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Remote working past a COVID-19 world

In the last 6 months, the majority of knowledge workers (and school kids and many others) have gotten their fair share – and more – of video conferencing and working remotely. Plenty of research, articles and webinars have popped up touting the benefits of remote work, and that the way we work may have permanently changed and so on. But can we draw any form of firm conclusions about the future of work post a COVID-19 world?

If you’re like me – who is used to being fairly often on the move, visiting different countries, re-uniting with colleagues and friends in global offices, attending trade shows – sitting day after day, week after week, in the same location, with video conferences being the only way to connect face-to-face (or is that a contradiction in terms?), you have probably come to the conclusion that the adjustments you have had to make due to the pandemic pretty much suck. I miss seeing my colleagues in person, I miss being in different countries, I miss seeing my family overseas, heck I even miss airplanes and airports (although just ever so slightly and not very often). While there are certain things that are much better about not traveling (i.e. seeing the kids a lot more), there are some things that are not (i.e. having to deal with the kids a lot more). 

Photo by Chris Montgomery on Unsplash

Being all remote is not for everyone, and in fact, in some cases the lack of physical proximity can reduce the quality of work. Speaking for the technology sector, I doubt anyone feels they need to communicate more. There is no shortage of video calls and emails, but what is lacking is informal communication. In some professions, informal communication actually increases critical formal communication. Several studies, including one by Martin Hoegl published in 2001 showed that team communications within software development drastically increased when developers were in the same building, but even more if they were on the same floor in the building. As such, the study argues heavily for physical presence. However, ways of working together has changed remarkably since 2001, and the tools we now have at hand go a long way to make up for what we lose by not physically being together.

The lack of being able to travel is also an issue where the temporal distance – the time zone difference – are great. If you have a global role today, it means getting up early and staying up late, which over the long run can be a strain. A new study published in HBR, “The Effects of Temporal Distance on Intra-Firm Communication: Evidence from Daylight Savings Time“, shows that temporal differences have a huge impact on the nature and frequency of communications (a difference often mitigated by business travel). The bigger the difference, the less communication. Of course, equating increased communication with increased results and efficiency is a fallacy. While in software development, increased communication between developers may be critical, in other roles it can be a distraction. It’s been a while since I’ve heard in a work environment that we need more meetings. But few would doubt that colleagues who at least see each other in person from time to time probably work better together. Partly because social barriers get been broken down, and relationships between colleagues gets stronger, but also that certain types of creative problem solving are just better in person. 

The traditional model of always going to the office however has hopefully sufficiently been debunked. When Marissa Mayer back in the day mandated all Yahoo! employees go to the office, I thought she was out of her mind. The logic did not make sense, and if anything has been proven in the last 6 months, working remotely works quite well for knowledge based industries and in fact can lead to employees working too much (which by the way was known long before this year).  There is no longer a reason to believe that remote work is detrimental to corporate performance. For organizations to succeed in such a setting though, it’s not enough to just hand out webcams and mandate that they are on for calls. Companies must have a conscious relationship to how they communicate and disseminate information. The tools that are used to collaborate are hugely important, and if you rely just on email and video conferences, you are doomed to fail. My current employer is on GSuite, and I have quickly become a fan of how easy it is to share and collaborate on documents, and also to easily search for documents based on the content. There are also plenty of other tools out there like Asana, Slack, Monday, etc. that allows for not only implicit knowledge to be shared, but also where you can have an outlet to capture and share tacit knowledge – the knowledge that is within a person that is often shared in meetings and interactions, but that can indeed be very hard to capture. Ensuring all forms of knowledge is captured and easily shared will be the key for companies who rely on the success of its knowledge workers to build value together. And unfortunately it is likely going to take several tools – as no single tool delivers everything needed for communications and knowledge management.

I have worked in a semi-remote fashion for nearly 20 years, so relying on digital communication tools is nothing new for me, but exclusively relying on them is, and I am far from convinced that working remotely only will in any respect represent the future of work. Either end of the spectrum is not good – there has to be a balance.  I think that a model which does allow for remote work, but occasional physical get-togethers is a model which will prevail. Whether that is at the 90/10, 50/50 or 10/90 end of the spectrum remains to be seen – and will vary not only by company, but by job role. Corporate culture, employee characteristics (years of experience, whether they are self-starters, etc) and the tools available are hugely determinant. When we get past the pandemic, corporations employing knowledge workers will be faced with the challenge of implementing a hybrid model, with balancing employee needs and desires to that of their roles, as well as ensuring the tools are in place to support it. So much has changed in the last few months, and so much will change going forward, and it surely will be interesting to observe how companies implement this the best – as doing it right could potentially change competitive dynamics in an industry. Plenty of research material on this to come I’m sure…

This article represents my own opinions, and not necessarily those of any past or present employer.

