Author: Sara Savat


About Sara Savat

As a senior news director for social sciences, I write about political science, religion (and their intersection), sociology, education, anthropology, philosophy and linguistics. I have a passion for storytelling and enjoy working with our world-renowned faculty and members of the media to bring research to life for the public. Prior to joining the Public Affairs team, I worked in public relations at SSM Health and covered academic medicine at Saint Louis University. I have a master’s degree in communication from SLU. Outside of work, I am most likely to be found at a dance studio or cheering from the sidelines of a soccer field. My family and I also love traveling, camping and visiting national parks.

Many employers have already begun transitioning employees back to the office, while others plan to resume in-office work in the coming months. But after more than a year of working from home, is returning to business as usual even possible? Or desirable?

Employees have changed amid this pandemic. The more a company can match employee preferences and the optimal work conditions required for a given role, the better off they’ll be in terms of hiring and employee retention, according to Peter Boumgarden, an organizational behavior expert at Washington University in St. Louis.


“Working from home has a level of flexibility that is hard to match in a traditional environment,” said Boumgarden, the Koch Professor of Practice for Family Enterprise at Olin Business School. “Research by Nicholas Bloom and colleagues suggests that employees value this benefit, even seeing it as equivalent to the value they would get from a non-significant pay raise.”

And it’s not just flexibility that employees want.

“We know that autonomy — especially perceived autonomy — is a huge driver of employee satisfaction,” said Markus Baer, professor of organizational behavior at Olin Business School. “Just having the sense that you have control of your schedule and when to do certain tasks can boost motivation.”

Of course, there are benefits to working in the traditional office setting for individuals and teams. Interdependent work that requires coordination and input from multiple people is easier to accomplish in person. So are nonlinear tasks like brainstorming. Being co-located also helps employees feel connected to the team and provides networking opportunities that can help them advance their careers. This kind of rich social connection can be hard to mimic online, Boumgarden said.

Despite some of the benefits, some employers are seeking a return to more traditional working conditions.

“In my view, the return to office is driven by some mix of companies trying to recapture some of those lost elements, the desire to use expensive office real-estate set up for this strategy and, perhaps, because the old world still feels a bit more familiar,” he said. 

No one-size-fits-all approach

The question should not be whether to return to the office, continue working remotely or some hybrid option, but rather: What is the nature of the employee’s work? That’s what should drive return-to-work plans, Baer said.


For individual contributors, going into the physical office is less essential. In fact, many people have found over the past year and a half that they are more productive working at home without the typical office disruptions.

However, co-location becomes increasingly important as work becomes more interdependent and complex — especially when frequent communication is required, Baer said. Collaborative tasks such as ideating or coordinating projects are accomplished more efficiently in person.

But that doesn’t necessarily mean employees need to be in the office full time. For many teams, the ideal arrangement will change week to week based on current work needs, Baer said.

“There’s some research that shows that teams do really well when they have bursts of activity. I could envision teams coming together for a week or a block of intense activity to solve a problem and then disband when the problem is solved and it’s clear who is going to do what. Once those tasks are complete, the team can reconvene,” Baer said.

Hybrid challenges

From a productivity standpoint, a well-planned hybrid arrangement offers the best of both worlds: time in the office to plan and coordinate work, and uninterrupted time at home to complete tasks. Hybrid arrangements also enable employees to retain an office footprint while keeping some of the flexibility they’ve enjoyed over the past year and a half. For these reasons, Boumgarden believes hybrid work will be the future for many organizations. However, the challenges of hybrid work are significant, perhaps even more so than traditional in-person offices and fully remote work environments, he said.

“There’s some research that shows that teams do really well when they have bursts of activity. I could envision teams coming together for a week or a block of intense activity to solve a problem and then disband when the problem is solved.”

