate social cohesion, and build shared trust. To lose
sight of them during a significant shift to virtual-working arrangements is to risk an
erosion over the long term of the very trust, cohesion, and shared culture that often helps
remote working and virtual collaboration to be effective in the short term.

It also risks letting two organizational cultures emerge, dominated by the in-person
workers and managers who continue to benefit from the positive elements of
co-location and in-person collaboration, while culture and social cohesion for the
 virtual workforce languish. When this occurs, remote workers can soon feel isolated,
disenfranchised, and unhappy, the victims of unintentional behavior in an organization
that failed to build a coherent model of, and capabilities for, virtual and in-person work.
The sense of belonging, common purpose, and shared identity that inspires all of us to
do our best work gets lost. Organizational performance deteriorates accordingly.

Now is the time, as you reimagine the postpandemic organization, to pay careful attention
to the effect of your choices on organizational norms and culture. Focus on the ties that
bind your people together. Pay heed to core aspects of your own leadership and that of
your broader group of leaders and managers. Your opportunity is to fashion the hybrid
virtual model that best fits your company, and let it give birth to a new shared culture for
all your employees that provides stability, social cohesion, identity, and belonging, whether
your employees are working remotely, on premises, or in some combination of both.

Cutting the ties that bind

If you happen to believe that remote work is no threat to social ties, consider the
experience of Skygear.io, a company that provides an open-source platform for app
development. Several years ago, Skygear was looking to accommodate several new hires
by shifting to a hybrid remote-work model for their 40-plus-person team. The company
soon abandoned the idea. Team members who didn’t come to the office missed out
on chances to strengthen their social ties through ad hoc team meals and discussions
around interesting new tech launches. The wine and coffee tastings that built cohesion
and trust had been lost. Similarly, GoNoodle employees found themselves at Zoom happy
hour longing for the freshly remodeled offices they had left behind at lockdown. “We
had this killer sound system,” one employee, an extrovert who yearns for time with her
colleagues, told the New York Times. “You know—we’re drinking coffee, or maybe, ‘Hey,
want to take a walk?’ I miss that.”1 Successful workplace cultures rely on these kinds of
social interactions. That’s something Yahoo!’s Mayer recognized in 2013 when she said,
“We need to be one Yahoo!, and that starts with physically being together,” having the
“interactions and experiences that are only possible” face-to-face, such as “hallway and
cafeteria discussions, meeting new people, and impromptu team meetings.”2

Or consider how quickly two cultures emerged recently in one of the business units of a
company we know. Within this business unit, one smaller group was widely distributed
in Cape Town, Los Angeles, Mumbai, Paris, and other big cities. The larger group was
concentrated in Chicago, with a shared office in the downtown area. When a new global
leader arrived just prior to the pandemic, the leader based herself in Chicago and
quickly bonded with the in-person group that worked alongside her in the office. As the
pandemic began, but before everyone was sent home to work remotely, the new leader
abruptly centralized operations into a crisis nerve center made up of everyone in the
on-site group. The new arrangement persisted as remote working began. Meanwhile,
the smaller group, which had already been remote working in other cities, quickly lost
visibility into, and participation in, the new workflows and resources that had been
centralized among the on-site group, even though that on-site group was now working

1
Clive Thompson, “What if working from home goes on … forever?,” New York Times, June 9, 2020, nytimes.com.
2
 ara Swisher, “‘Physically together’: Here’s the internal Yahoo no-work-from-home memo for remote workers and maybe
K
more,” All Things Digital, February 22, 2013, allthingsd.com.

2
 virtually too. Newly created and highly sought-after assignments (which were part of the
business unit’s crisis response) went to members of the formerly on-site group, while
those in the distributed group found many of their areas of responsibility reduced or
taken away entirely. Within a matter of months, key employees in the smaller, distributed
group were unhappy and underperforming.

The new global leader, in her understandable rush to address the crisis, had failed to
create a level playing field and instead (perhaps unintentionally) favored one set of
employees over the other. For us, it was stunning to observe how quickly, in the right
circumstances, everything could go wrong. Avoiding these pitfalls requires thinking
carefully about leadership and management in a hybrid virtual world, and about how
smaller teams respond to new arrangements for work. Interactions between leaders
and teams provide an essential locus for creating the social cohesion and the unified
hybrid virtual culture that organizations need in the next normal.

