Lessons firms are learning about WFH

"Perhaps the biggest lesson is that we’re in the middle of a gigantic, unplanned experiment, and companies need to continue to try new things while rapidly discarding what doesn’t work" (WSJ, July 2020). Read the article for 5 more lessons.

Cracks in WFH

Working from home is not a panacea (WSJ, July 2020).

Who produces Kirkland products for Cosco?

In many cases, the same folks who produce the brand name product. (Napkin Math, July 2020). Except, Kirkland product must be 1% better.

Posts from an old blog on Organizational Architecture

https://e610vcu.blogspot.com/search/label/Organizational%20architecture?fbclid=IwAR2_9sDNY2FxjorjBmGxCwr_sW2DU-ZKVz7tdBr-dbrP3ljgzRJkt_9qGhI

Lenders should worry about both adverse selection and moral hazard

This piece argues that Income Contingent Lending reduces adverse selection and moral hazard relative to Income Sharing Agreeements (RealClearEducation, July 2020).

Apple integrates vertically

Apple has decided to produce its own chips instead of buying them from Intel (WSJ, June 2020 and WSJ, June 2020). I wonder if specialized investments or contracting costs increased?

An intelligent piece on the future of WFH

Big tech and universal telecommuting

by  Tyler Cowen June 20, 2020 at 2:12 am in 

• Economics
 
• Web/Tech

It has gone great so far, but I don’t think it is socially optimal to be doing this forever.  Here is my latest Bloomberg column on that topic, 2x the usual length, excerpt:

If Twitter, Facebook and other tech companies shift toward everyone working from home, it will mean less reliance on esprit de corps and morale to ensure performance, and more management using direct financial incentives and project- and output-based monitoring. Virtual tools can help organize teams, but they simply can’t replicate the intellectual frisson of “gathering the smart people” together, and this could damage performance and innovation.

And:

There is some evidence that when employees work at a distance, they don’t put in extra hours or extend themselves for the benefit of co-workers. That probably means a better work-life balance for many people, but perhaps also inferior performance from a lot of companies over the longer haul.

This move away from workplace morale as a motivator will help self-starter employees, but it may not be good for tech labor overall. In essence, without a local workplace ethos, it is easier to commoditize labor, view workers as interchangeable and fire people. The distinction between protected full-time employees and outsourced, freelance and contract workers weakens. A company can make the offer of, “If you hand in your project, we pay you,” to virtually any worker around the world, many of whom might accept lower wages for remote roles.

Bringing new workers on board is an especially difficult problem for this model.  In the short run, of course, that is a minor concern but over time it grows.