Markus Baer

“Very few of our offices are technologically or socially set up for a world where half of the workers are in the office and half are working from home,” Boumgarden said. “Managers needs to be thinking very hard about workflows required to drive efficiency and innovation in this new set-up. Overcoming these challenges will require investment of time and capital on the part of leaders.”

There are also employee management issues to overcome in a hybrid model. For example, if one person decides to work from home more frequently and another stays in the office, will they be seen equally by their superiors?

“I would argue that true clarity of expectations is critical. Workers should know both what the stated expectation is, but also what is the implicit norm,” Boumgarden said.

Lessons learned

For those who plan to return to a traditional office work arrangement, there are still lessons to be learned from the great work-from-home experiment. For starters, leaders need to revisit how frequently they schedule meetings, Baer said.

“When people are co-located, it’s easy to call a meeting to discuss something, but oftentimes these meetings are unproductive and nothing is really accomplished that couldn’t have been done in a simple email exchange,” Baer said.

The same communication tools that kept teams running while working remotely — such as Microsoft Teams, Skype or Slack — can still be used to inform employees or collect information without forcing them to sit through yet another meeting.  

Boumgarden hopes the experience of managing remotely will ultimately change how leaders do their jobs when they’re back in the office.

“For managers, I hope there are lessons learned about how one manages toward outcome versus micromanaging process alone,” he said. “Let’s start by acknowledging true contribution cannot be linked to minute and hours alone. For example, I might have an exceptionally productive hour that is equivalent to my typical four hours of output. The next day, I might have four hours of time that distill down to less than an hour of true ‘productivity.’ Or what about the breakthrough that occurs on a run or while lying awake at night? How should this be managed? Does it count as work time? These are the questions our next generation leaders should be asking.

“All this said, as soon as we realize that contribution does not neatly map onto time blocks, our way of assessing work should evolve,” Boumgarden continued. “I hope managers start to think about how they might creatively evaluate progress toward goals, while at the same time realizing that people work in different ways to reach this value.

“By not being able to micromanage over the last year-plus, I think many people had a realization that their actual management was much more superficial than truly additive of value,” he added.  

But perhaps the most important lesson we all learned over the past year and a half is the importance of remaining flexible.

“I think there is value in saying new models are still experiments. A company might roll out one approach to hybrid for some time and then adjust back as the data gives insight around what is and is not working,” Boumgarden said.

Pharmaceutical and biotechnology companies topped the 2021 RQ Top 50 list of the most innovative U.S. companies. The annual ranking identifies the smartest R&D spenders – those companies that both spend big (at least $100 million in R&D) and provide the greatest returns to shareholders from that investment.

Notably absent from the list were the three most attention-grabbing pharmaceutical and biotechnology companies of the year – Pfizer, Moderna and Johnson & Johnson.

Anne Marie Knott

That’s because the RQ50 is not like other innovation rankings. Developed by Anne Marie Knott, the Robert and Barbara Frick Professor in Business at Washington University’s Olin Business School, RQ (research quotient) measures R&D productivity in theoretical models linking R&D investment to revenue growth and market value – precisely the outcomes executives and investors care about, Knott said.

“RQ essentially measures how smart companies are. Just as high IQ individuals solve more problems per minute, high RQ companies solve more technical problems per dollar,” Knott said.

“While most of the market still thinks R&D spending is the best gauge of companies’ innovativeness, it’s not. It’s quality not quantity of R&D spending that matters.”

The proof is in the numbers: The RQ50 portfolio historically outperforms the S&P 500, despite the fact that the two portfolios bear the same level of risk (beta), Knott said.

What does it take to make the RQ50?

The 2021 RQ50 represents a broad swath of the economy. The biggest representation comes from pharmaceutical and biotechnological companies, which comprise nine of the top 50, or 18%. Makers of semiconductors make up 14% of the list followed by computer programming at 10%. By contrast, 28% of the RQ50 are the only firms in their industry to make the cut.  

“So it’s not the case these firms are all riding the same wave of opportunity,” Knott said. “The RQ50 firms are standouts in their respective industries.”

