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Work from Home and The Collapse of Social Capital: Ignoring the Cultural Impact of WFH Will Erode Relationships and Results

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PROVO, Utah, Oct. 27, 2020 /PRNewswire/ -- For the past seven months, we've been the subjects of a massive social experiment: what is the impact of a work-from-home (WFH) workforce on measures of corporate health like culture, engagement, morale, etc.?

Leaders who have ignored the potential impacts of WFH have put their organizations at substantial risk.

A new study by VitalSmarts, a leader in employee learning and development, shows leaders who have ignored the potential impacts of WFH have put their organizations at substantial risk. On the other hand, commitment, engagement, and teamwork are stronger than ever in organizations where leaders are proactively engaging employees in spite of WFH.

The August 2020 study of 212 senior leaders and 2,037 front-line employees shows organizations where leadership has done little to address the new WFH dynamic are at risk of:

  • Employee turnover
  • Sinking productivity
  • Weakened employee commitment and connection
  • Strained team performance and teamwork
  • Lower employee engagement and morale
  • Weakened employee/manager relationships

When it comes to overall culture health, employees at organizations where leaders have done nothing to preserve or improve the culture in light of WFH are significantly more likely to report their culture has suffered than employees whose leaders have taken action.

For example, employees in organizations where leaders have done nothing are 200 percent more likely to report feeling substantially less committed to the organization.  

But the greatest cost of inaction is to social capital – a measure of people's willingness and ability to work together to get things done.

To measure social capital, researchers used a five-question scale that asked survey participants to report whether a few behaviors that indicate healthy group performance had increased or decreased since WFH. Specifically, do employees:

1) Respond quickly to requests from each other
2) Give one another the benefit of the doubt rather than taking offense
3) Sacrifice their own needs to serve a larger team goal
4) Take initiative to solve problems rather than waiting to be told
5) Invest more than the minimum effort required to keep their jobs?

According to the study, social capital is deteriorating greatly in organizations where leaders have taken no action to preserve culture. In other words, employees in these organizations are much less likely to respond quickly to colleagues' needs, suspect one another's motives, focus on their own narrow interests and do as little as possible to avoid being fired.

Social capital, researchers suggest, is not just a predictor of organizational success, it is a measure of leadership competence.

"The job of a leader is not to create results," says Joseph Grenny, lead researcher on the study and co-author of Influencer: The New Science of Leading Change. "Leadership is about creating a social system that creates results."

Grenny adds that leaders who ignore social capital are ignoring organizational health.

"Similar to market capitalization or financial capital, social capital is a fundamental measure of leadership effectiveness," says Grenny. "Ignoring your reserve of social capital is as dangerous as ignoring your reserve of cash."

While the research uncovered hidden costs of WFH, it wasn't all doom and gloom. In fact, the data also tells a surprisingly hopeful story. Leaders who are implementing simple culture interventions are avoiding the hidden costs of WFH and even seeing a culture and commitment boost from WFH.

According to employees who feel more committed to their organizations since WFH, simple interventions like the following had the most meaningful impact:

  • Offer virtual training at least as consistently as was offered prior to COVID
  • Implement new tools and technology to facilitate connection
  • Offer counseling or psychological services
  • Fun, off-the-wall, virtual events (i.e. virtual dance parties, online eating contests, etc.)
  • Ask for input on needs in company-wide and 1:1 meetings
  • Change work hours or implement a flex-time policy
  • Schedule non work-related meetings for team members to simply connect

One senior executive's story illustrates the impact of simply inquiring about employees' well-being:

"Prior to the WFH deployment, I met with all employees roughly once a quarter for updates. After deploying to WFH, I changed that cadence to weekly with shorter (15-min) All Hands updates. I did this because I was worried people would feel disconnected otherwise. The feedback has been very positive… I will be doing it this way going forward regardless of whether we all return to the office."

When it comes to improving social capital, some interventions had more of an effect than others. But encouragingly, almost everything leaders did to help made a difference. A key finding of the study is that leadership matters more than location. If leaders invest in increasing social capital, they can largely offset the cultural downsides of WFH.

Specifically, where leaders proactively build a sense of connection during WFH, VitalSmarts index of social capital is substantially higher. For example, employees are:

  • 60 percent more likely to respond quickly to requests from each other
  • Nearly three times more likely to give one another the benefit of the doubt rather than taking offense
  • Nearly three times more likely to sacrifice their own needs to serve a larger team goal
  • Over twice as likely to take initiative to solve problems rather than waiting to be told

Grenny, who is also the cofounder of VitalSmarts, says this study provides both a warning and a roadmap for leaders trying to navigate a new WFH landscape.

"For decades, studies of corporate culture have concluded that the further two people were apart physically, the lower their estimation of one another was likely to be," says Grenny. "Our findings suggest otherwise—distance isn't destiny. At the end of the day, the necessary condition to a productive social system is leadership not location. The forced WFH experiment of 2020 suggests it is possible for leaders to create strong social capital without physical proximity and doing so is absolutely vital."

About VitalSmarts: Named a Top 20 Leadership Training Company, VitalSmarts is home to the award-winning Crucial Conversations®, Crucial Accountability®, Getting Things Done®, The Power of Habit™, and Influencer Training®, and New York Times best-selling books of the same titles. VitalSmarts has consulted with more than 300 of the Fortune 500 companies and trained more than 2 million people worldwide. www.vitalsmarts.com

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SOURCE VitalSmarts

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