Sunday Pick: Unsolicited Advice: Why is Amazon dragging its employees back into the office?
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Hi, everyone. Welcome back to Fixable. I'm Anne Morris. I'm a company builder and leadership coach. And I'm Frances Fry. I'm a professor at the Harvard Business School, and I'm Anne's wife. On this show, we believe that meaningful change happens fast. Anything is fixable, and solutions are often just a single brave conversation away. Usually, we either hear problems from the listeners or we bring in a guest that's amazing at having solved lots and lots of problems.

Today, we're diverging in our favorite way to bring you another installment of Unsolicited Advice, our recurring segment where we indulge our inner meddlers and tell a company that hasn't asked us

what we think they should be doing differently. So if this sounds like your idea of a good time, check out our episodes on Boeing and Starbucks from last season. And here's the tricky thing that we're going to do today. We're giving unsolicited advice to one of the most successful companies in the world. The audacity. I just love it. I love it. Frances, do the big reveal. We are talking about Amazon. I'm sure I have boxes outside our door right this moment. Okay.

Yeah. So in the last couple of weeks, as you've probably heard, Amazon's acclaimed CEO, Andy Jassy, announced a new five-day return to office mandate for the entire company, at least the entire executive corporate team, in a significant pivot away from its current hybrid three days in the office policy.

In this same announcement, Frances, he also talked about reducing the number of managers at the company. Hilarious is my first response. That sounds like a layoff, but by someone who didn't want to call it a layoff.

What problem is Andy trying to solve with this work from where I tell you to work mandate? Yes, and include a we're going to assign you some seats as well. So according to the memo, his rationale is that coming back to the office every day is going to strengthen company culture, improve team effectiveness in various ways.

And I think it might be useful to parse out these various ways because I think it's going to be relevant to today's conversation. So in this announcement, he wrote, we have observed that, aka no data for, we have observed that it's easier for our teammates to learn, model, practice, and strengthen our culture. Collaborating, brainstorming, and inventing are simpler and more effective.

Teaching and learning from one another are more seamless, and teams tend to be better connected to one another. So much data counters every one of those claims. So what I love is that he at least didn't say research shows, because then we could have shown him where he was wrong. And he's saying we've observed that might have been more truthful if he said, I'd really prefer that to...

Yeah, it's an interesting choice. The phrase we've observed is doing a lot of work in this memo. But I think what's interesting is I'm sure there is internal data on at least some of these metrics. He didn't share any. This is one of the most rigorous companies in the world, and it seems...

oddly fuzzy to me that there's no evidence as part of this narrative. I'd love if you can just give folks a sense of what does the research say so that we can hold it up at the same time as holding up Andy's memo? Yeah, I mean, there's a ton of great work being done on these issues from

really outstanding scholars. There's more every day as companies continue to experiment with new ways of working. I think one of the main headlines that's emerging, it's fair to say, is that a hybrid model with some organized overlapping days for teams in the office is going very strong as a way to organize work.

This is an arrangement with relatively few downsides, according to the research, and real upside. I just want to put names to this research because these are some of the most rigorous, articulate, and awesome scholars on the planet. Sadal Neely, Harvard Business School professor said,

Amazing thing. Nick Bloom out of Stanford, who knows more about remote work than anyone and is like the central source for the research and Lily Zhang. And they think so deeply about all kinds of organizational things, all three of them. And they don't collaborate.

All three of them have contributed to this research, which is pretty clear in its messaging. Yeah. Well, let me try to sum it up because one of the things that we have learned in the last five years is

is how much people really value flexibility and control in setting up their work lives. It's coming in only second to compensation in a lot of these studies. Which is incredible to me that this has risen to be the top thing. And when you said people...

I think it's important for us to double click. Like, which type of people are we talking about here? Yeah, it's a great question. So according to Gartner, who did a really great study on this, the categories of people who particularly value flexibility are high performers, women, and millennials. Right? So these are— So unless they're not important to you. Right.

Irrelevant Gen Xers like me, not a problem. Got it. Got it. We don't need high performers. Yeah. I mean, all workers value the flexibility of hybrid. It's like a really astonishing data. It's something like 98% love it.

as a way to work. But I think the issue here is that your best people particularly value this kind of agency and flexibility. And for instance, the difference between five days and three days for these segments is a big deal. So in one of Nick Bloom out of Stanford, in one of his recent studies,

of 1,600 tech workers at a Chinese tech company, Trip.com, a shift from five days to three days in office reduced attrition by 33%, which also, by the way, saved the company millions. But this isn't a small deal. This is a big deal to people. And this three to five...