Now in its eighth year, the RQ50 ranking is fairly stable: 66% of firms from the 2020 ranking appear again in 2021. According to Knott, that’s because firm capability changes slowly.

Of the 50 companies who made this year’s ranking, six have made the RQ Top 50 all eight years since CNBC published the initial RQ50 in 2014. These standouts include Hasbro, Lam Research, Netflix, NewMarket, Synaptics and Xilinx. 

New to the list

Seventeen companies are new to the RQ50 list. How did they make it?

  •, FMC, Guidewire Software, Match Group, NortonLifeLock and Qualcomm were close last year, but ascended this year.
  • Abiomed, Church & Dwight Co. and MaxLinear crossed the $100 million R&D threshold in FY2020.
  • Cara Therapeutics – No. 2 on the list – was excluded last year because its R&D exceeded revenues.
  • Prior to FY2020, Acacia Communications, Blueprint Medicines, Corcept Therapeutics, Hewlett Packard Enterprise, Lumentum Holdings, Square and Xperi Holdings hadn’t been publicly traded and conducting R&D for enough years to form their RQ.

Who dropped out?

In order for 17 firms to ascend, another 17 had to drop out. What happened to them?

  • AMAG Pharmaceuticals and The Meet Group were acquired.
  • Retrophin rebranded itself and now trades under a different name.
  • Halozyme Therapeutics and Ironwood Pharmaceuticals dropped out because their R&D spending fell below the $100M threshold for inclusion.
  • Arena Pharmaceuticals, Enanta Pharmaceuticals, Lexicon Pharmaceuticals and PTC Therapeutics no longer have revenues that exceed their R&D, a criterion for inclusion. 
  • Allison Transmission, Dow, Intuitive Surgical, FireEye, Sirius XM, Take-Two Interactive, United Therapeutics and Veeva Systems failed to maintain RQs sufficient to keep them in the top 50.

COVID-19’s effect on innovation

While the COVID-19 pandemic shut down manufacturing lines and disrupted global supply chains, research and development – at least so far – appears to have continued its upward trend. During FY2020, which for some ended in June 2020 and for others not until May 2021, R&D spending in absolute dollars increased by 6%. During this same time period, revenues fell on average 10%, making the R&D investment even more significant.

“In most cases, firms committed to their FY2020 R&D spending before the pandemic. So it’s still too early to measure the pandemic’s full impact on firm R&D investment,” Knott said.

“However, I’m cautiously optimistic that firms will continue to prioritize R&D because if there’s anything the pandemic has taught us, it’s the importance of innovation.”

There’s growing evidence that the COVID-19 pandemic spurred a small business boom. In May, the National Bureau of Economic Research found that small business rose 21% in 2020, compared to the prior year.

Even in the best of times, though, launching a successful small business is challenging. About 20% of U.S. small businesses fail within the first year, according to data from the U.S. Bureau of Labor Statistics. So, starting a small business during a global pandemic may seem especially risky.


However, recent developments—such as changes in the labor force—may play to small businesses’ advantage, says Glenn MacDonald, the John M. Olin Distinguished Professor of Economics and Strategy at Olin Business School.

MacDonald has extensive experience advising businesses large and small. Last summer, in conjunction with the STL Small Business Task Force, MacDonald and more than 50 of his former students provided volunteer consulting for struggling local small businesses.

MacDonald offered the following perspective on current challenges and opportunities for small businesses:   

Small businesses come in two flavors — those that are currently small but will either grow or die, and those that are inherently small. The former tend to be startups and small consulting companies; the latter are small restaurants, hair salons, yoga studios, coffee shops, etc.

The inherently small businesses always face two big challenges.

One is that they have relatively little capital and limited access to credit. A business slowdown, or worse, a lockdown, often wipes them out as they miss rent payments, payments to suppliers, etc. From this perspective, emergence from COVID times is very good news for those that have held on or recently started. But the return to mask mandates and uncertainly about the future will challenge these businesses considerably.

