Bad CEO Behavior Continues: Work from Home Edition
Over the last few months, there has been ample media coverage of out-of-touch CEOs. We had the Herman-Miller CEO who characterized her employees’ questions about pay as “living in Pity City.” The Clearlink CEO who praised an employee who gave up the family dog so that he could spend more time in the office. Elon Musk arbitrarily laid off more than half of the staff at Twitter.
This month’s contender for Worst CEO Behavior is Raul Vargas, CEO of Farmers Insurance Group. Mr. Vargas is the company’s new CEO, and one of his first orders of business was to reverse his predecessor’s stance on remote work. Employees hired as full-time remote employees now have until September to present themselves in the office thrice weekly. What’s driving this decision? Collaboration. And innovation.
However, if the pandemic taught Corporate America anything, it was that remote work works. Remote workers could still collaborate, innovate, and deliver record profits without setting foot in an office. We’ve seen many CEOs backtracking on their commitments to remote work, but this one is especially egregious because it undermines executive credibility. The company’s previous leadership announced that employees were free to work remotely, and employees—regular working people with families and bills—adjusted their lives accordingly. Some moved closer to family, others became more involved in their communities, and many made financial decisions based on what turned out to be a lie.
The CEO makes or breaks the culture at any company. Mr. Vargas had the opportunity to engender trust among his employees by honoring the mandate of his predecessor. Instead, he chose the opposite, a flagrant betrayal of loyal employees. Further, when employees expressed their dissatisfaction with this new policy, his official response was something along the lines of “I heard what you said, but I don’t care.” This will undoubtedly have far-reaching implications for Farmers’ culture.
If there is no impact on the business, why are we seeing so many high-profile CEOs do an about-face on remote working policies? Fear. That is the simple answer. This fear is unfounded—and it’s not even a fear of the unknown. They know that remote work is effective and productive. But their unfounded fears persist. Another reason? Simple control. The pandemic challenged long-held assumptions about what work and the workplace are. The workforce of the post-industrial age was modeled on the teacher/student relationship. COVID proved that such a model is outmoded. But some leaders want to hold onto the old ways and SEE employees working.
Remote work is not going anywhere anytime soon. Executives must assess if remote work is the hill they want to die on before making any drastic, permanent decisions. Allowing employees the flexibility to work how they want and from their desired location has few downsides. CEOs like Mr. Vargas, who want to control employee behavior, are in for a rude awakening.