The Real Reason We've Become Less Productive at Work

Greg Griesemer • March 7, 2023

“U.S. workers have gotten way less productive. No one is sure why.”


That was the headline of a recent Washington Post article highlighting a trend that has vexed business leaders in the post-pandemic era. While other economic indicators, like growth, remain on the upswing, the U.S. saw a 4.1% productivity drop last year — the largest decline since 1948.


When it comes to how much companies are producing per each hour of work, the trendlines are clearly moving in the wrong direction. The Post and other outlets have raised a number of potential causes — from burnout to “quiet quitting.” But from my perspective, there’s a clear elephant in the room.


It shouldn’t be any surprise that worker productivity has taken a nosedive right at the same time that more organizations have begun summoning workers back to the office. Elon Musk has made no secret of his disdain for working remotely, requiring Tesla employees to personally gain permission for working from home. Disney CEO Bob Iger just mandated that all employees return to the office for a minimum of four days a week, while Washington, D.C. Mayor Muriel Bowser has implored President Biden to call more federal workers back to the office in attempts to revive the downtown economy in the nation’s capital. Many CEOs, COOs, and CFOs I work with feel the same and have decided it’s long past time to put the pandemic behind us and get back to collaborating in person.

That may well be the right decision for many organizations. But they’re setting themselves up for a nasty surprise if they don’t rethink the way they measure productivity in this new environment.


At the beginning of the pandemic, many leaders were pleasantly surprised at how well their companies continued to plug along during the unprecedented, almost overnight transition to virtual work. Looking back, it shouldn’t be such a shock; not only were most of us well accustomed to working with people in distributed locations thanks to modern technology, we also suddenly had hours added to our day. The National Bureau of Economic Research found that professionals could save an average of 72 minutes a day by eliminating their commute, to say nothing of “super commuters” who regularly travel long distances into major urban hubs from the suburbs.


Factor in time spent on office conversation, spontaneous meetings, and other fixtures of daily office life, and it’s clear that for many employees, remote work added extra hours every week to focus on work with fewer distractions.

Employees may have effectively lost the argument about the merits of virtual work, but their bosses may come to regret that they haven’t thought through the productivity implications of bringing everyone back on-site. Many workers accepted the trade-offs of early morning Zoom calls or being summoned with an IM at any moment because they were working from home; spending hours on a train or car will change that situation profoundly.


The larger challenge is determining what implications return-to-office has on planning for the future. Many organizations have made the mistake of looking in the rearview mirror at what their teams were able to accomplish over the past year without factoring in the potentially significant impact of a return to a 9 to 5 on-site or a hybrid model.


So what can companies do to prepare for what I believe could be as much as a 10–15% drop in productivity? A few steps I recommend:


1. Align work schedules with goal setting. This involves setting achievable and ambitious goals, regardless of whether a hybrid or in-office work model is introduced. Work schedules and their impact on employee engagement and productivity are critical aspects that should be discussed in tandem. However, from what I have observed, this is not happening in many organizations. Instead, senior executive teams and boards tend to set goals in a vacuum, without considering the impact of work schedules on employees and their ability to achieve these goals. By taking the time to discuss and understand the impact of major shifts on employees, organizations can ensure that they are creating a productive work environment that benefits both the employees and the organization as a whole.


2. Monitor employee engagement. Stay connected and track employee sentiments as plans and transitions are made. Many employees simply want to be heard, consulted, and respected. If there is any lesson from the recent bungling of employee layoffs at many tech companies — in which downsizing was poorly communicated with no advance notice — it’s that organizations can’t afford to treat their people, their most precious asset, recklessly. You may not ultimately agree on policy, but give your employees a full hearing and a fair shake.


3. Offer flexibility in performance management. Too many small companies still haven’t invested in a robust performance management approach; broadly speaking, I recommend most organizations introduce a quarterly process that allows them to track milestones achieved, missed, and changed throughout the year on a rolling basis. Not a revolutionary concept, but one that is not being followed consistently. This is especially relevant for organizations like smaller clinical-stage biotech companies — the kind I regularly work with. For those companies, a development midway through the year, like the FDA putting a clinical trial on hold, can scramble the plan that has been established for the rest of the year.


The important thing is to take action. Employees are clamoring for more flexibility around work while more companies are ordering workers back to the office. If organizations push ahead with aggressive return-to-work policies, they have to make sure they’re thinking through all the downstream implications of that policy shift — and the likely hit to productivity is a big one.