I can't help but thinking it's all leaders' ego. Yeah. I mean, it's an emotional topic. As you know, I have a freedom fetish. This would be a very hard shift for me. And even without getting into attributions of kind of what's really going on interpersonally,

I think we can have a very healthy debate and make a very persuasive argument around why this is a bad decision. Even Amazon can't afford to chase away top performers, women and millennials. Even Amazon.

So here's how people have responded. What we're seeing on social media, what's being reported by the news media, many employees are not happy with this change. Some have tried to fill in Jassy's data gap with their own anonymous survey. And the verdict so far seems to be that people don't feel great about this, at least among the people who responded to the survey.

And this is the response we would predict based on the research. Every single bit of research. Yeah, so I think the company is doing, again, we're talking about one of the most successful companies in the history of the world. I think it's fair to say it had a rocky 2022 like much of the tech sector. There have been rounds of layoffs since then, which Wall Street seems to like. The stock price is up more than 20% this year. I think this also reflects a focus on

They're high margin businesses like AWS, which continue to deliver. I think they're open questions about the longer term cost of this kind of drip, drip, drip of layoffs in terms of morale and culture. Those are, of course, harder to quantify. But Francis, I think the question for us today is what should Jassy do now? Like what's in the choice set of options based on where we are today?

What advice do we have for him and senior leaders at Amazon? And then what should our listeners do, if anything, in response to this news? So I love that. I love that agenda. And I want to begin with the open question is what will be the cultural impact of the drip, drip, drip of layoffs? It's actually not very open.

We know here's what we know what happens if you do layoffs, your stock price goes up in the short term and your company gets worse in the long term. Like we know those two things to be true. So you get this reward for it and you think no harm done. And here's where the harm is, is that once you do layoffs, the rest of us are thinking with at least some portion of our brain when's the next one coming?

And if you want to make matters much worse, do two rounds of layoffs. And then it's going to take up a bigger part of it. And then everyone with an option is going to go somewhere else where it's safer and where we feel more valued. So layoffs are not coded as the failure that they are, but they are a failure, which I think brings us to what Andy did, which he didn't call this a layoff.

And maybe he knows exactly what we just said. And maybe this is his way of trying to separate from people. Although if he's going to lose top performers, women and millennials, it's going to be an interesting way to do it. But I want to push back on our tone in this conversation a little bit. Let's say earnestly, I am Andy Jassy or a CEO who's feeling the same tension. So I'm

I am feeling a lack of engagement. I just feel it. Yeah. And I have enough pattern recognition to recognize or not recognize. That's part of why I'm sitting in this chair. Right. You know, when you see it. I remember not so long ago. Right. When the engagement was higher, it happened to coincide with the fact that everybody was in the fucking office every day.

And so it is my prerogative and I see correlation. I don't care what all your silly studies say about lesser organizations. This is Amazon. And so this is what we're going to do and we'll see how it goes. What is what is wrong with that as a way forward here? I think there is nothing wrong with it as long as you don't lop off and we'll see how it goes.

That is, as long as you keep the spirit of experimentation, which, by the way, is one of the secret powers of Amazon, they don't ever pretend they know something for sure and pour liquid cement on it. They adjust, adjust, adjust, adjust. The thing that I think was distracting to so many of us is he took a policy, not informed by data, poured liquid cement on it and said, this is the way it's going to be. It was so un-Amazon to us. Even if he didn't have an ulterior motive, it's

so out of character that we're going to be totally distracted to find the ulterior motive. Yeah, I had a similar out of character reaction here. So here is, in my experience of the company, it's rigorous, it's competitive, it's data driven, it's a high accountability culture.

And the ethos of this company, and I think part of the secret of its success, has been, like, go and make it happen. Like, go deliver exceptional results. Figure it out. We're going to hold you accountable for outputs. We're not going to measure inputs here. And we're not going to measure where the inputs occurred. I think that's the other part that is just super distracting. It's almost like, would you prefer that we work in the office and have lower performance? Right.

And it sounds like from the memo, yes, I would, because it's going to make me feel better. Yeah. I mean, one employee told CNN, Amazon has announced a five-day RTA policy, which is unfortunate because I'm interested in working for a living, not live action role-playing and virtue signaling, which sounds like something I would have said in my 20s and exactly how I would have reacted to this. And I do think it sums up

sentiment from a vocal segment of employees here. If spending every single day, all day, every day in the office is really so much better for results, then smart people will start to do it. To me, that is consistent with Amazon's ethos and values and historical culture. And so is he really going to tell top performers or

Is he going to take points off because they didn't swipe their badges at the number of times that he's now mandating? So then every other company that has done this, and by the way, it's all done with a CEO of a certain age that has a certain amount of nostalgia in there. But every other attempt of we're going back to five days, what happens is that the top performers start to leave and then you're like, huh.

