Leadership

– The purpose of an explanatory synthesis is to explain the topic at hand. First, explain the key points in each article (150 words).
-Next, identify key points of similarity or difference between the articles and explain their importance (150 words).

– This is not an argument synthesis – you do not need to take a stand or position on the topic.

– please use the three articles attached only.
– do not use outside references.
– please make the English words terminology simple and not very complicated.
Wdistant threats, which we call novel risks, can’t be managed by using a standard playbook.In the following pages we’ll explore the defining characteristics of these risks, explain how to detect whether they’ve materialized, and then describe how to mobilize resources and capabili-ties to lessen their impact.WHAT MAKES RISKS NOVELUnlike the more-familiar and routine risks a company faces, novel risks are difficult to quantify in terms of likeli-hood or impact. They arise in one of three situations:The triggering event is outside the risk bearer’s realm of imagination or The Risks You Can’t ForeseeWhat to do when there’s no playbookRobert S. KaplanProfessor, Harvard Business SchoolHerman B. “Dutch” LeonardProfessor, Harvard Business SchoolAnette MikesAssociate professor, Saïd Business SchoolAUTHORSELL-RUN COMPANIES PREPARE for the risks they face. Those risks can be significant, and while they’re not always addressed successfully—think Deep-water Horizon, rogue securities traders, and explosions at chemical plants—the risk management function of a company generally helps it develop protocols and processes to anticipate, assess, and mitigate them.Yet even a world-class risk manage-ment system can’t prepare a company for everything. Some risks are so remote that no individual manager or group of managers could ever imagine them. And even when firms envision a far-off risk, it may seem so improbable that they’re unwilling to invest in the capabilities and resources to cope with it. Such 40Harvard Business ReviewNovember–December 2020Victor Prado/The Licensing Project

experience or happens somewhere far away. These kinds of events are some-times labeled black swans, but they’re not inherently unpredictable. The global financial crisis of 2008, for instance, has often been described as a black swan because most banks investing in and trading mortgage-backed securities were blind to the risks embedded in their portfolios. They didn’t envision a general decline in real estate prices. A small number of investors and banks familiar with real estate and financial markets, however, did anticipate a mortgage mar-ket meltdown and earned huge profits by shorting mortgage-backed securities.Often, unforeseen risks arise from distant events at a company’s supplier. Take the case of a small fire in a Philips semiconductor plant in Albuquerque, New Mexico, in March 2000. Triggered by a lightning strike, it was extinguished by the local fire department within minutes. The plant manager dutifully reported the fire to the plant’s custom-ers, telling them that it had caused only minor damage and that production would resume in a week. The purchasing manager at Ericsson, a major customer, checked that his on-hand inventory of the plant’s semiconductors would meet production needs over the next couple of weeks and didn’t escalate the issue.Unfortunately, the fire’s smoke and soot and the extensive hosing of the facility had contaminated the clean rooms where highly sensitive electronic wafers were fabricated, and production didn’t restart for several months. By the time the Ericsson purchasing manager learned about the delay, all alternative suppliers of several of the plant’s wafers had already been committed to other companies. The component shortages cost Ericsson $400 million in lost revenues from the delayed launch of its next-generation mobile phone and contributed to its exit from this market the following year.Multiple routine breakdowns com-bine to trigger a major failure. Large, interconnected technologies, systems, and organizations can lead to a situation in which a number of events, each man-ageable in isolation, coincide to create a “perfect storm.” Consider Boeing’s development of the 787 Dreamliner. For this plane, Boeing introduced new struc-tural materials—composites rather than aluminum—to make the airframe lighter; required its first-tier suppliers to take unprecedented responsibility for design, engineering, and the integration of sub-assemblies; and replaced the hydraulic controls used in previous generations of aircraft with electronic controls that required large lithium batteries for backup. A Boeing engineer interviewed in the Seattle Times in 2011 noted that compared with all prior models, the 787 was “a more complicated airplane, with newer ideas, new features, new systems, new technologies.”Boeing experienced seven major and unexpected delays to the 787’s development, with commercial flights beginning three and a half years later than originally planned. The delays added more than $10 billion in devel-opment costs and forced Boeing to purchase a major supplier to prevent its insolvency. After the 787 was launched, its onboard lithium batteries caught fire during a number of flights, which led authorities to ground all the planes for several months. The company told Reuters, “We made too many changes at the same time—new technology, new design tools, and a change in the supply chain—and thus outran our ability to manage it effectively.”The risk materializes very rap-idly and on an enormous scale. IDEA IN BRIEFTHE PROBLEMEven a company with a world-class risk management system will come up against novel risks it has not planned for.WHY IT HAPPENSSome risks are so remote that no manager imagines them. And even if the firm does envision them, it may be unwilling to invest in the capabilities and resources to cope with them because they seem so unlikely.THE SOLUTIONRecognize novel risks by being alert for anomalies, interpreting reports from the field, and scanning for unusual events outside your industry. Once you’ve identified a novel risk event, mobilize an incident team or empower your people on the front lines to deal with it quickly.The clearest signal that a novel risk is emerging is anomalies—things that just don’t make sense. This sounds obvious, but most anomalies are difficult for people to recognize.42Harvard Business ReviewNovember–December 2020
Organizations train personnel, design equipment, and map out responses to address foreseeable risks but judge it impractical or uneconomical to prepare for events that are beyond a certain magnitude. Some events, moreover, are so huge that they make even the best cost-benefit analysis obsolete and hap-pen so fast that they overwhelm planned responses. We call this category tsunami risks, after the Fukushima nuclear plant catastrophe in Japan, an archetypal example.Fukushima, like many other power plants in Japan, had been designed to withstand rare events such as earth-quakes and ocean waves up to 5.7 meters high. But the Tōhoku earthquake in March 2011 generated a remarkable 14-meter-high tsunami that swept over the plant’s seawall, filling its basements and knocking out the emergency gen-erators at the plant, which had already suffered severe damage from the quake. The impact was overwhelming: The plant had three nuclear meltdowns and three hydrogen explosions, releasing radioactive contamination throughout the local region and forcing more than 100,000 people to evacuate. During the next three years, Tokyo Electric paid out more than $38 billion to compen-sate individuals and businesses for the disruption.The Covid-19 pandemic is similar. The world was already familiar with managing global outbreaks of viruses that cause acute respiratory symptoms, including the SARS epidemic in 2003, H5N1 “avian” flu in 2004 to 2006, and H1N1 in 2009. The CoV-2 coronavirus, despite being a variant of SARS, was novel because people it infected were both asymptomatic and contagious for an extended period, spreading it much farther and faster than most national health care systems had planned for.Companies can sometimes avoid the worst consequences of novel risks by using scenario analysis, a routine risk management tool, to identify them and then taking action to mitigate them. But even if applied frequently, this tech-nique will not cover all eventualities, and sooner or later companies will confront risks they’re unprepared for.RECOGNIZING NOVEL RISKSThe clearest signal that a novel risk is emerging is anomalies—things that just don’t make sense. This sounds obvious, but most anomalies are difficult for people to recognize or process.Take two of the cases already described. An experienced purchasing manager for semiconductors should arguably have realized that the soot, smoke, and large quantities of water that accompany even a minor fire could compromise the integrity of clean rooms. A senior risk manager at Boeing, presum-ably familiar with complex engineering projects, should have anticipated that novel risks could arise in the develop-ment of a plane when first-tier suppliers were performing major tasks they had never done before, the plane incorpo-rated materials never used before at such a scale in a large aircraft, and familiar analog hydraulic controls were replaced with entirely new electronic ones.Failures to pick up signals are rooted in well-documented biases. Decades of behavioral research show that people pay attention to information that con-firms their beliefs but disregard it when it conflicts with them. They often dis-miss repeated deviances and near misses as mere blips. This “normalization of deviance” gets reinforced by groupthink, which causes team leaders to suppress or ignore concerns and anomalies reported by lower-level personnel.Biases are also often reinforced by standard procedures. In 1998, for example, a Deutsche Bahn high-speed train derailed in Lower Saxony, Germany, killing 101 people and seriously injuring 88 others. But the accident could have been avoided. A passenger had seen a large piece of metal (later determined to have been a section of a wheel) emerge from the floor into a cabin, where it became wedged between two passenger seats. Yet he didn’t activate a nearby emergency brake, because a prominently displayed sign warned that travelers would be subject to a large fine if they pulled the brake without authoriza-tion—a measure intended to prevent unnecessary train stoppages.The passenger dutifully went to find a conductor, who had the authority to activate the brake but still failed to do so. When the conductor was sued for negli-gence by Deutsche Bahn, he successfully defended his actions by claiming that he had followed an established rule that required him to visually inspect any problem (which in this case was several carriages away) before triggering an emergency stop. His adherence to the protocol for managing a routine risk delayed his response to the novel event—with catastrophic consequences.The bottom line is that recognizing a novel risk requires people to sup-press their instincts, question their assumptions, and think deeply about the situation. This System Two think-ing, as Daniel Kahneman terms it, is unfortunately more time-consuming and more demanding than making a rapid evaluation and following the rules. And in cases like the train derailment, the pressure of the moment makes it more rather than less likely that people will default to their instinctive thinking mode. Given those problems, companies cannot rely on managers familiar with routine risk protocols to identify novel risks. They should instead:Empower a senior executive to worry about what could go wrong. At Nokia, Harvard Business ReviewNovember–December 2020 43