The second challenge is people. The inherently small business owner often has less education and experience, and is less capable of making the adjustments needed to survive a slow time. In addition, these businesses tend to pay less and attract a workforce that is less skilled and less able to continue with a job where business and pay are slowing. Thus, the small restaurant loses most of its cooks and servers if business slows and faces the difficult task of rebuilding when it picks up. From this perspective, the last year or so has been exceptionally challenging for small business, and it will stay that way for a while.

The startups and smaller or growing businesses have generally been better-positioned to ride out the recent year, and are now showing clear signs of improvement. They generally have access to somewhat better capital, education and experience, and more educated employees with fewer retention issues. The current uncertainty will slow them somewhat, but they should return to their pre-COVID path in the near future. 

Some of the recent developments play to small businesses’ advantage. For example, many in the labor force have found great value in work from home and greater flexibility, and are even willing to work for less to get it. Some medium and large companies can provide this structure, but they always find difficulty in light of the need to determine who is allowed to work in this way, developing consistent HR policies, etc. But small businesses can be more nimble and are finding increased ability to attract more educated and experienced employees without great increases in compensation.

It’s difficult to say if now is a good time to open a small business. A lot of the competition has been wiped out, so perhaps so. But starting up, dealing with the cash flow and credit issues as well as the people challenges, will all make business difficult for an undetermined period of time. So, it’s important to have a well thought out plan for riding that out, at a minimum.   

On June 16, the Federal Reserve announced it may raise interest rates twice in 2023 in response to higher-than-expected increases in inflation. In his announcement, Fed Chairman Jerome Powell said the higher inflation recorded this year should be temporary, but the risks that it would be “higher and more persistent than we expect” could not be ignored.

John Horn, professor of practice in economics at Olin, agrees with Powell’s overall inflation forecast of 3.4% for 2021. Inflation in some high-demand categories — such as travel, construction material and automobiles — may be even higher, he said.


However, some prices, such as lumber, are already coming back down, providing hope that current inflation is a short-term corrective measure and not a sign of long-term systemic problems.

“The uncertainty for me is how this gets played politically and what messaging gets through,” Horn said.

Inflation, Horn explained, can be a self-fulfilling prophecy. Worry about rising inflation can lead employees to demand higher wages. In order to pay those higher wages, employers raise prices for their products and services, creating actual inflation. The wage-price spiral is a vicious cycle. Likewise, inflation expectations will cause banks to increase interest rates, making it more expensive for businesses and individuals to borrow money.

“It’s important for the Fed to make sure that this is seen as a temporary blip and not systemic. Because if it’s seen as a systemic problem, and inflation expectations take charge, it’s really hard to make it stop,” Horn said. “Once that happens, the only way to stop inflation is to raise the interest rates really high and cause a recession. Maybe not in 2022, but it will be on the Fed’s radar. They will want to stop [rising inflation] sooner than later.”

“However, if prices come down and people see this as a temporary blip related to COVID-19 and the supply chain problems — if that story takes hold — then I’m not worried about inflation,” he added.

What’s driving inflation?

In the simplest terms, inflation occurs when consumer demand increases or supply contracts causing prices to rise. The current economic situation is a little more complicated, in part because both effects are occurring.

“There’s not a clear understanding of what is currently driving inflation, but most people are pointing to a couple of things,” Horn said. “First, as the economy is recovering from COVID and the shutdown, there has been an increase in demand for things people weren’t buying over the last year due to uncertainty about job future or lack of opportunity — like travel and dining out. As demand increases, so do prices. That’s one driver.”

Adding to the problem, many of the fastest growing sectors — including travel and hospitality, entertainment and restaurants — are struggling to find people to fill open jobs. These jobs typically don’t pay the best wages, and some would-be-workers are looking for better opportunities in other industries. Lack of child care and fears over COVID-19 exposure also are keeping former employees from returning, Horn said.

