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Federal Reserve Bank of San Francisco ABOUT US OUR PEOPLE JOIN US What We Study Our District Research & Insights News & Media / NEWS & MEDIA / EVENTS The New Future of Work: Remote Work DATE Thursday, Aug 20, 2020 TIME 10–11 a.m. Pacific LOCATION Federal Reserve Bank of San Francisco Virtual TOPICS Economic Inclusion Employment & Unemployment Labor Markets Workforce Participation 1:04:55 How is the pandemic reshaping the way we work? Is this the “new normal” everyone’s talking about, or can we expect more transformation? San Francisco Fed President Mary C. Daly explores remote work and what it means for the future of work with Arianna Huffington (Thrive Global), Erica Brescia (GitHub), and Nick Bloom (Stanford). August 20, 2020 (video, 1:04:55). Summary COVID-19 is a “forcing function” for remote work. The pandemic rapidly accelerated changes in businesses around the country and ways of working and collaborating many thought would take more than a decade to change were accomplished in a few days or weeks. In the first in a series of conversations about the new future of work, SF Fed President Mary C. Daly, Arianna Huffington, Erica Brescia, and Nick Bloom, explore remote work and what it means for productivity, inclusion, and human connection. Transcript Hide this section Mary C. Daly: Good morning. Good afternoon. Good evening. From wherever you’re viewing, welcome to the first in our conversations on the new future of work. I’m Mary Daly and I’m President and CEO of the Federal Reserve Bank of San Francisco. And on behalf of myself and my colleagues, we can say, we’re delighted to have you join our conversations. So you might ask why “new” and why now? We’ve been talking about the future of work literally forever, but COVID-19 has been a forcing function. It’s forced us to do what we thought we would take a decade or more to accomplish in one day, one week or one month. And it’s brought challenges, but it’s also brought learnings. So why now? Why focus on this when COVID-19 is still on our shores, and we’ve yet to put the pandemic behind us. And the reason is really simple. If we want a future that is inclusive, productive, and sustainable after the pandemic, we have to start today to build that. We have to come together and be intentional and craft the system that we want—craft the future that we can be proud of. So we start today with a conversation on the new future of work. And since it’s such a big topic, we’re going to chip away at it one topic at a time, one subject at a time. And today we’re going to take up the issue of remote work. To do this, we’re going to bring leading experts—really across the globe, three people to talk about this with us. Our first guest is Arianna Huffington. She is the founder and CEO of Thrive Global, a tech company focused on behavioral change. She is also of course, the founder of the Huffington Post, and she’s written several books including Thrive and The Sleep Revolution. When I think of Arianna, I think of a thought leader who works on the nexus of work in life and ensures that it’s integrated. Nick Bloom is a distinguished professor of economics at Stanford University, and he is our second guest. Nick is also the co-director of the Productivity, Innovation and Entrepreneurship program at the National Bureau of Economic Research. When you talk to economists—of which I’m one—Nick is really one of the leading experts in the world on productivity and management practices. Our third guest, Erica Brescia, is the chief operating officer at GitHub, a software development company. She leads business development, support, workplace, and international expansion in that role. Now GitHub is known for having a large remote workforce before COVID-19 and then an even larger one after COVID-19. Arianna, Nick, Erica, thank you so much for being here. I’m really delighted to start our conversation. And for those of you out there listening, thank you. Thank you so much. And for those of you out there listening, you’re going to hear many of the questions you submitted when you registered. So thank you all for your help. Let’s get started. So like I said earlier, COVID-19 has been a forcing function. And one of the things it’s forced us to do is learn about new things in our organizations and our organization abilities that we really didn’t think were possible. And I know from my vantage point here at the Federal Reserve Bank of San Francisco, I’ve learned that many more people can work from home, over 90% of our workforce is now home, than I thought was ever possible. So that’s my learning. And I want to start to each of the guests with a simple question. What has COVID-19 allowed you to see that points to hidden capabilities we can use when we’re past the pandemic? And Arianna, I’m going to start with you. Arianna Huffington: Thank you so much, Mary, great to be here with you and with Erica and Nick. So what is interesting is that what the pandemic, this incredible time of trial and tremendous losses—losses of life, financial losses—has also taught us is that a lot of the ancient wisdom around our hidden capabilities is now coming to the forefront. We have been living our lives like machines. And going back to the industrial revolution, we started revering machines and then software. And of course the goal of machines and the goal of software is to minimize downtime. But that’s not the human operating system. For the human operating system, downtime, the opportunity to recharge, to connect with our hidden capabilities is a feature, not a bug. We are now discovering that because we have to, we have to tap into that resilience in order to be able to function during these unprecedented times. So I love what you said, Mary. It is a forcing function to discover that we have many more hidden capabilities of wisdom, of being in the eye of the hurricane, in the calm in the middle of the storm, which are very difficult to access when we are fighting for survival, when we’re living in a fight or flight mode, living our lives breathlessly and frenetically, which has been the mode for decades now. And we’ve seen the consequences. Skyrocketing increase in chronic diseases and a crisis of mental health. All that, even before the pandemic, both of them exacerbated. So I’m particularly excited to be here with Nick because Nick’s work on productivity is key here, if we are going to see fundamental changes in companies, and we are working with dozens of multinational companies at Thrive, you need to convince them that if you don’t address this hidden human capabilities, you are not going to solve the problem of productivity declines that Nick has written about: 5-10% productivity declines, massive declines at the moment. They were already happening beforehand. They were just more hidden because attrition, [unclear] were not as easy to define then as they are now. So I feel it’s an exciting time and opportunity to rebuild the way we work and live and to discover this hidden capabilities of wisdom and strength and resilience that we all have as part of our birthright. Mary C. Daly: Well, thank you, Arianna. That was terrific. And I took notes on so many of the things you said. You mentioned Nick, and so let’s turn to Nick next. Nick, do you have an answer to this question for us? Nick Bloom: You know, thank you, Arianna. I think we’re very much aligned. I would say I’m just amazed about how effectively the economy has managed to turn to working from home. So if you told me back in January of this year, that we’ll be a primarily working from home economy now I would, you know, I’d be astounded. I would think it, you know, it was completely impossible, but if you look at the data, I’ve been running a lot of surveys and talking to multiple firms, you see that currently about 40% of people are working from home. About 30% of people are not working, which you know, building on both Arianna and Mary’s point, shows you how horrible the current pandemic recession is. And