James Day/Gallery Stockanother large customer of the Philips Albuquerque semiconductor plant, information about any unusual event in a supply chain had to be reported to a senior vice president of operations, logistics, and sourcing. This executive, who had few day-to-day operational responsibilities, served as the company’s top troubleshooter, or—as we like to say—its “chief worry officer.”This role differs from that of a tradi-tional chief risk officer, whose priorities are to improve the management of known routine risks and to identify new risks that can then be transformed into manageable routine risks. By contrast, the worry officer has to quickly recognize the emergence of any novel risk and mobilize a process for address-ing it in real time.When Nokia’s purchasing manager received the call about the plant fire, he checked that existing inventory levels were adequate and logged it as a routine event, just as his Ericsson counterpart had done. But following protocol, he reported it to the senior VP as a supply chain anomaly. The VP investigated further and learned that parts shortages from the plant could potentially disrupt more than 5% of the company’s annual production.The VP mobilized a 30-person multi-function team to manage the potential threat. Engineers redesigned some chips so that they could be obtained from alternative sources, and the team quickly purchased most of the remaining chips from other suppliers. But there were two types of chips for which Philips was the only supplier. The VP called the Nokia CEO, reaching him on the corporate plane, briefed him about the situation, and got him to reroute the plane to land in the Netherlands and go meet with Philips’s CEO at Philips headquarters.After the meeting the two companies agreed that “Philips and Nokia would operate as one company regarding those components,” according to an interview the troubleshooter gave the Wall Street Journal. In effect, Nokia could now use Philips as its captive supplier for the two scarce chips. The relationship allowed Nokia to maintain production of existing phones, launch its next generation of phones on time, and benefit when Erics-son exited the mobile phone market.Digitize event reporting. Digital technology can be a powerful tool in the search for anomalies, as the experiences of the Swiss electricity utility Swissgrid illustrate. Through a user-friendly mobile app, RiskTalk, Swissgrid’s employees can quickly report safety violations, maintenance problems, and imminent equipment failures. A rotating group of risk, safety, and quality managers monitor the app’s messages in a central control room, applying data analytics to connect the dots between these small and unrelated reports and identify potential novel risks. A control room manager who believes that a low-probability novel risk might materialize can analyze it more deeply to determine whether to implement a nonroutine response. In effect, members of the team serve as the company’s chief worry officers, empow-ered to think deeply about and respond quickly to novel risks.In addition to encouraging employee reports, companies can look outside their organizations for information 44Harvard Business ReviewNovember–December 2020
about novel risks. Swissgrid has joined forces with the Swiss army, the Swiss national police force, and several other federal and state agencies and corpo-rations to develop a real-time national crisis- management platform that can be accessed by all parties involved. Each entity uses the platform to report any issue it learns about, such as a forest fire, an accident triggering a massive traffic jam, or unusual snow conditions or avalanches in the Alps. Risk managers at Swissgrid, connected to the platform, get early visibility into external situations that could potentially interrupt the reliable flow of electricity to customers.Imagine what if. Companies can also identify potential novel risks indi-rectly—by looking at what has happened in other industries and countries and then asking themselves, “What if that happens here?”At Swissgrid the senior risk officer keeps an eye out for unsettling develop-ments like the Swissair bankruptcy and the high-profile cyberattack on the ship-ping giant Maersk. Following any such event, he schedules an extraordinary- risk workshop attended by senior managers and risk officers from every business unit and by external subject- matter experts. After deliberation, the group creates an action plan that can be deployed should something similar occur in Swissgrid’s supply chain. This systematic process helps the company spot potential novel risks and transform them into managed ones.As Swissgrid’s CEO, Yves Zumwald, has noted, “Our business, with indi-vidual risks and intricate connections spread across all our units, is too com-plex for any one individual to fathom. Yet we cannot wait for problems to show up and then solve them like fire fighters. [The systems we have put in place] enable us to solve a lot of problems proactively.” Those now include many risks that would be complete surprises to most other companies.RESPONDING TO NOVEL RISKSFor all a company’s efforts to anticipate what-ifs, novel risks will still emerge, and companies will not have a script or a playbook for managing them “right of boom,” or after disaster has struck. Also, nothing in the backgrounds of operating or risk managers will help them respond quickly and appropriately. In this situa-tion a company needs to make decisions that are (a) good enough, (b) taken soon enough to make a difference, (c) commu-nicated well enough to be understood, and (d) carried out well enough to be effective until a better option emerges. A company has two options for right-of-boom responses:Deploy a critical-incident-manage-ment team. This standard approach to a novel risk—creating a central team to oversee the response—works well when an event has widespread impact but doesn’t need a complete, immediate solution.The team should consist of employ-ees from different functions and levels of the company, external people with relevant expertise, and representatives of stakeholders and partners. For a novel event such as the Covid-19 epidemic, for example, a company’s critical-incident team would need people with medical, public health, and public policy exper-tise, which the firm might not have in-house. For managing the conse-quences of delays in large-scale product development—for instance, for a new aircraft—the team should work closely with its suppliers. Over time, as the situation changes and new information emerges, the membership of the team may change.The team deciphers the situation, identifies the most important issues, and establishes priorities among the firm’s multiple, and sometimes competing, constituencies and interests. It can delegate specific questions, such as how to access and preserve cash and how to manage key components in the supply chain, to other individuals or subgroups to examine, but the team must main-tain responsibility for coordinating all aspects of the response.The team usually meets at least daily and more often if the event is evolving rapidly. It manages communication within the firm and coaches the CEO on external communications. All communi-cations should be brutally honest about the reality of the situation, highlight clearly what the organization doesn’t yet know, provide a rational basis for hope, and empathize with all stakeholders affected by the event.The discussion dynamics are important. A critical-incident team brings together diverse individuals who may have never met before and might be reluctant to speak candidly among people they don’t know, especially those higher up in the organization. The aim is to encourage inquiry, not advocacy, which is why meetings must be psycho-logically safe gatherings where everyone can offer untested ideas and disagree. What is right is far more important than Recognizing a novel risk requires people to suppress their instincts, question their assumptions, and think deeply about the situation.Harvard Business ReviewNovember–December 2020 45
