In an age of technology, does physical proximity still matter in business?
For some things, probably not. Reverse auctions have made strong inroads into the business purchase of commodities such as paper. General Electric, for example, buys such commodities, not through a relationship with a preferred provider, but through the supplier offering the lowest price delivering against spec. In this case, technology has replaced the power lunch as the deciding platform for the purchase.
In many cases, however, the technology that facilitates bringing people together seems to have an edge over the technology that enables people to stay apart. Three stories, seemingly unrelated, came past my desk (actually through my computer) to underscore this point.
Twitter and Tacos
Twitter is a frivolous new application for those with too much time on their hands, right? This is what a noted journalist said recently. And what many in my age group say. But I remember when the PC was regarded as a toy as well, so I won’t dismiss it so easily.
For those who are not sure what Twitter is, or think of it as “trembling with excitement” (for those under 30, this used to be what twittering meant), here is a brief update. Social networks have set up the capability to send short (limited to 140 characters for technical reasons) text messages (called tweets) to a preselected group of people who sign up as “followers.” So in essence, a tweet is similar to sending a short text-only email to a distribution list. However, the results may start from a phone, or be delivered to a phone or to a social networking site. They are often characterized by texting abbreviations.
If you are interested in whom Katie Couric is going to interview next, or what they served at the White House dinner last evening, you can join her 11,000 followers to receive her tweets. You can find out how the gardens are developing, or that Beckham and three other soccer stars stopped by to talk about a new Malaria No More initiative, by receiving 10 Downing Street postings. In other cases, people tweet among a small group of friends — “let’s hang out at this area this evening” might be the simple message. There is not much content in 140 keystrokes, but that seems fine for a growing “sound-bite” culture. It may seem rather frivolous, certainly not something for serious business application.
But then a Newsweek story about a taco truck was forwarded to me by my SPU colleague Kenman Wong, showing indeed that Twitter has a business application. Roy Choi is a former chef at a four-star restaurant who decided to start making and selling his own recipe for Korean tacos — from a truck! We have all seen “taco trucks” parked by the side of the road with a hand-painted sign, hoping for customers. Choi and his friends found that Twitter would enable them to move from place to place, announcing their presence at a new location with a tweet. The followers grew quickly, and when he arrives at the announced location he may have hundreds of people in line waiting to buy his special tacos. If he’s delayed, a quick tweet tells people he will be there in 10 minutes. If the police chase him away from one corner, he simply tweets the next location and the crowds follow.
Let’s not miss the point. Twitter does not by itself make a good business any more than dot- com did a decade ago. I am sure Choi’s tacos must be great, or no one would show up. But if the product is great and the price is right, Twitter can certainly enhance a business by bringing in the customers.
Journey and YouTube
Journey was a popular music group in the 1980s, selling millions of albums. But through a falling out with their lead singer, they have struggled over the past decade. They had tried several new lead singers, but none of them created the sound for which Journey had developed its following. Recently, the group found its new lead singer, Arnel Pineda, in the Philippines, by doing a search through YouTube. After watching one of his performances on YouTube, they invited him to fly to the U.S. for an audition. He actually sang a Journey song to the immigration officer to prove that he was truly coming for an audition. Kenman Wong, a big Journey fan, also sent me the link to this story.
Again, we see an example of technology being used to bring people together, taking advantage of the powerful search capability to find the new singer. The end result was physically bringing the band together. Even YouTube has a business application.
A Pink Slip
The third story is quite different. In May of last year I received an email from a colleague and friend in Chicago. After living there for several years for his high-tech job, he and his wife had decided to relocate to Seattle. His job was very technical, and could be done from anywhere. He was tired of the weather in Chicago, and his management agreed that there was no reason for him to live there. Coordination with colleagues could be done electronically. He could fly back on a regular basis to do face-to-face coordination when needed, and everyone would be more productive.
I winced when I got the note. An executive friend in the past couple of years had also relocated to a place where he and his wife wanted to live. He traveled much of the time for his work, and decided he might as well have a base of operation where they would choose to live. His boss agreed. But when difficult times came for the company, he was the forgotten person on the team and lost his job. I didn’t want this to happen to my friend from Chicago, but he had written me just to say he was back, not to ask for advice.
Last month the email came:
“Al — recent news. After 11 months back in Seattle, I have been laid off. Incredible. I have been a critical part of two development launches this year…”
Would it have been different if he had stayed in Chicago? I don’t know, and neither did he when we discussed this over a recent lunch.
But it does seem reasonable to believe that the person in the office might have a slight edge over the one who is located remotely. After all, it is the person in the office who gets drawn into the impromptu brainstorming session. Or who strikes up the conversation over coffee that leads to a new way of thinking about a particular issue. It may be difficult to achieve the same level of serendipity and trust using technology.
Denise Daniels, another colleague at SPU, works in the area of human resources management. I asked her if she knew of literature that supported or refuted the idea that telecommuting workers were more vulnerable to layoffs than their in-office colleagues. She offered the following comments on the literature:
“Baruch, Y. (2000), ‘Teleworking, benefits and pitfalls as perceived by professionals and managers,’ New Technology, Work & Employment, 15(1), 34-49. The research shows that the career aspirations of teleworkers tend to be lower than the career aspirations of their counterparts.
“Baruch, Y. (2001), ‘The status of research on teleworking and an agenda for future research,’ International Journal of Management Review, 3(2), 113-129. Finds that teleworkers do not believe they are considered as readily as their at-the-office counterparts when it comes to promotions. They tend to have a sense of professional isolation. However, this perception may actually be only a perception, because a meta-analysis in 2007 finds no or positive impacts on telecommuters for promotion (see next article).
“Gajendran & Harrison published a meta-analysis in Journal of Applied Psychology (2007), which found that promotion opportunities actually improved for women who telecommute, but there was no impact for men (i.e., no negative or positive effect).
Finally, Professor Daniels sent me a recent article by Anya Kamenetz in Psychology Today Magazine, Jul/Aug 2007. In the article, she states:
Social interaction isn’t just good for productivity; face time in the office can be important for your career.
A January 2007 survey of 1,300 executives found that 61 percent believed telecommuters were less likely to advance — even though three-fourths said virtual workers were just as productive as their in-office colleagues.
Psychologist Judith Olson thinks she knows why: Employers tend to have better relationships with employees who are around in person. Your boss wants to be able to glance into your office and see that you’re on task, and is more likely to invite you to an educational seminar or an after-work advice session if she can bump into you in the hall. Managers, in fact, say they spend up to 70 percent of their time in informal, unplanned, face-to-face interactions.
There is yet no definitive final answer to the vulnerability of telecommuting workers.
Technology can enable business to bring people together and to work together while they are apart. Both are important. But technology is not yet at the level where it creates the same sense of trust and relationships that come from physical proximity. For now, I would still give the edge to technology that brings people together. And when remote work is a good idea, enabled by technology, it remains a good idea to make the effort to establish some level of physical presence for trust and relationship building.
Al Erisman is executive editor of Ethix, which he co-founded in 1998.
He spent 32 years at The Boeing Company, the last 11 as director of technology.
He was selected as a senior technical fellow of The Boeing Company in 1990,
and received his Ph.D. in applied mathematics from Iowa State University.