Future of work & second-order effects of CoVID19
I believe that the future of work will look very different after the forced work-from-home experiment of COVID-19. Over the last two months, I have come to believe that remote work is here to stay. image source
100% distributed may work for a few functions inside a company or few companies because of their nature of business. But, I suspect the pendulum will swing back a bit — the intangible things that don’t work when you’re not in the same room take longer to surface, and right now we may be burning the social capital that was accumulated in person.
Going distributed and remote is a one-way door (Type 1 decision), companies will have a difficult time re-centralising the entire workforce.
Though I’ve lots of questions and don’t have the answers yet, this post covers a personal reflection & perspective on the future of work and its second-order effects. How it could transform our lives as individuals, workers and entrepreneurs.
This might be one of those perpetual arguments, like ‘open plan versus closed offices’.
Perks, yes the perks
Change happens slowly, then all at once.
This week in North America, a wave of companies representing over $800B in market capitalization announced they’re embracing distributed work beyond what’s required by the pandemic:
Back home in India, IT leaders who employ the majority of knowledge workers are taking steps to transition into this new work normal:
Unacademy poster child of ed-tech in India has allowed 60% of its workforce to work-from-home permanently for the foreseeable future.
Distributed first companies pre-pandemic.
Basecamp, Automattic, Wolfram, GitLab, Zapier, Digit and Buffer are a few companies which are distributed first by design. Stephan Wolfram has been a remote CEO for 28 years, Automattic has been distributed-first for 15 years and GitLab publishes its compensation adjustments by location, few locations:
San Francisco: 1
New York: 0.9
London: 0.65
Mumbai: 0.319
India everywhere else: 0.308
But why all at once?
To answer this question, just follow the money (source).
Hybrid companies have much higher OPEX/Earnings unless they are high leverage tech cos. It’s pricey to pay for a fully functioning office for every full-time equivalent(FTE) and a functioning remote work setup for every FTE.
Those fancy offices, catered lunches, and all the other luxuries — that all costs money.
Now, let’s assume we all go back to work shortly. To do so, companies would have to completely re-tool their offices to accommodate all their employees and meet the right health protocols. And that will require more real estate, which also costs money — a lot of it. The other challenge of having physical spaces is the very real threat of COVID-19-related lawsuits. No one will say this out loud, but we have not internalized the litigation risks of physical space in this post-pandemic era.
Which leads to the questions, how will be our future of work, are there any second-order effects?
Second-order effects & possible opportunities for the future of work
Failing to consider second- and third-order consequences are the cause of a lot of painfully bad decisions… Never seize on the first available option, no matter how good it seems, before you’ve asked questions and explored — Ray Dalio
Following section is a map of second, third-order effects and possible opportunities for the future of work. It helps to understand how it could transform our lives as individuals, workers and entrepreneurs. It was developed via a combination of listening to podcasts, reading reports, and consuming articles and personal reflection.
I’ve tried to cover the 4 areas:
work-from-home Office
work-from-home Fashion
Work
Employment
That said, at some point, we’ll share a pizza and cling those beer mugs with our colleagues again, and that will be glorious. I can’t wait. But, the illusion that the office was about work will be shattered forever, and companies that hold on to that legacy will be replaced by companies who embrace the antifragile nature of distributed organizations.
Disclaimer:
I’ve overlooked the angle of strain in personal relationships & work-from-home with kids around. About me, I’m a parent to a 13 mo. and I can say that work-from-home with toddlers and kids around is challenging when both parents are working.
Second-order effects and opportunities are solely my perspectives and it doesn’t reflect my employer’s strategy in any way possible.
Hat tip to Balaji S. Srinivasan for raising the red-flags and helping me understand the consequences of CoVID-19 on Twitter. I cancelled my overseas work visit in early February after reading his tweet-storms.
Reach out to me if you would like to discuss further on this topic. I am at