Unsolicited Advice: Why is Amazon dragging its employees back into the office? (Transcript)

Please note the following transcript may not exactly match the final audio, as minor edits or adjustments could be made during production.

Anne Morriss: Hi everyone. Welcome back to Fixable. Hi man Morris. I'm a company builder and leadership coach, and I'm Frances Fry. I'm a professor at the Harvard Business School and I'm Anne's wife. On this show, we believe that meaningful change happens fast. Anything is fixable and solutions are often just a single brave conversation away.

Frances Frei: Usually, we either hear problems from the listeners or we bring in a guest that's amazing at having solved. Lots and lots of problems.

Anne Morriss: Today, we're diverging in our favorite way to bring you another installment of unsolicited advice, our recurring segment where we indulge our inner meddlers and tell a company that hasn't asked us what we think they should be doing differently.

If this sounds like your idea of a good time, check out our episodes on Boeing and Starbucks from last season. And here's the tricky

Frances Frei: thing that we're gonna do today. We're giving unsolicited advice to one of the most successful companies in the world, the, the audacity. I just love it. I love it. Frances.

Do the big reveal. And we are talking about Amazon. I'm sure I have boxes outside our door right this moment in .

Anne Morriss: Yeah. So in the last couple weeks, as you've probably heard, Amazon's acclaimed, CEO, Andy Jassy announced a new five day return to office mandate for the entire company, at least the entire executive corporate team in a significant pivot away from its current hybrid, three days in the office. Policy. In this same announcement, Frances, he also talked about reducing the number of managers at the company.

Frances Frei: Hilarious is my first response. That sounds like a layoff, but by someone who didn't wanna call it a layoff.

What problem is Andy trying to solve with this work? From where I tell you to work? Mandate?

Anne Morriss: Yes. And it include a, we're gonna assign you some seats as well, so according to the memo. His rationale is that coming back to the office every day is gonna strengthen company culture, improve team effectiveness in various ways.

And I think it might be useful to parse out these various ways because I think it's gonna be relevant to today's conversation. So in this announcement he wrote, we have observed that AKA, no data for . We have observed that it's easier for. Our teammates to learn, model, practice, and strengthen our culture.

Collaborating, brainstorming and inventing are simpler and more effective. Teaching and learning from one another are more seamless, and teams tend to be better connected to one another. So much data counters,

Frances Frei: every one of those claims. So what I love is that he at least didn't say research shows because then we could have shown him where he was wrong.

And he's saying, we've observed that . Might have been more truthful if he said I'd really prefer that.

Anne Morriss: Yeah, it's an interesting choice. The phrase we've observed is doing a lot of work in this memo, but I think what's interesting is I'm sure there is, I. Internal data on at least some of these metrics. He didn't share any.

This is the one of the most rigorous companies in the world, and it seems oddly fuzzy to me that there's no evidence as part of this narrative.

Frances Frei: I'd love if you can just give folks a sense of what does the research say so that we can hold it up at the same time as holding up Andy's memo.

Anne Morriss: Yeah, there. I mean, there's a ton of great work being done on these issues from really outstanding scholars.

There's more every day as companies continue to experiment with new ways of working. I think one of the main headlines that's emerging, it's fair to say, is that a hybrid model with some organized overlapping days for teams in the office is going very strong as a way to organize work. This is an arrangement with

Relatively few downsides according to the research. And real upside.

Frances Frei I just wanna put names: to this research. Yeah. 'cause these are some of the most rigorous, articulate, and awesome scholars on the planet. Tsedal Neeley, Harvard Business School Professor. Amazing thinker. Nick Bloom out of Stanford, who knows more about remote work than anyone and is like the central source for the research. And Lily Jang, and they think so deeply about all kinds of organizational things, all three of them, and they don't collaborate.

All three of them have contributed to this research, which is pretty clear in its messaging.

Anne Morriss: yeah, but well, let me try to sum it up because one of the things that we have learned. In the last five years, it is how much people really value flexibility and control in setting up their work lives. It's coming in only second to compensation in a, a lot of these studies I.

Frances Frei: Which is incredible to me that this has risen to be the top thing. And when you said people, I think it's important for us to double click, like, which type of people are we talking about here?

