The Challenges of Innovating From Home

My first experience leading teams working from home came over a decade ago at a cloud archiving startup in the suburbs of Boston. While I had managed geographically dispersed teams before, they were always centered around offices - e.g. Boston, Austin, Glasgow, Bangalore. But in this startup, I was responsible for teams that worked from home in different locations around the globe. While the technologies we used differ from today - e.g. IRC instead of Slack, Google Hangouts instead of Zoom - the benefits, patterns of work and challenges were very similar to our current post-pandemic world. Over time I would learn to deeply appreciate the benefits of a work from home culture: the ability to hire talent anywhere in the world, the increased productivity of engineers without commutes, and the personal flexibility afforded to our people. But I also struggled in this company to jump start a culture of innovation similar to what I’ve had in other office-based companies. This experience left me with the question that seems particularly relevant today: can you consistently create, foster and scale a culture of innovation in a work from home environment.

What Is Innovation?

To understand the challenge of innovating in a work from home environment, we should start by agreeing on a common definition of innovation. In a world in which we talk about every new idea as a “disruptive innovation”, the meaning of the word has been diluted. I propose the definition of innovation as: the discovery and delivery of substantial new value to customers and/or a business. Note: I choose my words carefully here. Something must be delivered, provide substantial new value, and must impact customers and/or a business for it to be classified as an innovation. I should also note there are many different types of innovation - e.g. innovation in business systems, innovation in product / service offerings, innovation in customer experience. In driving CloudHealth Technologies to what venture investors like to call product market fit - a.k.a. the ability to repeatedly sell and deliver a value proposition to a target market - we had to innovate simultaneously in marketing, sales process, product features, and customer service. If we had only innovated in our product, we almost certainly would have been one of the many failed startups in our market.

How Does Innovation Happen

While innovation tends to be unpredictable and non-linear / asynchronous in nature, one prerequisite is the existence of a culture of innovation. These are some of the elements that must be brought together to create a culture of innovation:

1. Diversity of thought / experience - Contrary to popular belief, innovation is a team sport. All great ideas are iterations on existing knowledge, and the more diverse experiences you can bring together, the more likely you are to innovate.
2. Connection to the customer & business - I have always appreciated the Amazon mantra: “innovating on behalf of the customer.” It provides a much needed direction for innovation. Unless you are in a research lab, innovating for innovation’s sake does not deliver business value. To innovate, your team of talented people with diverse thinking / experience need to understand the customer and business.
3. Business need - It is critical your people understand where there exists a need for innovation. In my previous CloudHealth example, our imperative was clear: achieve product market fit or become a failed startup. Everyone engaged in this mission understood what was at stake.
4. Commitment to collaboration - If you have all of the above ingredients, you still need to put them to work in an environment where your people can consistently collaborate, share knowledge, engage in high bandwidth discussions, and experiment.

Challenges of Innovating From Home

So why is it so hard to create, foster and scale a culture of innovation in a work from home environment? Let’s enumerate some of the issues:

• Absence of informal conversations - While I’ve seen teams try to replicate the informal conversations that happen in an office (e.g. Zoom coffee breaks), it never quite captures the spontaneity, quality and cross-functional nature of in-office discussions. The CTO of a local Boston startup said this absence of “micro-conversations” - i.e. short, frequent and unplanned discussions that might happen at the coffee machine or an after work drink - have impaired his ability to impart context and foster a culture of innovation. Another trusted local colleague added: “innovation is more like a cocktail party than a boardroom.”
• Reduction in high bandwidth conservations - While we can have high bandwidth conversations with colleagues working from home, they often suffer compared to our in-office equivalent. There is an energy that comes from in-person engagements and a natural ebb and flow in discussions. You also have the ability to leverage tools like white boards in support of ideation. Unfortunately none of our remote technology quite replicates the experience of being in a room with a white board and trusted colleagues.
• Scaling customer and business context - As an innovative organization changes and grows, each new member joining the team must be ramped with customer / business context. While a few organizations systematize this through bootcamps, training and job rotation, almost all rely on some form of tribal knowledge to impart business and customer context. The longer we work from home, the harder it is to maintain a high customer IQ across an organization - and thus the increased friction to delivering on a culture of innovation.

Ideas on the Future of Work

All of this should not entirely surprise us: humans are social animals, designed for a physical world. Technology cannot erase the millions of years of human evolution that have tuned us for in-person social connection (note: there is a reason we sometimes feel tired after a Zoom meeting, as our brain manages cognative overload in trying to compensate for a loss of social cues). So short of a revolution in technology, what can we do to ensure we maintain a culture of innovation? One of the common ideas I heard from industry colleagues is a plan to go back to a hybrid office culture as the pandemic subsides. Several are proposing 2-3 office days per week, with employees having flexibility for where they work the remaining days. The downside of this approach is of course the loss of some of the benefits of a fully remote team - e.g. the ability to hire talent from anywhere in the world, the cost efficiencies of not having an office, etc... But the upsides are clear: it gives us a model that has proven over time to support innovation. What was also clear in my various discussions was the near universal belief that a return to a full-time office culture was no longer a viable option.

Conclusions

With many businesses across the globe working from home, almost every organization is evaluating how their people will work after the pandemic subsides. While the consensus right now is leaning toward a world with fewer offices, I fear the cost on innovation could be substantial. Don’t get me wrong: I have deeply appreciated the ability to work from home in the last year. Cutting 2+ hours of commuting out of my day forced me to reevaluate how I spend my time. I should also make clear that most organizations have proven they can be highly productive when their people don't have to commute to an office. But with few exceptions, almost all the leaders I spoke with were struggling - like me in my cloud archiving startup over a decade ago - with the challenges of creating, fostering, and/or scaling a culture of innovation while working from home. Without some new technology and process innovations around remote work, businesses committing to full work from home may put themselves at a disadvantage over their in-office or flex competitors. In the words of the CIO of a financial firm in Chicago: “Innovation is the biggest casualty of working from home.”