who is right. That’s partly why someone other than the team’s leader should facilitate meetings. By listening rather than speaking, the leader reduces the likelihood that subordinates will defer to their perception of the chief decision- maker’s opinion.Manage the crisis at the local level. Some novel risks don’t allow for the luxury of a critical-incident team. Time is of the essence, and details about the situation are difficult to communicate to company headquarters far from where the threat has emerged. In those situations, responses must be delegated to personnel closest to the event.Take Adventure Travel Agency (not its real name), a Boston-based com-pany offering trips off the beaten track to experienced travelers. It initially employed U.S. tour guides who were familiar with its targeted customers. But the CEO soon learned, painfully, that any trip could involve accidents, illness, and disruptions from extreme weather, natural disasters, political unrest, hotel cancellations, airline delays, and strikes. Novel risks came with the business’s territory.In a lengthy, costly process, the company replaced its American guides with local guides in each country, who had considerable knowledge of their regions and strong local contacts. It empowered the new guides to problem- solve and implement a response to any novel situation that arose during a trip. The company believed that the guides had the best information about challenges that might come up; the best knowledge, connections, and resources to develop creative responses; the best understanding of the tour group’s preferences regarding responses; and the ability to put the chosen solution quickly into effect. The company’s headquarters assisted them by per-forming tasks best handled by a central staff (such as rescheduling flights and rebooking hotel reservations).The travel company’s decentralized approach of authorizing operations peo-ple to also serve as risk managers departs from established risk management standards. But for a distant novel-risk event requiring an immediate response, centralized risk managers would have limited information about the event, be unaware of local options and pref-erences, and have little to no ability to rapidly implement a response.The initial decisions by either a cen-tralized team or a local employee will be speculative, given how little infor-mation will be available in an uncertain, dynamic environment. Being perfectly exactly correct cannot be a performance standard. Any response may, in hind-sight, have been suboptimal. But the company has no alternative other than to make a quick, “probably approxi-mately correct” decision, learn from it, acquire new information, and act again and again to stay ahead of events. (For more on how to do this, see the sidebar “The OODA Loop.”)RISKS COME IN many forms and flavors. Companies can manage the ones they know about and anticipate. But novel risks—those that emerge completely out of the blue—will arise either from complex combinations of seemingly routine events or from unprecedentedly massive events. Com-panies need to detect them and then activate a response that differs from standard approaches to managing rou-tine risks. That response must be rapid, improvisational, iterative, and humble, since not every action taken will work as intended. HBR Reprint R2006BROBERT S. KAPLAN is a senior fellow and the Marvin Bower Professor of Leadership Development, Emeritus, at Harvard Business School. HERMAN B. “DUTCH” LEONARD is the Eliot I. Snider and Family Professor of Business Administration at Harvard Business School and the George F. Baker, Jr., Professor of Public Sector Management at Harvard’s Kennedy School of Government. ANETTE MIKES is a fellow at Hertford College, Oxford University, and an associate professor at Oxford’s Saïd Business School.The OODA LoopThe OODA loop—observe, orient, decide, act—was devised by a Korean War–era fighter pilot, Colonel John Boyd, who believed that pilots whose OODA loops were faster than those of their adversaries would control air battles. After a novel risk event, a critical-incident team with an OODA loop that outpaces changes in the environment will better control the event’s impact on the company.Initially, the team observes to learn all it can about the situation. The team orients itself by making sense of the situation and identifying its key elements. Members generate options, assess the likely consequences of each, select the best one, and take steps to implement the chosen response—treating the decision not as a permanent commitment to a course of action but as part of an ongoing experiment. The team begins the next OODA loop by observing the event’s evolution—particularly how its own actions modified the situation.All communications should be brutally honest about the situation, highlight clearly what the organization doesn’t yet know, and provide a rational basis for hope.John Kuczala46Harvard Business ReviewNovember–December 2020
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Our Work-from-Anywhere Future58Harvard Business ReviewNovember–December 2020
Best practices for all-remote organizationsPHOTOGRAPHER SEJKKOHarvard Business ReviewNovember–December 2020 59MANAGING PEOPLEAUTHORPrithwiraj (Raj)ChoudhuryAssociate professor, Harvard Business School
EFORE 2020 A MOVEMENT was brewing within knowledge- work organizations. Personal technology and digital connec-tivity had advanced so far and so fast that people had begun to ask, “Do we really need to be together, in an office, to do our work?” We got our answer during the pandemic lockdowns. We learned that a great many of us don’t in fact need to be colocated with colleagues on-site to do our jobs. Individuals, teams, entire workforces, can perform well while being entirely distributed—and they have. So now we face new questions: Are all-remote or majority-remote organizations the future of knowledge work? Is work from anywhere (WFA) here to stay?Without question, the model offers notable benefits to companies and their employees. Organizations can reduce or eliminate real estate costs, hire and use talent globally while mitigating immigration issues, and, research indicates, perhaps enjoy productivity gains. Workers get geographic flexibility (that is, live where they prefer to), eliminate commutes, and report better work/life balance. However, concerns persist regarding how WFA affects communication, including brainstorming and problem-solving; knowledge sharing; socialization, camaraderie, and mentoring; perfor-mance evaluation and compensation; and data security and regulation.To better understand how leaders can capture the upside of WFA while overcoming the challenges and avoiding negative outcomes, I’ve studied several companies that have embraced all- or majority-remote models. They include the United States Patent and Trademark Office, or USPTO (which has several thousand WFA workers); Tulsa Remote; Tata Con-sultancy Services, or TCS (a global IT services company that has announced a plan to be 75% remote by 2025); GitLab (the world’s largest all-remote company, with 1,300 employees); Zapier (a workflow automation company with more than 300 employees, none of them colocated, around the United States and in 23 other countries); and MobSquad (a Canadian start-up that employs WFA workers).The Covid-19 crisis has opened senior leaders’ minds to the idea of adopting WFA for all or part of their workforces. In addition to TCS, companies including Twitter, Facebook, Shopify, Siemens, and State Bank of India have announced that they will make remote work permanent even after a vac-cine is available. Another organization I’ve studied is BRAC, one of the world’s largest NGOs, which is headquartered in Bangladesh. Forced into remote work this year, it is deciding what work model to adopt for the long term.If your organization is considering a WFA program, transi-tion, or launch, this article can provide a guide.A SHORT HISTORY OF REMOTE WORKA large-scale transition from traditional, colocated work to remote work arguably began with the adoption of work-from-home (WFH) policies in the 1970s, as soaring gasoline prices caused by the 1973 OPEC oil embargo made commut-ing more expensive. Those policies allowed people to eschew physical offices in favor of their homes, coworking spaces, or other community locations, such as coffee shops and public libraries, for occasional days, on a regular part-time basis, or full-time, with the expectation that they would come into the office periodically. Workers were often also given control over their schedules, allowing them to make time for school pickups, errands, or midday exercise without being seen as shirking. They saved time by commuting less and tended to take fewer sick days.Thanks to the advent of personal computers, the internet, email, broadband connectivity, laptops, cell phones, cloud computing, and videotelephony, the adoption of WFH increased in the 2000s. As the researchers Ravi S. Gajendran and David A. Harrison note in a 2007 article, this trend was accelerated by the need to comply with, for example, the Americans with Disabilities Act of 1990 and mandates of the U.S. Equal Employment Opportunity Commission.Research has shown performance benefits. A 2015 study by Nicholas Bloom and coauthors found that when employ-ees opted in to WFH policies, their productivity increased by 13%. When, nine months later, the same workers were given a choice between remaining at home and returning to the office, those who chose the former saw even further improvements: They were 22% more productive than they had been before the experiment. This suggests that people should probably determine for themselves the situation (home or office) that fits them best.In recent years many companies have allowed more em ployees to work from home. It’s true that several MANAGING PEOPLEB60Harvard Business ReviewNovember–December 2020
