Joe Fuller: When we talk about flexible working arrangements, it’s important to establish what we mean by flexible. It’s vaguely positive, but often ill defined. That could partly explain why so many organizations’ flexible work benefits miss the mark. They’re often too broad, poorly communicated, or unavailable to the workers that need them the most. Why is such a seemingly pragmatic concept so hard to implement? And what accounts for the recent high profile about-faces on flexible working relationships by many large companies?

Welcome to the Managing the Future of Work podcast. I’m Harvard Business School professor and visiting fellow at the American Enterprise Institute, Joe Fuller.

I’m joined today by Anna Auerbach, Harvard Business School Class of 2010, cofounder and co-CEO of Werk Enterprises. Anna has a background in consulting and her cofounder, Annie Dean, is a former Wall Street lawyer. They originally founded Werk in 2016 to help professional women avoid being sidelined by life circumstances.

They subsequently extended the model to all levels of work. Over time, Anna and Annie learned that the secret to implementing flexible working relationships was mass customization. Werk uses employee surveys and customized data analytics to identify an organization's flexibility gaps. That allows companies to develop HR programs to address the specific needs of their workforce for flexibility.

The results are promising, with reduced voluntary turnover and Increased employee engagement. Can Werk's mass customization approach help companies realize the promise of flexible working arrangements and how should companies evaluate the economics of such programs?

Anna, welcome back to HBS.

Anna Auerbach: I’m so glad to be on campus. It’s wonderful to be here.

Fuller: Well, why don’t you start off by telling us, what caused you to launch Werk in the first place? What opportunity did you see, and what need are you trying to fill?

Auerbach: It’s interesting. When I graduated from HBS, one of my observations—and I think this is a lot of people’s observations and continues to be—is that you don’t see women represented at the highest levels of leadership. So for me, obviously, this was a personal passion point. There’s no question. There’s as many women getting advanced degrees at this point. And as much as I looked at the data, I couldn’t quite find the linkages. But what I did see was that over 30 percent of the most talented women drop out of the workforce after having a child. And of those, 70 percent say they would have stayed in if they had access to flexibility. It’s an old Pew research study. What’s interesting is, women are saying, loud and clear, what they need is flexibility to stay in the workforce, to advance. We really haven’t reevaluated how we work. So how we work has changed so much since the postindustrial era. We no longer necessarily need to be tied to offices; we’re not counting widgets. And technology has advanced at such a pace—and demographics have advanced at such a pace—we have the most diverse workforce we’ve ever seen. And yet, we still think of the workday as nine to six. Our work is more global. Our demographics are more diverse, as I mentioned. And we finally have the technology at our hands and at our fingertips to actually enable us to work in a different way. Flexibility could become the status quo instead of an exception to the rule.

Fuller: How do you translate that into a business model? Because those are good insights, certainly very consistent with our research here in the Managing the Future Work Project. But insight does not lead to a revenue model and to solutions.

Auerbach: I think the initial problem statement that we had was that women and talented employees in general were dropping out because of a lack of flexibility. So the market failure we saw that we could address was by marketing really high-level jobs with flexibility built right in—so really connecting the supply and demand—and that companies were willing to pay for high-level talent. Job-seekers were willing to pay for having this flexibility that was fundamental to them staying and succeeding in the workforce. Our business model, of course, evolved. And I think the real opportunity we saw is that the more we can help companies connect flexibility to the bottom line, the more this would actually become a hard-and-fast rule, as opposed to an exception. So employee productivity, retention, the ability to hire amazing talent, the ability to have a diverse workforce—so could we actually create a linkage between the offering of flexibility and these fundamentals? We realized very quickly that we had an opportunity to actually provide data to companies to connect the dots between something that seems like the right thing to do, a good thing to do, and sort of a more modern thing to do, and how that actually helps to foster their bottom-line fundamentals.

Fuller: When you talk about flexibility, flexibility can manifest itself in lots of ways. Most people, I think when they hear that, assume work-from-home options or the opportunity to schedule hours more conveniently. What are the different ways in which an employer can introduce flexibility into the workplace? What kind of impact does that have?

