✨ The Mathematics of When Remote Work Fails

Why high-stakes decisions, creativity, and serendipity work better in person

Yo! ✌️ I’m Brett! I am a Product Manager and former Cognitive Science researcher. Social Studies is a semi-weekly newsletter for people building great products for humans. It includes recaps of what happened on Tech Twitter every week plus deep analysis using frameworks from Psychology, Economics, and the other Social Sciences.

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✨TLDR

👨‍💻 The world is going virtual - Thanks to COVID, most of us plan to work remotely through the Summer of 2021. What activities will return to being done in person?

🤝 Some things feel better in person - High stakes decisions, creative work, and serendipity are all much easier to do in person.

🏛 High stakes decisions require higher trust - Making a big hire or investment feels better in person because in-person experiences increase trust. We get a better sense of and can become more intimate with business partners when we spend more time and have higher fidelity interactions with them. In person, they also have the opportunity to prove their commitment (by making the effort to appear in person) and stake their reputation on the success of a deal.

🎨 Creative work requires higher fidelity - Physical interactions engage more of the brain than those online. Creativity is improved when more senses are stimulated.

💥 Serendipity requires “collisions” - Chance encounters that spark innovation are more common in person, where people spend more unstructured time together.

⚔️ Competitive dynamics incentivize in person - The prisoner’s dilemma states that people will continue to appear in person when doing so is competitively advantageous.

🤖 Fully remote work is still coming - We’re being forced to figure this all out in real time and we’ll likely get used to it. Things will also improve. That’s how it works.


👨‍💻 The world is going virtual

Thanks to COVID, remote work is now a thing. A really really big thing. Many tech companies have announced most of their employees won’t be returning to offices until Summer 2021, and more companies continue to follow suit.

A vaccine for COVID will definitely increase the number of office workers, but remote work is most likely here to stay.

  • Companies are enjoying the benefits of being able to hire cheaply from an international talent pool and not owning expensive downtown real estate

  • Employees are enjoying the flexibility of working from wherever (and whenever for some) and will choose employers that allow this flexibility.

Neither will want to return to fully in-office work. That said, remote work leaves a lot to be desired.

🤝 Some things feel better in person

High stakes decisions

Creative work

Serendipity

Looking at these from the lens of probability theory, we can understand why each feels better in person.

🏛 High stakes decisions require higher trust

Remember when it was weird to buy things on the internet? The idea that you could punch in your credit card number onto some website and not get flat out robbed was absurd for a while.

Eventually things changed. First, people started buying cheap things on the internet like books and CDs. Now people buy expensive things like cars and homes.

What changed? Trust.

The risk of getting robbed on the internet has dramatically declined over the years, so people trust it more and are thus more comfortable making larger purchases.

In general, when stakes are higher, people are less tolerant to risk.

Simply put, there’s much more to lose when stakes are higher. As a result, when put in a high-stakes situation (doing a backflip off the roof or hiring a COO), people try to reduce risk as much as possible.

Risk is a probability judgment. It’s the likelihood of an adverse event (like cracking your scull open, the COO being a fraud) happening - P(adverse event). So it follows:

Distrust = perceived risk = what I believe P(adverse event) is

It’s ideal to reduce true risk, but the truth is, we have no idea what the true risk of anything is. As a result, all we can do is reduce perceived risk (increase trust).

There are a few ways to do this.

🖼 Higher fidelity increases trust

The clearer a picture you can paint of something, the more you believe it to be real.

We’ve all been at that dinner party where some dude was mansplaining about a topic he professed to know a lot about, but when you pressed for more information he was unable to respond.

In this case, we’re being provided some amount of data (everything the dude has said so far). In order to increase our trust that dude knows what he’s talking about, we need more data, so we ask more questions.

In business, there are a ton of data points that help us understand whether or not a deal is likely to succeed. From the terms on the contract to the reputation of the firm to the way the person you’re doing business makes eye contact with you.

In-person interactions are the highest fidelity interactions we can have. We observe body language and facial expressions amidst deeper discussions about life or the nuts and bolts of the deal. This allows us to collect much more data than we would have otherwise, and thus build more conviction about the deal.

⏳ Time increases trust

Along these lines, the amount of time you spend also increases the amount of data you collect. This is why it’s easier to do business with someone you’ve known for a longer time. You’ve observed that person enough to have a strong sense of the likelihood of a deal with them going south.

Interestingly, this is also why many people feel more comfortable hiring individuals they’ve interacted with on Twitter compared to others of similar or better pedigree who they haven’t.

🏋️‍♀️ Proof of work increases trust

Friedrich Nietzsche was famous for saying this:

He who has a why… can bear almost any how.

Here, he’s pointing out that motivation is the key determinant of whether or not an individual is able to overcome an obstacle. Sports coaches and hustle porn influencers know this well.

Flip this around and we can say that a person’s motivation can be measured by the obstacles they overcome. The difficulty of the “how” helps us understand the strength of the “why.”

This is really crucial in high stakes business deals where we want to know our prospective partner is highly motivated and committed to the deal.