Can I make it without the top performers or not? And so I'm either going to design jobs so that they don't require top performers or I'm going to make it flexible. The problem with making it flexible for some and not for others is now you're going to your beautiful culture where everyone is playing the same song. It goes away, goes away. And now we have a culture of favoritism and things like that. And that damage of that can be really high. So I think in these in these scenarios where compliance is variable and it

Which means that high status people get to make the decision and lower status people have to come in and play by the rules. That's how we see this playing out in other organizations. And you just set managers up for failure because, oh, if I'm a manager that enforces, I have a bad manager. Oh, well, my manager doesn't let me, but I hear this other fictional manager let their people do it. And it's just corrosive to a culture. So you either have to hold tight.

Are you going to hold tight and let your best people go? That's what the real question is. Now, maybe Andy has done the calculus and says, Amazon is so good, we don't need those, the top of the top people. We don't need women millennials or top performers. I'm trying to be, you told me you wanted to change the tone. I'm trying to change the tone. Maybe he said, we can figure out how to do it without these people.

people and I want to design an organization that is, I want to get the best people I can who want to work five days a week, which is of course not the best people who can do it. It's a subset. You're going to fish in a small part of the pond. And maybe that's what he wants to do. And as CEO, it is his prerogative to do it. But what they shouldn't be surprised with is

is having one of two things happen. Great people leave, or on the down low, we make exceptions for great people, and then we start to have our employee engagement and culture scores go down. Okay. So the other thing that struck me about this, in addition to it feeling very un-Amazon, was that mandates directionally are a red flag on leadership. It's like the leadership lever of last resort to fall back on this formal authority approach.

And I think you can use it, of course, but it's really when you've run out of other options. Future work is hybrid and we need to come up with better names because it's not really work from home anymore.

And I think as Sadal Neely has, I think we're using vocabulary of hers, but it's really work from anywhere. It's like anywhere, anytime work. And that is the world we're building. That is the globalized world we're building. We're collaborating with people in different time zone, in different parts of the world, because their perspective is critical to my work over here. Global organizations have been wrestling with these issues consistently.

for a long time. Like, as soon as the tech started to get there in terms of our ability to collaborate digitally across time and space, organizations where it was mission critical to do so have been doing it, right? And there's tons of great lessons we can learn from that. So it just, this just feels like...

To your point, nostalgia, to me, it smells of weakness and a leader to be playing this card. And one of the tells to me, as you said, and I love the phrase, mandates are a leadership action of last resort. Particularly in this country. Yeah. This just doesn't sit well with talented people who have options.

From my operations brain, I always go back to push and pull. Is it better to push a solution on or is it better to pull a solution? Pull is infinitely better than push.

everything is operationally better. And so if you do have to push, to your point, make it rare and make it very, very needed and make the value proposition crystal clear. If I was a leader today and I understood AI is really important and I want everyone to start experimenting with AI, I could say you all must use AI all day. In fact,

You have to each use AI 60 minutes of every... It's not going to work. But if I got up there and with an inspirational message and did it, I could get more people to open their hearts and minds to AI. Pull is more powerful than push. And I think that's the other thing that's so unusual. This is a gifted leader. Very gifted, apparently. Yeah. Just makes me think there must be something else going on that he's acting like his back is against the wall and he has no other option. Yeah. Like, if you are so convinced of your logic...

Let it win. Let it win.

Like if all of that is happening and leading to better work, then let's reward the output of those behaviors. Reward the output. Do not start rewarding the inputs. Or I promise you, I'll start talking to people in the hallways. Not about what you want me to talk to them about in the hallway. Oh, yeah. Those hallway conversations are being very overrated in this debate. And it's not good. Most of it. The water cooler? You actually want us to do less of that. You want us to do less of it.