the remaining 30% of people are working on the business premises. So right now there are more people working at home than working at work. And, you know, in some sense it highlights how working from home is one of the most important tool is actually in the fight against the pandemic. So without the ability to work from home, we would have had to go back to work far faster. Lockdown wouldn’t be nearly as effective. So in that sense is really valuable. It feels to me a bit like, you know, one of those popular Netflix or TV shows right now, whereby there’s this character that discovers they have these hidden powers they never knew were there. And, you know, slowly over the series, they discover more and more powers. It feels like that with the U.S. economy that we can at least, you know, 40% of us can work from home. The other thing that comes up a lot when I talk to firms is—and individuals—the question is why didn’t we do this sooner? So if you think about it, there are five key technologies we really need to work from home: email broadband, cheap computers, video calls, and Cloud or Dropbox type file sharing. But all of them have basically been around since 2010. Many people are saying, given it works so well, why didn’t we do this so much sooner? And you know, you know, the one silver lining there is out of the pandemic is it’s forced us—as Mary said it’s a forcing function—to force us to shift many of us to working from home. Mary C. Daly: So Nick, you know, that was terrific. And I think this forcing us, we’ve had the technology for a decade. Why didn’t we use it? But now we have to, and we had to do it quickly. And when we talk about this, Erica, it brings me to you, and you’ve been doing this in your company for a while. So what did you find is a hidden capability? And if you feel like commenting, why were we all so behind when you had already learned this in GitHub? Erica Brescia: Yeah. So let me speak first about something I’ve seen in society, and then also speak directly about GitHub. One thing that’s really exciting to me is the amount of collaboration that we’re seeing. So for those of you who aren’t familiar with GitHub, most of the world’s open source software is developed on GitHub. And so we have access to a ton of data around what’s being developed. And we did some analysis back in April, but the trends have held clear, and we’ve seen a 27% increase in the amount of open source software being developed. And what’s incredibly exciting and inspiring to me out of this crisis is the amount of collaboration we’ve seen, whether it’s across the private and public sectors whether it’s companies like GitHub working with universities, like University of Washington and Oxford, or with the state of California. I think we’re learning how as a society to do better work together. And I’m really excited about how we can take these learnings and some of the connective tissue that we’ve built in this crisis to advance research across all areas of the medical field, across technology. It’s just been so inspiring to see folks come together. And that’s a real hidden opportunity I think we’ve had this whole time that we didn’t really take advantage of as a society. You know, for GitHub like you said, we’ve had over 50% of the company working remotely for years. And I think it’s a huge competitive advantage to be able to hire folks from around the world and tap into talent that we wouldn’t otherwise be able to hire. For why it’s taken so long, I think some of it points to some of Nick’s points, like internet access has been improving across the globe and that’s been a huge enabler. I think, you can look to some of the experiences that companies have. I know Yahoo was a very public example when they pulled people back to work because they found that folks weren’t working. But we just have different tools. I mean, tools like Teams and Slack and Zoom are still relatively new in the workforce. And those have been huge enablers to help people feel like they’re staying connected. You know, we’ve been using Zoom for years, or Teams too, and I think what we’ve seen is as people get used to video calls, they feel a lot more connected into the rest of the world. And a lot of companies were doing remote work years ago, were still doing it via phone. And it’s just not the same to be on a phone call as it is to see someone and feel like you can have something more akin to a live conversation. So I do think that recent technological developments have really helped to set the stage to help us be effective and productive when working remotely. Mary C. Daly: That’s terrific. I mean, as I’m listening, I’m sure our listeners, our audience members are seeing the same things. You know, Arianna, you started with talking about the importance of us working together and collaboration and being connected, and how if we do this well, we will, we won’t end up in Nick’s declining productivity data. We will actually do better. And I think Erica, you summarized it well, we’ve got to have tools that allow us to do this. So I see the three remarks that you guys have made as being encouraging. And if there is a bright spot, the silver lining, I guess, in the COVID-19 it’s that the forcing function has forced us not only to look at the big gaps in our society, but also helped us see where there are real opportunities. So I want to pursue this idea of telework and productivity and social connection by next going to Nick to talk specifically about the considerable research you’ve done, that shows that remote work can have productivity benefits. And Erica just mentioned those, but since the pandemic, it seems like if I read your— well it’s written about you more than what you write—it seems like maybe your position on remote work has changed. So I read once that you’ve gone from an evangelist for telework to an evangelist for working in the office. So my question to you is first, do they have it right? And second, if you have changed your views, is that because of your research or because you are having the very real experience of so many Americans of trying to work on your research and also homeschool a little kindergartener at the same time? Nick Bloom: Yes. I mean to two points, one is working from home under COVID is far from ideal. So just to give you, you know, one, one issue is kids. That you’re right. I, you know Erica and I were chatting—my kids also started school on Monday. And it’s really hard working from home and kids at home. 57% of Americans have kids under the age of 18 at home. A second issue is having access to your own room. So I’ve worked with companies over the years, they’d always require you have no kids at home; you have your own room that’s not your bedroom. You can—I don’t know if you can see behind me—I’m unfortunate to have that, but only 49% of Americans do, but there’s like a huge bed behind me. It’s not the best at home office. And then thirdly, having working equipment, including broadband and the laptop. This laptop I’m on here, I dropped it on the way in from the garden and the screen is partly broken. So working from home under COVID is far from ideal. I, before COVID, I was very pro working from home, I still am. I just was not in favor of what you can call full-time working from home for everyone. So just to be clear, before COVID, people that work from home, most of them work from home one or two days a week. And I think that’s a fantastic thing. And in the data we see working from home, one, two, three days a week can be very effective at increasing productivity. It’s much less obvious on full-time working from home in the sense that there’s concerns over things like creativity—can you create new ideas if you’re permanently working from home? Motivation—is it hard to stay engaged and focused if you’re at home? Loyalty to your company. And then the other side of it is, also not obvious, not everyone actually wants to work from home full time. So in recent surveys we’ve done, we discovered, we asked, you know, after the