Auerbach: The language of flexibility is really outdated. We’re still using terms like “telework,” “telecommute.” And the reality is, as someone that works so deeply in this field, I actually can’t tell you what those things mean. So a big insight we had was that we had to actually create a better taxonomy, both to structure the types of flexibility so you could collect data, but secondarily to actually provide real language that had distinct terms. We looked at every single flexibility type that was out there—things from work from home, remote, to flexible hours, flexible places, whatever companies are using. And we cataloged them, and we broke them down into their component parts, and we found that they had three things in common. One is, where your body is when you’re doing the work. Two, the time that you’re doing the work. And three, how ad hoc or predictable that schedule is. That third dimension is all too frequently not considered. And we took these three components and built them back up to create a mutually exclusive, collectively exhaustive set flexibility types. Again, this is important because it allows you to structure the data. If you have overlapping types, you actually can’t build unique data sets. What we found was that there are six types. They encompass a combination of these three factors. So time, place, and predictability. Only two of them actually have really to do with location. So we define them as remote, which is never in the office. And that’s important, because it’s not, “I’m remote today.” You are a remote employee. Desk-plus is distinct from that. Desk-plus is you have location variety. So you have the ability to be in your office plus another location of your choice. Importantly, we’re not calling it work from home. At this point in time, most people are actually not working from home. And work from home has so much emotional baggage associated with it. When it comes to time, we think about two different types. We think about micro agility, which is the ability to make small adjustments on an ad hoc basis. So this accommodates a doctor’s appointment, parent-teacher conference, letting in the plumber. We all have that. That’s distinct from time-shift. So time-shift is a structural shift in your hours. So this encompasses things like early in/early out, a compressed work week, anything that is a fundamental set in hours, but not ad hoc. So you can start to see how the differences play out. And the last two types—so we have six, and there’s a seventh that’s sort of a permutation—the last few types are travel-lite. So the ability to travel less than 10 percent. We generally don’t think about that as a type of flexibility, but if you think about individuals that are caregiving to parents, to children, people that have health concerns, this is fundamental. Part time, which is a fractional schedule. And that creates the last permutation, which is job-share. And what’s been really powerful—and we’ll talk more about the data, I’m sure—is that our minds tend to go to remote, and our mind tends to go to employees not in the office. And yet remote is one of the least in-need flexibility types. What people need more is the ability, oftentimes, is to play with time. And we don’t spend enough time thinking about how employees can play with time. And so it’s been really powerful to have this kind of taxonomy so that we can get really specific about the different types and not try to conflate the different permutations of flexibility.

Fuller: Anna, you mentioned that remote work is actually not one of the most common, most desirable forms of flexibility. Do you rank order them, and are there one or two of those seven that really jump out as being broadly applicable to workers?

Auerbach: We actually did a massive research study of the US workforce in terms of the need and access to flexibility and the effects of that. Since then, we’ve obviously collected specific data from companies. The most in-need flexibility types are desk-plus, which is I mentioned distinct from remote. So it’s the ability to spend one or two days a week out of the office. Then, very importantly, micro agility. So that ability to make micro adjustments. So out of the people that need Micro agility—it’s over 80 percent of the US workforce—three out of four cannot access that on a day-to-day basis. If you think about that in conceptual terms, that means three out of four people that have a doctor’s appointment or a parent-teacher conference or need to let in a handyman actually can’t do that. When we think about things like desk-plus and micro agility, they’re actually small tweaks to how we work every day.

Fuller: When you talk about three out of four workers wouldn’t have that type of flexibility, is that uniform across pay grades and level of seniority? It’s easy to imagine, it’s hard for an assembly-line worker to say, “Well, I’m not going to be here for 45 minutes in the middle of the day, because I’m going to do a call with my kid’s teacher,” or something. But one would imagine white-collar environment, certainly I envision there is a lot more kind of ad hoc flexibility, and people are more easily accommodated.