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So let's get into other ways we might solve the problem. Okay. I'm exasperated. I'm a CEO. I don't know what to do, but I'm observing this culture challenge. I'm observing this lower engagement. These things like learning, modeling, mentoring. And again, we're already meeting people.

overlapping three days in the office, right? So the theory of the case here is that two additional days, and I'm not telling you- It's going to skyrocket our learning, modeling, and mentoring. I'm not telling you what to do on those days. I'm not organizing those days. I'm just saying those days, we're going to co-locate you and all this magical stuff is going to happen. So let's say, right, I want a more precise instrument and I'm trying to achieve these outcomes. So what else could I do here? Well, let's just go down the list. So learning,

Is learning in corporations better in person than remote? No, it's not. One, why? Because in person is just the people that happen to be in person. It's like, oh, I have to coordinate and you have to fly in and you have to fly in because it's not like everybody is in the same location, right? Or so I'm either going to have like small local learning in person and if I can like reserve the room or I can have

on Zoom, bring in the best people, have a great instructor. Everyone gets to learn. And not only am I learning, but I get to use chat and I get to use all of that beautiful technology. So there's learning in person at the Harvard Business School versus learning remote at the Harvard Business School. I think you could have a conversation of which is better. I still think I can teach remotely just as well as I teach in person. Maybe that's not true for everyone, but I assure you the learning that is going on in organizations that don't have rooms that are curated for learning and the curvature of the stairs and the bend of the classroom.

So even this notion that learning happens more in person is I would have no problem saying no chance does learning happen better in person than if you can do it remote when we all get to log in and we all get to do it. So that's, I think, the first one. So, for example, so like Gallup did some really interesting research actually trying to get at this. And one of the things that fell out of it was that meaningful feedback matters.

Right. Was four times as impactful in driving increased engagement than mandating that people are co-located in a specific geography. Yeah, of course, because feedback is amazingly important. But let me ask you this, Anne. You do a lot of coaching. In fact, I'm going to go ahead and say I think you're the best coach in the world. How much of that coaching do you do live and in person?

Oh, 90% of it is remote. At least, at least 90% of it. Would you be more effective if it were live and in person? No, no, no. But I think that what that is, I think is a beautiful example is if you want to improve coaching, if you want to improve learning, if you want to improve mentorship. Improve coaching, learning, and mentorship. Don't give me this constrained optimization when the constraint is going to make us worse. Right, right. And I think another example is this culture of,

of meetings that I think has infected many organizations. And we have found in our own experience of this, just bringing a little bit more intention to how we're designing those meetings, wherever they're happening, wherever they're happening, bringing a little bit more intention. Gives wildly better outcomes. I mean, what's the most recent company we work with?

They spend 50% less time in meetings. They have better meetings. They have more time available because they optimize meetings. They didn't say, let's mandate that you all have to be in the same room at the same time, and then we're going to do things. No, don't do that. Optimize meetings. Right, exactly. The direction point is if you're trying to solve for increased engagement, there are much more precise tools that we know are going to have an impact than, again, from this very blunt instrument of,

of telling smart people how they are allowed. Where to, yeah, where to work and how they're allowed to interact. I'm going to give you a subset of them and then I'm going to ask you to compete against people that have all of them. The more we are talking about it, the more outrageous it feels to me. And I want to just also say another thing about in-person. It also underestimates the power of the phone.

And we that technology of picking up the phone and talking to someone and you can do it with intimacy that I'll go for a walk. You go for a walk. It doesn't have to be the same time. I don't want to be walking next to you. But we're that we're both having that deep, meaningful, intimate conversation, much harder to do informally.

person because everybody keeps stopping by my freaking office. I don't want you to stop by my office. As I look through his list of the four things with the sub bullets on each one, and you just say yes, no, in person reliably makes it better. I'd love to see the evidence. I think the point here is not only that

returning to the office doesn't solve your problem here. There are also other things you can do that solve these problems much more effectively and efficiently. I think that's what I'm really pushing on. And so now what advice would I give Andy? Well, I'd say, look, your diagnosis is correct.

You need more learning. You need more modeling. You need more mentoring. So he got it half right. He got to the core of the problem. Yes. And what he's not doing is experimenting with solutions. And his first one out of the gate is not going to work. You know what? No problem. But don't pour liquid cement on it. Yeah. And now which ones are likely to work? Well, let's start experimenting and let's do that with openness. And by the way, don't have the mandates come out of the top.

Have your teams experiment and find out who's got the best learning climate. How are you doing it? Who's got the best mentoring? Who's got the best coaching? How are you doing it? And then on those three days a week that we do come in, because we're coming in three days a week. We're just talking about the extra two days. We're just talking about the extra two days. That's a lot of time. Oh, my gosh. Let's design that time impeccably. Impeccably. Right. Let's make sure that in that.

