CEO Daily: Why Goldman Sachs is an outlier

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March 14, 2022

Good morning.

Post-pandemic life is beginning to come into focus, but post-pandemic work⁠—particularly the sort that used to be done in offices⁠—remains a blur. Fortune’s Geoffrey Colvin wrote last week about Goldman Sachs’ effort to get employees back to the office five days a week. “The secret sauce to our organization,” CEO David Solomon told him, “is [that] we attract thousands of really hard-working people who come to Goldman Sachs to learn to work, to create a network of other extraordinary people, and work very hard to serve our clients.” But Goldman is an outlier. Just a few steps down the street, American Express CEO Stephen Squeri laid out for me a radically different vision, saying that 40% of his employees will continue to work remotely, and the remainder will only be required in the office two days a week. “Hybrid” is the byword adopted by most companies—a catch-all phrase that is defined only by its lack of definition.

I have spent a lot of time on this subject over the last year and a half, reading research, talking to CEOs, and talking with Fortune’s own employees. Generalizations are difficult, since every person’s and every organization’s situation and needs are different. But some things can be said with a high degree of confidence:

• Productivity did not decline during the pandemic. Indeed, in most cases it went up. Increased flexibility and decreased commuting time made it possible for people to get more work done. Even Goldman Sachs acknowledges that—the past two years were the firm’s best ever.
• Organizational culture, in most cases, did fray. There is little doubt that the so-called “Great Resignation” is driven in part by employees who feel less bound to their current employer, and therefore are more willing to jump at opportunities that offer marginally better pay, career advancement, or alignment with their values.
• That said, pre-pandemic office cultures were often less than ideal. Research shows that while the sense of “belonging” at work declined for most employees, it actually increased, on average, for members of underrepresented groups. Office culture created feelings of exclusion.
• “Strong ties,” on average, have stayed strong. Teams of people who work together frequently have done a good job using digital tools to keep their members connected during the pandemic. And in many cases, their efforts have become more inclusive. Every box is an equal size on Zoom.
• “Weak ties,” however, have weakened. The serendipitous office interactions that helped lubricate cooperation between teams have evaporated, decreasing trust and making cross-silo cooperation more difficult. I’ve seen that at Fortune, and other CEOs confirm the same.


So where does that leave us? Struggling to create a future of office work that combines the best of the old with the best the new, and better serves the needs of both employees and organizations. That turns out easier to say than do. For instance, many companies embracing hybrid are leaving it to individual teams to decide which days to come to the office. But team leaders often struggle to balance conflicting demands of team members. And a team approach does little to address the fraying of “weak ties”—since different teams may gather at different times. Meanwhile, fully remote workers worry they’ll become second-class citizens as office culture returns.

There’s still a lot to sort out on this subject. Much of my knowledge comes from the excellent quantitative and qualitative research done by Brian Elliott, Sheela Subramanian, Helen Kupp and their team at the Future Forum, which was set up by Slack early in the pandemic to explore such questions. (Fortune is a partner of the Forum.) They’ve written a book, out May 17, that provides a useful roadmap for organizations trying to make their way to a better future. You can preorder here.

By the way, when I spoke with Squeri, he said his company’s data suggests business travel is coming back somewhat faster than expected. But that’s not because companies are sending more folks out on sales and customer visits. Rather, it’s because they are bringing people in for team meetings and other “culture building” exercises. He expects business travel to be back to pre-pandemic levels by the end of next year.

More news below.



Alan Murray
@alansmurray
alan.murray@fortune.com

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