Featured in today's newsletter:

  • Lessons from a striking case study in remote working.
  • A discrepancy in workers’ and executives’ excitement around artificial intelligence.
  • The three questions to ask about team priorities.

AI and Work Radar

  • A recent Qualtrics survey reveals a gap between workers’ and leaders’ attitudes toward AI: Some 46% of individual contributors are scared of the potential impact of AI and 39% are excited, while those sentiments are flipped among executives, with 64% saying they’re excited about AI’s possibilities and 30% feeling scared. In an interview with Charter Pro last month, BCG managing director and partner Julia Dhar advised leaders to assuage workers’ anxiety by focusing on tasks, not jobs: “People are expecting that their roles will change,” she said, and “it's very clear that they're expecting guidance from their leaders about how to prepare.”
  • One critical question around AI adoption is who within a company should lead the decision-making. A growing number of employers are creating AI “task forces” comprising representatives of different departments and levels across the organization to advise on experiments and use cases. Others are taking a more segmented approach, operating task forces by department or function.
  • While Gen Z workers are entering the workforce with more AI fluency than many of their older colleagues, they’re especially vulnerable to poorly managed generative AI adoption, with some organizations automating the low-level tasks that would otherwise serve as entry-level learning and training opportunities.
  • To avoid “hallucinations” and increase output quality, narrow the pool of information a chatbot can draw from by directing it to base its answers on specific reputable sources, like trusted media outlets or academic journals.

Focus on a Case Study in Making Remote Work Succeed at Scale

Allstate has about 57,000 employees and 82% of those in the US work remotely. The insurance company sold its sprawling Illinois headquarters last year and shed half of its office real estate overall, saving hundreds of millions of dollars annually.

At a time when many executives are frustrated that employees aren’t spending more time in the office, Allstate CEO Tom Wilson says the remote arrangement is working well for his company. “We decided to jump into the water and see where it goes,” he said during a session at the recent Aspen Ideas Festival. “Our employees decided they wanted that and we're finding a way to make it work.”

Charter’s Kevin Delaney moderated that session with Wilson and Joanne Lipman, author of Next! The Power of Reinvention in Life and Work. Here are excerpts from Wilson’s comments, edited for clarity and space, explaining the remote-work arrangement, challenges with it, and what he has learned to do differently as a result:

How Allstate went from about 20% permanently remote pre-pandemic to 82% now:

We went through a process where we top-down said certain departments need to be together. Our investment department, the traders, they need to be together. We just know they need to be looking at each other, looking at their screens. But there's a lot of other people who don't need to be together.

We then gave people choices from that. And of the people we gave a choice, 95% said they wanted to work permanently remote, they didn't want to come into an office.

We also didn't declare we had a headquarters. It was in suburban Chicago. The mayor of Chicago really wanted us to say Chicago was our headquarters. And we've resisted that. We've said we'll always have a big presence there, but we don't have a headquarters because I don't know what a headquarters is anymore. A headquarters used to be the center of power. You came there to get noticed and be seen by people and move up. And we don't have one of those anymore.

Recognizing the limits of executive power to enforce a return:

I don't think I have all the answers, and if I did, our people wouldn't necessarily follow me anyway. A bunch of my friends in New York who run financial services companies made this declaration: ‘You will be in the office.’ And nobody came in. Shows you what power you have as a CEO: like zero. So go with the flow, treat employees as customers, treat them with respect, and then they'll come with you.

How to make remote work feel meaningful:

We're thinking about the whole work experience. So not just what happens in the office, but how do we make that remote experience better. There's some really good things here. I used to have to go around the country and do town hall meetings with 500, a thousand people, to try to get our employees. Now we do a Zoom call, we get 20,000 or 30,000 people on the call at once. It saves me a bunch of time, saves them from having to come for a meeting. If I'm boring, they can click off. It's just better.

We took those meetings and now we had Arthur Brooks come in and talk to our employees just about happiness. Chat went crazy. You couldn't believe how excited people were.

So there are ways you can think about outside the office. How do we make that experience rewarding?

How to strengthen organizational culture with remote work:

This is going to raise the bar because culture can be transmitted physically. Culture is just like you walk into a building, you walk into an office, it just becomes part of you. In this hybrid world and with the pace of change, whether that's pace of change on the diversity of your workforce or pace of change with AI and the other stuff, culture becomes a higher bar. And I don't think as a management science, we have good processes around culture. If you ask people what the definition of culture is, it's sort of like pornography: you know it when you see it. We tried to develop our own answer, to come up with four components of culture so that we can actually measure it and see if we're making a difference.

What good managers look like in this new world:

First and foremost it's that you care a lot for your employees. Second, that you're really clear about where your company's going. Here's our purpose, here's what we're trying to achieve, here's what you want to do.

Remote work raises the bar on decision clarity. It used to be you could walk out of a meeting and if it wasn't so clear, there'd be a meeting after the meeting. Or somebody walked by your office: ‘What did you say over here? I didn't understand it.’ But now you click off Zoom and then they go off and you don't see them for three days. I'm finding it's harder for me to be clearer and more specific and it takes extra work.

The same thing is true on feedback. If you've read Reed Hastings’ book on feedback, on what they do at Netflix—it’s a lot more aggressive than we do, let me just put it that way. But they have really high margins and their people add a lot of value. So obviously it does work for them. But the idea that you're really crisp and blunt with people so that when they walk out of that meeting, they're not wondering, do they like me or not? You’ve got to be really clear. So it changes what we have to do. For us, those two elements, when we look at culture and we break it into parts and we break it into processes and say, what are we going to measure? Decision clarity and feedback are two things we're working really hard on.