IDEA IN BRIEFTHE SHIFTThe Covid-19 lockdowns proved that it is not only possible but perhaps preferable for knowledge workers to do their jobs from anywhere. Will this mark a long-term shift into all-remote work?BENEFITS AND CHALLENGESStudies show that working from home yields numerous benefits for both individuals and their organizations, most notably in the form of enhanced productivity and engagement. But when all or most employees are remote, challenges arise for communication, knowledge sharing, socialization, performance evaluation, security, and more.THE RESEARCHAs more companies adopt work-from-anywhere policies, best practices are emerging. The experiences of GitLab, Tata Consultancy Services, Zapier, and others show how the risks associated with this type of work can be overcome.prom inent corporations, including Yahoo and IBM, had reversed course before the pandemic, asking their employees to resume colocated work in a bid to spur more-effective collaboration. But other organizations—the ones I study—moved toward greater geographic flexibility, allowing some if not all employees, new and old, to work from anywhere, completely untethered to an office. The USPTO is a prime example. Its leaders launched a WFA program in 2012, building on an existing WFH program that mandated workers’ physical presence at headquarters, in northern Virginia, at least one day a week. The WFA program, in contrast, requires employees to spend two years at HQ followed by a WFH phase, after which they may live anywhere in the continental United States, provided they’re willing to pay out of pocket for periodic travel back to headquarters (totaling no more than 12 days a year). The patent examiners in the program dispersed all across the country, choosing to move closer to family, to better climates, or to places with a lower cost of living.Most companies that offer WFH or WFA options keep some workers—at the USPTO it’s trainees and adminis-trators—at one or more offices. In other words, they are hybrid-remote operations. But the experiment with all- remote work forced by Covid-19 has caused some of these organizations to strategically move toward majority-remote, with fewer than 50% of employees colocated in physical offices. TCS, for example, which employs close to 418,000 people who were traditionally located either on campuses or at client sites around the world, has decided to adopt a 25/25 model: Employees will spend only 25% of their working hours in the office, and at no point will the company have more than 25% of workers colocated. TCS plans to complete this transition in five years.Even before the crisis, a smaller group of companies had taken this trend a step further, eliminating offices altogether and dispersing everyone, from entry-level associates to the CEO. GitLab embraces this model at scale: Its remote workers span sales, engineering, marketing, personnel management, and executive roles in more than 60 countries.EXPLORING THE BENEFITSI’ve spent the past five years studying the practices and productivity trends of WFA companies. The upsides—for individuals, companies, and society—are clear. Let me outline them.For individuals. One striking finding is how greatly workers benefit from these arrangements. Many told me that they regard the freedom to live anywhere in the world as an important plus. For those in dual-career situations, it eases the pain of looking for two jobs in a single location. One pat-ent examiner told me, “I’m a military spouse, which means I live in a world with frequent moves and personal upheavals that prevent many spouses from pursuing lasting careers of their choice. WFA has been the most meaningful telework program I have encountered. It allows me to follow my hus-band to any U.S. state at a moment’s notice and pursue my own aspirations to contribute to my home and society.”Some cited a better quality of life. “WFA has allowed my children to see their grandparents on a regular basis and play with their cousins,” I heard from another USPTO employee. “Being closer to family has improved my overall happiness.” Others talked about proximity to medical care for children, accommodating their partners, and the ability to enjoy warmer weather, prettier views, and greater recreational opportunities. Millennials in particular seemed captivated by the idea that WFA would allow them to become “digital nomads,” traveling the world while still employed. Before the pandemic-related restrictions, some companies, such as Remote Year, were aiming to facilitate that lifestyle, and Harvard Business ReviewNovember–December 2020 61
some countries, such as Estonia and Barbados, have created a new class of employment visa for such workers. As one patent examiner said, “Participation in [WFA] is outstanding for work/life balance. I live in my favorite part of the coun-try…I have more time to relax.”Cost of living was another frequent theme. Because the USPTO did not adjust salaries according to where employees chose to live, one patent examiner told me, “I was able to buy a large home in my new location for about a quarter of the cost in northern Virginia.” Some localities, such as the state of Vermont and the city of Tulsa, Oklahoma (where Tulsa Remote is located), have made a concerted effort to lure remote workers, touting the local community and lower costs. In San Francisco the average rent on a two-bedroom apartment is $4,128; in Tulsa it’s a mere $675.WFA also helps knowledge workers deal with immigration issues and other restrictions on their ability to secure good jobs. William Kerr, Susie Ma, and I recently studied MobSquad, whose coworking spaces in Halifax, Calgary, and other cities enable talented knowledge workers to bypass the onerous U.S. visa and green card system and instead obtain fast-track work permits from Canada’s Global Talent Stream. Thus they can continue serving companies and clients in the United States and other countries while living and paying taxes in Canada.One engineer we interviewed had come to the United States after graduating from high school in his home country at the age of 12. At age 16 he enrolled at a U.S. university, where he acquired degrees in math, physics, and computer science in three years. By age 19 he was employed at a med-ical tech company through the optional practical training (OPT) program, but he failed to get an H-1B visa and faced deportation. MobSquad moved him to Calgary, and he kept working with the same employer.In interviews with female employees at BRAC, I learned that women whose careers were previously limited by cultural taboos against traveling to remote places or delegat-ing housework had been helped by WFA. As one explained, “Earlier I had to wake up early in the morning and cook three meals for my intergenerational family. Working remotely has allowed me to spread out the household work, get extra sleep, and be more productive.”For organizations. My research also uncovered ample organizational benefits from WFA programs. For example, they increase employee engagement—an important metric of success for any company. In 2013, a year after it instituted work from anywhere, the USPTO was ranked highest on the Best Places to Work in the Federal Government survey.Workers are not only happier but also more productive. When Cirrus Foroughi, Barbara Larson, and I evaluated the USPTO’s transition from WFH to WFA, the timing of which happened at random for workers who’d chosen that path, we found that WFA boosted individual productivity by 4.4%, as measured by the number of patents examined each month. The switch also led examiners to exert greater effort. Of course, further research is needed to determine whether WFA generates similar benefits for workers performing different tasks in other team structures and organizations.Some gains generated by WFA are more obvious. For example, fewer in-office employees means smaller space requirements and reduced real estate costs. The USPTO estimated that increases in remote work in 2015 saved it $38.2 million. WFA programs also hugely expand an orga-nization’s potential talent pool to include workers tied to a location far from that of the company. That’s a primary rea-son for the adoption at TCS of what it calls secure borderless workspaces, or SBWs: It wants to ensure that every proj ect is staffed by employees with the right skills, no matter where they are. Rajesh Gopinathan, the CEO, describes this model as “talent on the cloud,” while another senior executive says it will potentially allow the company to tap niche labor markets, such as Eastern Europe, that have a large supply of skilled financial analysts and data scientists.Finally, WFA can reduce attrition. Some USPTO workers explained that because they loved their preferred locales but also recognized the limited job opportunities there, they were motivated to work harder and stay longer with the Patent Office. Leaders at GitLab, too, pointed to employee retention as a positive outcome of the company’s decision to be all-remote. The net benefit, they believe, including the productivity increases and property cost savings they’ve seen, equals $18,000 a year for each worker.For society. WFA organizations have the potential to reverse the brain drain that often plagues emerging markets, small towns, and rural locations. In fact, Tulsa Remote was established to attract diverse, energetic, community-minded newcomers to a city still healing from historic race riots a MANAGING PEOPLEABOUT THE ARTSejkko grew up between Portugal and Venezuela. His photographs capture the traditional houses of Portugal yet often convey a sense of tropical vibrancy and childhood nostalgia. Sometimes they look lost or out of place; other times they seem warm and self-contained.62Harvard Business ReviewNovember–December 2020
Millennials seemed captivated by the idea that working from anywhere would allow them to become “digital nomads,” traveling the world while still employed.Harvard Business ReviewNovember–December 2020 63