pandemic, assuming there’s a vaccine, what would you like to do? How many days a week would you like to work from home? And 20% of people say, “None. I want to return to the office straight away.” They tend to be younger, single, living in small apartments so they want to go back into work. 25% of the people want to work from home full time. They tend to be older, married with kids. And then the majority of us want something like two to three days at home. So, you know, right now I feel like if anything, society is in this euphoric position whereby there are so many, as you and Arianna and Erica mentioned, there are so many people working from home right now that discover this inner power that I feel they’ve maybe become too enthusiastic. I think it’s a great technology, but I think it’s kind of best to do this something like two to three days a week, at least if you want to. And there’s fewer people—I mean Erica has been very advanced with her company that allows full-time working from home— that definitely works for some people, I wouldn’t say certainly the best way for everyone to remain productive. Mary C. Daly: I feel like we relearn this lesson throughout our lives that sometimes moderation on anything is the optimal outcome. So that, you know, not all of one thing or all of another thing. Arianna, I want to talk to you next, turn to you next and ask you this question. You’ve been very vocal in all your writings and public appearances of getting people to think about what the workforce of the future is going to look like and how they can prepare for it. What are they going to need to do? And specifically I’ve been really interested in the work you’ve done or the point you’ve made that we should be investing in jobs that can’t be automated away. And these are caregiving jobs that require some sort of human interaction, that our magical powers you even said in the beginning is this human interaction. So my question is, has the pandemic, which has put so many people who have this human interaction—caregivers—at risk, has it changed how you think about this? Do you still see the future of work concentrated around jobs with human interaction as their, their center? Arianna Huffington: Well, actually it has intensified that conviction because that conviction came from a lot of work. Some of it done by Kai-Fu Lee in China, and then looking at what’s happening in the United States around the fact that we may lose as many as half the jobs to automation in the future. So what can be the jobs of the future that machines cannot take over? And these are all caregiver, caregiving jobs. They’re jobs that, whether they are teaching or caregiving of the elderly, anything that requires that human empathy and interaction, because machines are not good at that. But I think what is interesting and how that applies to the conversation we’ve had so far about working from home or working at the office is the most important thing right now is not exactly where are we working, but how do we show up at work? Like what state are we. There’s some amazing research that just came out of Yale that shows that when we are stressed and anxious, which the majority of people, according to every survey are right now, whether you’re working at home, or working in the office, you are not going to be as productive because your prefrontal cortex is weakened and stress interferes with productivity. So what we need to do, to do is to just expand the conversation to address this human layer. You know, obviously technology is key. We could not function without all these advanced technologies that everybody has already celebrated and which I’m sure are going to be getting better and better. But in the process, if we ignore the human being, if we ignore, how can we help reduce the stress? That’s what we are focusing on at Thrive—working with Accenture, with Wal-Mart, with Verizon, with multiple companies. And the key here is that this does not apply just to people working from home, which is frankly, a luxury right now, but including essential workers, workers on the floor of Wal-Mart, workers in call centers. And we are working with them to see how we can reduce stress. And what is incredibly powerful and makes me so optimistic is that the latest neuroscience shows that it takes 60 to 90 seconds to course correct from stress. Stress is unavoidable. We’re not going to eliminate it. What we need to eliminate to avoid the mental health crisis that we’re facing right now is cumulative stress that makes it harder for people to sleep, to recharge, to center. So we’ve created in our behavior change up ways to reset in 60 seconds. And we can use them with call center operators, we can use them in grocery stores, and we can use them between Zoom or Teams meetings at home. But the key that we can not forget is that we are human. We are not machines. We cannot perform at peak levels independently of what state of mind and what emotional state we’re in. Mary C. Daly: I love what you said and you said this in your intro. And I really emphasize it here, you know, the idea of downtime is a feature, not a bug, and machines do eventually get downtime, but when they break. And since we have a human-centered culture, we need to not have people break. And I like your idea of taking some time in between. That’s really, I think it’s one of those things that when you hear it, you say, “Well, of course, that’s true.” But we actually haven’t been practicing it. So I think I share your optimism that COVID gives us an opportunity to really learn this. So Erica, let me turn to you now. And I will tell you, and people know, I’m an economist. And so something you learn in economics right out of the gate, research in general is about natural experiments and so who doesn’t love a natural experiment. And whether you meant it to or not, at GitHub you’ve been accidentally conducting this natural experiment because you had a large remote workforce prior to the onset of COVID. And now you have a full on remote work workforce now that COVID’s here. And so much of the discussion we’ve heard it already come through is about is it the pandemic that’s making us all anxious and agitated and feeling dislocated, or is it telework? And I think to help us sort that out, it would be really great if you could talk to us about your experience at GitHub and other organizations that are mostly remote and answer, is it teleworking that’s hard? Is it the pandemic that’s hard? Or is it something there that we haven’t quite seen yet? So Erica I’ll turn that to you. Erica Brescia: It’s definitely both. I mean, first of all, I think it’s important to understand that the transition to remote work, even in non-pandemic times is hard, right? To Nick’s earlier point, you need to have a great home office set up, and I’m sure folks have seen companies like GitHub and others who now give employees stipends to get their home office set up so they have a great environment to work. It takes a lot of learning and discipline. You know, when do you start work? When do you stop work? That’s a huge issue for folks transitioning to remote work, pandemic or otherwise. Folks forget to stop and eat lunch. People don’t get as much exercise because their commute goes from maybe, in the Bay area taking BART and then walking to an office, to just walking to another room in their house or maybe even to a computer right next to the bed, right. So there’s a lot of learnings people have to do when they’re transitioning to remote even in normal times. And now what we’ve seen is there is this increased stress. I mean, first, just the weight of the world is on everyone with the pandemic, with the economic recession in the U.S., with many of the other societal issues that we have— we have wildfires in California now on top of everything. But you know, I think beyond that, we have people who are in apartments with tons of roommates, and everybody’s fighting for space. I had a video call with somebody who was sitting on the floor of a bathroom one