Hey everyone,
Maybe itās just me, but it seems like there has been a lot of chatter about remote work, hybrid work, āthe new normalā, āworkplace of the futureā, ārising interest rates will kill remote workā, etc. over the past few weeks.
Hereās my view in a nutshell:
For many reasons, remote work represents a tremendous opportunity.
Remote work requires different management skills. The idea of obtaining and practicing these skills is attractive to some leaders and repulsive to others.
Remote work isnāt perfect. Itās different and it certainly isnāt for everyone or every organization.
For the next few weeks, Iām going to write about remote work and specifically the arguments supporting or criticizing it.
As always, Iād love to hear your thoughts,
Ben
Remote Work, Cognitive Dissonance, and Market Size š„§
Hereās a wild conversation:
Entrepreneur: I have a great, disruptive idea that will change the world!
Investor: Great, tell me more!
Entrepreneur: OK, I have this fantastic, scalable, high-margin product that people love! And Iām going to sell it in Fremont, California.
Investor: Um, why Fremont?
Entrepreneur: Itās where I have an office so I can see my customers face-to-face silly! Personal connections are essential, and itās how our customers will know we arenāt phoning it in.
Investor: So your total addressable market is Fremont?
Entrepreneur: Yes! You get it! And donāt forget there will always be customers willing to move here to experience my genius - your upside is limitless!
You donāt have to be a Wharton MBA to know that the Entrepreneur in the above example is a moron. What are they thinking?! Are they needlessly limiting their addressable market to Fremont, California?
And yet The Worldās Richest Man wrote a couple of emails about remote work. They got leaked. To summarize, heās not supportive of the practice.
Tesla has and will create and actually manufacture the most exciting and meaningful products of any company on Earth. This will not happen by phoning it in [AKA working remotely].
In this post, Iāll explain why Elon Musk, or any leader, will have a hard time āmanufacturing the most exciting and meaningful products of any company on Earthā with an anti-remote attitude. I wonāt get into his assumption that remote work is āphoning it inā.1 Instead, Iāll make my point using something he surely understands: market size.
Talent is Limited
People have different strengths and weaknesses; they have different motivations, different abilities, and different skills and traits that influence shareholder value. Said another way, talent is not infinite. As such, employers always benefit by having a larger pool of potential candidates.
I realize that the above statement may be obvious, but maybe it isnāt? If it is painfully apparent, why would so many CEOs get upset about the prospect of a remote workforce?
To illustrate my point, letās look at how limiting Muskās view is by looking at a specific role at his company thatās challenged by his remote work strategy: Recruiters. There are, according to LinkedIn:
2,200 recruiters in Fremont, CAĀ
922,000 recruiters in the US
2,130,000 recruiters globally
Thatās a massive difference in scale. Meanwhile, there are 17 openings for āRecruitersā at Tesla in Fremont. If Musk is after the top 1% of recruiters heāll find 22 of them in Fremont. Good luck to him.2
Hiring is Sales Now
Hiring is sales now. Sourcing and recruiting employees is no different than the total addressable market, so why wouldnāt you have the largest talent pool available?Ā
This is a concept that Musk has to understand. The entire premise of Tesla is that there is worldwide demand for well-designed electric vehicles. The operative word there is āworldwideā - if Teslaās only customers were where it had offices, it wouldnāt be able to attract the investment required to produce an electric vehicle, much less produce them at scale.
The Answer
Brian Chesky, CEO of Airbnb, is one of the few leaders openly supportive of remote work because heās willing to accept and exploit the opportunity it provides. Hereās what he had to say on MSNBC earlier this month:
And all the CEOs hauling employees back to the office, thatās their prerogative. But hereās what I would say. The companies with the best talent usually win and if youāre limiting your talent to a commuting radius, youāre not going to have the best people, because the best people will live everywhere.
Yes, Chesky has a direct business interest in supporting remote work, but that doesnāt make him wrong.
Currently, Tesla has 65 openings across all of their locations for recruiters. How quickly could they fill those roles by adapting to the new normal rather than fighting against it? More importantly, how much better of a company could Tesla be?
As always, thank you for reading. Next week weāll talk about the moral case for remote work.
Heās wrong by the way.
Some of you may be saying āBut people will relocate!ā Iām skeptical. US migration has been in steady decline for a while, and any recruiter who owns a home with a sub 3.5% mortgage or relatively cheaper rent isnāt going to jump at the chance to move to the Bay Area.
I started remote work in 2018 (before it was cool, jk) because the CEO wanted to get the best team possible, right? š
I'd say in that regard it worked - we definitely had a stellar team from all different time zones. We met in person every 2.5 to 3 months in a different city and each retreat was the highlight of my time there!
Until it wasn't, and that's a story for another time (comment in another post?) Hint: CEO's "locus of control"