Ghost Town

“A good life depends on the strength of our relationships with family, friends, neighbours, colleagues and strangers” – David Lammy

Late last year, I wrote about how clusters relate to innovation. The post described the importance of social interaction and how it has been essential to innovation through the ages, from the coffee houses of old, through scientific and literary clubs in the 19th Century, to the success of Silicon Valley. The post came with a warning: the death of the office and the death of the city could also lead to the death of innovation, causing even greater economic damage than the Covid-19 pandemic that made us all accept the idea of working from home.

It seems that some evidence to support that warning is already emerging. I’ve heard numerous anecdotes from companies who have found that working from home presents a dichotomy. Freed from the everyday distractions of the office, people have found that they are more productive. They can get short-term tasks and administrative work done more quickly. This isn’t a huge surprise. Many times when I was working I would take myself home for half a day if I needed to catch up on a lot of administrative work in a short space of time. The catch, though, is that many of them report that their creativity is missing and that their pipelines of new ideas are drying up. Without engagement with other people, no new ideas are being generated. These companies are succeeding in the short-term but could be severely challenged in the medium to long-term. This was documented as long ago as October 2020 in a survey conducted by Boston Consulting Group and KRC Research and reported by Forbes (McKendrick, 2020). Innovation is driven by a combination of opportunities (the needs of customers and other stakeholders) and capabilities. It is this combination that drives the generation of new ideas and new inventions. And although driven by opportunities and capabilities, these new ideas and inventions often arise by random – they are catalysed while making coffee in a break between meetings, when overhearing somebody else’s conversation, while trapped together on a long car journey. The magic that makes those ideas and inventions happen does not seem to be present when we meet virtually – at least we haven’t figured out how to replicate it yet. And without the source of those ideas and inventions being continually replenished, we will run out of the feedstock we need for innovation. As I noted in November’s blog, “if we want to innovate, we need to find ways to congregate”.

There’s more. Switching off the pipeline of new ideas is just scratching the surface of the issues that are created when working from home. From an innovation perspective, some are positive, and some are negative.

Matthew Syed opened his book “Rebel Ideas” with a chapter on the importance of diversity in thinking (Syed, 2019). In it he wrote about how a severe lack of diversity in the CIA prevented them from seeing the warning signs that would have uncovered the planning of the 9/11 attacks in September 2001. The CIA didn’t miss the warning signs because they were stupid, far from it. They missed them because their lack of diversity did not allow them to see the world from multiple perspectives. Syed illustrated how diversity of background, and the resulting diversity of thinking, is essential for organisations to succeed at all levels. A number of recent studies have suggested that the physical office environment has created artificial barriers to the growth of diversity in the workplace. It is therefore very possible that allowing more remote working will reduce discrimination and increase opportunities for diversity, which will strengthen the ability of organisations to thrive – and in particular will boost their capacity for innovation.

On the other hand, the potential negatives of remote working extend beyond the reduction in opportunities for communication and collaboration. In a post from January 2021 I wrote about how your organisation really exists for the benefit of those around you and not just to meet your own narrow, internally defined objectives – and how without meeting the needs of your nontraditional stakeholders it will not survive in the long run. A lot of those nontraditional stakeholders are potentially adversely impacted by any continuance of working from home.

Mother working from home with kids. Quarantine and closed school during coronavirus outbreak. Children make noise and disturb woman at work. Homeschooling and freelance job. Boy and girl playing.

Think about employees who can’t afford childcare during the day, or do not have the space in their homes for a separate office to work in, with a door that they can close on the hustle and bustle of daily family life. They could effectively be priced out of their potential careers. Think about employees who might collectively decide to work remotely for some or all of the week, and who might cluster together in technology or creative “enclaves” away from the city centre as described by Kat Hanna in 2017 (Hanna, 2017). Employees who can’t afford to join them in these enclaves will be disadvantaged. And think about people whose ongoing income will depend on the continued use of offices in cities: train drivers; workers at coffee bars and lunchtime restaurants; newspaper vendors; cleaners; maintenance technicians; receptionists; … the list goes on. Any of them could potentially lose their livelihoods if we all decide to stay away from cities indefinitely. Our city centres could become ghost towns, with the businesses (and their employees) who depend on commercial activity and bustle disappearing. We could finish up with damaged cities and walled-off enclaves where privileged and wealthy knowledge workers continue to work from home. That’s not good for the long-term health of society, and it’s unlikely to be attractive to increasingly ESG-sensitive investors. And to make it even worse: those knowledge workers in the enclaves might become increasingly productive but they would become increasingly less innovative and our long-term economy, as well as individual companies, would suffer as a result.

If they are to succeed in the long-term, organisations must take care of the environment and the ecosystems around them. They must aim to nurture the society in which they operate, and there is a growing body of evidence to show that companies that do so are more successful. Organisations that abandon offices will significantly damage their local ecosystem, which could have adverse and unanticipated consequences for those who make that move simply for the short-term gain of cost savings.

“People who work together will win, whether it be against complex football defenses or the problems of modern society” – Vince Lombardi

References and Further Reading

Birkinshaw, J., McCallum, D., & Ghazi-Tabatabai, S. (2021, February 18). The Remote Working Marathon – Morale, Flexibility And The Gender Divide.

Clegg, J. (2020, November 5). Working Together.

Clegg, J. (2021, January 2). Five Nonmarket Forces.

Hanna, K. (2017, May 2). Why do Businesses Cluster Together?

Judge, T., & Cable, D. (2004). The Effect of Physical Height on Workplace Success and Income: Preliminary Test of a Theoretical Model. Journal of Applied Psychology, 89-3, 428-441.

McKendrick, J. (2020, October 18). Work From Home Fallout: Productivity Up, Innovation Down.

Syed, M. (2019). Rebel Ideas: the Power of Diverse Thinking. London: John Murray.

Tannen, D. (1995). The Power of Talk: Who Gets Heard and Why. Harvard Business Review, September-October.

© 2020-2021 J M Clegg Ltd

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3 thoughts on “Ghost Town”

    1. Thanks for sharing this Mark. Some good comments in there from the employee perspective.

  1. John,
    whilst I agree with much of what you have to say, I do believe that longer term the downtown areas are hives where people want to be, especially young people. I am much reminded of my time in Singapore with the HDB flats located around the island in enclaves which developed local bars, restaurants, shop and business clustered in the ground floor of the flats. Common areas joined multiple buildings and you had the equivalent of a lively down town in each enclave. In a city like Houston, which is spread out massively, a growth in down town office buildings becoming converted to apartments/office spaces would enable the development of a focused local atmosphere, excellent network infrastructure could support the development of more knowledge workers with a large common area to provide that option for mixing. I think we are more creative and adaptable than often assumed. As for the train, bus and taxi drivers;well, not that many carriage drivers left in downtown London either, not nearly as many as in 1900. The appearance of some jobs always
    presages the disappearance of others.

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