Is hybrid culture becoming, well, less hybrid? Deciding whether to keep the workforce flexible in terms of working location is under discussion given upcoming office lease renewals and business leaders are battling with tough investments decisions in todays economic situation. Should they revive the in-office mandate to justify the expense of their real state and leases but then risking employee dissatisfaction? Or, should they continue to pursue long term hybrid or anywhere work policies, thus downsizing office space but maybe affecting collaboration, innovation and controversially… productivity in some eyes?

Flexible working hours are becoming more normalized, however, with the C-suites at Twitter and Starbucks damning ‘work from home’ and enforcing strict return to office mandates this year, the case for hybrid appears somewhat under threat. Particularly when businesses are constantly managing new tensions of hybrid work like remote surveillance, team culture and workplace innovation.

Yet, employees who have now experienced hybrid working are not eager to work for companies mandating strict office-only policies and there in lies the challenge for organisations. For example out of two companies who offer the same role and similar salaries and benefits, it’s the one with flexible working as standard that will be more favourable to join. What is the future of the office, or as I believe, the physical workplace which then encompasses all of our workforce?

With empty office space doubling in many cities – London being one example – in the last three years business leaders find themselves at a crossroad: Should they renew or terminate their big city leases?

Many hybrid working policies are being dictated by this decision to rethink organisational real estate.

Some have already made their decision. Our research shows that since the pandemic, one in ten businesses in EMEA have completely gotten rid of their physical office, and more than half have reduced office space. But what about the rest? What should business leaders consider before making their renewal decision?

The innovation conundrum points to an Office or Physical Workplace-based solution

The hybrid model is designed as a compromise to support a distributed workforce whilst still recognising the value of in-person connections. However, our data shows flexible working policies negatively impact an organisation’s ability to innovate successfully. Employees expect a culture of freedom, but if this is at the expense of commercial gains, is hybrid perhaps failing the modern business?

The innovation conundrum builds a case for renewing real estate leases with almost two thirds of respondents saying their work is more innovative if they are in their employer’s buildings. Whilst this may not be what home workers want to hear, these findings reveal a harsh truth that businesses must address. Teams that are struggling to innovate remotely threaten the longevity of their organisation. Innovation outputs are paramount for commercial success. If employees are not empowered to be creative and come up with ideas remotely, the successful rise of hybrid work will fail to become a reality.

The hybrid way, or the highway

To label flexible working as a failure in response to innovation decline would be very wrong. Distributed teams are the new reality as an overwhelming majority of the Middle East workforce (82%) report a higher job satisfaction if they can work from anywhere . Of course this depends on the nature of the employee’s job function.

Over the next 12 months, the vast majority (83%) of Middle East organizations surveyed are planning to invest significantly more in their digital culture, and more than a third (38%) are prioritizing investments that fuel innovation and creativity. Driving innovation to create business efficiencies, cut costs, or increase market attractiveness is clearly a business imperative.

Post-pandemic anywhere work policies have resulted in positive impacts across the board with half of EMEA enjoying improvements in communication with managers, morale, and collaboration. Gone are the days of traditional office culture where employees would expect surveillance by managers as ‘part of the job’ or accept gruelling long days at their desks.

Business leaders cannot afford to doubt the value of flexible working as they risk their employee retention plummeting and their recruitment efforts stagnating. We all saw the backlash that can happen when Elon Musk demanded Tesla workers to return to the office.

However, open plan spaces should not be blindly scrapped in response to the hybrid craze, nor should hybrid workplace alternatives. The answer lies in achieving a balance. The strategy lies in the advantages of technology, culture and, of course, our people themselves, allowing them to do parts of their role in the best place that works for them and the organisation, be that all at home or all at the physical workplace. The question then is how to equip and enable the organisation to achieve that balance?

Reviving innovation with a digital-first approach to productivity

Creativity and technology are not mutually exclusive assets. Technology has enhanced every channel in business, every aspect of daily life. If given the right foundation, digital creativity can thrive.

Organisations need to take better advantage of the tools designed to facilitate innovation. Accelerating secure access to corporate intelligence for all employees regardless of location will be instrumental to enabling digital creativity. Commitments to a workplace ‘refresh’ should leverage technology whilst also taking upskilling programmes, remote work security and corporate purpose to the next level. This will spearhead a cohesive culture of authenticity and collaboration. For the workforce to truly benefit from the power of digital tools, they must first have this foundation.

Digital transformation for creative outcomes

Introducing mandated in-person ideation sessions would be a doomed approach to the innovation conundrum. Innovation and productive output don’t need to suffer because employees aren’t in the office. Companies that are thriving are setting up as ‘remote-first’ with no second class citizens at home or in the office. Working from anywhere is now cemented as an integral part of modern corporate DNA and cutting back on physical space may be what is needed to make room for the inevitable digital-first future. What leaders need to focus on is the investment that is right for the longevity of their business.