When I worked for Medtronic businesses in Santa Rosa, CA, in 2012, implementing a remote work environment, we learned that requiring innovation workers to come into the office every day was unnecessary. In fact, we discovered that virtual teams and virtual work are better for innovation.
The common wisdom at the time we started was that they needed to be face-to-face five days a week to succeed. Many leaders still believe this principle to be true today—especially for employees who work in labs with sophisticated test and analysis equipment. But after the first year, the operating norms for the innovation teams changed. I noticed that workers on the innovation teams — who were allowed to work from home, away from the office din, to review data, write reports, and clear their minds — were ablet to obtain new perspectives. One R&D director told me that his innovation workers were more productive doing their “heads down work” at home rather than in the office. If he needed them, he knew how to find them quickly.
In short, it worked.
Our experience is now backed up by long-standing research showing that hybrid work has a positive effect on product development performance by enabling knowledge sharing, cross-functional cooperation, and inter-organizational involvement. This new paradigm improves the speed and quality of product development, provided that face-to-face contact is not completely replaced by virtual communication.
New research upends what we thought helped innovation
Strikingly, research published this year reveals that brainstorming can be better done virtually, that serendipity contact does not help innovation, and, more strikingly, that virtual work is accelerating innovation. The old paradigm that serendipity and having employees locked in a room all day to accelerate innovation is urban legend.
Let’s start with the research on serendipity. That is, having employees in the office daily and casually running into ideas and conversing helps innovation. Research discussed in the New York Times in June 2021 suggests it doesn’t.
According to Ethan Bernstein, who teaches at Harvard Business School and studies the topic: “There’s credibility behind the argument that if you put people in spaces where they are likely to collide with one another, they are likely to have a conversation. But is that conversation likely helpful for innovation, creativity, or what an organization hopes people would talk about? There is almost no data whatsoever.”
Ethan Bernstein, in the article, concludes, “The idea of random serendipity being productive is more fairytale than reality.”
Gleb Tsipursky, published in a February 2022 article in the Harvard Business Review, explains how virtual brainstorming can produce more innovation:
Gary points out that most of us are used to traditional brainstorming and know it as a great tool for building team alignment and collaboration. Based on new research, however, he asserts that it’s much less successful for generating innovation than virtual brainstorming.
Here is how to set up successful virtual brainstorming with remote, hybrid or in-person teams. The only requirement is that everyone not be in the same room:
- pick a shared collaboration tool,
- ask participants to submit their ideas (even if they’re contradictory),
- evaluate ideas through anonymous voting or polling sessions,
- then you can decide to meet in-person or discuss shortlisted ideas virtually.
Virtual brainstorming provides a better experience for groups as a whole, generates more novel ideas, and balances the preferences of introverts and extroverts, optimists and pessimists, and lower- and higher-status members
Virtual work and digital technology required by Covid-19 accelerated innovation
Finally, the tipping point for me is that McKinsey and Company researchers published an article on June 6, 2022, showing that virtual work accelerates innovation.
The McKinsey authors write that despite the disruption of Covid 19 over the past two years, innovation has been rising worldwide. A McKinsey survey of top executives around the world found that companies accelerated their digitization of customer, supply chain, and internal operations by an average of three years.
According to McKinsey, over the past two years, countries around the world have set records for new business formation, new patents issued, venture capital invested, and more. The US Census Bureau’s seasonally adjusted business formation statistics data show that through 2021, a record 5.38 million applications had been filed to form new businesses—an increase of more than 50 percent over pre-pandemic 2019.[i] The brisk pace meant there were roughly 409,000 more US filings in 2021 than at the same point in pre-pandemic 2019. The World Intellectual Property Indicators also showed that aggregate global filing activity across 150 authorities grew in 2020, even amid the global health crisis.[ii] Venture capital flows have also boomed: in 2021, global venture capital more than doubled from 2020, rising 111 percent.[iii]
The McKinsey authors write:
“What’s striking about these dramatic advances is that they largely entailed people collaborating remotely, leveraging technology in different ways, and being bolder with innovation, automation, and digitization than ever before. For decades, physical proximity has been considered essential to successful innovation. In an influential 1977 book, management professor Thomas Allen described a strong negative correlation between physical distance and frequency of communication, finding that people are four times as likely to regularly talk with someone six feet away from them as with someone 60 feet away, and people almost never communicate with colleagues on separate floors or in separate buildings.[iv]
While the pandemic-related measures have thwarted the engineered serendipity designed into physical work spaces, making watercooler conversations and impromptu problem-solving interactions difficult to replicate virtually, it has led to a broad embrace of videoconferencing and virtual collaboration tools, according to the McKinsey authors. Organizational network and collaboration analytics have also enabled innovative companies to help employees build and sustain the ties necessary to generate new ideas.
As a result, organizations have, in the words of McKinsey author Steven Johnson, “widened the pool of minds that could come up with and share good ideas”[v] a vital ingredient for innovation. The pandemic has increased the collective speed and creativity of innovation efforts by connecting people into broader virtual networks.
Do employees have to be elbow-to-elbow all the time to be innovative? Does brainstorming have to occur in-person? New research provides a firm no. In addition, virtual or hybrid organizations with solid networks and collaborative analytics can be more innovative than in-the-office organizations.
Covid-19 has taught us much.
About Victor Assad
Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and managing partner of InnovationOne. He works with companies to transform HR and recruiting, implement remote work, and develop extraordinary leaders, teams, and innovation cultures. He is the author of the highly acclaimed book, Hack Recruiting: the Best of Empirical Research, Method and Process, and Digitization. Subscribe to his weekly blogs at www.VictorHRConsultant.com.
[i] Business Formation Statistics, April 2022,” US Census Bureau, May 11, 2022.
[ii] World Intellectual Property Indicators 2021, WIPO, 2021.
[iii] Jordan Major, “Global VC funding hit a record $621 billion in 2021, a 111% increase YoY,” Finbold.com (Finance in Bold), January 13, 2022.
[iv] Thomas J. Allen, Managing the Flow of Technology, Cambridge, MA: MIT Press, 1977
[v] Steven Johnson, Where Good Ideas Come From: The Natural History of Innovation, New York, NY: Riverhead Books, 2010.