Since showing up to do business in person is significantly more effort than doing business virtually, it serves as a kind of proof of work mechanism. The difficulty of physically showing up demonstrates commitment to a deal.

This happens all the time in romance. When the dude messes up he doesn’t just call up the girl and say he’s sorry. He gets his ass to her house with an acoustic guitar, a sign, and a bouquet of roses. Proof of work.

❤️ Intimacy increases trust

Despite most “crime families” like the Mafia not actually being literal blood relatives, they still use language as if they were. The same phenomenon is also at play in bazaars throughout the Middle East where you hear the words “my friend” and “brother” over and over again.

What’s going on?

Family members are the closest relationships individuals will have in their lives. Because we view family as extensions of ourselves (both figuratively and genetically), we have a natural bias to support them at all costs. As a result of this mutual support, we trust family with anything.

In the world of organized crime and under-regulated markets, trust is low. The likelihood someone kills you or takes your money, is non-zero.

Business still needs to get done though. Treating people like family helps.

When we treat business partners like family, we suggest to them that they are part of this mutual support system and thus that they can trust us. This is absolutely necessary in low trust environments like bazaars or high stakes decisions like M&A deals.

Feeling like family requires intimacy. While it’s possible to become intimate virtually, in-person encounters are better for a couple reasons:

  • Proof of work: Doing the hard work to foster connection shows commitment to that connection. Taking the time and energy to show up and spend time together increases intimacy.

  • Physical touch: It’s been shown that physical touch increases feelings of intimacy. Pats on the back, high fives, etc. are all 10x better at fostering connection than emoji reactions in Slack.

💊 Insurance increases trust

Business has gone hand-in-hand with sex, drugs, and law-breaking in general for ages. Tons of business in South Korea gets done in brothels and Putin is known to set up diplomats with prostitutes in hotels he’s rigged with cameras before negotiating with them.

What’s going on? Blackmail.

It’s easier to trust someone will come through on their end of a deal when they stake their reputation on it. Participating in illicit activities together gives both parties insurance that the other won’t back out. Doing so in person versus remotely prevents both parties from faking participation.

While most business doesn’t involve overt blackmailing, these activities have become important, yet unconscious rituals for deal-making.

🎨 Creative work requires higher fidelity

Despite the power of technology, many writers still use a pen and paper. There are similar stories for virtually every other creative discipline - engaging the physical world makes you more creative.

The most likely reason for this is that creating in the physical world is a much higher fidelity experience than creating in the digital world. Moving a pen across a paper or turning a nob on a MIDI controller engages more of the brain than the digital equivalent.

Since creativity necessitates making disparate connections, it makes sense that engaging more disparate parts of the brain should yield higher creativity. In fact, that’s how creativity-stimulating psychedelics work.

This is your brain on LSD, literally - CNN

It follows that higher fidelity (in person) experiences also help when doing creative work collaboratively because they increase the number of connections across brains.

💥 Serendipity requires “collisions”

Serendipity is when a chance encounter births a billion-dollar business. Many of the most successful businesses today were sparked from hallway conversations, lunch meetings, and other seemingly insignificant run-ins.

Bell Labs, one of the most innovative companies in history, architected its offices to increase the number of these serendipitous “intellectual collisions”. Countless other firms have followed suit. Scott Habjan writes:

The physical environment can serve to not only attract the best and brightest, but to also foster interaction and groundbreaking collaboration between them.

In order to increase serendipity, you can increase the chance of a collision as Bell Labs and others have done with their office layout or increase the amount of time that collisions can happen in.

Working in person has much higher serendipity not only because are employees spending more time together. The chance of unstructured interaction is much higher being co-located - think about how many random, unstructured hallway conversations you have in the office compared to working from home.

⚔️ Competitive dynamics incentivize in person

There is a multiplier effect on the above-mentioned items when status competitions come into play.

When trying to beat a competitor to a deal or win a promotion over a coworker, “doing what’s necessary” gets replaced with “going above and beyond.”

If you really want the deal or the promotion, you’re going to do whatever it takes to get there. Most critically though, if you don’t, your competition will.

This is the prisoner’s dilemma of remote work - whenever there’s a competition where showing up in person increases odds of winning, everyone will show up in person.

🤖 Fully remote work is still coming

When it comes to high stakes decisions, creative work, and serendipitous encounters, in-person work is indeed far superior to remote work today. That said remote work

We will deal with it because we have to - COVID is keeping most companies remote through Summer 2021 but hiring, investing and innovation won’t stop. The most successful firms will find ways to function effectively remotely and retain these practices even when the world opens back up again.

Things will get better - There are ton of new technologies in development (video, enterprise collaboration, AR/VR, crypto, etc.) that will dramatically improve our ability to work remotely in the coming years. The explosion of remote work thanks to COVID has driven a Cambrian explosion in investment and innovation in the space.

This is how technology adoption works. We get there eventually.


✌️ Further reading


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🙏 Thanks

Huge shout out to Andrew Chen for sending me down this fascinating rabbit hole!
Here’s a video of me basically every day of my life now.