On the impact of remote work on diversity and inclusion:

It's huge. Our diversity hires are up 30% since we went remote. Let's say you're a mother who wants to work, but you have two kids in school and you want to be able to take them to school and pick them up at school. But you still have time, you want to work during the day. If you had to drive 22 miles to come to our office, drive 22 miles back to school, you couldn't work for us. And now you can. Our office was in the northern suburbs of Chicago and Chicago gets whiter and less diverse the farther north you go. So people from the south side didn't come work for us.

Now the challenge we have—all these things come with challenges—is then you get them spread everywhere. So you're like, well then what's your opportunity to actually be able to get them to come back physically and have some connection and not be isolated? We've had seven talent centers around the country—do we ring fence it and say, look, you’ve got to live within 50 miles of one of our talent centers because it's at least some place you can come or can we create pods? If we have two people in Des Moines, we're not going to have 2,000 square feet of space for them. So it’s complicated, but there's a real benefit to society.

Read a fuller transcript with Wilson’s comments, including discussion of productivity and the drawbacks of remote work. Watch the video of the session with Wilson, Lipman, and Delaney from the Aspen Ideas Festival.

What Else You Need to Know

Companies with flexible work policies are growing faster than fully in-person ones. Organizations with hybrid or remote-work policies added employees more than double the rate of fully in-office organizations between March and May, according to Scoop Technologies’ analysis of 3,600 companies over a three-month period.

  • Among companies with hybrid-work policies, companies that required one day in person expanded headcount by 5%, nearly double the growth rate of companies with fully in-person schedules.
  • Amid ongoing friction over return-to-office plans and evolving hybrid-work policies, more than one-fourth of companies with fully in-person schedules report that they are having issues hiring, according to research from design and construction firm Unispace. One of the groups most resistant to fully in-person work is managers and other senior employees. Some 44% of senior employees and 50% of mid-level employees strongly prefer to work from home over the office, compared to just 6% for junior employees, according to McKinsey research.

With few legal protections, workers are left vulnerable in extreme heat. As temperatures reach record highs across the country, just seven US states currently have heat-safety laws on the books.

  • The US also does not have federal laws around heat-related worker safety. The Occupational Safety and Health Act, which mandates only a “general duty” for worker safety, does not address heat specifically.
  • The Bureau of Labor Statistics recorded 36 heat-related workplace deaths in 2021, the latest year with available data.
  • In Texas, which this year is having one of its hottest summers on record, a new law voids any city and county regulations around worker breaks that are stricter than the statewide rules. The law has left Austin and Dallas unable to enforce their rules mandating regular breaks for construction workers, while San Antonio has scaled back plans for its own break requirements in response.

Wage growth is once again outpacing inflation. Median weekly pay last quarter increased 5.7% year over year, while the consumer price index increased by 4%, marking the first time in more than two years that wages grew more quickly.

  • Many economists are now revising their recession outlook: A recent Wall Street Journal survey put the likelihood of a recession within the next year at 54%, down from the 61% previously predicted.

Employers are increasingly dropping cannabis drug-testing requirements. As drug laws change to decriminalize and legalize cannabis use across the country, many organizations are no longer testing potential hires and current employees for THC amid a tight labor market.

  • Some form of cannabis use is now legalized in 47 states, and recreational cannabis use is legalized in 23 states and Washington, DC. In states like Texas, however, cannabis use is not protected by employment laws even while the medical use of low doses is legal, meaning that employers can fire employees or turn away applicants who test positive.

US adults say work is an increasingly important part of their lives. Some 83% rate it as very or extremely important, according to a recent Gallup survey, up 9% from the same survey 20 years ago.

  • The biggest jumps, however, were unrelated to work: Some 55% of respondents said that their community activities are very or extremely important, up from 32% in 2002, and 61% said the same of hobbies and recreation, up from 48%.

American adults view fair worker treatment as the most important ESG issue. Compensation in particular is the issue most commonly cited as most important, followed by US job creation, ethical leadership, worker health and safety, and career-development opportunities, according to research from JUST Capital on public perceptions of employers’ environmental, social, and governance efforts.

  • When asked to rate the factors that make a company “just” in order of importance , respondents valued worker-focused issues three times as highly as initiatives related to other stakeholders, including customers, shareholders, the environment, and a company’s surrounding community.

Here are some of the best tips and insights from the past week for managing yourself and your team:

  • Address conflict debt. If you’ve let disagreements about priorities, responsibilities, and trust build up over time, call a meeting to reset and clear the air. Compile a list of all unresolved conflicts and work through each one to find solutions before moving onto the next.
  • Appoint a floor manager. Help re-onboard workers back to the office by having a dedicated person who can orient colleagues to new spaces and answer questions about facilities and resources.
  • Have regular check-ins on your strategy. Increase clarity and accountability around team priorities by routinely asking three questions: “Are we still passionate about doing this?” “Is the purpose still the same?” and “Can it make money in today’s environment?”
  • Trade cold-calling for threading. Boost participation in meetings without catching employees off guard with the threading technique: Address an attendee using their name, give context for the question, and only then ask them the question.

Coda

Sleeping on the job. Some employers, looking for ways to support the wellbeing of their burned-out workers, are landing on an unorthodox solution: encouraging a workday nap.

  • “If you go for a nap with an unsolved problem — an email you haven’t been able to phrase quite right or a conversation that’s weighing on your mind—you often wake up [and] know what to do or say,” executive coach Cara Moore, founder of the sleep-focused UK consultancy ProNappers, told The Financial Times.

Meet the new manifesting. The hashtag #delulu—Gen Z slang for “delusional”—has racked up more than a billion TikTok views, with users sharing stories of achieving unrealistic or out-of-reach career wins via sheer will (and a little self-promotional exaggeration).

The handbook for this new era of business doesn’t exist. We’re all drafting our own as we go along—and now we’d like to start doing so together. You can sign up here to receive this briefing by email.