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The day I left my wallet

It was supposed to be the perfect father/daughter day. Beautiful California sunshine, school holidays, and we were headed for Waterworld. After an hour drive, just as we pull into the parking lot to pay for parking, I realized I forgot to bring my wallet. Unfortunately not the first time I’ve done this, and normally a very frustrating experience causing me to be angry at myself – but luckily I’m a payments/tech geek and figured ‘Hey, I have Samsung Pay. No worries’. There was no way I was driving back, so to make this a good day, Samsung Pay would just simply have to do.

I had my doubts of course. I’ve had experiences where Samsung Pay flat out did not work, and I’ve had plenty of uncomfortable experiences with people behind me when I’ve been fumbling with the finger print reader, feeling the increasing annoyed expressions in my surroundings. But my day with only Samsung Pay gave me a good insight into the state of mobile wallets in general.

1. Design matters

Samsung Pay does really work most places (well, the machine at Waterworld that collects payments for lockers has a magnetic stripe inside the machine, so no, that did not work and I had to use the car as a locker which was inconvenient but ended up saving me $12, so….), but there are inherent flaws in the Samsung Galaxy S6 implementation. First, the finger print reader is less than stellar, and it may take several attempts for it to work. Second, it takes what seems like forever to retry a finger print read. In reality probably only 3-5 seconds, but there is no reason it should not be instant to retry.  This IS a problem, as delays lead to uncomfortable feelings about causing them, and that will kill adoption. The S8 has the fingerprint reader on the back side of the phone, which also has led to frustrations among users.

In comparison, I have used Apple Pay a lot, and the finger print reading nearly always works at the first try, and retry can be done in less than a second. I.e. my level of comfort is significantly higher. This matters.

2. Infrastructure needs to support the experience

I am glad I had my Samsung phone as I know at least it theoretically works everywhere. While Apple Pay does work nearly flawlessly – and is starting to be more convenient than pulling out my card – the lack of acceptance means simply I would never leave my house with just my iPhone.

But the mobile payment infrastructure flaws came blatantly obvious when I tried to pay for food at Waterworld. For some reason, the cash register is completely behind a wooden panel. So, in this case, I had to actually hand the phone to the cashier, whereupon I started hearing “That doesn’t work here”, and I reply “Yes, it does. This is not Apple Pay”. After back and forth 3 times, followed by 2 attempts by the cashier who held it too far from the magnetic reader, I went demonstratively behind the panel and held my phone to the reader, causing her face to be red of embarrassment – or possibly anger (and possibly slightly impressed that it did work).

My second attempt was much better when at another concession stand I was buying a slurpie for my daughter (No, not me. Seriously. Don’t touch the stuff. Except maybe a sip). The register was right there, and I got the beep within half a second of holding the phone up, bringing a huge surprised look and a smile to the cashier. I could not help myself and said “Hey, it’s a kind of magic”. Que Freddy Mercury.

The lesson though is that while the phone may work on most readers, unless the reader is close enough for you to reach over and do it, given a general lack of awareness of Samsung Pay, the act of paying is likely to be a painful affair where you either feel you are reaching over inappropriately or you end up in a semi-argument with a cashier that it really, really does work, you just held it wrong. Only the hard core nerdy payment geeks like me will endure such an experience for a second attempt, which means adoption of this may be a while out (possibly to a point where NFC or other more seamless methods are ubiquitous).

3. It needs to better than the present experience

For consumer behavior to change, you need a huge improvement over the existing experience. Taking my card out takes seconds, and generally works flawlessly. Ask yourself – will you feel good about leaving the house and only bringing your phone to pay? Most likely not. And this means mass adoption is not going to be there for some time. When paying with your phone means a) it works everywhere, b) it’s fast and without technical glitches, c) you get a better experience than paying with your card (like not having to sign, which helps for US which does not have chip/pin, AND you get some additional benefits like on the spot discounts etc, etc), only then will there truly be mass adoption. But will we all eventually leave without our wallets and feel good about it? Highly likely.