Anne Morriss: Yeah. Uh, it's a great question. So, according to Gartner, who did a really great study on this, the, the categories of people who particularly value flexibility.

Are high performers, women and millennials. Right. So, so these are, so, unless they're not important to you. So irrelevant. Gen Xers like me, not a problem. Got it. Got it. We don't need high performers. Right. Yeah. I mean all, all workers value the flexibility of hybrid according to, it's like really astonishing data.

It's something like 98%. Um, love it as a way to work. But I think the issue here is that your best people particularly value this kind of agency and flexibility. And Frances, the difference between five days and three days for these segments is a big deal. So in one of Nick Bloom, uh, outta Stanford, in one of his recent studies of, you know, 1600 tech workers at a Chinese tech company, trip.com, a shift from five days to three days in office, reduced attrition by 33%, which also by the way, saved the company millions.

but this is a big, this isn't a small deal. Yeah. This is a big deal to people and this three to five.

Frances Frei: I can't help but thinking it's all leader's ego. Yeah.

Anne Morriss: I mean, it's an emotional topic. I, as you know, I have a freedom fetish. This would be a very hard shift for me, and even without getting into attributions of kind of what's really going on interpersonally, I think we can have a very healthy debate and make a very persuasive argument around why this is a bad decision.

Frances Frei: Even Amazon can't afford to chase away top performers, women and millennials,

Anne Morriss: even Amazon. Um, so here's how people have responded, , what we're seeing on social media, what's being reported by the news media. Many employees are not happy with this change. Some have tried to fill in chassis's data gap with their own anonymous survey.

And the verdict so far seems to be that people don't feel great about this. At least among the people who responded to the survey. And this is the response we would predict based on the research, every single bit of research. Yeah. So I think the company is doing, again, we're talking about one of the most successful companies and.

The history of the world. I think it's fair to say it had a Rocky 2022. Like much of the tech sector, there've been rounds of layoffs since then, which Wall Street seems to like the stock prices up more than 20% this year. I think this also reflects a focus on their high margin businesses like AWS, which continue to deliver.

I think they're open Questions about . The longer term cost of this kind of drip, drip, drip of layoffs in terms of morale and culture. Those are of course, harder to quantify. But Frances, I think the question for us today is, what should Jassi do now? I. Like what's in the choice set of options based on where we are?

What advice do we have for him and senior leaders at Amazon? And then what should our listeners do, if anything, in response to this news? So I love that.

Frances Frei: I love that agenda, and I wanna begin with. The open question is what will be the cultural impact of the drip, drip drip of layoffs? It's actually not very open. We know, here's what we know. What happens if you do layoffs? Your stock price goes up in the short term and your company gets worse in the long term. Like we know those two things to be true.

So you get this reward for it, and you think no harm done. And here's where the harm is, is that once you do layoffs, the rest of us are thinking with at least some portion of our brain, when's the next one coming? Right. And if you wanna make matters much worse, do two rounds of layoffs, , and then it's gonna take up a bigger part of it, and then everyone with an option is gonna go somewhere else where it's safer and where we feel more valued.

So layoffs are not coded as the failure that they are, but they are a failure, which I think brings us to what Andy did, which he didn't call this a layoff. Maybe he knows exactly what we just said and maybe this is his way of trying to separate from people. Although if he's gonna lose top performers, women and millennials, it's gonna be an interesting way to do it.

Anne Morriss: But I wanna, I wanna push back on our tone in this conversation a little bit. Let's say earnestly I am Andy Jassy or A CEO, who's feeling the same tension. So I am feeling a lack of engagement. I just feel it. Yeah. And I have enough pattern recognition to recognize or not recognize. That's part of why I'm sitting in this chair.

Right. You know it when you see it. I remember not so long ago, right when the engagement was hired, happened to coincide with the fact that everybody was in the fucking office every day. And so it is my prerogative. And I see correlation. I don't care what all your silly studies say about lesser organizations.

This is Amazon. And so this is what we're gonna do and we'll see how it goes. What is, what is wrong with that? As a way forward here?

Frances Frei: I think there is nothing wrong with it as long as you don't lop off and we'll see how it goes. Right? That is if as long as you keep the spirit of experimentation, which by the way is one of the secret powers of Amazon.

