Home » Go Ahead, Tell Your Boss You Are Working From Home: Nicholas Bloom (Transcript)

Go Ahead, Tell Your Boss You Are Working From Home: Nicholas Bloom (Transcript)

Around 1800, modern workplaces started to be formed, we started to mass in factories and offices, and the modern form of commuting to the office and back or to the factory and back started to be set and stored.

But a lot has changed in the last 200 years, in a sense, we don’t need to be like this anymore. There’s modern communications, modern computer systems, the Internet.

So one of the things I want to argue is the way that we organize the office, the way we organize factories is something that is very backward looking, and it doesn’t need to be that way anymore. I have kids, and it reminds me a lot of these long summer holidays.

The summer holidays for three months is a huge challenge for parents. What on earth to do with your children for three months? You ask, “Why do we have these long summer holidays?”

Again, it’s one of these throw-back things because when the school day was starting to be structured a couple of hundred years ago, we’d release kids to go and harvest the fields. And I don’t know about any parents here, but my kids certainly are not doing any harvesting anymore in the, you know, the bare in the summer.

I’m going to argue working from home is a future-looking technology; I think it has an enormous potential. Now, that’s my claim.

What I’m going to talk about for the rest of the day is some evidence to support that. I wanted to collect evidence that was scientific. My father is actually a scientist, he does lots of drugs testing, I talked to him a lot about that.

If anyone here is in the pharmaceutical industry or works at the Federal Drug Administration, you know that to prove something like a medical device, you have to separate out into a large pool of subjects, randomly pick some treatment and some control, allow one to take the drug, one not to, and to follow them through for months on end.

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So I wanted to do something very much like that for working from home, to scientifically test it. I was fortunate enough that I found a company that would do that with me, it’s called Ctrip. They are China’s largest travel agency, they have about 20,000 employees, they’re worth about $20 billion on NASDAQ.

Here’s a picture of their headquarters in Shanghai. They look like any kind of modern office: very dilbertesque, lots of desks and cubicles, and thousands of people working, taking calls, typing on their computers, dealing with customer complaints, coming out with new products, managing their team.

Why would they be interested in working from home? They’re interested in working from home because Shanghai is a phenomenally expensive place to run a business; it has incredibly expensive property prices. And they were growing rapidly. Their aim was to try and grow, but without increasing their office space.

It’s probably a similar thought for many people here that operate in the Bay area or in New York or in Chicago or London or Paris or Toronto or Tokyo or Johannesburg. Wherever you are around the world, office space is becoming very expensive in big cities.

So this is what motivated them to start down this road. Rather than to roll the whole thing out, they thought they would run a big working-from-home experiment. So they got a large number of volunteers from two divisions, that wanted to work from home, and they set it up as a randomized control trial.

In a very Chinese style, James Liang, who is the CEO, pictured here, drew a ping-pong ball out of an urn. The urn said “even,” which meant everyone who had an even birthday, so was born on the second, the fourth, the sixth, the eighth, the tenth of the month, got to work at home for the next nine months.

If you had an odd birthday, like myself, the first, the third, the fifth, the seventh and ninth of the month, you stayed in the office for the next nine months.

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In fact, we tracked these two groups for about two years. This was to set it up as scientifically as we could.

Now, what did we find? Oh, oh…

Before we go to the results, I should point out – Here are the people working from home. It’s not clear, when looking at these guys, exactly what is going to happen. The person in the bottom right doesn’t look exactly very enthusiastic to me. I’m somewhat nervous, so are they, about some of these characters.

In the top right is another picture to show the downside of working from home. That’s her bed in the photo, so she has about a four-foot commute. Which is great and very efficient.

On the other hand, I personally really wouldn’t want to spend 21-22 hours a day in the same room, day in and day out. It’s certainly not for everyone.

To point out, just to get the experiment clear, they’re typically working in teams of 10 to 15 people, and they all have the same manager.

Here’s a team manager. She’s running her team: some of them are randomly sent home, some of them are randomly still left in the office, but they are all working under the same manager. Those at home come in one day a week. They may all come in on Wednesday; they’re at home on Monday, Tuesday, Thursday, Friday, the whole team is in the office on Wednesday.

She can monitor and see what’s going on, they’re all working the same shift. The only thing that’s really changing is where they work.

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