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Is Scotland making the right business investment, use of technology, and staff training to succeed?

Is Scotland is making the right business investment, use of technology, and staff training to succeed?  In a service economy, has flexible working really helped? Evidence this year is mixed, and remote working may unleash new competitive forces for Scotland’s businesses.

Moving a large part of the economy to working from home with little notice, has been a remarkable achievement.  And it is natural to conflate reduced travel time and improved wellbeing at home, with efficiency and progress.  But, my daily calls as an investment manager with a wide range of companies tell a different story.  A more nuanced picture is emerging, varying between sectors and dependent on who is being asked.  Productivity in complex services is hard to measure Management, staff and customers each have their own perspective.

A bigger economic challenge for Scotland is emerging from the rapid acceptance of remote working.  Once data is moved to the cloud and employees are remote, roles may be ripe for cost reduction.  Machine readable data become more amenable to artificial intelligence and automated methods.  This can open more work to those providing services from abroad.  It may seem surprising when disruption has encouraged manufacturers to shorten supply chains, that more sophisticated services may actually open up to a more competitive global labour market.

Certainly, there are benefits in flexible working; organisations can access a more diverse workforce with broader skills. But the sudden change to large scale working from home had little preparation and may even have reversed some of the hard won progress for groups that pioneered flexibility.  Evidence is emerging that the move in 2020 has placed a greater domestic burden of care on women.

Businesses and teams with previously established working from home seem to be coping well.  Some businesses - in the financial and enterprise support sectors for example - were already mainly online and cloud-based.  Flexible and remote working can be well matched to administrative or data-based activities.  But many businesses are finding working from home in customer-facing roles a much greater challenge.  Some businesses are simply not set up to route calls through to staff at home, and monitoring of the customer experience is difficult.  Few organisations are actively monitoring user experience or seeking candid feedback.  Services have a lot of inertia and typically involve trust.  In lockdown there is a natural reluctance to leave familiar providers, but eventually customers respond to a deterioration of service.

Working from home also brings negatives that may take much longer to crystallise.  Surveys may not truly capture engagement and morale. Some people rely on office routine, teamwork and interaction with colleagues to support their mental wellbeing.  No-one misses long commutes, or some of the dysfunctional characteristics of crowded city centres, but many genuinely want a balance between home and office and see an unreality to virtual online relationships.  Overwork may be a bigger risk without the visual cues of end of day that an office provides. Working in groups in an office brings collaboration, innovation and idea generation.  It can be hard to voice concerns about the change in practise, but it is important for employers to explore the right balance between home and office for each individual.

Stress can also be an unacknowledged problem.  Working from home has brought the new risk of digital “presenteeism” – being at one's place of work for more hours than is required. Is it healthy to look at emails outside working hours?  This feeling of never being off work can be a sign of job insecurity. And back-to-back online calls are so easily set up that it can be difficult to pause for breath or step back to gain perspective. Are employers reassuring their staff - conveying the trust that flexible working demands? Managers will need to think a bit more about the home environment of each team member and individual needs for support.

If the demands of lockdown are to lead to a permanent change in working it raises questions for society as well as organisations. Flexibility and remote working has the potential for wider inclusion; bringing different types of work to those outside cities and giving opportunity to groups with constraints on their availability. Can people take the flexibility they might have in a low paid junior role up into senior responsibilities?  That may be a particular challenge for women in the new flexible roles – work flexibility must be taken up to all levels.

The challenges include training, and in particular development of younger employees. In many professional and service sectors a key element of learning involves mentoring and coaching by experienced staff. For those new to work, personal development progresses by interaction with professionals and peers. Younger employees must be given the opportunity to develop their interpersonal and management skills through direct interaction with colleagues and clients. Zoom and Teams are no substitute for this.

There is much to learn about how to lead and manage teams remotely.  This ranges from building-in a bias to recruiting flexible talent, to how to ensure equality of opportunity for those not usually in the office.  This should cover not just working from home, but offering genuinely flexible jobs, part-time roles, job sharing and compressed work.  And offices themselves will need to adapt - not just shrink in city centres, but actually adapt the physical space to cater for more collaboration and hot desking.

Some managers privately admit that culture in an organisation is much harder to maintain without office attendance.  Organisational culture is a fragile concept.Significantly reduced face-to-face contact between team members may unsettle this culture and undermine risk management as well as performance.In future, organisations must develop practices to cement connections within teams and reinforce organisational purpose and values.

The old organisational model must adapt, but there was much about it that worked. Typically decision making and innovation in organisations is in teams.In services new clients were usually won via physical meetings. However, the communication tools that foster good remote working practice within organisations do not maintain the same easy contact with other businesses. There is a buzz to big cities that creates new activity, out of scale and connections. In a world where services begin to globalise, there may still be advantage in city office presence.

For organisations, workers and society as a whole, big challenges lie ahead.  There are dangers in organisations pivoting to a new operating model without more facts and analysis. 2020 has brought both opportunity and challenge to Scotland’s economy.

A version of this article was published in The Herald on 2/12/2020.