Yeah. They don't ever pretend they know something for sure and pour liquid cement on it. They adjust, adjust, adjust, adjust. The thing that I think is, was . Distracting to so many of us is he pulled up, took a policy, not informed by data, poured liquid cement on it and said, this is the way it's gonna be. It was so unam Amazon.

Yeah. To us. Even if he didn't have an ulterior motive. It's so right out of character. We are gonna be totally distracted to find the ulterior motive.

Anne Morriss: Yeah. I had a similar out of character reaction here. So here is, in my experience of the company, it's rigorous, it's competitive, it's data driven, it's a high accountability culture, and the ethos of this company, and I think part of the secret of its success has been like, go and make it happen.

Like go deliver exceptional . Results, figure it out. We're gonna hold you accountable for outputs.

Frances Frei: We're not gonna measure inputs here and we're not gonna measure where the inputs occurred. I think that's the other part that is just super distracting. Yeah. It's almost like, would you prefer that we work in the office and have lower performance?

Right. And it sounds like from the memo, yes, I would. 'cause it's gonna make me feel better.

Anne Morriss: Yeah. I mean, one, one employee told . CNN , Amazon. Amazon has announced a five day like RTA policy, which is unfortunate because I'm interested in working for a living, not live action role playing and virtue signaling, which sounds like something I would've said in my twenties and exactly how I would've reacted to this.

And I do think it sums up a sentiment from a, from a vocal segment of employees here if, if spending every single day. All day, every day in the office is really so much better for results, then smart people will start to do it. To me, that is consistent with Amazon's ethos and values and. Hi historical culture.

And so is he really gonna tell top performers? Is he gonna take points off? 'cause they didn't swipe their badges at the number of times that he's now mandating.

Frances Frei: Well, so then every other company that has done this, and by the way, it's all done with a CEO of a certain age that has a certain amount of nostalgia in there.

But every other attempt of, we're going back to five days. What it happens is that the top performers start to leave and then they, and then you're like, huh, can I make it without the top performers or not? And so I'm either gonna design jobs so that they don't require top performers, or I'm gonna make it flexible.

The problem with making it flexible for some and not for others is now you're your beautiful culture where everyone is . Playing the same song, it goes away. It goes away. Right. And now we have a, a culture of favoritism. Mm-hmm . And things like that. And that the damage of that can be really high. So I

Anne Morriss: think right in these, in these scenarios where compliance is variable and it, which means that high status people get to

Make the decision and lower status people have to come in and play other rules. Like that's how we see this playing out in other and organizations. And you just set managers

Frances Frei: up for failure because, oh, if I'm a manager that enforces, I have a bad manager. Oh well my manager doesn't let me, but I hear this other fictional manager let their people do it and it's just corrosive to a culture.

So you either have to hold tight, but are you gonna hold tight and let your best people go? That's what the right real question is. Now, maybe Andy has done the calculus and says Amazon is so good, we don't need those . The top of the top people. We don't need women, millennials or top performers. I'm trying to be, you told me you wanted to change the tone.

I'm trying to change the tone. Maybe He said we can figure out how to do it without these people. And I want to design an organization that is, I wanna get the best people I can who wanna work five days a week, which is of course not the best people who can do it. It's a subset. You're gonna fish in a small part of the pond and maybe that's what he wants to do.

And as CEO, it is his prerogative to do it, but . What they shouldn't be surprised with is having one of two things happen. Great people leave or on the down low, we make exceptions for great people and then we start to have our employee engagement and culture scores go down.

Anne Morriss: Okay, so the other thing that struck me about this, in addition to it feeling very unam Amazon, was that mandates.

Directionally are a red flag on leadership. It's like the leadership lever of last resort to fall back on this formal authority. And I think you can use it of course, uh, but it's really when you've run out of other options. Future work is hybrid and we need to come up with better names 'cause it's not really.

Work from home, and I think as, as Sal Neely has, I think I'm, I think we're using vocabulary of hers, but it's really work from anywhere. It's like anywhere, anytime, work. And that is the world we're building. That is the globalized world we're building where we're collaborating with people in different time zone, in different parts of the world because their perspective is critical to my work.