century ago. With an offer of $10,000 to relocate to Tulsa, the company attracted more than 10,000 applications for just 250 slots from 2019 to 2020. Obum Ukabam was one of the work-ers chosen. When he’s not busy with his day job as a mar-keting manager, he mentors and coaches a local high school debate team. Talented newcomers of varied ethnicities are arguably making the city more multicultural. Meanwhile, the transitions at the USPTO and TCS have brought many people back to their hometowns.Remote work helps the environment as well. In 2018 Americans’ commute time averaged 27.1 min utes each way, or about 4.5 hours a week. Eliminating that commute—particularly in places where most people commute by car—generates a significant reduction in emissions. The USPTO estimates that in 2015 its remote workers drove 84 million fewer miles than if they had been traveling to headquarters, reducing carbon emissions by more than 44,000 tons.ADDRESSING THE CONCERNSThe office—with its meeting rooms and break areas and opportunities for both formal and informal interaction—has been a way of life for so long that it’s hard to imagine getting rid of it. And legitimate hurdles exist to making all-remote work not only manageable but successful. However, the Covid-19 all-remote experiment has taught many knowledge- work organizations and their employees that with time and attention, those concerns can be addressed. And in the companies I’ve studied, several best practices are emerging.Communication, brainstorming, and problem-solving. When workers are distributed, synchronous communica-tion becomes more difficult. Tools such as Zoom, Skype, Microsoft Teams, and Google Hangouts can help for those working in the same or similar time zones but not for those spread farther apart. In research with Jasmina Chauvin and Tommy Pan Fang, I found that when changing to or from daylight saving time caused a one- to two-hour reduction in business-hour overlap (BHO) between offices of a very large global corporation, the volume of communication fell by 9.2%, primarily among production workers. When BHO was greater, R&D staffers conducted more unplanned synchro-nous calls. Group meetings are even harder to schedule. Nadia Vatalidis of GitLab’s People Operations group says that having team members in Manila, Nairobi, Johannesburg, Raleigh, and Boulder made finding a time for their weekly group call nearly impossible.WFA organizations must therefore get comfortable with asynchronous communication, whether through a Slack channel, a customized intracompany portal, or even a shared Google document in which geographically distributed team members write their questions and comments and trust that other team members in distant time zones will respond at the first opportunity. One benefit to this approach is that employees are more likely to share early-stage ideas, plans, and documents and to welcome early feedback; the pressure to pre sent polished work is less than it would be in more formal, synchronous team meetings. GitLab calls this process blameless problem-solving. The company’s leaders note that employees accustomed to a culture of emails, phone calls, and meetings may struggle to change old habits; they solve that problem with training during onboarding and beyond. At Zapier, in a program called Zap Pal, each new hire is matched with an experienced buddy who sets up at least one introductory Zoom call and continues to check in throughout the first month. For synchronous brainstorming the company uses video calls and online whiteboards such as Miro, Storm-board, IPEVO Annotator, Limnu, and MURAL but also urges employees to use asynchronous means of problem-solving through Slack channel threads.Knowledge sharing. This is another challenge for all-remote or majority-remote organizations. Distributed colleagues can’t tap one another on the shoulder to ask questions or get help. Research by Robin Cowan, Paul David, and Dominique Foray has postulated that much workplace knowledge is not codified (even when it can be) and instead resides “in people’s heads.” This is a problem for all organizations, but much more so for those that have embraced WFA. The companies I’ve studied solve it with transparent and easily accessible documentation. At GitLab all team members have access to a “working handbook,” which some describe as “the central repository for how we run the company.” It currently consists of 5,000 searchable pages. All employees are encouraged to add to it and taught how to create a new topic page, edit an existing one, embed video, and so forth. Ahead of meetings, organizers post agendas that link to the relevant sections to allow invitees to read background information and post questions. Afterward recordings of the sessions are posted on GitLab’s YouTube channel, agendas are edited, and the handbook is updated to reflect any decisions made.Employees may see the extra work of documentation as a “tax” and balk at the extremely high level of transpar-ency necessary for a WFA organization to thrive. Thorsten Grohsjean and I have argued that senior managers must set MANAGING PEOPLE64Harvard Business ReviewNovember–December 2020
an example on these fronts by codifying knowledge and freely sharing information while explaining that these are necessary trade-offs to allow for geographic flexibility.A related idea is to create transcripts, publicly post slides, and re cord video seminars, presentations, and meetings to create a repository of such material that individuals can view asynchronously at their convenience. For its 2020 annual meeting, which was forced by the pandemic to go virtual, the Academy of Management curated 1,120 prerecorded sessions, arguably expanding the flow of knowledge to scholars—especially those in emerging markets—far more than would have been possible at the in-person event, which typically happens in North America.Socialization, camaraderie, and mentoring. Another major worry, cited by managers and workers alike, is the potential for people to feel isolated socially and profession-ally, disconnected from colleagues and the company itself, particularly in organizations where some people are co -located and some are not. Research by Cecily D. Cooper and Nancy B. Kurland has shown that remote workers often feel cut off from the information flow they would typically get in a physical office. Without in-person check-ins, managers may miss signs of growing burnout or team dysfunction. Even with videoconferencing that allows for reading body language and facial expressions, the concern is that virtual colleagues are less likely to become close friends because their face-to-face interactions are less frequent. As GitLab’s technical evangelist Priyanka Sharma put it, “I was very nervous when I was first thinking of joining, because I was very social in the office. I worried that I would be so lonely at home and wouldn’t have that community feel.” Houda Elyazgi, a marketing executive on the Tulsa Remote team, expressed similar sentiments: “Remote work can be very isolating, especially for introverts. You almost have to create an intentional experience when you’re socializing with others. And then you have to be ‘on’ all the time, even when you’re trying to relax. That’s taxing.”In my research I’ve seen a range of policies that seek to address these concerns and create opportunities for social-ization and the spreading of company norms. Many WFA organizations rely on technology to help facilitate virtual watercoolers and “planned randomized interactions,” whereby someone in the company schedules groups of Work-from-anywhere organizations have the potential to reverse the brain drain that often plagues emerging markets, small towns, and rural locations.Harvard Business ReviewNovember–December 2020 65
employees to chat online. Some use AI and virtual reality tools to pair up remote colleagues for weekly chats. For example, Sike Insights is using data on individual commu-nication styles and AI to create Slackbot buddies, while eXp Realty, an all-remote company I’m currently researching, uses a VR platform called VirBELA to create a place for distant team members to gather in avatar form.Sid Sijbrandij, a cofounder and the CEO of GitLab, told me, “I know at Pixar they placed the restroom centrally so people would bump into each other—but why depend on randomness for that? Why not step it up a notch and actually organize the informal communication?” These “mixers” often include senior and C-suite executives. When I described them to my HBS colleague Christina Wallace, she gave them a nice name: community collisions. And companies have always needed to manufacture them: Research dating back to Thomas J. Allen’s work at MIT in the 1970s shows that workers colocated on the same “campus” may not experi-ence serendipitous interactions if they are separated by a wall, a ceiling, or a building.When it comes to interaction between people at different hierarchical levels, my research has revealed two problems with straightforward solutions. Iavor Bojinov, Ashesh Ram-bachan, and I found that the senior leaders of a global firm were often too stretched to offer one-on-one mentoring to virtual workers. So we implemented a Q&A process whereby workers posed questions through a survey and leaders responded asynchronously. Senior managers at another global firm told me that they had difficulty being themselves on camera. Whereas young remote workers were “living their lives on Instagram,” their older colleagues found virtual engagement harder. The company implemented coaching sessions to make those executives more comfortable on Microsoft Teams.Another solution to the socialization problem is to host “temporary colocation events,” inviting all workers to spend a few days with colleagues in person. Prior to Covid-19, Zapier hosted two of those a year, paying for employee flights, accommodation, and food; giving teams an activities budget; and sending people home with $50 to use on a thank-you gift for their loved ones. Carly Moulton, the company’s senior communications specialist, told me, “Personally, I have made a lot of friendships with the people I travel to and from the airport with. The event managers will put us into random groups based on what time you arrive and depart. I’ve always been with people I don’t normally work with, so it’s nice to have a dedicated time when you have to make conversation.”Finally, at the USPTO, I learned another way to create camaraderie. Several WFA examiners have voluntarily created “remote communities of practice” so that a handful of them can get together periodically. A group living in North Carolina, for example, decided to schedule meetings on a golf course to socialize, discuss work, and problem-solve together. Another manager created a “virtual meal” by order-ing the same pizza for delivery to the homes of all remote direct reports during a weekly team call.Performance evaluation and compensation. How can you rate and review employees you’re never physically with, particularly on “soft” but important metrics such as interpersonal skills? All-remote companies evaluate remote workers according to the quality of their work output, the quality of virtual interactions, and feedback from clients and colleagues. Zapier, for example, uses Help Scout for customer support replies; a feature of this software is that customers can submit a “happiness score” by rating the response as “great,” “OK,” or “not good.”In the spring and summer of 2020, as groups suddenly transitioned to remote work, I was asked whether manag-ers should use software to track worker productivity and prevent shirking. I am very much opposed to this Orwellian approach. The USPTO addressed claims of “examiner fraud” and “attendance abuse” in its WFA program following a review by the U.S. Commerce Department’s Office of the Inspector General. Those claims involved either overreport-ing of hours worked or shifts in the time logs of completed work, such as backloading at the end of a calendar quarter—neither of which related to the metric on which performance was measured: the number of patents examined. Never-theless, from then on, all USPTO teleworkers had to use organizational IT tools, such as logging in to a virtual private network (VPN), having a presence indicator turned on, and using the same messaging services. But when we compared data from before and after that intervention, we found that it had no effect on average output.How to set compensation for workers who work from any-where is an active and interesting debate. As mentioned, it’s a benefit to be able to reside in a lower-cost-of-living locale while earning the income one would in a more expensive one. But that’s conditional on the company’s not adjusting wages according to where a worker lives, as was the case at the USPTO. Matt Mullenweg, the founder of Automattic (parent of WordPress), another all-remote company, told me that its policy is to pay the same wages for the same roles, regardless of location. But GitLab and other companies do MANAGING PEOPLE66Harvard Business ReviewNovember–December 2020