What Startups Entering the US Need to Know

By Greg Griesemer • September 23, 2024
In the quest for new customers, access to a wider variety of talent, and better risk mitigation, more startups are expanding internationally—even at a relatively early stage in their development. But in their pursuit of those benefits, the companies sometimes overlook the importance of aligning their policies and processes with the local standards of the markets they’re entering—and that can create big problems for them. It’s a story I’ve seen play out far too many times, especially for overseas companies setting up operations in the U.S.; organizations end up trying to bolt their own regulations and culture into an environment halfway around the world with a vastly different foundation. Here are some things to consider before you open up your branch office in New York or Los Angeles: Establish a solid global framework that allows for country-specific execution. I collaborated with a company headquartered internationally that had issued stock options on their local Stock Exchange—and then attempted to apply those same local taxation laws to their U.S. employees. What they didn’t consider is that U.S. employees don’t live under the local country’s jurisdiction. This mid-sized company, with about 9,000 employees, had global roles filled by individuals who had never worked outside of their home country. Suddenly, these employees were tasked with managing a global expansion. It's important to consider the full range of issues when you’re opening up operations overseas: everything from recruiting and hiring, to onboarding and benefits, to how policies will “come to life” in a country with different regulatory requirements and cultural norms. For example, that same company's U.S. employees were required to submit expenses back to headquarters, receive computers from the same location, and have their legal documents generated by inhouse counsel versed only in local law. This approach created enormous inefficiencies and disconnects that were detrimental to the business and dramatically impacted employee engagement and retention. Most companies think that when they expand to another country, they are merely establishing a division. They often do not consider the necessary connectivity back to the headquarters. Employees based around the world need to function as if they were in their home country, yet they encounter vastly different operational realities. Seemingly simple things like how you collect new employee data require compliance with U.S. and home country data-privacy laws, which can differ dramatically. All of these issues create a spiderweb of challenges that need careful planning and execution. Make sure you fully understand the legal, financial, IT, and HR implications of operating in the U.S. One key lesson is the coordination of these general and administrative (or G&A) functions. It is not enough to hire a local HR team; the entire G&A structure must be aligned with U.S. standards. For example, an offer letter drafted by an attorney in another country might not comply with U.S. labor laws, leading to potential legal issues. Another example I encountered involved where to situs benefits for an Asia-based company. The company had to navigate varying state benefit laws in the U.S. While they initially tied their benefits to the state of Delaware, where they were incorporated, they later had to switch to California, realizing that was the appropriate state, as the bulk of their employees were based there. This process was complicated by the fact that the Asian team wasn’t up to speed on the complexities of U.S. healthcare benefits, leading to delays and confusion. Finally, don’t forget: Culture eats everything else for breakfast. The way that teams approach performance management, time off, and employee relations – among other thorny issues -- can vary dramatically among countries. A company that does not adapt its practices to the local culture and embrace their nuances may place their long-term success within that market at risk, unnecessarily, and face employee dissatisfaction and high turnover. ° ° ° Instantaneous communications allow organizations to operate on a global landscape like never before. But be sure you know what you’re getting into. Companies entering the U.S. – or any foreign market – should take precautions to adopt an integrated and aligned global framework that allows the flexibility needed to execute according to the laws and customs of the country they’re entering. With thorough planning, some local expertise, and a heaping of agility, your organization will be better prepared to ensure a smooth and successful expansion into new markets like the U.S.

Building the Right Foundation: Why Startups Develop Accountability ‘Gaps’ — and How to Make Sure Yours Doesn’t

By Greg Griesemer • July 12, 2024
I’ve written about how the roots of success or failure are planted early in a startup’s life. Think of startups as being like new homes: If the basement doesn’t have the right piping, the water and electricity throughout the house aren’t going to function correctly either. In my mind there are three key pillars for building a proper foundation for startups: compliance, employee well-being, and accountability. (To read my articles on each of those pillars, go here .) In the final installment of this series about foundation-building for startups, I’ll dive into how to avoid accountability gaps. These gaps can arise due to the fast-paced, dynamic environments and often limited resources that are prevalent with startups. Because of those factors, there are inherent challenge in establishing clear roles, setting measurable goals, creating and maintaining consistent communication channels, fostering strong leadership, and implementing structured processes and documentation. Accountability and Consequences Accountability is about consequences. Without consequences, there can be no genuine accountability. Think of Harry Truman famously placing “The Buck Stops Here” as an ever-present reminder on his desk in the Oval Office. As a leader, you must be willing to create and enforce consequences for actions, or lack thereof. The seeds are often sown during the initial stages of a startup when, as the CEO or early-stage leader, you’re moving at the speed of light and taking on countless tasks yourself. Time is the most precious commodity, and there’s never enough of it. It’s not uncommon for entrepreneurs to hire friends or acquaintances without anywhere near the same level of scrutiny they would apply to hiring a stranger. A firm handshake replaces a thorough vetting process. This less buttoned-up approach can certainly allow you to move faster without layers of process, and building a startup can feel easier when you’re surrounded by people you know. But it can lead to significant problems down the line. When you bring in someone you’ve worked with before or who comes highly recommended, you can assume that their performance will match their reputation. It’s only when you start hiring individuals you don’t know that the accountability gaps become glaringly apparent. Recognizing these realities, what can you do to establish a simple foundation of accountability that you can build from as you grow? Levers of Accountability One of the first levers for establishing accountability is having a bonus program tied to performance. Some small startups might argue that they lack the financial means for bonuses, so they rely only on fixed salaries. The prevailing sentiment might be, “We can’t afford to pay bonuses; we’re already burning through cash as it is.” But my view is: You can pay more in bonuses today or pay more in the form of turnover costs tomorrow. A fundamental component of accountability is having a robust performance management system in place. You can’t wing this based on your gut. I implore every founder to put in place — from the beginning — a comprehensive framework for monitoring and holding employees accountable for their performance. Importantly, this performance management should be closely linked to compensation. If employees meet or exceed their goals, they should be rewarded accordingly — and vice versa. One reason startups neglect performance management is an attempt to be forward thinking. Some companies subscribe to the idea that traditional performance reviews are outdated, and so they embrace a more fluid, informal approach. This might seem refreshing, but it can lead to confusion regarding roles and expectations. I think students need report cards — and by the same token, talent needs a regular assessment, so they know what they are doing right and when they need to course correct. Another critical lever for creating accountability is addressing performance issues promptly. Are you comfortable with giving warnings and making it clear that certain behaviors or underperformance are unacceptable? This is the flip side that comes with hiring people you know well, maybe even relatives: Are you able to separate your relationship from the need to remove incompetent or, yes, even toxic, people from your team? It’s More than Rules Accountability isn’t just about setting rules and expecting everyone to follow them. It’s about creating a web of interconnectedness within the people, systems, and initiatives of your organization — ultimately enabling all of these elements to work together effectively. It’s human nature to wait to address a problem until it becomes too painful to ignore. Just like you may not visit an orthopedist until your shoulder starts to ache, startups sometimes overlook accountability elements until something breaks. In the context of the company, this might mean a top-performing employee threatening to leave due to the absence of a bonus program, or a sudden exodus of talent when vesting occurs without a clear retention strategy. These “pain points” are what ultimately prompt startups to take accountability seriously. Why not avoid all that pain to begin with?