Another contributing factor: When the pandemic hit, companies scaled back production or, in some cases, shut down factories altogether. Now that demand is increasing, it will take time for the supply chain and production to catch up, Horn said. A highly publicized example of this is the global shortage of semiconductor chips.

“They are used in more things than might expect — not just electronic devices, but also automobiles and appliances. Even if production capacity is available, the raw material inputs are not always available. When we think of the supply shock, the supply is constrained because all up and down the supply chain, companies slowed down or shut down at the beginning of pandemic. And the startup is not instantaneous,” Horn said. 

Ongoing effects of trade wars started under the Trump administration also have driven inflation.

“International trade normally lowers price because you have more opportunities for competition and lower prices,” Horn said. “The trade conflicts, coupled with COVID, have reduced that as an option for price competition.”

While a boost in international trade would have a positive effect on inflation, many of the countries that have historically provided lower-cost labor will continue to struggle with COVID-19, Horn added.

A measured response

The trillion-dollar question of the day is whether the current inflation is just a corrective shock coming out of the COVID-19 pandemic or rather a longer-term systemic shift. The answer will be primarily determined by monetary policy, Horn said.

Since the Great Recession of 2008-09, central banks around the globe have been pumping money into their national economies in an effort to stimulate the economy. Before the Great Recession, the Fed had just $800 billion in the economy. Today, that figure has grown six-fold to $6 trillion.

“When that extra money is out in the economy and there’s not more products to buy, prices will go up because consumers will be willing to pay more to get the products they want,” Horn said.

“That’s the longer-term systemic problem with having an increase of money in the system. And most central banks around the world have been doing this for more than a decade.”

Decreasing the money supply without triggering a recession is a challenge, though. Before the pandemic, the Fed had successfully decreased the money supply to the $3-tillion range. But, over the past 15 months, the money supply has doubled and surpassed its post-Great Recession peak, Horn said.  

“This really is a balancing act: How fast can they pull back on money supply to prevent inflation from taking off without putting the brakes on the economy just as we’re recovering from COVID?” Horn said.

“If the Fed takes the money out too slow, it causes systemic inflation, as opposed to temporary corrective inflation, which may be what’s happening right now. On the other hand, if they start to incrementally increase interest rates ahead of that happening, they’ll also cause a recession. It’s not like the global economy is so stable and strong that the Fed has a lot of wiggle room to play with.”

While it has been more than 40 years since the U.S. experienced serious inflation, the country has already experienced two significant recessions in a little more than a decade. A third recession could be disastrous, especially for younger generations. Getting this response right is of the upmost importance, Horn warned.

“My grandparents’ generation lived all their lives as if they were still in the Depression,” he said. “There already is some evidence that younger generations — Gen Z and millennials — are starting to behave this way. If that cohort goes through three major recessions in less than two decades, it will affect consumption — probably for the rest of their lives.

“That’s not good for the long-term economic growth of the U.S.”   

Today’s consumers are more attuned to brands’ values and willing to pay a premium to support companies that share their values, according to new research from the Bauer Leadership Center at Olin and Vritya brand measurement company specializing in values.

Additionally, the majority of consumers—54%—now say companies should take a stand on issues, even if they disagree with that stance.

The findings come from a survey conducted in January 2021 by Vrity. Researchers wanted to study generational differences in consumer values and how the COVID-19 pandemic has impacted brand-related purchasing behaviors. They surveyed 1,072 people living across America about recent employment changes, personal values and the brand values that matter most to them.


“I think the most interesting findings are about generational similarities and differences in values, causes, and the effect of values and causes on purchasing behavior,” said Stuart Bunderson, director of the Bauer Leadership Center and the George & Carol Bauer Professor of Organizational Ethics & Governance at Olin Business School.