day because all the other rooms in their apartment were being used. And conversely, there are people who are alone and feeling very isolated right now. Some folks unfortunately struggling with depression or addiction who can’t get the support that they need and who are finding the pandemic incredibly isolating. And then there’s, of course, childcare responsibilities on top of that. I have a seven-year- old and adjusting to having everybody at home, everybody working from home has been challenging. But I do think that over time, post-pandemic, folks are learning a lot of important lessons about how to work better remotely and companies really need to invest in this for the long-term. A lot of things that are forced by remote work are healthy anyway. So one of them is a lot of written communication skills, right? A lot more happens in writing when you have folks working remotely and learning to document things, to document business cases, to document when decisions are made to make that information as available as possible within a company—that’s incredibly important for advancing your business, regardless of whether or not people are working remotely. Learning how to work asynchronously, that’s something certainly forced when you have a globally distributed workforce; you need to learn how to work with folks when you’re not always in live meetings. And again, I’ll take that back to written communication. Whether, you know, we use GitHub for GitHub so everything happens in GitHub issues, but there are obviously other solution, Office365 and Google Docs and things like that. I think there’s a lot that we’re all going to learn as companies about how to empower people to work more effectively, even when some folks do end up coming back to the office. And just to wrap this up, I’ll say we do have a large remote workforce. It is a huge advantage to the company. I think it allows people to live where they want to and still get great opportunities from an employment perspective. But working from home isn’t a panacea and even companies like GitHub don’t feel that way, right? A lot of our employees cannot wait to get back into the office. They miss their coworkers. And the second driver for wanting to go back to the office, with about 50% of folks saying this, is they need the work/life separation. They want to go into an office, and they want to leave the office and go home. I think it’s important that we realize that this hybrid model that Nick’s been talking about is incredibly important. We need to make sure that folks who need that work/life separation have an opportunity to get that, and then make sure that we’re putting all of the right processes and building the right muscles to enable folks in an office to work effectively with folks who might be working remotely all of the time. Mary C. Daly: Well, Erica, I think that your last comment really keys us up for, sets us up, for the question that if I looked over the audience or the registrant’s questions, so many people asked us about this next one. They said, it’s now clear if you listen to the news, watch TV, whatever you do, talk to your friends, that telework is actually exacerbating so many of the inequalities that were already present in our society. It’s really, in the minds of many, created a have and have-not world. And so if telework is part of our new future—and Erica, you mentioned building processes—how can we mitigate these effects and ensure a more inclusive future one, which actually works for all? If we’re going to even have this hybrid model, what do we need to do to ensure it doesn’t result in this duality of worlds where some have, and some do not have? And I’m going to ask each of our panelists to comment on this. And Nick, I’d like to start with you on that topic. Nick Bloom: You’re definitely right. So working from home really risks a big increase in inequality. And this has been a huge issue obviously in the U.S., but I mean, you can hear my accent—I’m British born, you know, around the world. And just to explain why, if you look at people that work from home, they’re five times more likely to have a university degree than to have been high school or less. And the reason—it’s really obvious that if you look at the types of jobs that are easier to work from home, they are more managerial, more professional. They’re basically based on computers. It’s obviously easier to do that. If you look at the types of jobs that I mentioned, that 30% of people on business premises, they tend to be more face- to-face interactions, more working with equipment, machinery. They, on average, are lower paid—not entirely, for example, surgeons or dentists or pilots have to be on the business premises, but this is a big issue for increasing inequality. And, you know, it’s something that I think we’re going to have to think very hard about how we’re going to address this. And I’m not sure there’s any easy solutions except to at least be aware of it. And in fact, earlier this week, I was talking to a group of CEOs and this came up about people very concerned that within their firms some people get to work from home. Other people have to come in, and the people coming in are quite upset about it. You can imagine they still have all the commuting, and they have the infection risk. The other thing I want to raise, interestingly, going back to commentary both Arianna and Erica mentioned, which is there is this tradeoff between being in the office and being at home and differences in preferences. So I mentioned some people really want to work from home five days a week. Other people really want to work in the office. In some of the research I’ve seen historically, you find that people, if you’re in a mixed environment where you have a team with say, some people at home five days a week and others in the office, you can find there’s a promotion penalty for being at home. So for example, I did a big study in China about ten years ago, and we discovered people working from home almost half as likely to be promoted as people in the office, if they both worked in the same team. And that raises a slight tension for me that post-COVID, if we have mixed modes—while I think it’s fantastic and I like the idea of choice—as a manager I slightly worry if we have very different patterns that you can implicitly have some people left behind. And that could have an issue for diversity of certain groups or people with young kids or people with strong religious views saying, “I’m more likely to work from home.” You can see that is going to generate an inequality in that dimension as well. So both a problem, I think, for lower income people and less educated people are less likely to have the opportunity to work from home, and also people that choose to work from home may suffer. And I want to make sure that there’s some kind of equality within firms, which is why I think the mixed mode is important—somehow suggesting that everyone is in three days a week, and maybe everyone goes from home two days a week, is maybe the best of both worlds. It doesn’t perfectly keep everyone happy, but then in other ways it’s very equal across employees that are in that group. Mary C. Daly: Well, I really like that, I opened our talk today by thinking about being intentional about the future. And I think if you—your last point was really well taken that if people are going to get promoted more frequently when they’re in the office, then post- COVID we’re going to leave behind people who make a different choice. And those people might be parents with kids or people who live far away because it’s too expensive to live near work, that would actually end up in a less inclusive future, not a more inclusive future. So these are exactly the topics we need to be thinking about. I really found that useful. Arianna, could I ask you to chime in on this next and talk about your view on this? Arianna Huffington: Yes. Well, first of all, Mary, the growing inequalities has been a crisis going on pre- pandemic. And what is fascinating