Choose your model

Addressing working norms, and their effect on culture and performance, requires
making a basic decision: Which part of the hybrid virtual continuum (exhibit) is right for
your organization? The decision rests on the factors for which you’re optimizing. Is it
real-estate cost? Employee productivity? Access to talent? The employee experience?
All of these are worthy goals, but in practice it can be difficult to optimize one without
considering its effect on the others. Ultimately, you’re left with a difficult problem to
solve—one with a number of simultaneous factors and that defies simple formulas.

That said, we can make general points that apply across the board. These observations,
which keep a careful eye on the organizational norms and ways of working that inform
culture and performance, address two primary factors: the type of work your employees
tend to do and the physical spaces you need to support that work.

First let’s eliminate the extremes. We’d recommend a fully virtual model to very few
companies, and those that choose this model would likely operate in specific industries
such as outsourced call centers, customer service, contact telesales, publishing, PR,
marketing, research and information services, IT, and software development, and
under specific circumstances. Be cautious if you think better access to talent or lower
real-estate cost—which the all-virtual model would seem to optimize—outweigh all
other considerations. On the other hand, few companies would be better off choosing
an entirely on-premises model, given that at least some of their workers need flexibility
because of work–life or health constraints. That leaves most companies somewhere in
the middle, with a hybrid mix of remote and on-site working.

The physical spaces needed for work—or not

Being in the middle means sorting out the percentage of your employees who are working
remotely and how often they are doing so. Let’s say 80 percent of your employees work
remotely but do so only one day per week. In the four days they are on premises, they
are likely getting all the social interaction and connection needed for collaboration,
serendipitous idea generation, innovation, and social cohesiveness. In this case, you might
be fine with the partially remote, large headquarters (HQ) model in the exhibit.

3
 Exhibit
Optimizing the hybrid virtual continuum

Six models reflecting a mix of on-site and remote working

Desirable outcome Ability to Productivity Cost of

Cost to be managed access talent (individual and real estate
team)

Almost Limited Company leaders

entirely on remote work, and employees are
premises large HQ centralized in 1–2 big
principal offices

Partially Company leaders and most

remote work, employees spend majority,
large HQ but not all, of their time in
1–2 principal offices

Partially Multiple proportionate-size

remote work, offices with leadership and
multiple hubs employees dispersed among
all offices
Hybrid
models Multiple Leadership and employees
microhubs dispersed across small-
footprint “microhubs” located
in various geographies

Partially remote No permanent offices; rented

work, with flex flex space2 used for periodic
space1 in-person collaboration (but
not connectivity)

Almost Mostly remote

entirely off work, no office
premises sites

1
Flex space includes temporarily (eg, monthly) rented space used in select cities for periodic gathering and collaboration.

If, instead, a third of your employees are working remotely but doing so 90 percent of
the time, the challenges to social cohesion are more pronounced. The one-third of your
workforce will miss out on social interaction with the two-thirds working on-premises—
and the cohesion, coherence, and cultural belonging that comes with it. One solution
would be to bring those remote workers into the office more frequently, in which
case multiple hubs, or multiple microhubs (as seen in the exhibit), might be the better
choice. Not only is it easier to travel to regional hubs than to a central HQ, at least for
employees who don’t happen to live near that HQ, but more dispersed hubs make the
in-person culture less monolithic. Moreover, microhubs can often be energizing, fun,
and innovative places in which to collaborate and connect with colleagues, which further
benefits organizational culture.

Productivity and speed

Now let’s begin to factor in other priorities, such as employee productivity. Here
the question becomes less straightforward, and the answer will be unique to your
circumstances. When tackling the question, be sure to go beyond the impulse to
monitor inputs and activity as a proxy for productivity. Metrics focused on inputs

4
 or volume of activity have always been a poor substitute for the true productivity
that boosts outcomes and results, no matter how soothing it might be to look at the
company parking lot to see all the that employees who have arrived early in the day,
and all those who are leaving late. Applied to a hybrid model, counting inputs might
leave you grasping at the number of hours that employees are spending in front of their
computers and logged into your servers. Yet the small teams that are the lifeblood of
today’s organizational success thrive with empowering, less-controlling management
styles. Better to define the outcomes you expect from your small teams rather than the
specific activities or the time spent on them.

