Giving employees greater flexibility to help them balance work and life is now commonplace. But could allowing employees complete autonomy over when and where they work lead to increased productivity and engagement? Business journalist Vicki Arnstein finds out.
Technological advances, and a change in legislation allowing all employees to request flexible working from June 2014, means more employees are working flexibly than ever before.
What is ROWE?Results Only Working Environment (ROWE) is the brainchild of Cali Ressler and Jody Thompson, the co-CEOs of a US company called CultureRx, which has trademarked the concept.
Its book, Why Work Sucks and How To Fix It, argues that allowing employees to do whatever they want, whenever they want, as long as the work gets done, delivers better results.
Figures from the TUC, based on Office for National Statistics data, show that more than four million people regularly worked from home in 2014 – an increase of more than 62,000 on 2013 and an increase of more than half a million since 2007.
But some companies are now going beyond offering degrees of flexible working. A super-charged version, referred to as output-only working, or ROWE (Results Only Work Environment), is starting to take root in the UK.
Under this management model, employees are made aware of the company’s goals and expectations and then they undertake tasks in the way they think will achieve the best results – and during the hours and at the location they choose.
UK service provider Compass Point Business Services started on its own ROWE journey in 2011. It now represents CultureRx In the UK, the company that trademarked the model in the US, helping other companies become ROWE certified.
“We were a company like many we talk to now,” explains Marcus Coleman, managing director. Coleman read Ressler and Thompson’s book on holiday and started putting ROWE into practice on his return.
After working out the detail, Coleman saw an opportunity to help other businesses. “It made me think we could help other organisations in the UK and save them time and bother because it took us a while to figure it all out,” he says.
At Compass Point, half of its 240 employees now work in this way, and the remainder will convert during 2015.
Doing things differently
For the company, “going ROWE” has reaped dividends for staff engagement and productivity.
It is not rocket science, it is giving options to people to do things slightly differently, and they do.” – Marcus Coleman, Compass Point Business Services
One of the tasks the business undertakes is detecting fraud where people are claiming single occupancy Council Tax but living in a partnership. Before ROWE, the fraud team worked 9am until 5pm, when most people are out at work.
Since the team has decided to do some work outside of these hours, the fraud detection rate has increased by 10%.
“Sure enough, they started spotting cars on drives and identifying that some single dwellings were not what they were supposed to be. That is the beauty of the results-only work environment, it is not rocket science, it is giving options to people to do things slightly differently, and they do,” says Coleman.
Financial investment company BNY Mellon, which has 50,000 employees globally, has also piloted ROWE for its 250 employees in Poole, Dorset.
The idea was proposed by John Fenech, senior learning partner for BNY Mellon’s Corporate University. “I had been following ROWE for five years thinking it would be impossible to get an organisation of our size and complexity to adopt such an initiative,” he explains.
He submitted the idea to his superiors, focusing on the cost savings and reduced employee turnover, and received backing to run a pilot in the UK.
The pilot was initially applied to 50% of the Poole branch in May 2014 and to the remaining 50% in March this year. The company is considering other pilots in the UK and Ireland.
Fenech says employees in Poole are now claiming less overtime. “If an employee has to come in at 7am to do something for a client in Asia Pacific, and they get to 2pm in the afternoon and are done for the day, they go home. They don’t feel comfortable claiming overtime, and nor do they want to.”
Getting middle managers on board
Coleman says that at Compass Point, the biggest adaptation is required by middle managers.
“If they are going to manage their teams and define their teams by the results they are achieving they need to understand what needs to be done to achieve those results,” he says. “They can no longer rely on their team turning up between 9am and 5pm and thinking that must be fine.”
Case study: 02In 2013, Telecommunications company 02 built on its existing flexible working approach with the introduction of smart@work.
Michelle Adams, head of leadership, talent and resourcing at O2, explains: “It is about creating an environment where people are empowered to think about how and where they do their best work and then giving them the freedom to do it.”
Under smart@work, O2 measures the output and quality of work employees produce, rather than hours worked. “Often people assume a working day involves sitting at your desk at 9am and not moving until eight hours later. Not only is this unrealistic, but our research has shown this is bad for productivity,” says Adams.
While most applicable to office roles, Adams says smart working also applies to store employees.
According to Adams, smart@work has increased engagement and productivity, with 75% of employees saying they are most productive if they can choose when, where and how they work. It has also become a key recruitment tool.
“Flexibility is becoming an increasingly high priority for all job-seekers – not just those with parenting or caring responsibilities. [And] for Generation Y, the idea of 9-5 is an outdated concept. These [people] are the future of our organisation,” she adds.
Far from just being a recruitment and retention tool, smart working also makes business sense. Internal research has suggested smart@work could save our business around £365,586 in travel time, more than £1.2million in people time, and 150 tonnes of CO2 in just one year.
Fenech agrees. While the Poole managers have been supportive, it has been a culture change for them. “At first they would say things like ‘How will I allocate the work load if I don’t know where people are when?’ We would say ‘You don’t allocate the workload, you tell the team what needs to be achieved and let them work out the allocation’.”