4. The future is already here

The Singapore VC firm Life.SREDA writes in their Money of the Future report: “Only geeks and early adopters use [Apple Pay, Samsung Pay, etc] frequently, as they are inclined to test new solutions or make themselves fashionable and advanced.” – while I am glad to admit I’m both a geek and early adopter, the Waterworld experience was hardly about me trying to be fashionable and advanced, and certainly, my points above need to be universally addressed for take-up to happen. When addressed, paying with your mobile will be the preferred choice for most.

One need only to go to China (and India) to understand that paying with your phone is now truly the de facto experience. But that is because the Chinese are way ahead in mobile payments infrastructure, and have also created a very good and simple user experience using QR and barcodes (similar to what you can see Starbucks is doing in the US). And this is not one of those “But yeah, it’s China, and it will never happen here” moment. This is not a repeat of the failure of DoCoMo services to go beyond Japan. The changes are fundamental, and they will eventually be everywhere.

Disclaimer: The views expressed on this post are mine and do not reflect the views of any clients or companies I am currently working for or have worked for.

Posted in Payments, The Business of Mobile.

Bay Area living: How long can this last?

There has always been a perception that New York is a very exclusive place.  Of course, when you stack 1.6m people in the tiny little area of Manhattan, and 8,4m in the city as a whole, it will cause some pricing pressure.  At an average cost of $3,692 for a 2 bedroom apartment though, New York is starting to look cheap to San Francisco’s $5,043.

Just how crazy is it that you need to make over $216,000 in salary for that to be affordable? Well, you need to be in the top 5% of income earners in the US – that’s how crazy it is.  And the fact is that most people in San Francisco cannot afford living there – by a long shot.

Just how big is the problem?  I’m sure everyone in SF just gets paid through the nose, which is why it does not matter? Well, let’s look at median house price compared to median income.  It’s largely believed that a ratio higher than 3 causes issues, i.e. when you have to pay 3 times your gross annual income for a house, it starts becoming painful.  How does San Francisco stack up here? It’s largely creeping towards 10x!

House price indicator (Source: The Economist)

In San Francisco, the price to buy or rent is 2-3 times higher than the US average. If you look at the recent growth, 7 figure house prices have gone from 19.6% to over 50% since 2012 (Btw, if you click the link, note that the top 3 cities are all in the Bay Area).

This means in general living in the Bay Area means you are screwed. People in your company in those other offices around the US likely experience significantly less financial stress and have a significantly higher disposable income.  Take into effect that California also has a state income tax, one wonders when you’ll start seeing armadas of U-Haul trucks.  Thank goodness there is one positive stat:

Sun in Burlingame

One cannot dismiss the fact that the Bay Area has a problem.  The un-affordability does not stop with housing. High cost of living drives up the prices for other goods and services as inhabitants struggle to survive. For instance, a nice 3 course meal in SF is 50% more expensive than say Austin, Texas – another tech hub. Of course you can cut down on dining, and you can stay less fit (which costs 60% more), but if you have kids for instance and need to send them to daycare, well then expect to pay through the nose.

If you think this just leads to self-selection and no issues in society, think again. Crime is on the rise in virtually every category, and in general, income inequality has been very closely linked to “unhappiness” or societal issues. The Bay Area is arguably the world’s most important hub for innovation in technology, but if nothing is done over the long term this advantage could disappear.  Will it be bad for innovation?  Probably not, as capital and talent can flock elsewhere even though the Bay area still has a lead on this:

VC investments

However, as international talent is highly sought to drive this innovation, as 60% of top 25 startups are funded by 1st or 2nd generation immigrants, the high cost of living combined with outdated immigration laws helps drive or keep talent overseas.  If you do not think this will have an impact on the Bay Area at some point you need to think again.

So what can be done? And is there any willingness to do anything?  Rent control may be one answer, but there are arguments it may not work. The other answer seems to be to increase supply and build more housing. San Francisco seems to be way behind on this front, where 40% of SF’s housing was built prior to 1940, and even the new units being built seem to appeal only to the very wealthy. So where will this end for the Bay Area, for entrepreneurs, for innovation? Will it be Tulsa, here we come?   Somehow doubt that, but only time will tell it seems…

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