Auerbach: That’s right, and our data set is the deepest of the white-collar workforce, which won’t surprise you as we’re thinking about flexibility. That being said, we’re starting to gather a lot more data in terms of hourly and frontline employees. So what’s really interesting is that, when you think about the white-collar workforce, your access to flexibility increases over time. It’s almost a straight-line increase. Actually, the one interesting thing that we see is it actually dips a bit at the mid- to senior levels, because as you become a people manager, you feel the pressure to be in the office for your team. Then, when you think about sort of hourly and frontline employees, I mean, yes, the reality is you can’t be a bank teller or a worker on an assembly line and be remote or desk-plus. That’s just not possible today. But what you can do is have access to some of the time modifications, and I think those are incredibly important. I mean, people who have frontline jobs still have families, still have health to take care of. They still face the same commutes that we all do and sometimes more challenging commutes. And what’s been interesting to see is that there is a lot of opportunity in terms of need, but also willingness on the part of the employers to get a little bit creative when it comes to jobs that are more tied to time and place.

Fuller: How does a company get interested in this in the first place? Is this something that an HR function—a human resources function—implements? Or is it a function of senior management getting interested in this?

Auerbach: Oftentimes, I think the initiative happens both bottom up and top down, actually. So not a cop out, but I think it actually works both ways. I would say one out of three or four companies we talk to these days actually is doing this as a top-down initiative, and there’s some sort of ¬C-level initiative around flexibility, which is just mind-blowing. I mean, we’ve been in business for about three and a half years, and this was not the case three and a half years ago. I think the change is happening very quickly in terms of this being a top-level priority. At the same time, I think there’s a lot of grassroots demand for it. So what we see is oftentimes this comes out of employee resource groups—ERGs are actually really demanding flexibility. A lot of companies have a parents group or a women at work or dad’s at work, and a lot of the need comes out of those groups, and they do have the ability to bubble up their priorities. I think one of the challenges with bottom-up efforts is obviously having an executive sponsor and the budget to do so. I think one of the very well-documented challenges of ERGs is they’re not often able to effect change because they often don’t have budgets. I think budget is just so critical when it comes to change management within a company. I think the perfect situation is when it comes both top down and bottom up. But the reality is, it functions different ways. One interesting thing we’ve seen a lot is it’s often led by a really powerful business-unit leader. If there’s a business-unit leader—you know, they have their own P&L—if there’s somebody that’s really performing within a company, they can do whatever they want in their business unit, ultimately. They’re the ones that are facing the day-to-day pain of a lack of flexibility. We’re seeing oftentimes when we start with a company, it’s a very forward-thinking business-unit leader that recognizes that this is just obviously the direction, and that they will only stand to gain things within their group by implementing flexibility. They start there, and then it bubbles out to the rest of the organization. I think executive sponsorship is incredibly important. I think it’s very rare that we work with a company where we don’t have some sort of sponsorship from central HR. And they don’t need to be the leader of the effort, but I think there needs to be awareness. But it’s really powerful when it comes both top down and bottom up.

Fuller: When you think of some of the senior leaders that you’ve worked with who were integral in catalyzing this type of change, how do they explain their motivation and what caused them to suddenly say, “We’re going to embrace this”?

Auerbach: It’s actually really simple. It’s people who have worked this way already, and they succeeded in working in this way. What’s powerful is that now, at this point, millennials are 65 percent of the workforce in the US. We think about millennials as just so young, and I’m a millennial. We have kids. Well, we’re old now, we’re not that young anymore. I think the last stat I saw is that Goldman, their new class of MDs [managing directors] is 44 percent millennial, right? So we have millennials that are rising into leadership positions in organizations. For a lot of people—and not just millennials, it certainly happens in Gen X and other populations. We often see fathers at organizations become advocates for this. There’s certainly a continuing gender dynamic. We operate in a gender-agnostic way—this is flexibility for everyone—but there’s obviously a gender dynamic in that women often have a more acute need for flexibility because they are the dominant caregivers. It’s just a fundamental fact of our society that is not going to change anytime soon. But there’s often more of a social penalty. We always talk about the “Mommy Penalty” and the “Daddy Bonus.” What I have found interesting is seeing fathers in organizations lead the charge—younger dads that believe and know that we can be successful working in a different way—and they also have the social capital to advocate for this internally.