In addition to giving teams clear objectives, and both the accountability and autonomy
for delivering them, leaders need to guide, inspire, and enable small teams, helping them
overcome bureaucratic challenges that bog them down, such as organizational silos and
resource inertia—all while helping to direct teams to the best opportunities, arming them
with the right expertise, and giving them the tools they need to move fast. Once teams
and individuals understand what they are responsible for delivering, in terms of results,
leaders should focus on monitoring the outcome-based measurements. When leaders
focus on outcomes and outputs, virtual workers deliver higher-quality work.

In this regard, you can take comfort in Netflix (which at the time of this writing is the
32nd largest company in the world by market capitalization), which thrives without limiting
paid time off or specifying how much “face time” workers must spend in the office.
Netflix measures productivity by outcomes, not inputs—and you should do the same.

No matter which model you choose for hybrid virtual work, your essential task will be to
carefully manage the organizational norms that matter most when adopting any of these
models. Let’s dive more deeply into those now.

Managing the transition

Organizations thrive through a sense of belonging and shared purpose that can easily
get lost when two cultures emerge. When this happens, our experience—and the
experience at HP, IBM, and Yahoo!—is that the in-person culture comes to dominate,
disenfranchising those who are working remotely. The difficulty arises through a
thousand small occurrences: when teams mishandle conference calls such that remote
workers feel overlooked, and when collaborators use on-site white boards rather than
online collaboration tools such as Miro. But culture can split apart in bigger ways too, as
when the pattern of promotions favors on-site employees or when on-premises workers
get the more highly sought-after assignments.

Some things simply become more difficult when you are working remotely. Among
them are acculturating new joiners; learning via hands-on coaching and apprenticeship;
undertaking ambiguous, complex, and collaborative innovations; and fostering the
creative collisions through which new ideas can emerge. Addressing these boils down
to leadership and management styles, and how those styles and approaches support
small teams. Team experience is a critical driver of hybrid virtual culture—and managers
and team leaders have an outsize impact on their teams’ experiences.

5
 Managers and leaders
As a rule, the more geographically dispersed the team, the less effective the leadership
becomes. Moreover, leaders who were effective in primarily on-site working arrangements
may not necessarily prove so in a hybrid virtual approach. Many leaders will now need
to “show up” differently when they are interacting with some employees face-to-face and
others virtually. By defining and embracing new behaviors that are observable to all, and
by deliberately making space for virtual employees to engage in informal interactions,
leaders can facilitate social cohesion and trust-building in their teams.

More inspirational. There’s a reason why military commanders tour the troops rather
than send emails from headquarters—hierarchical leadership thrives in person. Tom
Peters used to call the in-person approach “management by walking around”: “Looking
someone in the eye, shaking their hand, laughing with them when in their physical
presence creates a very different kind of bond than can be achieved [virtually].”3

But when the workforce is hybrid virtual, leaders need to rely less on hierarchical
and, by doing so, more on inspirational forms of leadership. The dispersed employees
working remotely require new leadership behaviors to compensate for the reduced
socioemotional cues characteristic of digital channels.

Cultivate informal interactions. Have you ever run into a colleague in the hallway and,
by doing so, learned something you didn’t know? Informal interactions and unplanned
encounters foster the unexpected cross-pollination of ideas—the exchange of tacit
knowledge—that are essential to healthy, innovative organizations. Informal interactions
provide a starting point for collegial relationships in which people collaborate on areas
of shared interest, thereby bridging organizational silos and strengthening social
networks and shared trust within your company.

Informal interactions, which occur more naturally among co-located employees, don’t
come about as easily in a virtual environment. Leaders need new approaches to creating
them as people work both remotely and on-site. One approach is to leave a part of the
meeting agenda free, as a time for employees to discuss any topic. Leaders can also
establish an open-door policy and hold virtual “fireside chats,” without any structured
content at all, to create a forum for less formal interactions. The goal is for employees,
those working remotely and in-person, to feel like they have access to leaders and to the
kind of informal interactions that happen on the way to the company cafeteria.

