Best Buy & Culturerx Optimas Award Winner for Innovation
The electronics retailer gets results by doing away with the traditional rules of work, giving employees the autonomy to do their jobs when they want, where they want.
Last year, employees in the procurement department at Best Buy’s headquarters increased savings by 50 percent compared with the previous year. They did the expense-trimming even as they set their own hours and generally decided how, when and where they got their jobs done. The procurement group is part of a Best Buy initiative dubbed the Results-Only Work Environment, or ROWE.
Concrete savings on office supplies and other goods and services not for resale is the best evidence yet that ROWE isn’t just a radical dream about employee autonomy, says Jody Thompson, one of the architects of the program and co-founder of consulting firm CultureRx. That ROWE would lead to tangible business improvements by procurement employees isn’t surprising, she says.
"When they are working they’re more focused," she says. "They just have more energy and excitement on the job."
With ROWE, salaried employees are required to put in only as much time as it actually takes to do their work. Hourly employees in the program have to work a set number of hours to comply with federal labor regulations, but they get to choose when they do it.
In 2002, Best Buy began switching to the system on a division-by-division basis at its 4,000-person headquarters. So far, 68 percent of corporate employees work under the results-only approach. Thompson and her consulting partner, Cali Ressler, developed ROWE while working together at Best Buy, convinced that traditional flexible work arrangements usually fail to change the way teams are managed.
Best Buy was impressed enough to let the pair start CultureRx as a subsidiary that would pitch the concept to other organizations. Launched in late 2005, CultureRx has been in conversations with several Fortune 100 companies as well as smaller businesses. Although no deals have been struck yet, "we’re close," Ressler says.
Until recently, ROWE’s visible results have been limited to lower turnover—ROWE teams have 3.2 percent less voluntary turnover—and employee perceptions of improved productivity. Overall, ROWE team workers say they feel 35 percent more productive. The procurement team believed it was doing better, reporting a 45 percent productivity jump last year. Thompson and Ressler hope to gather other evidence like the procurement cost cutting that matches perception against reality.
The results-only approach deserves credit as a major advance in establishing work/life balance for employees, says Pat Katepoo, founder of WorkOptions.com, an organization that helps employees secure flexible work arrangements. But Katepoo worries many employers and workers—especially older ones—aren’t ready for such an extreme overhaul of work. She also says CultureRx errs in discouraging more modest flexible work programs, such as telecommuting. Those can make a "huge difference," she says.
Thompson and Ressler say most efforts to improve work/life balance do not get to the root of the matter: focusing on results. They also say Best Buy employees of all ages have thrived under ROWE.
In fact, the system continues to expand at Best Buy. Applying the results-only principles to a Best Buy retail store may take place this year.
For putting an innovative idea into practice with a payoff, Best Buy and CultureRx win the 2007 Optimas Award for Innovation.
Based in Richfield, Minnesota, Best Buy operates more than 1,150 retail stores in the U.S., Canada and China. Best Buy’s revenue for the nine months ended November 25 was $23 billion. Its net earnings for the period were $614 million. Minneapolis-based consulting firm CultureRx is a subsidiary of Best Buy.
Best Buy sells consumer electronics, home office products and appliances, competing with such chains as Circuit City and Wal-Mart. Its operations include Pacific Sales Kitchen and Bath Centers and Jiangsu Five Star Appliance Co. CultureRx helps organizations reshape their approach to work, focusing on a "Results-Only Work Environment."
Workforce Management, March 26, 2007, p. 28 -- Subscribe Now!