Fuller: Anna, you mentioned how companies measure their success, growth, profitability, shareholder value. Obviously, most employers want to be a more pleasant place to work, want to accommodate their colleagues and workers. But are there hard benefits, tangible returns, to implementing these types of changes?

Auerbach: We actually, finally, have robust data connecting flexibility to the bottom line. Over time, we see approximately a 48-point increase in employee net promoter scores. So I think Net Promoter Score has become the new hot metric, similar to engagement. So how likely are you to recommend your employer to a friend or colleague? It’s a great leading indicator of a number of things, like your ability to hire, ability to retain talent, the ability of your talent to perform. And our companies that we’ve worked with are realizing 30 to 40 points of that in a six-month period, which is wild, if you think about the effects on the workforce. If you think about other hard metrics, for employees that have access to flexibility, they’re less likely to leave. So it actually reduces their intended churn by about 50 percent. And then, what we use is discretionary effort. So how likely are you to go above and beyond for your job?

Fuller: So you poll the employees on this frank message?

Auerbach: We do. We asked them directly, “How likely are you to go above and beyond?” And what we’re able to do in our data set is we can segment it based on flexibility needs met, flexibility needs unmet, and the whole gradation in between—so the extent to which your flexibility, actual deep needs, not wants, are met. What we see is that, for employees whose flexibility needs are met, they’re five and a half times as likely to be at peak productivity, and you can realize them in six months. When we work with companies in our analytics tool is we’re assessing true need. What we’re doing is we’re using a psychometric assessment to suss out the friction points that they experience in their day. We actually suss out which friction points are the most powerful and to what extent. So is it commute? Is it caregiving responsibilities? Is it health and wellness needs? Is it your office environment? You know, we have this whole conversation about introverts being in these large open office spaces and how unproductive that is. Our algorithm is sussing out what are your friction points and, therefore, how deep is your need, and what type of flexibility does your need map to? You can start to see how this works where, if the algorithm asks you repeatedly around your commute, and that keeps popping up, it sounds like your flexibility types might be desk-plus or time shift. And so, over time, our algorithm susses out exactly who you are as an individual. Then we ask perceived access—so how likely are you to access this or that type of flexibility? Again, the components, not the names. Finally, we assess risk factors—so how likely are you to stay? We ask employee net promoter score, the discretionary effort, and a number of other factors that we use to triangulate the data.

Fuller: In our research on care and caregiving benefits, what we found is that many companies had benefits that their employees did not access—didn’t, in fact, use—and often elected not to use them because they didn’t want to signal, for example, a lack of commitment to work or ambivalence about their work. What are you finding in terms of the uptake of benefits as they relate to flexibility?

Auerbach: We’re assessing whether employees think they have access to different types of modifications, like coming in a little bit late, like working from home one or two days a week. And then we’re able to compare that to what companies say they offer. This data and this analysis is striking to most companies. Most companies do think they offer flexibility policies, and they do think they are available. There’s also a huge disconnect of perceptions from senior levels to more junior levels. At senior levels, leaders perceive that they offer and have much more flexibility than other employees would perceive that they have. What our analysis can actually show companies is that, despite maybe you saying you have a documented partial work from home policy, what we’d call desk-plus, three out of four employees do not feel like they have access to that. That creates a lot of opportunities for how you actually start the change-management process. The interesting thing on the caregiving angle is we actually have found that the caregiving gap actually is an inverse gap. People who are caregivers in the workforce actually have more access to flexibility than non-caregivers. It’s not to say that there isn’t a penalty to accessing that flexibility, but for companies, being a caregiver is a known use case, it’s a known adaptation they need to make—which is our parents, our moms or dads, need more flexibility. If you need flexibility but you’re not a parent, you’re actually more likely to be disadvantaged. And that goes in tiers. If you’re caregiving for not children, if you’re care giving up, you probably have a harder chance accessing flexibility. If you have issues with needing flexibility that are based on productivity or health and wellness, you’re less likely to have access to flexibility. This is really challenging for companies to see, but really important for them to have visibility into. The last thing I’ll mention is that there has been a penalty to taking flexibility. It’s very hard to say were you passed over for a promotion, or did you face lower pay or a smaller bonus because you took flexibility. It’s notoriously hard to capture. The challenge is that, even if people are taking flexibility, oftentimes there is a penalty today.