about that is that, I’m sure all of us, we’ve been in multiple conferences about inclusive capitalism, about the risks of growing inequalities, but next to nothing has been done. So really one of the things that is happening right now in terms of your forcing mechanism is that leaders are realizing that they have ignored huge crises, and now they have to address them. Growing inequality is one of them. Skyrocketing rates of chronic diseases like diabetes and heart disease is another. And all that is connected to how we show up at work. Are we bringing our best selves, our best decision making? Unfortunately, we have focused much more on how many hours we’re working than the outcome of our work. And in terms of Nick’s concern about promotion, if work is outcome-based rather than who is showing up and who stays late, things are going to be dramatically different. But sometimes I’m reminded of my visit to Pompeii and remembering and reading about what happened there. They had all these warning signs, you know, dogs running away, smoke belching from Vesuvius, but they ignored them as not particularly alarming until they were buried under 60 feet of ash. So we have an opportunity now to really get serious about these issues and to stop simply talking about them. And one of the things that, again, I’m optimistic about is that so many of the companies we’re working with are beginning to see business as the main platform of change. They’re not just looking to government. With Wal-Mart, for example, we’re the exclusive provider for the 2.2 million associates, we are doing so much to help improve the health of those working from the stores, the frontline grocery workers—those who are, have been invisible and now are made more visible and considered essential and have had amazing results by moving to prevention, moving to nutrition, to mental health support, to exercise and seeing, you know, people reversing diabetes and reversing heart disease and losing over a hundred pounds. So we have an enormous amount of structural changes we need to make, including the way we look at healthcare, which right now is disease care. And we cannot talk about productivity independently of all that. If you’re sick, you’re not going to be as productive. And, and if you are depressed and anxious, you’re not going to be as productive. So expanding the conversation to include the full humanity and also looking at whether technology is augmenting our humanity or diminishing it, which it does in many cases when we get addicted to our phones or social media, is also another part of the tech conversation. Mary C. Daly: Boy so many things in there I want to ask follow-ups to on both Nick and Arianna. And I’m going to take the moderator’s prerogative and ask a follow up in a moment, but I’d like to first move to Erica to answer this question with your perspective. Erica Brescia: Yeah. I’d like to challenge Nick’s about promotions a little bit. I think that’s a temporary problem. I think companies are still learning how to support remote workers effectively and put the right processes in place and train managers to manage remote teams. I don’t think over the long-term that trend will hold. And I’d be really curious to see if you did a study across companies that have long had remote workforces where that’s really an ingrained part of the culture, if that’s still an issue. I can tell you that at GitHub pre-pandemic attrition was lower and satisfaction was higher among remote workers. So I think that that this is a trend that we’ll see go away. I’ll also say from an inclusive environment perspective, I think being able to support fully remote work is incredibly important. I was talking to a Hubber several weeks ago, who is a member of an underrepresented minority in tech who has to work from home because his wife has a medical condition and he was thrilled to be able to find a job opportunity where he can continue doing amazing work and still be able to be there and care for his family. So I think being able to hire globally, being able to tap into talent bases that might not have access to local jobs, and being able to provide more flexibility and work schedules to people will actually help us be more inclusive, to more types of workers. A lot of folks who want to work from home have children at home and need to schedule their care around the children’s schedule—or their work, excuse me, around children’s schedules. And I think as we evolve the way we work, as we bring more flexibility to work, as we learn to work more asynchronously, we’re actually going to be able to provide job opportunities to many more in the workforce than we could if we required them to come into the office. Mary C. Daly: So that’s terrific. And I actually want to ask my follow up question, which I changed as you were talking, because I, I really want to get to this issue. So Arianna, you mentioned, and I actually agree, that that businesses are going to be part of the change, maybe driving the change for our society in this front. And so, Nick and Erica, you mentioned ways in which teleworking can be less inclusive and problematic, and more inclusive and less problematic. And so the question I have is what can businesses—many of the people listening are business leaders, business workers—what can businesses start doing to ensure that we get the good outcome, as opposed to the less than good outcome. Right now we’re in data collection, right? Here’s opportunities for inclusiveness, here’s areas where inclusiveness isn’t there, or where there’s negative consequences. What do we need to do to ensure that we get the outcome we want? And I’ll open it to whoever wants to take a crack first, and I’ll listen for who that is, and then we’ll go from there. Arianna Huffington: What is great is that we actually have some outcomes that we can look at. I mean, we are working very closely with Salesforce, for example, and in the interest of full disclosure, Marc Benioff is an investor in Thrive. And look at the way they created Salesforce from the beginning, instituted certain fundamental principles. The 1-1-1 rule, you know, giving 1% of the revenue, 1% of employees time, and 1% of tech resources to others, you know, immediately stressing the importance of community from the beginning. And now we are seeing many companies prioritizing volunteering, inclusivity, all these things, which in the past perhaps were part of commencement speeches but not really part of business plans. And I think one of the things that has happened since the pandemic is the CHRO has become the most important executive next to the CEO. And the CHRO is looking at how can they really enhance the wellbeing of their employees, knowing that this will have a direct impact on productivity and business metrics. And we’re finding that volunteering, expanding our circle of concern beyond ourselves and our family to include the community, is critical both in closing these income inequalities we are talking about but also in helping us be more connected with something deeper than ourselves in our lives than just as I said earlier, the sort of breathless frenetic way we have been living before. Mary C. Daly: So Arianna, can I ask you one follow up to this? Because you’ve said—this is something I talk about publicly all the time—that bringing your whole self to work makes you a more productive person. And it sounds like from what you’ve described, you think this is essentially missing. And if we do that, that’s a real opportunity in our country. Arianna Huffington: Yes. Mary, it’s essentially missing, and you know it’s missing because our culture really doesn’t believe it. We still live under the cultural delusion—even though it is denied by all science and all data—that if we are on 24/7, if we never disconnect, we are going to be more effective. And I’m stunned by the amount of leaders who truly believe that. I was recently working with the management committee at Accenture, for example, that runs their whole global operation, 500,000 