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. As I often say to our people, commuting is way overrated.

The virtues of not having a headquarters:

We had a traditional suburban headquarters campus, a mile long, half-mile wide, 2 million square feet. Nobody was coming in and we're like, ‘Well, this is not a good plan.’ Because you’ve got to heat it, cool it, make sure it doesn't get moldy and all kinds of stuff. So we sold it. But I think probably the more interesting thing is we 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.

Where this all is headed:

People think, ‘You don't trust me,’ or ‘You're just making me come in. Why are you making me come in? I'm perfectly happy.’ And why come in and do a Zoom call? And then you go in and nobody else is in the office. I've done that, I like going to the office. But I'm not going to make everybody come in all on some certain day.

You've got to give them a reason. The tension point is making them come in to do something they don't need to do in an office is a bad idea. If there's something, you come in and do something in the office and it's rewarding for you, it's personal growth, and you have fun, then you're happy to come in. The tension is as we go down this growth, we don't know where we're going, we're just in motion.

I don't think we'll stay at 82%. I don't know where we'll be. I don't have a number or target. What we decided to do is we're just going to jump into the water and see where it goes. Let people choose. We got rid of about half our real estate, saved hundreds of millions of dollars a year with the concept that if we need to get real estate again, there's going to be some around. Because we don't think we're going to use 100%. So for us, it's like we're just in motion. Some people were kind of like, ‘We're done with Covid,’ and they just want it to be done. I don't know where we're going, but I think it's going to be good and I'm willing to find some better place to go.

How to make time in the office feel meaningful:

We don't know yet, but I'll tell you what we're trying. The first is 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? Leaders have to figure out how to do that. Quite honestly, I don't know that I'm good at it and I don't know that the rest of our leaders are that good at finding ways, with your team who are working remote, when you click leave on Zoom or Teams that you find some way to do the thing you would've done walking down the hall. So we're experimenting. What we're trying to create is two things. One is we're investing money in that. We call it 'connected and belonging' because we think you don't get this sense of connectedness, you're isolated.

The other thing is thinking of pods of offices. So rather than this big giant office complex with 2 million square feet, we have a pod we call ‘Chicago suburban’ up by our old office. It's like 50,000 square feet. We've got two different formats in it to see what kind of physical space people want. We're going to see if it works. We used to have three and no one went to the third one, so we got rid of it. We're just going to try to figure it out but not assume that it's back to either the bench rows of computers or the rows of cubicles all in some big office because it really didn't work that well anyway.

On the shortcomings of remote configurations:

A lot of those are true, but whether they're true at 100% of your employees or true for some people… But then I'm like, that's just a problem to work on. Just because you don't have mentorship doesn't mean that you had perfect mentorship when you were in the office. So you’ve just got to kind of make it up as you go. I do think isolation is not a good thing. Being in a room in your house on a Zoom call is somewhat isolationist. Not only is it just bad for your mental health, it's bad for your life in general. If I think about our employees, I want them to have a good life experience with us.

You lose random events. If you think about your own life, how many random events have dramatically shaped your life? I met my wife at a birthday party where they were throwing peanuts on the floor. If I’d not gone, I might not have ever met her. By being isolated, you don't get random events. That said, that doesn't mean that coming to an office sitting behind a screen is [better]. So it's incumbent on us with our employee value proposition to try to experiment to find ways to do it. Some of our leaders have parties. We've allocated money to try a bunch of stuff and see if it works.

On productivity and organizational culture with remote work:

Productivity you can measure. So it depends. Our coders actually seem to be more productive. Where we'll lose it is in the cross-function productivity. If you're a product person and you're doing our pricing and that kind of stuff, you can get your team together, you can have a pizza party, you can do that kind of stuff. But the odds that you run into a claim person, that is low. That we haven't figured it out.

On culture, this is going to raise the bar because culture can be transmitted physically. I'll give you an example. One of our daughters for her semester abroad went to Mali, which is a country where women enter through different doors and people eat with their left hands. Physical things you would not think of first. She's incredibly independent, never did anything I said, and suddenly she's going through the other doors and eating with her left hand and explaining to me why that's not a big deal because she needs to fit in.

Culture is just like you walk into a building, you walk into an office, you see the way and 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. And if you look in the dictionary, it's got a crappy definition, it says ‘Culture is culture’ or something like that. 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. So I think it's going to raise the bar on culture.

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'd 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. You get through the meeting, you're like, okay, we're done. Good luck. And the old system used to prop that up. I don't think in terms of decision clarity that this system props you up.

The same thing is true on feedback. If you've read Reid 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. Yes, here's the feedback, that was really good. Normally you might not have to do it.

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.

The impact of remote work on diversity and inclusion:

It's huge. When you look at our diversity numbers, we're better than most, but we think we can be better. It's not like we're starting at a really low bar. Our diversity hires are up 30% since we went remote. Some of that is we've got this machine that is not all that accepting of differences. So 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.

Our numbers are way up. There's another thing that we've done to really encourage people: we lowered the number of jobs that require a four-year degree. So 54% of the people we hired last year did not have four-year degrees. Something like 70% or 75% of Black Americans have not finished a four-year degree. If you want to increase your representation in that cohort and you're only fishing for one of four, that’s not good. The answer is do you really need to have a college degree to do a bunch of these jobs? All of my kids have liberal arts degrees, but is that really going to make them a data analyst? Probably not, but maybe they can figure it out.

So we've seen it as a great benefit to 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.

Watch the video of the session with Wilson, Lipman, and Delaney from the Aspen Ideas Festival.

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