Fuller: Well, you’re working with employers to try to understand that, by adopting more flexible policies of addressing the seven types of concerns that you highlighted earlier, that they can improve things like morale and reduced turnover and things like that. How can they engage in a dialogue with their workforces so that these perceived penalties are set aside, that the employees feel comfortable accessing the types of opportunities you’re suggesting their employers implement?

Auerbach: One of the more powerful things we do is we can actually segment the data by different demographics. Companies can actually tie this to diversity inclusion initiatives to better understand if there’s certain populations in their workforce that have “flexibility inequities,” as we call them—so lower perceived access to flexibility based on who you are or where you are in an organization. What we also do is we actually allow every employee to have access to their flex personality type. Every individual that participates at an employer can understand who their flex personality is and what their types are—based on their actual needs, not sentiments. Most people are an average of two to three flexibility types. As you think about engaging in a dialogue, so much of it is the language we use, and that’s why we do have the taxonomy. The flex personality types really help people communicate in a business-first way around their flexibility needs. It also allows companies to understand—at large, and then by certain populations or firmographics—what are the needs of the workforce, and what do they stand to gain in those needs. We also provide a lot of support in terms of change management. We have a number of self-service change-management tools that allow companies to understand how do you share the data? Who do you share it with? How do you start these conversations? How do you enable managers to succeed in this new world? There’s no question that the frontline of change is going to be the manager-to-employee relationship. A big part of this is this sort of labeling of flex personas. You can say, “Hey, my flex type is micro agility and desk-plus. And so what enables my success is to be able to attend to my doctor’s appointments or my kid’s parent-teacher conferences. I’m much more productive when I work from home one day a week because it allows me to do all that writing that’s part of my job.” That is a much better and more productive and transparent conversation then either not showing up at a certain time or saying, “I’m going to work from home on Fridays,” which is just not well perceived oftentimes. What we’re trying to do is create not only visibility but also to create the tools for conversations to happen on the ground at companies.

Fuller: In some of our research here at our project, when we look across different geographies and different economies, we see quite different patterns of everything from how skills are developed to workforce participation rates to how various working populations view and anticipate the impact of changes in the nature of work on their futures. What kind of exposure have you had to markets beyond the US? And are you seeing similar patterns to the ones you identified earlier?

Auerbach: What’s really interesting is that there isn’t as much variance in needs across the world. Humans are humans. I think the needs change actually based on demographics of a company: so generations, the general composition of the workforce, but also sort of the physical environment of where the companies are located. One of the interesting dynamics we see is that, depending on how strong the public infrastructure is in terms of public transit, you see different needs for different flexibility types. So it’s not going to surprise you that, if there’s a dense urban center, and people have an average commute of 15 minutes, they’re going to have different flexibility needs than a place that has no public transport and people are driving two hours each way to the office. But where we see huge differences internationally is in access. So there’s no question that different countries have a different sort of work environment and different expectations and different norms when it comes to work. And we can see that in our data. We can see countries that are a little bit more lifestyle-oriented, if you will, have a lot more access to flexibility, companies that have reputations for being really, really hard-working and long hours. We see that displayed in our data, loud and clear. And I think for companies that are thinking about this globally, understanding those global dynamics, it’s just incredibly important, because today most of our workforce is quite mobile. There’s no question that, within a company, an individual may work over multiple geographies over time. And I think for companies, a big decision to make is, “How consistent are we going to be across the globe in terms of offering this? We have a very mobile workforce, so is somebody’s experience in Brazil, should it be the same as their experience in Germany, as the US, as in Spain?” And also to pinpoint if you’re seeing countries that are particularly struggling with hiring or turnover—not to say that flexibility is the only cause, but it’s certainly a really important root cause. And without having visibility into that, companies are looking globally and not understanding why certain countries have certain challenging dynamics.