Further approaches include virtual coffee rooms and social events, as well as virtual
conferences in which group and private chat rooms and sessions complement plenary
presentations. In between time, make sure you and all your team members are sending
text messages to one another and that you are texting your team regularly for informal
check-ins. These norms cultivate the habit of connecting informally.

Role model the right stance. It might seem obvious, but research shows that leaders
consistently fail to recognize how their actions affect and will be interpreted by others.4
Consider the location from which you choose to work. If you want to signal that you

3
See Tom Peters blog, “The heart of MBWA,” blog entry by Shelley Dolley, February 27, 2013, tompeters.com.
4
Tomas Chamorro-Premuzic, “How to work for a boss who lacks self-awareness,” Harvard Business Review, April 3, 2018, hbr.org.

6
 tolerate virtual work, come into the office every day and join meetings in-person with
those who happen to be in the building. This will result in a cultural belief that the HQ or
physical offices are the real centers of gravity, and that face time is what’s important.

Come into the office every day, though, and your remote-working employees may soon
feel that their choice to work virtually leaves them fewer career opportunities, and
that their capabilities and contributions are secondary. By working from home (or a
non-office location) a couple days a week, leaders signal that people don’t need to be
in the office to be productive or to get ahead. In a hybrid virtual world, seemingly trivial
leadership decisions can have outsize effect on the rest of the organization.

Don’t rely solely on virtual interactions. By the same token, despite big technological
advancements over the years, nothing can entirely replace face-to-face interactions.
Why? In part because so much of communication is nonverbal (even if it’s not the
93 percent that some would assert), but also because so much communication involves
equivocal, potentially contentious, or difficult-to-convey subject matter. Face-to-face
interactions create significantly more opportunities for rich, informal interactions,
emotional connection, and emergent “creative collision” that can be the lifeblood of
trust, collaboration, innovation, and culture.

Media richness theory helps us understand the need to match the “richness” of the
message with the capabilities of the medium. You wouldn’t let your nephew know of
the death of his father by fax, for instance—you would do it in person, if at all possible,
and, failing that, by the next richest medium, probably video call. Some communication
simply proceeds better face-to-face, and it is up to the leader to match the mode of
communication to the equivocality of the message they are delivering.

In other cases, asynchronous communication—such as email and text—are sufficient, and

even better, because it allows time for individuals to process information and compose
responses after some reflection and thought. However, when developing trust (especially
early on in a relationship) or discussing sensitive work-related issues, such as promotions,
pay, and performance, face-to-face is preferred, followed by videoconferencing, which,
compared with audio, improves the ability for participants to show understanding,
anticipate responses, provide nonverbal information, enhance verbal descriptions,
manage pauses, and express attitudes. However, compared with face-to-face interaction,
it can be difficult in video interactions to notice peripheral cues, control the floor, have
side conversations, and point to or manipulate real-world objects.

Whatever the exact mix of communication you choose in a given moment, you will
want to convene everyone in person at least one or two times a year, even if the work
a particular team is doing can technically be done entirely virtually. In person is where
trust-based relationships develop and deepen, and where serendipitous conversations
and connections can occur.

Track your informal networks. Corporate organizations consist of multiple, overlapping,

and intersecting social networks. As these informal networks widen and deepen, they
mobilize talent and knowledge across the enterprise, facilitating and informing cultural
cohesiveness while helping to support cross-silo collaboration and knowledge sharing.

7
 Because the hybrid virtual model reduces face-to-face interaction and the
serendipitous encounters that occur between people with weak ties, social networks
can lose their strength. To counter that risk, leaders should map and monitor the
informal networks in their organization with semiannual refreshes of social-network
maps. Approaches include identifying the functions or activities where connectivity
seems most relevant and then mapping relationships within those priority areas—and
then tracking the changes in those relationships over time. Options for obtaining the
necessary information include tracking email, observing employees, using existing
data (such as time cards and project charge codes), and administering short (five- to
20-minute) questionnaires. It is likely that leaders will need to intervene and create
connections between groups that do not naturally interact or that now interact less
frequently as a result of the hybrid virtual model.