have different pay for different geographies, taking into account the experience of the worker, the contract type, and the task being performed. Although research is needed on which approach is optimal, it’s possible that companies that tie wages to location will lose high-quality WFA workers to rivals that don’t. Another pertinent issue is whether to pay WFA workers in the currency of the country where the orga-nization is incorporated or the local one, in part to ensure consistent wages across locations over time given exchange-rate fluctuations.Data security and regulation. Several managers told me that cybersecurity was a big area of focus for WFA programs and organizations. “What if the WFA worker takes photo-graphs of client data screens and sends them to a competitor?” one asked. The CIOs of some companies with remote-work policies said another key concern was employees’ use of personal, less-protected devices for work at home.It’s true that all-remote companies have to work harder to protect employee, corporate, and customer data. As TCS transitions to a majority-remote model, it has moved from “perimeter-based security” (whereby the IT team attempts to secure every device) to “transaction-based security” (whereby machine learning algorithms analyze any abnormal activities on any employee laptop). MobSquad has repli-cated its client security infrastructure for WFA workers, and employees work on clients’ cloud, email, and hardware in its offices for security reasons. All-remote and majority-remote organizations I have studied are experimenting with a wide range of solutions to protect client data using predictive analytics, data visualization, and computer vision.Transitioning to an all-remote or a majority-remote organization sometimes requires jumping regulatory hurdles as well. At the onset of the pandemic, when TCS was forced to become all-remote, it had to work with NASSCOM (India’s National Association of Software and Service Companies) and the Indian authorities to change laws overnight so that call center staffers could work from home. Other laws had to be tweaked so that TCS workers could take laptops and other equipment out of physical offices located in India’s “special economic zones.” Irfhan Rawji, the founder and CEO of MobSquad, had to work closely with the Canadian govern-ment to ensure that the economic migrants chosen by the company to move to Canada could receive their expedited work permits and be integrated into its model. Any all- remote organization thinking about hiring talent globally has to consider local labor laws as they relate to hiring, compensation, pensions, vacation, and sick leave.IS THIS RIGHT FOR YOUR ORGANIZATION?Of course, WFA may not be possible at this time for some organizations, such as manufacturing companies—though that could change with advances in 3D printing, automation, digital twins, and other technologies. However, with the right strategy, organizational processes, technologies, and—most important—leadership, many more companies, teams, and functions than one might have thought could go all or mostly remote. My ongoing research with Jan Bena and David Rowat suggests, for example, that start-up knowledge-work com-panies, particularly in the tech sector, are well positioned to adopt a WFA model from their inception. Take the all-remote eXp Realty: We found that lower real estate, utility, and other overhead costs may mean a higher valuation for the company if and when its founders exit the start-up.My studies of the USPTO and TCS indicate that large and mature organizations, too, can successfully transition to a hybrid or a majority-remote regime. The question is not whether work from anywhere is possible but what is needed to make it possible. The short answer: management. “If all senior leaders are working from an office, then work-ers would be drawn to that location to get face time,” one all-remote middle manager told me. But if leaders support synchronous and asynchronous communication, brain-storming, and problem-solving; lead initiatives to codify knowledge online; encourage virtual socialization, team building, and mentoring; invest in and enforce data security; work with government stakeholders to ensure regulatory compliance; and set an example by becoming WFA employ-ees themselves, all-remote organizations may indeed emerge as the future of work. HBR Reprint R2006CPRITHWIRAJ (RAJ) CHOUDHURY is the Lumry Family Associate Professor of Business Administration at Harvard Business School. His research focuses on the future of work—especially how work-from-anywhere practices are changing its geography.All-remote companies do have to work harder to protect employee, corporate, and customer data. Some use predictive analytics, data visualization, and computer vision.Harvard Business ReviewNovember–December 2020 67
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Fernando F. SuarezProfessor, D’Amore-McKim School of BusinessJuan S. MontesAssociate professor, Carroll School of ManagementAUTHORSBuilding Organizational ResilienceTo cope—and thrive—in uncertain times, develop scripted routines, simple rules, and the ability to improvise.S uccessful organizations all have well-established routines for getting things done. The task may be as lofty as acquiring a com-petitor or as prosaic as filling out a time sheet, but if you look closely, you’ll find a reliable process to guide you through it. These routines are often taken for granted in stable periods. However, they tend to break down when a company faces high levels of uncertainty or needs to move quickly in a crisis. Organizations scramble to make adjustments on the fly—with varying degrees of success. Before the next crisis hits, it’s wise to spend time thinking systematically about the granular nuts-and-bolts processes you use—and to experiment with alternatives.Researchers have identified three broad approaches to getting work done, and what they’ve learned can help managers respond more effectively to highly changeable environments. The first approach is the one we’ve just described: organizational rou-tines, which are efficient when work is predictable. The second approach is simple rules, or heuristics—rules of thumb that help you speed up processes and decision-making and prioritize the use of resources in less-predictable contexts (for example, “We invest only in projects with a projected ROI of 10% or more”). And the third is improvisa-tion—spontaneous, creative efforts to Harvard Business ReviewNovember–December 2020 47
conditions. These detailed processes increase the efficiency of a climbing team and help keep it safe. They script out how the team sets up camp, prepares backpacks and tools, coordinates shifts and roles for the ascent, and maintains the ropes. Rodrigo Jordán, the expedi-tion leader, led planning sessions every evening and had the final word on the most important decisions.As the next phase of climbing began, the environment changed in often dramatic ways, and some of the organi-zational routines broke down. The first big challenge on the route is an uncom-monly treacherous 4,000-foot wall of rocks and ice. (It’s the reason so few expeditions attempt this side of Everest.) For 12 days the climbers “opened the route” by choosing a path and attaching ropes up the face, going incrementally higher but returning to base camp every night until they were able to establish Camp One, just past the wall. Once the ropes were in place, the following day’s climb became faster and safer. The route is technically difficult, and the climbers were always “counting the minutes address an opportunity or a problem (for example, when a team figures out how to do manual production because a factory’s automated line has suddenly broken down).Surprisingly, nobody has ever studied how those different approaches can be used as a tool kit. Yet any organization— or team—will do better if it can move easily among them. People can impro-vise in the face of a crazy-seeming, unexpected situation, learn from the improvisation, and eventually develop a simple rule based on what they’ve discovered, for example. Or they can revise an organizational routine after experimenting with new approaches to a particular task. Fluency in all three modes can improve performance and enhance resilience under any circum-stances. And if an organization faces extreme uncertainty, that fluency becomes essential. In fact, we believe that the ease with which teams refashion how specific tasks get done—whatever the level of turbulence—is the defining capability of a resilient organization.We recently had a chance to think more deeply about that hypothesis while writing an article for Organization Science about a Mount Everest climb that one of us (Juan) had been lucky enough to take part in. In it we explored how the three approaches had been used on the expedition, how they interacted, and which worked best under what circumstances. To be sure, the expe-dition involved far more pressure and unpredictability