Fuller: Anna, often issues like this are actually a subject of public-policy debate—things like paid family leave being on the table in the United States currently. How does what you’re suggesting a company do dovetail with public policy, and are there public-policy prescriptions that you think would greatly enable the implementation of flexibility in the workplace?

Auerbach: I would love to see flexibility be a public-policy issue. I do think we’re years away from that. I think one of the challenges today is that we have some more fundamental issues that I think we need to move public policy on. I do think family leave is one of them. I think it’s incredibly onerous for employers to provide it. I’m in New York; we have New York Paid Family Leave, which even as a startup as an employer, we had three babies added to our team this year. As a small startup, that’s really challenging financially. So things that states are doing to move ahead in that I think are incredibly helpful to employers. I think we’re starting to actually get more data that, when you do provide paid family leave, employees are more likely to return, they’re more likely to be productive, they’re more likely to come back on a full-time schedule. All of these things actually pay for themselves in multitudes. And so I think we have some big public-policy priorities before we ever get to flexibility. I think the other interesting thing about flexibility is that paid family leave actually has a hard cost, right? You actually have to pay people out for those weeks that they are not there. Flexibility actually doesn’t have a hard cost, right? Flexibility is actually free to offer for employers. You have to work a little bit more intelligently. You have to have maybe better technology, better systems, better tracking. But, fundamentally, for me to enable an employee to work from home a day a week or to even shift their hours or to use micro agility to step away from the office, it doesn’t cost me anything out of my pocket. So I think we’re a ways away from that in being a public-policy area, but in the meantime, I think there’s a lot of room for private solutions. And I think what’s exciting about that is, as we face a very tight talent market, it’s a real opportunity for companies to differentiate and to really win the war for talent. It’s becoming a really high-demand issue for employees, and so the more companies can really win at the private solution, the more likely they are to be advantaged over time.

Fuller: Anna, earlier you mentioned someone’s flex persona, an individual worker’s specific needs profile in terms of flexibility. How is that captured in terms of their privacy rights? When you go globally, of course, you start engaging different levels of statutory privacy protection—GDPR [the EU’s General Data Protection Regulation] in Europe, for example.

Auerbach: I think we’re just at the start of people analytics becoming a larger discipline, right? So we’re dealing with the data and privacy of employees day to day, and I think that’s just so important. We would never share an individual’s profile or individual results. We generally don’t share results with an N less than 10, so a group of less than 10. So that’s our smallest data cut. But more broadly, you know, I think to GDPR compliance and things like that, fundamentally our flex assessment is the onboarding to the flexibility journey in the platform, and it’s fully voluntary. So actually, that allows us to function within GDPR really well, because you don’t actually have to answer anything, and you don’t have to participate. As they go through the assessment, we have the typical language around anonymity and confidentiality. It’s really important for us to maintain that for very obvious reasons, which is it’s just the right thing to do. But then, also people will be more honest and more trusting of the process. But every individual will get access to their own profile in their inbox delivered securely. So that’s an opportunity for them, if they want, to share it with their manager, to share it with their colleagues. We have a lot of recommendations that come with the profile. You know, we’re not just going to say, “Hey, this is your flex personality. Good luck. God speed.” But instead we provide them with a lot of materials around how they have these conversations. And, importantly, the flip side of it is we give managers conversation guides around what are some of the safe-space questions to ask. I mean, I think one of the important things is flexibility should not actually have to be justified. You shouldn’t have to explain all your personal factors for why you need flexibility. The fact that you need micro agility—say you’re dealing with a health issue—what we’re trying to avoid is the individual having to recite all their personal health history to their manager. Nobody wants to do that, right? It’s much easier to say, “Hey, I’m going to be micro-agile on Wednesday, 10 o’clock till 11 o’clock AM.” So we also want to give managers the tools to have those conversations. So it’s not, “Why do you need this?” but creating the space for employees to volunteer information if they want, but also kind of having guided, really productive questions on why this or that type of flexibility and how that’s going to enable the function of their job and enable their success at work.

Fuller: Anna, that’s a pretty compelling story about why people do adopt your platform and these types of tools, but when you bump into a company that’s skeptical or not so sure this is for them, what’s behind that? What are their objections or concerns?