Over here, IT global organizations have been. Wrestling with these issues for a long time, like as soon as the tech started to get there, in terms of our ability to collaborate digitally across time and space organizations where it was mission critical to do so, have been doing it right and there's tons of great lessons we can learn from them.

So it just, this just feels like. To your point, nostalgia, to me, it, it smells of weakness in a leader to be playing this card. And one of the

Frances Frei: tells to me, as you said, and I love the phrase, mandates, are a leadership action of last resort. The , like particularly in this country. Yeah.

Anne Morriss: This just doesn't sit well talented people who have options.

Frances Frei: From my operations brain, I always go back to push and pull. Is it better to push a solution on or is it better to pull a solution? Pull is infinitely better than push. Everything is operationally better, and so if you do have to push to your point, make it rare and make it very, very needed and make the value proposition.

Crystal clear. If I was a leader today and I understood AI is really important, and I want everyone to start experimenting with ai, I could say you all must use AI all day. In fact, you have to each use ai, 60 minutes of ev. It's not gonna work. But if I got up there and with a inspirational message and did it, I could get more people to open their hearts and minds to AI.

Pull is more powerful than push. And I think that's the other thing that's so unusual. This is a gifted leader.

Anne Morriss: Very

Frances Frei: gifted apparently. Yeah. Just makes me think there must be something else going on that he is acting like his back is against the wall and he has no other option. Yeah.

Anne Morriss: Like if you are so convinced of your logic, then let it win.

Let it win. Then, you know, give people the option and then reward the shit outta people who are showing up every day and clearly building better teams and producing more things and inventing more things. And. Someone described this as the myth of the magical hallway conversation, , having all these magical hallway conversations like, if all of that is happening and leading to better work, then let's reward the output of those behaviors, reward the output.

Frances Frei: Do not start rewarding the inputs, or I promise you, I'll start talking to people in the hallways. Not about what you want me to talk to them about in the hallway.

Anne Morriss: Oh yeah, that's hallway conversations are being very overrated in this debate, and it's not good. Most of it, yeah. The water cooler.

Frances Frei: You actually want us to do less of that?

You want us to do less of it?

Anne Morriss: So lemme get, lemme, let's get into other ways we might solve the problem. Yeah. Okay. I'm exasperated, I'm a CEO. Uh, I don't know what to do, but I'm observing this culture challenge. I'm observing this lower engagement. Yeah. These things like learning, modeling, mentoring. Yeah. And again, I'm already, we we're already meeting…

Frances Frei: We overlapping three days in the office, right? So the theory of the case here is that two additional days, and I'm not telling, it's gonna skyrocket our learning, modeling and mentor,

Anne Morriss: I'm not telling you what to do on those days. I'm not organizing those days. I'm just saying tho those days we're gonna co-locate you and all this magical stuff is gonna happen.

So let's say, right, I want a more precise instrument and I'm trying to achieve these outcomes. So what, what else could I do here? Well,

Frances Frei: let's, so let's just go down the list. Yep. Learning. Is learning in corporations better in person than remote? No, it's not one. Why? Because in person is just the people that happen to be in person.

And so, oh, I have to coordinate. And you have to fly in. And you have to fly in. 'cause it's not like everybody is in the same location, right? Or so I'm either gonna have like small local learning in person and if I can like reserve the room or I can have. On Zoom, bring in the best people, have a great instructor.

Everyone gets to learn and not only am I learning, but I get to use chat and I get to use all of that beautiful technology. So there's learning in person at the Harvard Business School versus learning remote at the Harvard Business School. I think you could have a conversation of which is better. I still think I can teach remotely just as well as I teach in person.

Maybe that's not true for everyone, but I assure you the learning that is going on in organizations that don't have rooms that are curated for learning and the curvature of the stairs and the bend of the classroom, so even this notion that learning happens more in person is, I am, I would have no problem saying.

No chance does learning happen better in person than if you can do it remote when we're all get to log in and we all get to do it. So that's, I think the first one.

Anne Morriss: So for example, so like Gallup did some really interesting research actually trying to get at this, and one of the things that fell out of it was that meaningful feedback.

Right. Was four times as impactful in driving increased engagement? Yeah. Than mandating that people are co-located in a specific geography.

Frances Frei: Yeah, of course. Because feedback is amazingly important. But let me ask you this, Anne, you do a lot of coaching. In fact, I'm gonna go ahead and say, I think you're the best coach in the world.