than most HBR readers normally have to deal with. But what we learned can help organizations cope better with whatever challenges they face. And if 2020 has taught us anything, John Kuczalait’s that everyone needs to prepare for higher levels of volatility, uncertainty, complexity, and ambiguity.THE RESILIENCE TOOL KIT ON MOUNT EVERESTThe Kangshung Face is the most remote, least explored side of Mount Everest. It’s a difficult route to the summit that as of 2020 only three teams had completed successfully. On Juan’s expedition a team of six climbers, who had trained together for almost two years, spent 41 days on the mountain. (It was a smaller team, with fewer sherpas and a briefer stay on the mountain, than was typical.) Three climbers reached the summit—one more than the team had thought could manage it—with no serious accidents and with minimal use of oxygen. The challenges that arose along the way offer insights into how a skilled team moves between modes of working as the context changes.As the climbers, sherpas, and porters settled into base camp, at 17,700 feet, they relied on well-known routines that were suited to relatively benign When to Try Each ApproachMuch of the time, organizational routines can guide how work gets done. But if resources are scarce, things are moving fast, or the terrain is unpredictable, simple rules and improvisation should be in the mix.Routines(scripted work processes)“Follow this checklist to prep for surgery.”You’re in familiar territory.The environment is stable.Heuristics(rules of thumb that help simplify decision-making)“Prioritize big-ticket client work in a crunch.”You need to make decisions faster than usual; existing routines aren’t effective.Key assumptions remain valid; decision-makers understand the problems they encounter.Improvisation(spontaneous, ad hoc responses to a problem or opportunity)“Employees must stop working in the office immediately. Where do we start?”You’re on uncharted ground with a high degree of uncertainty.Key assumptions no longer hold; decision-makers need to experiment to figure out what will work.EXAMPLEBEST WHENCONTEXT48Harvard Business ReviewNovember–December 2020
of a disagreement with Chinese author-ities. The problem intensified when the team’s sherpas were hit by an avalanche. Though they suffered only minor injuries, they were understandably concerned for their safety and negotiated carrying lighter loads. In response to having far fewer supplies than planned, the team developed two simple rules. The first was Carry only the supplies that the climbers who are going to the next stage need. (Normally, climbers bring buffer supplies to the upper camps, of which there were three on this expedition.) The second was Always return to sleep at the lower camp. This made sense for a number of reasons, the primary one being that less oxygen would be needed at lower camps.The next stage of the trek, up a long glacier, took 17 days. It went slowly because the climbers were walking through deep powder and reacting to a higher altitude (21,000 to 23,000 feet). This stretch was technically easier than the wall but had hard-to-anticipate crevasses and a higher risk of ava-lanches. Though the plan was for only two climbers to summit the mountain, during this phase a third member (Juan) turned out to be in better physical shape than expected. He had a brief radio conversation with Jordán, and they decided together that he would join the others in attempting to summit. This improvisation carried risks: Juan didn’t have a sleeping bag, so the original two summiters would have to share theirs with him, and because of the diminished supplies, they’d also have to share their oxygen, leaving them somewhat short. But Jordán concluded that the team had a better chance of reaching the top with three climbers than with two. This decision, like most decisions about improvisation, had to be made quickly; there wasn’t time to build consensus. (In contrast, groups usually adopt a heuris-tic only after extensive discussion.) That meant it posed another risk: alienating other members of the team.before the next avalanche,” in the words of one participant. Normally the expedition leader coordinates this kind of ascent, but a few days in, the climbers realized that Jordán, who was at base camp, didn’t have enough information to make timely decisions and that this was putting them at risk.The team discussed this breakdown in the organizational routine over dinner several days running and eventually developed a simple rule: The first climber on the rope calls the shots. That heuristic sped up decision-making by empow-ering the climber who was leading the ascent at any particular time. It made the group into an essentially flat organiza-tion while routes were being opened up. Jordán continued to make all other decisions and to coordinate activities during the evening planning sessions.Another organizational routine had begun to break down at the start of the climb, when the team was forced to leave 300 pounds of supplies behind because Harvard Business ReviewNovember–December 2020 49
In the final, “death zone” stage of the climb, which took five days, the climbers were in a first-ever situation that demanded rapid responses. There were few rehearsed routines or simple rules to fall back on. None of them had ever been at such a high altitude before, and they didn’t know how their bodies would react. In situations like this, climbers often improvise. The three climbers began the final ascent carrying ropes because the Hillary Step, a steep, rocky section just before the summit, required them to climb tied together. However, the ropes became too much of a burden for their tired bodies and slowed down one climber. They decided on the spot to simply drop the ropes and continue sepa-rately. When the context is uncertain and speed: a sharp increase in the rate at which the team had to make decisions. That was the case on the wall, when the team transferred decision-making rights from the expedition leader to the on-site leader. Here, and in other cases where things were happening too quickly, heuristics seemed to offer the best response. They helped the climbers adjust to the faster pace, but they didn’t change the underlying principles that guided the expedition. (There was still a designated decision-maker during the route openings, for example, and a rule governing how many supplies to carry in specific circumstances.)The second trigger was complex, unfamiliar contexts, such as when the climbers experienced the death zone unforgiving, as it was here, there’s no way to know whether you’re making the right call. By dropping the ropes, the climbers increased their risk of a bad fall—but also the likelihood that they’d finish the climb. Fortunately, the move paid off when all three reached the summit safely.WHAT WE LEARNEDWhen we analyzed our findings from Juan’s extensive notes and from videos, diaries, letters, and interviews with the other climbers, we came away with the following observations:Heuristics and improvisations are triggered by different types of challenges. We saw two major reasons for the adoption of new tools. One was 50Harvard Business ReviewNovember–December 2020How Hospitals Used Routines, Simple Rules, and Improvisation to Deal with Covid-19During the spring of 2020, when patients suffering from Covid-19 threatened to overwhelm hospitals, health care professionals responded not just with courage but with ingenuity. Stories of their resourcefulness filled the news and social media.As we look at these reactions to a novel situation, however, we see something else: examples of how people utilized new routines, heuristics, and improvisation to work more quickly and effectively.New routines. Normal hospital practices were disrupted, but some of them could be rescripted. Emergency rooms have a process for managing patients’ arrival and treatment, for example, but patients were flooding in too rapidly as the pandemic spread. Hospitals replaced a multistep indoor admission process with screening patients’ temperatures outside the ER building so that people with high fevers would be prioritized.Doctors and nurses who weren’t treating Covid-19 patients swiftly settled into new routines in response to the need for social distancing: They conferred with patients over the phone or by computer rather than in person.Heuristics. As the crisis intensified, routines needed more than minor adjustments. Doctors and nurses began to rely on heuristics to speed up activities and processes. If it was impossible to treat everyone needing care, they would make a quick triage decision: Admit the patient (if a bed was available); send him or her to another hospital (if one wasn’t); or send the patient home (if that person’s symptoms were not life-threatening).At a later stage, care-givers had to make painful choices about which patients would get time on limited ventilators. Hospitals developed heuristics for making those decisions; generally they were based on which patients had the greatest likelihood of surviving (such as younger people).Improvisation. Over time the resource gap grew larger. Health care workers didn’t have enough N95 masks and protective gowns, nor did they have enough beds in their intensive care units. These problems prompted several improvisations. Some nurses and doctors began to reuse masks (aware of the increased risks to themselves). Hospitals repurposed entire floors to expand ICU areas or to treat the more-stable Covid-19 patients, often making the change in just a few days. New York City built a makeshift tent hospital in Central Park and transformed the Javits Convention Center into a field hospital in anticipation of a surge in patients.The most extreme situations involved the shortage of ventilators. Doctors and nurses, trained to do everything medically possible to save lives, had to adjust to a reality in which that simply wasn’t possible. They turned to risky improvisations, like sharing ventilators between two patients.By the summer, health care workers had developed a better understanding of how to treat Covid-19. The pandemic still presented massive challenges (like the development of a vaccine), but the early-stage experimentation with protocols meant that hands-on care for patients had significantly improved.
