The Hybrid Work Pyramid of Needs

As the pandemic has shown us all too clearly, there are significant benefits to working remotely. But for organizations that straddle the line between fully remote and fully in-person teams—what we call “hybrid”—simply adapting existing remote strategies for their needs isn’t enough to maintain company culture and deliver business results.

Instead of trying to blend remote and in-person solutions, hybrid companies will need to develop new ways of thinking about the unique challenges they face. This will include managing their now mostly-vacant corporate real estate, optimizing the in-office experience, using tools and systems that allow employees to marry in-person with virtual collaboration, and ensuring that employees remain engaged even if they don’t spend 100% of their time with each other.

It’s clear that hybrid is here to stay and will likely become the dominant work model for the coming decades. In fact, research from Accenture found that 63% of high-growth companies already use a hybrid work approach, and data from McKinsey projected that 90% of organizations will adopt some combination of remote and on-site work as they emerge from covid-era restrictions. Anecdotally, the vast majority of the companies in our portfolio have opted for a hybrid approach. Regardless of which solutions these companies develop to address the hybrid work challenges, one thing is clear: the future of work lies in the hands of these hybrid organizations, and we are excited to see what solutions will be developed to support this new way the world works. 

The unique challenges for hybrid companies

Depending on a company’s own definition of “hybrid”, it may face several unique challenges. For example, a company that mandates their employees to come into the office a certain number of days per week may struggle with real estate utilization and may need to rethink its in-office experience. A company that has a remote Product, Engineering and Design team, but an in-person go-to-market team, may struggle with issues related to culture and belonging. Or, a sales team that has certain folks in the office and others remote may experience difficulties with internal communication and documentation.

Some of these challenges are more foundational and are immediately obvious and pressing, while others will become more burning and apparent over time. This is our attempt at defining the hybrid work pyramid of needs to help inspire founders to build solutions to address these challenges.

Managing your corporate real estate

One of the most critical issues for hybrid companies to solve is how they should think about their physical office space. Most companies are now being forced to revisit the way their corporate real estate is being used, particularly those who have transitioned from fully in-person to the hybrid model. For them, the most obvious challenges are logistical. For example:

• How big of a space to get and how to best utilize it 
• How to downsize existing office space if you are locked into a long-term lease and how to monetize any spare capacity you may have 
• How to coordinate when people are coming in, and ensure that everyone has a desk (shift from 1:1 desks to floating desks)
• How to allocate and book conference rooms 

Because this is often the most visible and pressing need of new hybrid companies, technology solutions are more mature and include both legacy options as well as newer solutions developed with hybrid work in mind. 

Elevating the in-office experience

Once the basic need of ensuring everyone has a desk is met, companies will have to think about how to make the in-office experience not feel like a chore, but rather something that employees look forward to, even if for just one or two days a week. If staff members feel like there is no purpose to commuting other than being in compliance with a policy, they will only do so begrudgingly and sparingly, which will chip away at their motivation and productivity. What's the point of coming into the office if on that day everyone is locked into a phone booth on Zoom calls? Why travel into the office on a Thursday if your closest team members came in on Wednesday instead? 

The in-office experience is changing, and solutions will be developed to elevate it. By collecting data, analyzing our behaviors, and decoding the office social graph, technology might soon tell us when to come into the office, where to sit, which corporate events to attend, and who to grab lunch with, so that we might after all look forward to days in the office.

Rethinking internal communication and collaboration

Once hybrid companies have figured out how to manage and optimize their “in-office days”, they are still left with the challenge of how to ensure that communication and collaboration happen seamlessly, regardless of where employees are. 

Tools like Zoom set the standard of how we can collaborate virtually, and most of us have now adjusted to using them daily. But what happens when only a few of your team members are sitting in the same conference room, while others are on Zoom? 

Most of the tools we use today were designed before companies decided to embrace a hybrid way of working, and as such they are not optimized around that, resulting in challenges including efficiency losses, lack of inclusivity, and poor record-keeping. 

How can we take the best parts of working virtually and the best parts of working in person to supercharge collaboration and communication tools? To use a metaphor, is there an augmented-reality equivalent to hybrid communication and collaboration - i.e. a future where working in a hybrid manner is a better experience than being either fully virtual or fully in-person?

Preserving team and company culture 

We believe that hybrid organizations are at the greatest risk of culture erosion. Unlike fully-remote companies, which by nature have to be more intentional about building and maintaining culture, and unlike in-person companies, which are more conducive to building real relationships amongst their employees, hybrid cultures fall in the gray and dangerous zone of “cultural complacency.” Without making adjustments, with time, employees at hybrid companies will ultimately lose their sense of belonging and connection to the organization they work for. 

One such adjustment, for example, is that hybrid companies will have to more carefully balance their employees’ need for connection vs. their need for independence. Leaders and managers will have to orchestrate who should come in, when, and how people should come together IRL to create moments that contribute to an employee’s sense of belonging while also allowing for their flexibility to work in a more independent manner. This is a very difficult task that even the most skilled managers will struggle with. Through thoughtful data-gathering, technology will provide leaders with the tools to manage their increasingly complex team dynamics.

Additionally, we expect hybrid companies to have to deal with other unique challenges such as inclusion (how to ensure that the company doesn’t create two classes of employees), and fairness (are some employees getting greater access to leadership/ideas?). 

Ultimately, we believe that the advantages of a flexible workplace are far greater than its disadvantages, and for this reason, we have conviction that the future of work will continue to be hybrid. As time goes by and employees adjust to this new normal, new needs will develop, and we're looking forward to funding companies that have solutions for them. If you are a founder building a company in this space reach out to me at carlotta@emcap.com!