Let’s move together

This one is not about working from home. I have made it clear that I am not a fan of remote work because it reduces productivity in the long run. Instead, this is a note about how important it is for CEOs and corporate leaders to work closely with their employees and share the same environment.

Michael Bloomberg is famous for not having an office of his own but sitting on the floor with his employees. Meanwhile, when I worked at a major Swiss Bank which deserves no credit to be mentioned here, the boss of our department was literally sitting on a different floor from the rest of his team. It was an office that spanned the entire floor of a large building with an elevated platform hovering above everyone else where the boss and his entourage were sitting. The symbolism couldn’t be more striking.

But bosses who share the same space with their employees are getting better performance out of them. That is at least what a study by Mario Amore and his colleagues indicates. They looked at something rather extraordinary, namely whether CEOs of Danish companies lived close to their businesses and in the same neighbourhoods as their employees. Thus, these CEOs weren’t just sharing the same environment during office hours but year-round. They found that businesses, where the CEO lives closer to the office and in proximity to the employees, have fewer workplace complaints and administrative remarks due to violations of workplace regulations. Similarly, companies where the CEO lives in the same area as the employees get better reviews in employee surveys.

That study may sound weird, but it hints at something important. The researchers could identify the pathways that lead to better performance. They found that if a CEO has more social interactions with his or her employees, the workplace conditions improve overall for the entire firm. Social interactions make bosses aware of the real-life problems (at work and at home, mind you) of employees. And once bosses are aware of the issues at hand, they tend to do something about it, especially if they are sharing the same environment as their employees.

With better workplace conditions come more motivated employees. And more motivated employees are more productive. It is this boost to productivity that creates outperformance in companies with CEOs that are closer to their employees. In the end, you don’t really have to live in the same neighbourhood as your employees or send your children to the same schools. But you do have to share the same lifestyle, challenges, and everyday experiences as they do. The more insulated a CEO becomes from her employees the worse the performance of the company.

As for Michael Bloomberg and his employees, imperfect as it may be, Bloomberg gets an 85% approval rating from his employees on Glassdoor. The Swiss Bank I mentioned above: 69% approval for its CEO. Meanwhile, at my current employer Liberum, our CEO gets a 100% approval rating. Not sure what that says about my productivity and the productivity of my colleagues.