without knowing how their bodies would react. In those cases the team was more likely to improvise, because some challenges required out-of-the-box, ad hoc solutions that sharply departed from what the team had imagined would take place. Sometimes they were in response to an opportunity (a third climber seemed fit enough to summit). At other times they were in response to a problem (the ropes were too heavy, so they were abandoned). (See the exhibit “When to Try Each Approach.”)The tools are interdependent and dynamic. The lines between routines, simple rules, and improvisation aren’t always clear, and one approach can morph into another. For example, under normal circumstances, specific members of a climbing team are assigned to check and maintain the ropes daily. However, the extreme conditions of the Kangshung Face prompted an improvisation: One climber, when descending after a 12-hour climb, stopped for almost an hour to repair the ropes in a section of sharp rocks when he became very concerned about safety. From the base camp the other climbers could see that he had stopped but didn’t know why. That night they dis-cussed his improvisation and concluded that the extra safety was worth more than the cost in time spent. They replaced their rope maintenance routines with a simple rule: If you see a damaged rope, you have to fix it right away.In other instances a newly introduced heuristic might prompt an improvisation. As noted earlier, the team developed heuristics around how much to carry and where to sleep, in response to resource constraints. Those rules increased effi-ciency and maximized speed, but they were also risky. That became apparent late in the climb, when one of a pair of support climbers, who should have gone back to Camp Two for the night, began exhibiting symptoms of hypothermia. The team had to improvise: Both support climbers spent the night in Camp Three, without sleeping bags and oxygen, because the team hadn’t brought any extra supplies. (In accordance with a rule established earlier, those were reserved for the climbers who would continue to the summit.) This improvisation worked out, fortunately: The summit team was able to continue its ascent, and the com-promised support climber went down to Camp Two safely the next day.USING THE TOOL KITThe Covid-19 crisis and the economic havoc it has wrought are harbingers of the extraordinary challenges we’re all going to face in coming years. (For a look at health care professionals’ adoption of the three approaches during the pandemic, see the sidebar “How Hospi-tals Used Routines, Simple Rules, and Improvisation to Deal with Covid-19.”) Climate change, massive migration flows, and technological advances will all dramatically reshape the social and economic landscape in ways we can’t fully anticipate. They will disrupt indus-tries, economies, and nations.But organizations aren’t helpless. They can prepare themselves to cope with novel and uncertain situations, be they existential crises, like a pandemic, or more-familiar situations, like an industry shake-up. By actively training the organization to alter the combination of routines, heuristics, and improvisation on the fly to match the changing require-ments of different possible scenarios, leaders can build resilience throughout their organizations. Organizations that regularly deal with fast-evolving situa-tions—think SWAT teams and military commandos—know that it pays to practice and prepare for the unexpected while you have the luxury of time and resources, instead of trying to learn how to adapt in the middle of a storm.Most organizations are already good at working with routines. Indeed, managers have been trained to focus on efficiency, so they’re naturally inclined to codify best practices into organiza-tional routines. Therefore management should focus on helping people add heuristics and improvisations to their tool kits. What we observed in the Everest expedition can serve as a helpful template. Here are some suggestions for getting started:Analyze which tools you use to get different chunks of work done. The point isn’t to do fine-grained process mapping—it’s to think at a high level about how you handle work. Such an analysis isn’t necessarily straightfor-ward, though, because most work gets broken down into parts that may call for different tools. If you do A/B testing on new product features, for example, you almost certainly have a rigorous organizational routine in place—whereas decisions about what to test may be more open-ended and improvisational. Do your best to build a picture of which approaches are used where, and whether your organization favors a particular one. Then think about whether it’s the best choice for most of those tasks. You’ll manage a crisis better if you’ve analyzed Harvard Business ReviewNovember–December 2020 51Organizations that deal with fast-evolving situations—think SWAT teams—know that it pays to practice and prepare for the unexpected.
and discussed your processes—and done at least some reinvention—before you’re in the thick of things.Question the assumptions behind your routines. Every routine and process is built on a significant number of assumptions. Spend some time figuring out what they are, at least for your key routines, and then think about how you’d operate if they didn’t hold. These questions will help:• What types of decisions do you assume must be handled by high-level managers? How do you envision those decisions being made in a crisis?• Do you assume that your existing pro-cesses have been revised and perfected over time—that they’re optimal? Will they hold up in times of duress?• Where in the flow of work do prob-lems consistently arise? Is there an argument for reshaping that segment or allocating more resources to it? What would happen if you suddenly had to get that chunk of work done much faster?• Do you assume that organizational resources are allocated well? Would you reapportion them if you suddenly had to respond to a major disruption?Practice doing more with less. We can’t think of any actual crisis that didn’t involve resource scarcity of some kind. The Everest climb certainly did. So it makes sense to get used to working lean. Managers can challenge a unit by asking it to achieve an ambitious goal with sig-nificantly fewer resources than normal, for example. Or a team can brainstorm about how it would respond if a key resource suddenly became scarce.Deepen your knowledge of how your work fits into the whole. Organizations tend to ask people to specialize, stick-ing to narrow tasks or activities. It’s efficient, and it fits well with scripted organizational routines. In uncertain times, though, deeper knowledge of how other areas function (perhaps gained through cross-training) makes a group more resilient. Team members develop a better idea of how their work depends on others’ work, and vice versa. As a result, when a routine is changed, the larger group’s work is less likely to be disrupted.Invest in building expertise. New heuristics and improvisations may appear spontaneous, but in reality they work best when they rest on a foundation of knowledge and training. The moun-tain climbers in our study trained much harder than those on other expeditions we have data on, and they did it in the belief that they’d be better prepared to adjust when they needed to.Identify your priorities. If a crisis is unfolding, red lights and alarms go off everywhere, and managerial attention becomes a very scarce resource. In such situations leaders need to hyperfocus on the metrics that are central to moving the organization through the turmoil. By doing so, they can help everyone tackle the most-pressing problems and concen-trate on the activities that are essential to avoiding a collapse; everything else will simply have to wait. This often requires tough trade-offs. The metrics won’t be the same in every situation, however, so it’s useful to imagine a variety of scenarios and think through what they might specifically require.Learn to give up control. In a crisis, solutions are not obvious and seldom come from a top-down approach. All organizational brains are needed to solve problems on the spot. If those brains don’t feel empowered to act immediately, a problem can quickly get worse. This goes beyond the traditional advice about empowerment, which says that people should be given limited freedom to make decisions in their area. Organizations that survive dangerous times have developed the ability to swiftly delegate authority and decision- making to people with expertise on the front lines.Here’s the beauty of analyzing your routines and practicing new ways to solve problems in anticipation of a crisis: Your organization will become more adept at heuristics and improvisation, which will make it more resilient and resourceful—and better able to cope when uncertainty does reach alarming levels. HBR Reprint R2006BFERNANDO F. SUAREZ is the Jean C. Tempel Professor of Entrepreneurship and Innovation at the D’Amore-McKim School of Business at Northeastern University. JUAN S. MONTES is an associate professor of the practice at the Carroll School of Management at Boston College.52Harvard Business ReviewNovember–December 2020ABOUT THE RESEARCHThis article is based on an ethnographic study of a Mount Everest ascent via one of the mountain’s most-technical and least-known routes, the Kangshung Face. We had direct access to the details of the expedition because one of the authors was on it and took extensive notes throughout. We also had access to the diaries of three other expedition members, 12 hours of video footage, 1,250 photographs, and transcriptions of interviews with expedition members. In addition, we reviewed 52 letters written by the members before, during, and after the ascent, together with the planning documents for the trip and the rationale for the team selection.Gregory Reid/Gallery Stock
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