How much of that coaching do you do live and in person?

Anne Morriss: Oh 90% of it is remote, but that's least, at least 90% of it. Yeah.

Frances Frei: Would you be more effective if it were live and in person?

Anne Morriss: No. No, no. But, but I think that what that is, I think is a beautiful example, is if you wanna improve coaching, if you wanna improve learning, if you wanna improve mentorship, improve coaching, learning, and mentorship.

Right. That's that's point. Don't give this constrained optimization when the constraint is gonna make us worse. Right. Right. And I think a, another example is this culture of. Of meetings that I think has infected many organizations. Oh. Like to, and we have found in our own experience of this, just bringing a little bit more intention to how we're designing those meetings wherever they're happening.

Wherever they're happening, bringing a little bit more intention gives wildly

Frances Frei: better outcomes. I mean, what's the most recent company we work with? They have, they spend 50% less time in meetings. They have better meetings. They have more time available because they optimize meetings. They didn't say, let's mandate that y'all have to be in the same room at the same time, and then we're gonna do things.

No, don't do that. Right.

Anne Morriss: Optimize meetings. Right, exactly. The direction point is if you're trying to solve for increased engagement, there are much more precise tools that we know are gonna have an impact. Then again, from this very blunt instrument of of telling smart people. How they are allowed where to,

Frances Frei: yeah, where to work and how they're allowed to interact.

Right. I'm gonna give you a subset of them and then I'm gonna ask you to compete against people that have all of them. It, the more we are talking about it, the more outrageous it feels to me. And I wanna just also say another thing about in-person also underestimates the power of the phone and we, that technology of.

Picking up the phone and talking to someone and you can do it with intimacy that I'll go for a walk. You go for a walk. It doesn't have to be the same time. I don't wanna be walking next to you, but we're that we're both having that deep, meaningful, intimate conversation. Much harder to do in person because everybody keeps stopping by my freaking office.

I don't want you to stop by my office. Yeah. As I look through his list of the four things, with the sub bullets on each one, and you just say, yes, no in person. Reliably makes it better, right?

I'd love to see the evidence.

Anne Morriss: I think the point here is not only that returning to the office doesn't solve your problem here, there are also other things you can do that solve these problems much more effectively and efficiently.

I think that's what I'm really pushing on. Yeah. And so now

Frances Frei: what advice would I give Andy? Well, I'd say, look, your diagnosis is correct. You need more learning, you need more modeling, you need more mentoring. So he got it half right. He got to the core of the problem. Yes. And what he's not doing is experimenting with solutions.

Yeah. And his first one out of the game is not gonna work. You know what, no problem. But don't pour liquid cement on it. Yeah. And now which ones are likely to work? Well, let's start experimenting and let's do that with openness. And by the way, don't have the mandates coming on top. Have your teams experiment and find out who's got the best learning climate, how are you doing it?

Who's got the best mentoring, who's got the best coaching? How are you doing it? And then on those three days a week that we do come in, 'cause we're coming in three days a week, we're just talking about the extra two days. We're

Anne Morriss: just talking. Actually, that's a lot of time. Oh my. Gosh, let's, let's design that time.

Impeccably. Impeccably, right? Let's make sure that in that, in those impeccably, in those times, we are solving for learning and co connectivity and shared creativity and well, and, but by the way,

Frances Frei: I'm not convinced that the learning and shouldn't be happening on the days we're not in the office. But still, I want us to, I want us to just be pristine about the design of things in doing it.

So what should . An organization do that is struggling with engagement. Here are things that I think are unconditionally a good idea. Invest in learning. Yes. Invest in mentoring. Mm-hmm . Invest in role modeling the way to do things. Yes. Yes, yes. And here is unconditionally a bad idea mandate where I do it.

Yep.

Anne Morriss: Yep. A hundred percent. A hundred percent. I love that. I love that and I love that I've gotten you so worked up in this conversation, be it, imagine if you are on the Amazon payroll , but yes, and I, I think to the question of how should you respond, I. Um, if you're not Amazon, how should you respond to this noon?

I, I say get out that recruiting clipboard and fire up the machine, because I think there's gonna be a lot of great talent Yeah. That is gonna decide that these are not terms of work that they are willing to accept at this time.