Another issue for Coleman has been managing disappointment of employees not currently working in ROWE.
“One of the biggest challenges is in the transitional phase is when you are taking one or two teams through the journey. There is so much buzz, noise and interest in the teams that are going ROWE that the teams that aren’t can get quite agitated.”
Fenech, however, has seen a different result: “They understand that you have to pilot it and they hope it is going to work so that they can benefit from it. It has created a real air of optimism and excitement.”
To become a ROWE-certified company, investment is required to complete the official programme, including staff training. Other costs come from supporting employees to work flexibly, such as providing them with suitable IT equipment and systems.
At Compass Point, Coleman says between £20,000 and £30,000 was invested in a secure link and IT for its administrational processing team to work remotely.
However, the additional work undertaken by this team in a year gave a payback 10 times that investment. “Their productivity went up 20-30% – [a payback] in the region of a couple of hundred thousand pounds,” he says.
It is not necessary, however, to become certified to introduce this way of working.
Consumer Intelligence – a Bristol-based market research company employing 73 people – introduced output-only working in 2013. Under this, staff set their own targets and there are no set hours.
“Think flexible working on steroids,” says Jane Ginnever, head of talent at Consumer Intelligence.
“We’ve got rid of financial targets for performance, job descriptions and set hours. Giving people autonomy to work in a way they want and need to work to deliver results is far more powerful than what is written in a job description.”
The benefits are clear. “We have reduced our office space by a third because many of our contact-centre employees work from home. We have reduced staff turnover from 17% in 2013 to 6% in 2014,” Ginnever adds.
Sickness absence has also plummeted, although this is now harder to track accurately as people pick work up from home when they’re feeling under the weather, rather than taking a whole day off.
Is there a danger employees will feel that, because they are being measured by what they achieve – despite being able to take time off when needed – they should be available 24-7?
Professor Frank Wijen, associate professor of strategic management at Rotterdam school of Management at Erasmus University, says there are dangers of only measuring output.
You have contact over instant messenger or email or phone calls but there is something about going to the water cooler or getting a cup of tea in the kitchen with colleagues and having a bit of banter.” – Andrew Erhardt-Lewis, PwC
“There is of course the saying that, if you can measure it, it will get done, but you have to bear in mind that not everything that can be counted counts and the opposite.
“If you can measure in a meaningful way then why not, but the question is ‘can you really always measure in a meaningful way?’
“For certain positions there is a productivity measure, such as sales representatives, but for other positions, such as support staff, it is much harder. If you measure quantity, doesn’t it go at the expense of quality?
“In a call centre, if you see how many calls a person takes, maybe these are very lousy calls and they do not solve the problem the customer has. You need to have meaningful ways of counting.”
Coleman agrees that collecting meaningful data is essential. “You have got to be clear what you are trying to get from people and be clear that you can measure it so that when you do get a challenge from a board or trustees you can say ‘here are my facts and my figures – previously my team produced this much and in this environment they produced this much and here is their engagement survey before and after’.”
While organisations might worry that giving so much freedom could leave them open to risk, Ginniver says a results-oriented environment makes it far easier to see who is working and who is not.
“It becomes really obvious really quickly if people aren’t making progress or going to achieve what it is they are trying to achieve,” she says.
But how about the risk of employees becoming detached from the company as they increasingly operate homeworking or keep different hours from other team members?
Andrew Erhardt-Lewis, a director in human resource services at consulting giant PwC, says the loss of personal contact can pose issues: “You have [contact] over instant messenger or email or phone calls but there is something about going to the water cooler or getting a cup of tea in the kitchen with colleagues and having a bit of banter.
“If there is going to be more flexible or home-based working that comes into the environment, or the ROWE kind of concept, is there a risk that companies are going to lose a component that drives their culture?”
Meeting in the flesh
To help mitigate this risk Erhardt-Lewis advises considering policies such as saying that once a month everyone must be physically present for a team meeting, for example, or that everyone must be in the office on a particular day each week.
There may also be a concern that employees start to feel like work horses, who are having every last drop of productivity squeezed out of them, but it seems ROWE-style working practices leave employees feeling empowered and engaged.
“The whole ROWE concept is that, not only do you get your life back, but that the company gets more work out of you. It is a win-win.
“This is not just a soft and fluffy cultural-change programme this is a really sharp-edged business-improvement tool,” says Coleman.
So should all businesses be looking towards this type of model in the future? Blaire Palmer from That People Thing, which helped Consumer Intelligence transition to an output-only model, thinks so.
“You have a lot of clever, educated people who are limited by the environment in which they work. There are little changes happening, such as businesses taking out layers of hierarchy, but that is just tweaking an industrial-age model of business,” she says.
“Leaders will need to get their head around having far less control than was possible in a very structured, hierarchical set-hours environment.”
Gulliver agrees: “We have established a way of working over last few hundred years where organisations are established thinking that people are bad.
“There are all these policies and management tools designed to stop the bad people affecting the business but what it is doing is inhibiting all the good people – who are the vast majority – from actually enabling a business to do what it can really achieve.”