employees. And their CHRO—and she wrote about it so I’m not disclosing anything—Ellyn Shook said, “You know, Arianna, I really cannot afford to go on my daily walk right now. I’m working across multiple time zones. I have such tremendous responsibility”. And I said, “You know, Ellyn, you cannot afford not to go on your daily walk if you want to make good decisions and be the most effective you can be.” And she had to change her mindset and stop seeing doing something for herself as self-indulgent, as a luxury. And she started going back to a daily walk. She sent me a text the other day that she had been walking for 110 uninterrupted days, and the impact that had on her as a leader, on the decisions she made, on everything. And she’s talking about it. So we need more role models. We need more people in senior positions to give others cultural permission to recognize that how they take care of themselves connects them to these hidden capabilities that you started our conversation with, Mary, and has a direct impact on productivity. Mary C. Daly: I really love that. I think that’s right. We can’t afford not to take care of ourselves. It’s really not going to help us in the long run. Erica or Nick. Do you want to add to the discussion about how do we make sure we get to the next place intentionally so that we’re more inclusive. Erica Brescia: First of all, I’ll say the one thing that I have not sacrificed has been my workout sessions. Incredibly important to take care of yourself. And that’s something that I really focused on keeping constant through COVID, and it’s been really key to me. I’ll also say, we do regular wellness surveys of our employees, and the top rated things that are helping employees reduce their stress and feel better about work and life in general is the executive team encouraging them to take time off and take vacations. And then the second thing was their managers encouraging them to do that. So one thing we’ve been doing very publicly is everybody on the senior executive team at GitHub has been taking regular vacations, has been telling the company about it; encouraging folks to take time off; and reminding folks that even when you can’t necessarily travel like you normally would, just taking time away is so incredibly important. I do want to comment on your question as well, Mary, and I think that one thing that organizations need to do in addition to making sure people take time away is just learn how to support remote work effectively. GitHub has put out a blog series about how different teams across our company are doing it, including teams who are very new to remote work. So you can go to the blog, and we’ve done a bunch of interviews and tried to share some best practices. But it really does require an investment, and an investment in training, and investment in learning and helping people understand how can you work better remotely? Another thing you need to invest in is finding ways for employees to connect socially, since they can’t be together in the office and try a bunch of things and see what works. Something that’s been really cool for us is we have something called Coffee and Beats. And every Wednesday morning we bring in an artist and they perform over Zoom. And anyone in the company can tune in and hear some amazing music. We’ve had everything from classical, to rap, to DJs, and it’s a really cool opportunity for folks to come together. We had a gym in San Francisco. We stream our gym workout classes now so people can tune in, and the meditation one—to the wellness point earlier—is one of the most healthy sessions. We’re doing virtual offsites. People are hosting Minecraft competitions and cooking experiments together and things like that. So I think finding ways to keep people engaged and connected and socializing in a remote world is incredibly important to helping you support remote work effectively, which again, to my earlier point, helps you build a more inclusive workforce and company over time. Mary C. Daly: I learned many things from your response, but two things I wanted to comment on. One is, Arianna said—and I totally believe this—we need to bring our whole self to work. And what you’re, I think, saying is we need to recognize that these are still people working from home, and we need to help with the social interaction so people can be fully human, even though we’re all remotely working. The second thing I will share with people is that I was thinking of doing Coffee and Karaoke with my wife and I for the teams here in San Francisco. And now I’ve put that idea beside. It will not be me singing. I will, in fact, bring artists in. So my team has probably taken a big sigh of relief over that. And I appreciate that, that insight. So thank you. Nick. I’d like to turn to you to get any comments you have about this question about how do we make sure we have a more inclusive world going forward? Nick Bloom: I was about to say I liked the idea of coffee and karaoke, so maybe we should have this in Stanford too. I wanted to make one point, which Arianna and Erica—and particularly in Erica’s last thing has come up—and I’m totally in agreement of this. I just want to be very clear on it, which is the importance of being well managed for working from home. And why don’t I illustrate it by coming back to Marissa Mayer, who was mentioned earlier in the call, which is—as many people probably remember Marissa Mayer was a superstar CEO that was brought in to turn around Yahoo about seven or eight years ago. But you know, in an odd way, her biggest amount of press coverage was when she paused the working from home program in Yahoo in 2013. I actually reached out to Marissa. And I had a long conversation with her about four weeks ago. She replied—I emailed her and got in contact with her—and she said, “Lots of journalists have been chasing me all the time, but because you’re a Stanford professor, I thought I’d talk to you,” which hopefully she doesn’t regret. I tell you what she explained about that decision and the broader point it highlights. So, Marissa said when she took over Yahoo, they’d had endless CEOs, a lot of churn; the firm wasn’t in the best shape. And she started to put in place a very rigorous performance evaluation system—so being able to effectively assess who’s doing well, who’s kind of on track, and maybe who’s struggling and needs some help. And she said, as she was starting to do that, she discovered this whole group of people working from home, some of whom didn’t appear to be logging in at all—they needed to log in to do work for Yahoo—but there was no login for days on end. And so she said, “Look, it’s really essential that you have good management, particularly good HR management”—exactly as Erica was just saying, in fact—”in order to make working from home a success.” And the reason is if you think of—as an economist, there are two ways maybe you can evaluate people: there’s evaluate them based on output or evaluate based on inputs. And if you evaluate based on output, for example, for me as a professor that may be say, teaching and research and maybe university administration; I’m evaluated on how effectively I do that. And, you know, personally that’s great. I just want to kind of get on with my job and do it in the best way possible and not have somebody looking over my shoulder. But if say Stanford was chaotic and badly managed and couldn’t do that, they fall back on evaluating me based on inputs. So am I sitting at my desk? Do I appear to be looking at my computer? Am I awake? Do I turn up? How many hours am I putting in? And that’s—coming back to Arianna’s issue—that’s where all the stress gets generated. And so, well-run firms evaluate employees based on output; it’s what you achieve and what you do. And they are, you know, they don’t have to peer over your shoulder and treat you like they’re very, you know, very big-brother like to evaluate you based on input. So I think working from home turns out to highlight how critical it is for firms to have good