Auerbach: We’re still dealing with early adopters. As I said, one out of four companies, one out of three companies we talked to, this is a top-level priority. But that means for the remainder it’s not, right? And so it is somewhere on the docket, I would say in terms of people initiatives, I’m not sure for the rest it’s rising to the top, because they’re dealing with just really near-term things, like they have to hire 500 people this year, they’re switching to a different HRIS. These things oftentimes trump the investment in flexibility. So I think what’s really interesting is, when we think about objections, it’s all too often because companies are not able to connect the dots between what their people priorities are for the year and where flexibility comes into play. I mean, our perspective is that flexibility is a root cause of a number of symptoms. All too often, HR departments are really focused on the symptoms. They’re not curing the disease. What we want to do is help them to connect the dots between things that are their priorities for the year—be it talent acquisition, retention, engagement, diversity—and how all of these things tie back to flexibility. Personally, I think we do that actually quite successfully, and I think our research study and our data is actually what helps to create that business case. But I think a lot of times the objections are a misunderstanding of how this aligns to their priorities. In addition to that, I do think we have a lot of traditional leaders that grew up in a world where flexibility was not the norm. I think it’s a lot of like, “Well, I did this, I survived this way. That’s just the way it’s going to be.” And I think it’s scary to think about workers not being in the office 9 o’clock to 6 o’clock. We’re used to looking around, and you see all your little happy heads at cubicles, and you feel like things are happening, right? You don’t know. You don’t know that people are not on Facebook, that they’re not shopping on eBay. I mean, your IT department probably knows, but you as a manager don’t know. So I think that’s some of the training we have to do in terms of mindset shift, is understanding that the work product is a work product, and if you’re not sure if people are performing, you have a performance-management issue, you don’t have a flexibility issue. And those two things are very distinct. Thinking about some of the really public pullbacks on flexibility—and there’s a number of them that are in the news all the time—I think all too often it was a knee-jerk reaction to, in a time of change, you want to see those heads at the cubicles. You just want everybody there. You want to catalog what everyone is doing. You want it to be easy for you to understand if there are redundancies, if there are productivity issues. And what’s easy is what’s in front of you, right? And I think it’s what we do in the absence of better systems and better processes and better performance-management tools. I also think sometimes there’s a pullback on flexibility when it’s fully unstructured. So what we advocate for is not a free-for-all, it’s for structured flexibility. It’s to measure the data, to watch the baseline. If flexibility is affecting performance, there should be a pullback. But all too often, when companies are pulling back, it’s because it’s just chaos. People are not informing their manager. Nobody knows what schedule anybody’s on. What’s powerful, though, is bringing data back into the conversation. So, to the extent that companies embark on this journey, they can very quickly see where their opportunities are, and it gives them confidence that they’re doing the right thing and that their people metrics are moving in the right direction.

Fuller: Certainly one thing we see across multiple areas of research is companies actually act against metrics or objectives as they understand them, but they often don’t really understand the systems effects of the choices they’re making and, therefore, miss out on opportunities to improve their performance by implementing changes like this.

Auerbach: We’re just starting to get smarter in employee insights. It seems sort of silly that we know everything about our customers but nothing about our employees. So our systems are still a bit outdated, and I think a lot of HR information systems are kind of dinosaur—old, kind of big-beast products that it’s very hard to customize and to update. It’s very hard to draw data out. And without a doubt, historically, who’s dealt with HR data? It’s HR departments. And that data hasn’t actually been used in a way for executives to strategically manage and motivate their employees. I think we’re just at the start of a shift in HR from compliance to people operations. I think we’re just starting to connect the dots on the data, because I think our systems haven’t been as conducive to doing that, and we haven’t realized the power of what our people data can do in terms of enabling the management of our employees, the motivation of our employees, and the happiness of our employees on a day-to-day basis.

Fuller: Well, Anna, thanks for coming back to HBS and sharing the story of Werk with us.

Auerbach: It’s been wonderful to be here. Thank you so much for the opportunity.

Fuller:From Harvard Business School, I’m Professor Joe Fuller. Thanks for joining us for the Managing the Future of Work podcast.