Real Estate Reductions Of UK Banks And The Performance Of Virtual Teams

Adelicia Caree

Amy Wrzesniewski, Yale University Amy Wrzesniewski Three of the UK’s largest banks recently announced plans to accelerate their remote work arrangements and reduce their real estate footprint. What are they up to, and what can you learn from that? Specifically, HSBC plans to cut its global real estate footprint by […]

Three of the UK’s largest banks recently announced plans to accelerate their remote work arrangements and reduce their real estate footprint. What are they up to, and what can you learn from that?

Specifically, HSBC plans to cut its global real estate footprint by 40% over the next several years. It claims “our people could be just as productive working from home as in the office.” Lloyds Bank intends to cut office space by 20% by 2023, citing the pandemic as having “accelerated trends in employee expectations.” Standard Chartered announced late last year that it plans to offer flexible work plans to 90% of global staff – also by 2023.

What is going on here? It looks like a “perfect storm,” where four forces – the coronavirus, major city real estate prices, commuter overheads (in cost and time) and technological innovation – have come together. The combination of all four has promoted an assault on office space and career arrangements for many. Yet, unlike the situation of the fishing boat at the heart of the perfect storm metaphor, the lesson is not to expect the fishing to return to normal. It is to anticipate a different and ever-changing career seascape.

What does fit with the situation of the fishing boat is that both the UK banks and the boat depend on teamwork. How can you think about the kind of teamwork required in service industries like banking, when some or all team members work from home? How can you be a good team player, as either a leader or a contributor to team performance? I reached out to Yale University professor Amy Wrzesniewski, who teaches about Leading Global Virtual Teams, for her thoughts.

Michael Arthur: What’s different about virtual teams?

Amy Wrzesniewski: The old assumption about teams was that they were co-located in physical space on site, and stayed in close proximity to one another throughout the working day. However, I was involved in one early experiment with a West Coast technology organization that sought to have 10% of its employees work from home. One thing we observed was that many people who worked from home had made deliberate choices to do that, and not to seek further promotion. Another observation was that the work-from-home group were ascribed lower status by the on-site group. Also, the on-site group had a greater opportunity for trust-building.

Arthur: Do you always need trust?

Wrzesniewski: Trust can come more naturally between people in the same physical space. Also, since we’ve been working from home I’ve been shocked at the number of conversations I’ve had with people where they’ve said “Oh, I wish I would have called you sooner. I didn’t realize the difference a conversationI could have made.” Things that became 20 emails could have taken two minutes on the phone. I think it is a big switch for people, and it contributes to the number of missed opportunities and misunderstandings.

Trust is more important in some situations than in others. For many virtual work roles, people can work independently. For example, customer service representative tasks can be scripted and signposted beforehand. The organization can use basic metrics to measure individual productivity, and trigger customer feedback requests about the service they received. Leaders can also circulate aggregate statistics and accompanying encouragement to nurture a sense of belonging across the team. In many cases leaders can also encourage remote workers to identify with the goals of the organization.

Arthur: Going back to the problems of having a small percentage of workers at home, would one solution be to increase that percentage?

Wrzesniewski: Yes, but that raises a question about the distinction between synchronous and asynchronous working. In pure form, synchronous work is done within a team, with everyone present. In contrast asynchronous work is done alone, but can be shared with a team later.

At Yale we run an exercise with two offices to illustrate the tradeoffs. We establish two teams in different locations with separate sets of responsibilities for completing a project. They are allowed to communicate in various ways, but there are costs involved. Some teams proudly turn in their work and take pride in being on time and under budget. In the debrief they realize they didn’t understand what the other team was needing, or what would have been optimal for the project as a whole. My point is that, in a virtual context, we need to see communication as an investment and not as a cost.

Arthur: Improved collaborative software and the ease of videoconferencing and recording have made virtual work easier. The requirement to work from home has meant many people have become much more familiar with the technology, and more willing to join in. So what are the pitfalls?

Wrzesniewski: First, the pitfalls reflect the kind of work being performed. There’s relatively routine work, like the customer services work already noted, that can be done asynchronously. Then there’s work like computer programming or tax accounting where assignments can be coordinated after being performed asynchronously. But when you’re dealing with decision-making, or problem-solving, or choosing a fresh direction it becomes more complicated.

Arthur: So what do you do?

Wrzesniewski: Let’s take decision-making first. Decision-making is almost always done with limited information. So, an important first step is to determine when you have gathered the information you need to make your decision. Then you have to make sure all that information gets shared among the decision-makers. Next, the leader’s role is critical in facilitating a process in which people are heard. Finally, the team needs to believe the leader will effectively represent their decision inside the organization.

Arthur: In contrast to?

Wrzesniewski: In contrast to problem-solving or choosing a fresh direction. Both of these call for brainstorming, where the main point is to generate alternatives rather than exclude them. The School of Architecture at Yale runs a competition among first-year architecture student teams to design a building in six weeks, which calls for both innovation and decision-making. Along the way, the student teams often conduct several student charettes, to physically represent multiple solutions to the same problem in the structures they’re designing. Seeing the solutions helps in making further decisions – it saves the teams from having to argue about abstract ideas.

Arthur: So, everyone needs to value synchronicity, at least some of the time.

Wrzesniewski: Yes, but that may not be enough. You have to consider different time zones and countries and work spaces and so on. But that’s just a beginning.

Suppose your virtual team includes experts you’ve brought in from outside. You will need to make sure that both the rest of the team and each expert are willing and able to have a healthy exchange of information. That means going through preliminary stages of icebreaking, sharing background information, and building rapport. Only then will you have a situation where an expert shares effectively and the rest of the team appreciates what the expert has to offer. You also need to factor in the cost of everyone’s time to prepare.

Arthur: One more question. Does the perfect storm mentioned at the start of this interview provide an exceptional learning opportunity?

Wrzesniewski: It does, and my final word for people is to get comfortable working in virtual teams, on behalf of both your career and your team. Virtual teams are here to stay, but you need to know how to use them.

Michael Arthur: Thank you for your advice.

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