HR systems. Because if you have good HR systems, a lot of the issues we raised about extreme stress—Erica and I had this discussion about whether people working from home get left behind. All of those issues tend to fall away if you can evaluate people on what they achieve. And so that I think is extremely important, much more so than in a way than it was before COVID. Mary C. Daly: That’s terrific. And, I am going to now use my moderator’s prerogative to ask a broad question to everyone about this. So one thing that really, I think, people struggle with is it’s much easier sometimes to count inputs. It’s much easier to think that people are like machines, and we run them, and then they clock in. They appear to be staring at their computer—I like that a lot, Nick. And, so how do we help everyone shift from an evaluation system that’s all about things we can count and to things that actually can be measured but we can’t use a counting system for it. You know, you can’t count the number of hours someone’s looking at their computer. How would you think about doing this? And I don’t know the answer. I love to ask questions I have no idea about. Arianna you’re at the top of my screen for the piece I can see. Can you start on that question for us? Arianna Huffington: Yes, absolutely. Actually, what is fascinating now is that HR organizations are becoming less bureaucratic. They have to act much faster. There is a much greater urgency around these issues. We are finding that deals that would have taken three months now close in three days because these problems are so urgent. And they’re also recognizing that bringing your whole self to work is not a cliché; it’s essential for productivity. And what I love is that we bring to the skeptics a lot of data and examples from athletes. Because athletes really demonstrate that results—which is are you winning on the field or on the court?—are so connected to recovery. Recovery for athletes is part of performance. So we need to change the culture so that HR leaders and executives and boards and everyone else can recognize that and see the terrible impact that burnout-fueled cultures have on business metrics. I was on the board of Uber when things started falling apart, and it was very clear that we were fueled by burnout. And that has consequences. When people are depleted and running on empty, they operate at their worst. They’re more sexist, less inclusive, make worse decisions. So that permeates the culture. And I think boards need to start looking at all that. We are actually building a mental resilience and wellbeing dashboard for boards and executives to be able to have all the data, which are actually leading indicators of the lagging indicators which are business results, like attrition, like productivity. So we have a lot of work to do, but I love you’re forcing function, Mary; we now have to do it. Mary C. Daly: Yeah. And I like the idea that you’ve just introduced that just because you can’t count it, doesn’t mean you can’t measure it. So you have a dashboard that’s a leading indicator on business performance, and it links back to the humanness in all of us. That’s really a terrific place to go. So Erica, can I go to you next? Erica Brescia: Sure. I think there’s a few things. So, we do wellness surveys every month and really focus on building a sense of belonging in employees because we feel like that really sets them up for success. And there’s a lot of different things that contribute to that. Whether it’s our communities of belonging for folks within GitHub, whether it’s an opportunity to tap into some of their passion areas, whether or not they feel supported by their managers, whether or not they see how their work is connected to the company. I think that’s all incredibly important. Another thing. And I’ll say this has always been the case in tech, right? Because managing lines of code or hours worked is a terrible, terrible idea for developers. And I think everybody knows that. It’s pretty well established by now. But I think having a really good system of goal setting and measurement is important. I think most companies today have adapted or adopted OKRs or some form of that. And we certainly do that from the very top, all the way throughout the company at GitHub. And what that means is that we’re setting quarterly objectives and then key results that all roll up to support the goals of the company. So when it comes time to look at performance reviews or recognition and rewards, as we call it at GitHub, we really look at what objectives did we set? Did we meet those? And another key thing that we look at is did people live our leadership principles when achieving those values? Were they acting as if we’re one product and one global team? Are they practicing kindness? Are they shipping to learn? Are they approaching things with a growth mindset? We look at both behaviors and we also look at progress towards goals when we’re looking at how to measure productivity. But that’s something that started long before COVID and will certainly continue long after. Mary C. Daly: Yeah. And that’s terrific. And what I found here in our organizations, when we focus on both behaviors and these outcomes, more accountable outcomes, people feel more involved. And they feel a greater sense of belonging just because they’re all part of the mission of what we’re trying to accomplish. So it has that extra benefit. So Nick, I’ll turn the final answer on this question, “what can we do,” to you. Nick Bloom: I’ll be quick. I’ll just summarize what’s gone before, which is two things. One is, as both Arianna and Erica, is that it’s very important to collect data. The more data you collect, the more people doing it. And it’s creative data. It can be surveys. In many jobs I’ve had 360 reviews where you ask my peers and my boss and people that work for me how I’ve done. So one is collection of data. The other thing is just being deliberate and intentional. Arianna mentioned the HR role is more important than ever and I think that’s particularly true. So for example, when I was at McKinsey, our jobs as a consultant were really all over the place. So just very different roles, and you go into a firm and do something completely unique and new, but we still have rigorous incentive systems. You can make positive and negative comments on McKinsey, but I think they’re definitely very good at motivating and assessing their staff. And on the intentionality, the story was 20% of the partner’s time was spent on HR. It was seen as a really important thing and they put a lot of time and effort into it. So I think deliberately collecting data and just realizing that this takes time and resources—and HR is particularly critical—are the two key steps. Mary C. Daly: Well, I took a lot out of that. And before I go to our one last question, the words I heard that I think are so important are we have to change our mindset. We have to really think about what we’re trying to do. We have to foster belonging. And most importantly, we have to lift the—you know, for the longest time in work, it seems like the HR function has been the people who pay, work our paychecks, and make sure that nobody does anything wrong—and lifting these individuals up, which has been already coming, but lifting them up to this. These are the critical people who help us live the promise of our people are our best asset. And so I’m getting a lot out of this that I think other people will help, who are listening. So we’ve only got time for one last question, time flies when we’re all having such a robust conversation. So I’m going to ask you a question. It’s probably the hardest question I’m going to ask. We’ve asked today, but it’s what I really meant to have us all think. So for each of you, imagine you’re ten years in the future, so it’s 2030, and we’re long past these challenging, hard, unprecedented times. What’s the lesson you most hope we learn from this pandemic? And Erica, I’m going to start with you. Erica Brescia: New models of working, I