“2020 was an inflection point for many Americans,” added Jesse Wolfersberger, CEO and co-founder of Vrity. “Some percentage always cared about brand values, but now we’ve crossed a threshold where most people care and are willing to make purchase decisions based on values. It’s the new differentiator for brands, and the genie is never going back into the bottle.”

2020’s effect on personal values

Times of crisis often cause people to reflect on their values, and 2020 was no exception. In a year marked by a global health crisis, historic job losses, high-stake political elections and social unrest, some 35% of the people surveyed reported a change in their personal values over the past year. Conversely, 36% reported no changes in personal values, and 22% reported that their values were affirmed last year.

Younger people and people of color were most likely to report a shift in values in 2020. Older generations — the Silent Generation (1928-1945) and the baby boomers — and whites were less likely to experience personal value change and reported the highest levels of value reaffirmation.

Interestingly, those who experienced any kind of employment change in 2020 were more likely to experience a change in personal values.

“We have robust evidence that people who underwent an employment change — primary job loss or furlough, significant cut in pay or hours or shift to permanently or mostly working from home — were more likely to report that 2020 changed their personal values. This holds after controlling for income, education, age and ethnicity,” Bunderson said.

Brand values and purchasing behaviors

One of the most significant findings was that 55% of respondents reported paying more attention to brand values today than they did one year ago. Generations X and Y were generally more values-conscious than other generations. The Silent Generation and Gen Z reported the lowest levels of value consciousness (38% and 39%, respectively), however the small sample size may have influenced the results for Gen Z.

“People who shifted to working at home were especially likely to report that they pay more attention to brand values now (73%). Other types of employment change did not appear to have the same effect,” Bunderson said.  

Americans are not just paying attention to brand values, they are incorporating values into their buying decisions.

“To me, the most unexpected finding was the degree to which people will vote with their wallets,” Wolfersberger said. “I expected a small effect here, but the findings show that 82% would pay more for a value-aligned brand, 43% of people would pay twice as much and 31% would buy the value-aligned brand at any price.

When shopping in stores, 46% of participants reported doing research on brand values. A slightly higher percent of respondents — 49% — look into brand values before making online purchases. In both scenarios, Gen X and Y were most likely to study brand values.

Altogether, 60% of respondents reported that they “have made a purchase from a brand because they have values I believe in.” Likewise, 53% of the respondents said there are brands they would never purchase because of their stance on an issue.

“Across generations, Gens X, Y and Z show affinity to brand values in their purchasing,” the authors write.

Given the potentially high cost of negative public relations, some brands may be inclined to stay silent on issues. However, the majority of respondents — including 63% of Gen X and 59% of Gen Y — believe that companies should take a stand on issues, even if the respondents disagree with that stand. Gen Z was the most likely to punish a company for silence on an issue.

What causes matter most?

According to the authors, there was reasonable agreement between generations other than Gen Z about their top 5 brand values, which included “affordable and a good value,” “good customer service” and “honest and authentic.”

Gen Z had more unique values in their top 5, preferring “friendship and family,” “treats their employees well” and “fun and comfortable.”

There were more differences across generations when it came to ranking causes. “Fighting poverty, hunger and homelessness” and “curing or treatment of a disease” were more important for older generations.

Generations X, Y, and Z showed stronger preferences for “ending racism,” “gender equality” and “LGBTQ equality” than the two older generations, particularly baby boomers — who showed the weakest preferences for these categories but did show the highest preference for helping “people with disabilities” (35%).

Seemingly paradoxically, Gen Z showed higher preferences for “military and veterans” (25%) than either Gen X or Y, which is interesting because they ranked “patriotic” particularly low (8%) on the brand values ranking.

 “Our researcher shows that consumers care about brand values more than ever. It’s not enough to simply make a good product, today’s brands need to do right by the customer, their employees and the community,” Bunderson said.

“Those that do will have the most loyal customers,” Wolfersberger added.

Nick Johnson, a PhD student at Olin, and Chris Copeland, chief strategy officer and co-founder of Vrity, also contributed to this research and white paper.