Frances Frei: You know, when I talk to the, the people leaders at organizations, they say the hardest job they have for high performers is getting them to not pick up the phone when recruiters call.

Well, yeah, this was just made a whole lot easier. Amazon, and I think one of the reasons I take it so personally is Amazon, they're one of my heroes. They have done things the right way. I'm a basketball fan, and when people say, oh, I play the game the right way, and it means they've done it with experimentation, with rigor, with optimism on behalf of customers, they're obsessed in really beautiful ways.

They've done it the right way, and this is so. Clumsy and my, my real problem with it is other people are gonna say, well, Amazon did it, so I should too. And that to me will be the real devastation.

Anne Morriss: Yeah. This is a company that has shown the power of this adult to adult engagement between employer and employees, and this is such a deviation.

From that on a whole bunch of levels. And this is not the decision of a leader at the, at the peak of his confidence. This is not, I just, I'll, I'll, I'll say that.

Frances Frei: That's a nice, that's a nice way of saying it.

Anne Morriss: If you look at other tech leaders in this space, and I think Microsoft stands out to me on this, could, could you imagine

Frances Frei: Satya Nadella coming up and saying this?

It would. I like, it's impossible to imagine him doing such an un rigorous, pessimistic thing. It's impossible to imagine.

Anne Morriss: Yeah, and I think listeners, you can go and hear his comments on, he's not commenting on, on Amazon's decision, but in general, this question and how he and his chief people officer, who's wonderful, Kathleen Hogan, have kind of moved through.

These are hard questions, these same questions with similar dynamics and have reached the conclusions that we have seen work in other organizations.

Frances Frei: Yeah.

Anne Morriss: And one of the threads you'll hear from the Microsoft team is also what we have seen emerging as a Beck's practice here, which is to really push the decision rights around this out and down.

'cause it's, it's a very local decision. So it de depends on the needs of sometimes very specific teams and those needs may evolve over time. Yeah, this notion that one size fits all is just crazy. It's absurd for a company this size, this complex with so many different lines of business. What we see really work is push, again, pushing those decision rights and figuring out the team level or the function level, and then learning from whatever happens next and informing your next move.

With the results of this experiment, we are building a new world of work. We are designing new ways of working. There's no question that the future is anywhere, anytime work where you know the boundaries of time zones and geography dissolve. It's a very exciting world and it's a very powerful signal that Amazon is saying

You know, we're not gonna lead the way into that world. We're gonna follow and we're gonna, we're gonna grip the steering wheel as we go because we're not sure how to

Frances Frei: navigate this space. One of the reasons that we use Microsoft as a comparison to Amazon is geographically industry category. They're very, they have very similar access to people.

They have very similar challenges, and Microsoft is killing it by loosening its grip. And that's why it's so conspicuous that Amazon has always loosened its grip, not on should we have obsession with the customers? Hold on tight, but loosened it on how you delivered the result. Right? And now they're tightening the grip on some of the things and it just

Doesn't feel like it's gonna work for this set of employees, but we're, we'll find out. I like that.

Anne Morriss: We're gonna have this out there on the record and Andy is in, and now we're on a first name basis, , 'cause we've been yelling at you. Andy is an incredible executive who's delivering unbelievable world class, incredible results and it is not too late, sir.

It is not too late to rethink this decision to really partner deeply with your employees on a better way forward. And so that is my advice, in fact, is to slow this down. You don't have to do it publicly, right? Just slow down the implementation of this and use it as an opportunity to to do a real listening tour with your best employees and listen and figure out together the best way forward here.

Frances Frei: Thanks for listening everyone. If you wanna figure out your workplace problem with us here at Fixable, please send us a message. You can email [email protected]. Call us at two three four fixable. That's 2 3 4 3 4 9 2 2 5 3 or because we're so modern, just shoot us a text.

Anne Morriss: I want a phone call. To your point, I think the phone is underrated in our modern workplace.

Please give us a call for me. You can text.

This episode was produced by Rahima Nasa from Pushkin Industries. Our team includes Constanza Gallardo, Izzy Carter, Banban Cheng, and Roxanne Hai Lash. This episode was mixed by Louis at Story Yard. I help.