The Future Workplace Depends on Efficiency, Effectiveness, and Balance

In order to shift from survival mode to growth mode, companies need to embrace thoughtful work design.

Robert Hooijberg and Michael Watkins Reading Time: 10 min 

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Many leadership teams are grappling with how to build and sustain the requisite talent foundation to grow their businesses as the world emerges from the pandemic. Unprecedented high levels of professional mobility in the workforce driven by a fundamental reassessment of priorities and expanding opportunities to work from anywhere present a new strategic challenge. Companies that fail to adjust their workforce policies to reflect these emerging realities are likely to underperform those that do.

To be successful, companies must strike the right balance between driving for efficiency and achieving effectiveness while also supporting employees to balance work and life in meaningful ways. Efficiency measures tend to focus on reducing office space, commuting, travel, and entertainment activities. Effectiveness is about executing on existing goals and innovating in products, services, and business models. Quality of life refers to ensuring that employees have the resources and support needed for work-life balance.

We think of the future workplace as a stool whose three legs — efficiency, effectiveness, and quality of life — must be kept in balance. For the stool to remain upright, all three legs need to be sufficiently strong.

Weighing Hybrid Work’s Costs and Benefits

In their drive for increased efficiency, companies are trying to permanently reduce costs by widely sustaining economic gains realized through virtual work throughout the pandemic. This includes reduced travel and entertainment expenses and, critically, dramatic declines in office space. Many companies are making these efficiency gains permanent. For example, Salesforce and Airbnb significantly reduced the amount of office space they rent. Salesforce currently plans for more than 65% of its employees to work in the office just one to three days a week — 40% more than before the COVID-19 pandemic. And it was reported in May 2021 that Airbnb would “unload an additional 287,000 square feet at its San Francisco headquarters, bringing the total reduction of its real estate to more than 424,000 square feet.”

However, the focus on achieving these short-term efficiency gains must be weighed against the risk of impairing effectiveness. Companies must carefully assess, for example, how far they can push virtual work without undercutting innovation in product and process development or negatively affecting customer relationships and business development.

That said, during the pandemic, managers also created many process efficiencies.

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About the Authors

Robert Hooijberg is a professor of organizational behavior at IMD Business School. Michael Watkins is a professor of leadership and organizational change at IMD, cofounder of leadership consultancy Genesis, and author of The First 90 Days: Proven Strategies for Getting Up to Speed Faster and Smarter (Harvard Business Review Press, 2013).

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Comment (1)
Michael Beer
I agree of course, that collaborations is not a string suite of individuals or organizations. When we help leaders conduct honest, collective, and public (transparent) conversations about barriers to implementing the organization's strategy by a method i and my colleague invented called the Strategic Fitness Process poor coordination and collaboration across the organization is cited most often. I do not agree, however, that training is the first line of defense. In my 1996 Harvard Business Review article "Why  leadership training doesn't work: And What to do about it,"  My colleagues and I argue based on research and experience that structural changes that put people in horizontal groups (task force, new product team etc.) is the first step, not training. We believe training solutions are too easy and can be delegated to HR. Collaboration requires goal oriented behavior for which the team is responsible and accountable to managers above them. Training and process consultation and coaching real time behavior is far more effective learning methods and it achieves results at the same time.

Michael Beer