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Is Hybrid Eroding Company Culture?
Human Resources

Is Hybrid Eroding Company Culture?

A Conversation with Chief People Officers

Egon Zehnder recently convened HR leaders from across asset management, wealth, and insurance firms in the U.K. for an online discussion about how hybrid working models are affecting company culture. We heard some intriguing experiences from these leaders, including that hybrid was nothing new for many – it existed before in most organizations, but at a smaller scale. What has changed is the environment, which is now more complex than ever before. But one message was consistent across all Chief People Officers (CPOs) – their work will now entail managing new expectations while addressing concerns from both employees and CEOs.
 
As you read on, you will find the participants' key reflections and how CEOs can adapt their styles to build followership and tap into their organizations’ greatest asset – people – to build, alongside Chief People Officers, a culture that generates great outcomes for all.

1. Hybrid is Not a Radical Shift but Managing it at Scale Is

It may come as a surprise, but one of the first things we heard as we opened up the call was, “Hybrid working is not new! We used to average around 3.5 days in the office pre-pandemic – now it’s probably around 2.5 days,” as one participant shared, and others agreed. 

So, what is it about the current environment that is changing? Post pandemic, as hybrid scaled up, so did concerns around productivity and human connection. Attendees agreed that employees want to be trusted and that top management will need to find ways to create and maintain that trust when we spend less time in person. 

For one CPO, teams that prioritize “clients first, teams second, and individual needs third” are on track for better outcomes. This leader’s company was already hybrid prior to 2020. Now, despite one less day per week in the office on average, performance remains high as a result of shifting internal conversations from attendance to performance, leaning into trust and judging performance based on output.

While there was general agreement among the participants, one leader pointed to the inclusion aspect of establishing mandatory office days, particularly for employees at the beginning of their professional careers. “Being at a professional setting enables those individuals to have more time to adjust, learn, be mentored,” the leader argued. Related to that point, all participants agreed that it was critical to embed meaningful connections when teams are on-site, but how to effectively do that is a common challenge for many.

An important lesson from these past years is that offering workplace flexibility is a competitive asset for employee attraction and retention because people simply want to have a choice. “Our tech teams average 1.5 days a week in the office. This has put more pressure on HR with more mediation needed. These are not easy conversations to have,” one leader explained. “We know that we build more culture and engagement when we get a certain amount of face-to-face interactions. But we also know that forcing people to go back to five days a week will be detrimental. CPOs need to be upfront with their team’s needs to be in the office.”

2. Are We Focusing on the Right Things? 

Connected to our first point is the question: Is office attendance the same as productivity? Are we more productive when we are in the office? In most CPOs' views, employees are producing the same, if not exceeding, past performance while working about the same number of hours as pre-pandemic levels. “It’s more a question of wellbeing. Our pace is much faster as of the pandemic, and this could lead to high resignation levels and even burnout. [Employees] need to understand the home and work distinction of switching off from work to home,” a leader noted. “Burnout is a concern, as the pace seems to not be dropping.”  

Despite improved performance, some senior business executives still believe productivity is being affected negatively. But why? “It seems to be a gut feeling, not data driven. It goes back to the question of trust and lack of trust that staff are productive. This is a minority of leaders who have that view, but they are noisy,” said one CPO.

It’s more a question of wellbeing. Our pace is much faster as of the pandemic, and this could lead to high resignation levels and even burnout. [Employees] need to understand the home and work distinction of switching off from work to home.

HR Leader

3. How Do We Thrive in Hybrid? 

Time in the office is limited and it will certainly continue to be that way. To strengthen office culture, many participants are being proactively intentional about the quality of time spent together, for instance, by having tighter coordination to integrate teams in the office. One organization is helping line managers to oversee the new environment and offer more assistance to those who are not embracing the hybrid model, which is part of the inclusion aspect of the work.

“Leaders who manage hybrid really well have shown to be more thoughtful, have a higher EQ, use support from HR and embrace a culture of feedback, including having regular conversations on what is working and what needs to change,” one CPO noted, highlighting that clear communication, having purpose to use the time together in the best way possible, and shared expectations are also part of the work on culture in this hybrid setting.

Onboarding and embracing those working from home and making them feel part of the conversation is also part of the challenge. Some models, such as those requiring more presence in the first weeks, as well as mentorship and intensive training, were some solutions being tested out by participants’ companies.

Leaders who manage hybrid really well have shown to be more thoughtful, have a higher EQ, use support from HR and embrace a culture of feedback, including having regular conversations on what is working and what needs to change.

Chief People Officer

The Role of Hybrid Leaders

Through Chief People Officers and HR business partners more generally, leaders can gauge the overall sentiment and culture pulse of their organizations. But the culture "starts from the top," and the CEOs are the ones who set the tone for the whole organization. In this more complex environment, many may need to do some work on themselves in order to become more effective leaders, and that was a shared view from our participants.

Interestingly, this also came through a recent Egon Zehnder global CEO survey which found that CEOs have increasingly started to commit to listening to diverse perspectives and are more frequently seeking feedback from new places – including team members, chairs, mentors, consultants, and other CEOs. Now, as the study points out, CEOs are seeking to hone their ability to become more adaptive, relational, and self-aware as part of their leadership development journey. This intentional effort to connect at a human level will be a key ingredient in their ability to re-build the culture in this hybrid environment. 
 
Organizations also need to reassess how they are choosing and developing their top executives. This environment of challenges and ambiguity calls for executives who are energized by, and can act on, human issues and those who show a strong ability to engage across the organization with hearts and minds. Identifying and further developing such leaders as role models and culture champions becomes paramount in the hybrid environment. Egon Zehnder’s Potential Model is an effective tool companies can use to do that because it evaluates individuals across four dimensions: Curiosity – willingness to learn and adapt; Insight – ability to problem solve; Engagement – their capacity to raise and nurture relationships; and Determination – resilience to manage the increasing blurred lines between home and office. These are essential elements for leaders to build followership in today’s world that craves purposeful leadership.

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