Hybrid virtual teams

Leadership is crucial, but in the hybrid virtual model, teams (and networks of teams) also
need to adopt new norms and change the way they work if they are to maintain—and
improve—productivity, collaboration, and innovation. This means gathering information,
devising solutions, putting new approaches into practice, and refining outcomes—and
doing it all fast. The difficulty rises when the team is part virtual and part on-site. What
follows are specific areas on which to focus.

Create ‘safe’ spaces to learn from mistakes and voice requests

Psychological safety matters in the workplace, obviously, and in a hybrid virtual model
it requires more attention. First, because a feeling of safety can be harder to create
with some people working on-site and others working remotely. And, second, because
it’s often less obvious when safety erodes. Safety arises as organizations purposefully
create a culture in which employees feel comfortable making mistakes, speaking up,
and generating innovative ideas. Safety also requires helping employees feel supported
when they request flexible operating approaches to accommodate personal needs.

Mind the time-zone gaps

The experience of a hybrid virtual team in the same time zone varies significantly from a
hybrid virtual team with members in multiple time zones. Among other ills, unmanaged
time-zone differences make sequencing workflows more difficult. When people work
in different time zones, the default tends toward asynchronous communications (email)
and a loss of real-time connectivity. Equally dysfunctional is asking or expecting team
members to wake up early or stay up late for team meetings. It can work for a short
period of time, but in the medium and longer run it reduces the cohesion that develops
through real-time collaboration. (It also forces some team members to work when
they’re tired and not at their best.) Moreover, if there is a smaller subgroup on the team
in, say, Asia, while the rest are in North America, a two-culture problem can emerge,
with the virtual group feeling lesser than. Better to simply build teams with at least four
hours of overlap during the traditional workday to ensure time for collaboration.

Keep teams together, when possible, and hone the art of team kickoffs
Established teams, those that have been working together for longer periods of time, are
more productive than newer teams that are still forming and storming. The productivity

8
 they enjoy arises from clear norms and trust-based relationships—not to mention
familiarity with workflows and routines. That said, new blood often energizes a team.

In an entirely on-premises model, chances are you would swap people in and out of
your small teams more frequently. The pace at which you do so will likely decline in a
hybrid virtual model, in which working norms and team cohesion are more at risk. But
don’t take it to an extreme. Teams need members with the appropriate expertise and
backgrounds, and the right mix of those tends to evolve over time.

Meanwhile, pay close attention to team kickoffs as you add new people to teams or
stand up new ones. Kickoffs should include an opportunity to align the overall goals of
the team with those of team members while clarifying personal working preferences.

Keeping track
Once you have your transition to a hybrid virtual model underway, how will you know if
it’s working, and whether you maintained or enhanced your organization’s performance
culture? Did your access to talent increase, and are you attracting and inspiring top
talent? Are you developing and deploying strong leaders? To what extent are all your
employees engaged in driving performance and innovation, gathering insights, and
sharing knowledge?

The right metrics will depend on your goals, of course. Be wary of trying to achieve across
all parameters, though. McKinsey research shows that winning performance cultures
emerge from carefully selecting the right combinations of practices (or “recipes”) that,
when applied together, create superior organizational performance.5 Tracking results
against these combinations of practices can help indicate, over time, if you’ve managed to
keep your unified performance culture intact in the transition to a new hybrid virtual model.

We’ll close by saying you don’t have to make all the decisions about your hybrid virtual model
up front and in advance. See what happens. See where your best talent emerges. If you end
up finding, say, 30 (or 300) employees clustered around Jakarta, and other groups in Kuala
Lumpur and Singapore, ask them what might help them feel a socially supported sense of
belonging. To the extent that in-person interactions are important—as we guess they will
be—perhaps consider a microhub in one of those cities, if you don’t have one already.

Approached in the right way, the new hybrid model can help you make the most of talent
wherever it resides, while lowering costs and making your organization’s performance
culture even stronger than before.

Andrea Alexander is an associate partner in McKinsey’s Houston office, where Aaron De Smet is a
senior partner and Mihir Mysore is a partner.

Copyright © 2020 McKinsey & Company. All rights reserved.

5
 ee Chris Gagnon, Elizabeth John, and Rob Theunissen, “Organizational health: A fast track to performance improvement,”
S
McKinsey Quarterly, September 2017, McKinsey.com.