Building The Right Foundation Series Part 3: How Startups Should Tackle Employee Well-Being

By Greg Griesemer • May 1, 2024
I’ve written about how start-ups have to create a proper foundation in the early days—just like a new home needs a good basic structure to ensure that it doesn’t collapse when you add a second floor, and the electricity still functions when you redo the living room. For a company, this foundation helps it create the constants that employees, customers, and partners can rely on amid the usual ups and downs that all companies go through. In my mind there are three key pillars for this foundation, none of which can be neglected: compliance, employee well-being, and accountability. In this part of the series, I want to explain why employee well-being is so critical. (To read parts one and two of the series, go here .) Defining What It Means for Your Organization I believe that to a large extent the future of the workplace hinges on employee well-being, especially as remote working environments continue to blur the porous line between work and the rest of our lives. Companies that neglect well-being run the risk of increasing burnout and turnover and reducing productivity and engagement—all of which can severely hinder the growth of a startup. On the flipside, I’ve seen firsthand how early-stage companies that get it right are talent magnets. They create an environment where employees feel valued and are aligned and working hard to achieve the business vision. As fast as many start-ups are moving to keep their momentum going, it’s vital for their leaders to carefully think through what employee well-being means for them. It's not just a matter of offering benefits; it's about defining a stance on the various dimensions of how you’ll approach your employees’ overall health, happiness, and satisfaction with work. This should include physical, mental, financial, and even spiritual considerations. What dimensions do you include in your definition of well-being? What do your employees value and expect? What programs and policies help ensure it? And what trade-offs are you willing to make in other areas of the business to make it a reality? From my conversations, I know CEOs and leadership teams can struggle on how to even begin answering these questions. In response I’ve offered a relatively simple framework, with a few questions for each, to get the conversations started. Rich dialogue usually spiders out from here. Getting Started Purpose ( Emotional ): Many start-ups I’ve worked with do not take the time to define their Vision and Values and miss out on the power that clarifying their “why and how” can bring to an organization. Employees seek out and stay with organizations that connect to their hearts and minds – sharing what’s in yours will allow that to happen. 1. Why does the company exist? 2. What is its passion? 3. What characteristics and behaviors will each employee exemplify? Health ( Physical, Mental ): Setting the direction of your benefits offering should be a top priority for companies that wish to remain attractive to current and potential future employees. Most employees do not worry about or even understand their coverage, but need peace of mind knowing that it’s there when they need it most. Getting the programs AND messaging right is key here. 1. What do we want our benefits to “say” about how we treat our employees? 2. Do we have the right broker partner to help us maximize our programs while optimizing our budget? 3. How will we educate our employees to keep them healthy and happy? Pay ( Financial ): Good, fair pay is a cornerstone of your well-being strategy and a non-negotiable. Competitive packages attract and keep talent, provide employees the means to care for themselves and their families, and are often viewed as a measure of equity. Spending time here will help create an environment where employees feel valued, respected, and motivated. 1. What benchmarking methods are you using to ensure competitiveness in your talent market? 2. How transparent do you plan to be on company matters? How openly will you share and communicate your decisions about pay equity, for example? Moving Forward Once you have answered these foundational questions, then you can design the policies and launch the programs to make those broad strokes a reality. At a time when talent is more mobile than ever, having clarity about the well-being of your startup's team is a strategic move that fosters a positive work environment and fuels long-term success. In my next post, I’ll take a look at the final critical piece of foundation-building: accountability.
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