And those times we are solving for learning and connectivity and shared creativity. And well, and but by the way, I'm not convinced that the learning shouldn't be happening on the days we're not in the office. But still, I want us to just be pristine about the design of things in doing it. So what should an organization do that is struggling with engagement? Here are things that I think are unconditionally a good idea.

Invest in learning. Yes. Invest in mentoring. Invest in role modeling the way to do things. Yes, yes, yes. And here is unconditionally a bad idea. Mandate where I do it. Yep.

Yep. 100%. 100%. I love that. I love that. And I love that I've gotten you so worked up in this conversation. Imagine if you were on the Amazon payroll. But yes. And I think to the question of how should you respond if you're not Amazon? How should you respond to this? I say get out that recruiting clipboard and fire up the machine because I think there's going to be a lot of great talent there.

That is going to decide that these are not terms of work that they are willing to accept at this time. You know, when I talk to the people leaders at organizations, they say the hardest job they have for high performers is getting them to not pick up the phone when recruiters call.

Well, this was just made a whole lot easier, Amazon. And I think one of the reasons I take it so personally is Amazon, they're one of my heroes. They have done things the right way. I'm a basketball fan. When people say, oh, I play the game the right way, it means they've done it with experimentation, with rigor, with optimism on behalf of customers. They're obsessed in really beautiful ways. They've done it the right way. And this is so...

so clumsy. And my real problem with it is other people are going to say, well, Amazon did it, so I should too. And that to me will be the real devastation. Yeah. This is a company that has shown the power of this adult to adult engagement between employer and employees. And this is such a deviation from that.

on a whole bunch of levels. And this is not the decision of a leader at the peak of his confidence. I'll say that. That's a nice way of saying it. If you look at

other tech leaders in this space. And I think Microsoft stands out to me. Could you imagine Satya Nadella coming up and saying this? It would, like, it's impossible to imagine him doing such an unrigorous, pessimistic thing. It's impossible to imagine. And I think, listeners, you can go and hear his comments on, he's not commenting on Amazon's decision, but in general, this question of

and how he and his chief people officer, who's wonderful, Kathleen Hogan, have kind of moved through. These are hard questions, these same questions with similar dynamics and have reached the conclusions that we have seen work in other organizations. And one of the threads you'll hear from the Microsoft team is also what we have seen emerging as a best practice here, which is to really push the decision rights around this out and down because it's a very local decision.

So it depends on the needs of sometimes very specific teams. And those needs may evolve over time. Yeah, this notion that one size fits all is just crazy. It's absurd for a company this size, this complex with so many different lines of business. What we see really work is push, again, pushing those decision rights and figuring out the team level or the function level and then learning from whatever happens next.

and informing your next move with the results of this experiment. We are building a new world of work. We are designing new ways of working. There's no question that the future is anywhere, anytime, work, where, you know, the boundaries of time zones and geography...

dissolve. It's a very exciting world. And it's a very powerful signal that Amazon is saying, you know, we're not going to lead the way into that world. We're going to follow and we're going to grip the steering wheel as we go because we're not sure how to navigate this space. One of the reasons that we use Microsoft as a comparison to Amazon is geographically

industry category. They have very similar access to people. They have very similar challenges. And Microsoft is killing it by loosening its grip.

And that's why it's so conspicuous that Amazon has always loosened its grip, not on should we have obsession with the customers, hold on tight, but loosened it on how you deliver the result. And now they're tightening the grip on some of the things and it just doesn't feel like it's going to work for this set of employees. But

We'll find out. I like that we're going to have this out there on the record. And Andy is in, and now we're on a first name basis because we've been yelling at you. Andy is an incredible executive. Unbelievable, world class. Incredible results. And it is not too late, sir. It is.

It is not too late to rethink this decision to really partner deeply with your employees on a better way forward. And so that is my advice. In fact, is to slow this down. You don't have to do it publicly, right? Just slow down the implementation of this and use it as an opportunity to do a real listening tour with your best employees and listen and figure out together the best way forward here.

Thanks for listening, everyone. If you want to figure out your workplace problem with us here at Fixable, please send us a message. You can email fixable at ted.com. Call us at 234-FIXABLE. That's 234-349-2253. Or, because we're so modern, just shoot us a text. I want a phone call, to your point. I think the phone is underrated in our modern workplace. Please give us a call. For me, you can text fixable.

This episode was produced by Rahima Nassar from Pushkin Industries. Our team includes Constanza Gallardo, Izzy Carter, Banban Chang, and Roxanne Heilash. This episode was mixed by Louis at StoryYard. I help.

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