think, most certainly. I hope to see a lot more flexible work arrangements. Let people plan their work around their lives because you ultimately get better results from that. And to my earlier point, it’s much more inclusive if you can do that. Let people experiment with job sharing, 80% time for 80% work. The gig economy is fascinating. And I do think we have some challenges to address, to make sure those folks get access to benefits. But I was talking to the CEO of a gig work company called Limitless the other day. And she was telling me that they see a lot of folks who are retired, who just want some additional interaction and mental stimulation. She sees folks who are parents. She sees folks who are studying for school. And they’re deriving immense satisfaction, a lot of learning. And it opens up future job opportunities from them. And her company does support staffing via the gig economy. And they see higher CSAT results from the folks who are working via gig than some of the call centers because folks have more control over their schedules, and it brings so many more people into the workforce. So I’m really excited to see how things like flexible work arrangements, part time, job sharing, and the gig economy evolve over time. Because I think it will put everyone on a much more even playing field, and I think that’s really exciting. Mary C. Daly: So Nick, what’s your hope from what we’ve learned? Nick Bloom: I’m going to change tack slightly and say, I think we’re going to learn that life doesn’t need to be so concentrated into cities. So another thing that’s come out from COVID is obviously the movement out of cities. And there’s both a pull factor because of working from home; as both Erica and Arianna mentioned it’s much easier to work far away, deep in the countryside. But also a push factor, the issues about social distancing. Do you want to take mass transit? Do you want to get on the subway? We’ve all watched way too many of those videos of people sneezing and horrible stuff flying out there to ever be totally relaxed again about getting into a subway or getting into an elevator to go up to a 40-story building. So I think this is actually good. It’s going to rebalance society a bit. It’s going to spread us out, flatten things up. The other point for listeners, maybe it seems obvious, but personally I probably would avoid purchasing an apartment in a huge sky rise right now in a downtown, a big city, or buying a long lease on skyscrapers. I really see society maybe going back to the way it was 20 years ago, where cities were obviously more valuable in the center of economic life, but nowhere as dominant as they were in 2019. So, I think it’s good for rebalancing actually society. We see 2019 as slightly odd in the way we’re so obsessed with cities. A few large cities in the U.S. and certainly the rural parts of the country felt like they were getting left behind, or falling behind. And I think it will be rebalanced. Mary C. Daly: So Arianna, I’m going to give you the final word from the panel on what your hope is. Arianna Huffington: Well, first of all, I agree with everything Erica and Nick said. But Mary, since I saw that you’ve studied philosophy, I’d like to end on a more philosophical note to say that ten years from now, I hope we will all have realized that we have defined success far too narrowly, just in terms of money and status. And we need to go back to what ancient philosophers, whether it’s in the Tao or the Bhagavad Gita or the Stoics. They’ve all said the same thing: that, in fact, the good life is not just defined by money and status, and connecting with these hidden capabilities that you started us with is key to the good life and what we have been missing. And it’s really the distinction between our LinkedIn resumes and our eulogies. Have you ever been to a memorial when somebody was memorialized by saying George increased market share by one-third? No. So we need to bring these eulogy values into our lives, and, paradoxically, that’s going to make us more productive. I would love Nick to measure that in ten years, because we are going to see that when we bring perspective into our lives, when we don’t sweat all the small stuff, when we don’t worry about everything, when we don’t build negative fantasies about the future because we’re stressed out, we are going to be wiser, more productive, more effective, more empathetic. It’s going to be easier to include everybody in company cultures. And I see in ten years we can create this Utopia, but it starts from the inside out. And our saying, our motto at Thrive Global is “Upward, onward, and inward.” If we don’t take time to go inward and discover these hidden capabilities, we’ll continue living life breathlessly and frenetically and less productively. So I’m very optimistic. We are living through a crucible time, but crucibles are often necessary. They are catalysts for fundamental changes that are difficult to achieve, but I believe they’re in our future. Mary C. Daly: Well, thank you. I’m afraid our time has come to an end. And for those of you who we went a little bit over, a tiny bit over, I just couldn’t cut off such tremendous closing remarks. So thank you for staying with us. I want to give a big thanks to our guests, Erica, Nick, Arianna. Thank you so much for being here and starting off this series. Just in the conversations we’ve had, we’ve got so many more ideas about topics we’re going to need to take up. And to all of you who’ve tuned in, this is just the first of our conversations about the new future of work. If you’ve missed part of today’s program or want to share it with a friend or colleague, please go to our website to find a link to the full recording. As I said, at the beginning, we only get the future we want if we start talking about it today. Intentionally and together, we can make the new future. The one that Erica, Nick, and Arianna, so optimistically described for us. I share their optimism, but we’re going to all need to work on this together to make it whatever we want it to be. Thank you for joining us. I can’t wait to see you next time. About our speakers Mary C. Daly is president and CEO of the Federal Reserve Bank of San Francisco and helps set American monetary policy as a Federal Open Market Committee participant. Since taking office in 2018, she has committed to making the SF Fed a more community-engaged bank that is transparent and responsive to the people it serves. Arianna Huffington is founder and CEO of Thrive Global, a leading behavior change tech company, founder of The Huffington Post, and author of 15 books, including, most recently, Thrive and The Sleep Revolution. She has been named to Time Magazine’s list of the world’s 100 most influential people and the Forbes Most Powerful Women list. Erica Brescia is COO of GitHub, where she leads business development, support, workplace, and international expansion. Before GitHub, she was the COO and co- founder of Bitnami. Erica’s leadership in the technology space extends to serving on the board of the Linux Foundation, and being an Investment Partner in X Factor Ventures. Nick Bloom is a professor in the Department of Economics and Business Schools at Stanford University, and co-director of the Productivity, Innovation and Entrepreneurship Program at the National Bureau of Economic Research. His research focuses on management practices and uncertainty. He previously worked at the UK Treasury and McKinsey & Company. RELATED The New Future of Work: Future of Education (March 22, 2021) What’s the fate of America’s cities? 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Mary C. Daly (2020, August 19). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_20200820_mary_c_daly

@misc{wtfs_regional_speeche_20200820_mary_c_daly,
  author = {Mary C. Daly},
  title = {Regional President Speech},
  year = {2020},
  month = {Aug},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_20200820_mary_c_daly},
  note = {Retrieved via When the Fed Speaks corpus}
}