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Throwing Out the Rules of Work

October 7, 2006
Related Topics: HR Services and Administration, Featured Article
Back when he worked in a conventional corporate office for a previous employer, Best Buy employee relations manager Steve Hance admits he sometimes got through long, unproductive meetings by fantasizing about fishing or hunting. But since he began working for the Richfield, Minnesota-based national electronics retailing chain in March 2005, the outdoorsman no longer has to daydream.

    Instead, when Hance participates in a morning teleconference with his co-workers or in-house clients, he sometimes is calling in via cell phone from his fishing boat on a lake or from the woods where he's spent the hours since dawn stalking wild turkeys. "No one at Best Buy really knows where I am," he explains. "Nor do they really care."

    Gone are the days when Hance needed to spend morning until night seated in a cubicle surrounded by papers and charts he'd carefully arranged to ensure that co-workers and bosses who peeked in would see he was hard at work. At Best Buy, he's free to set his own schedule, to work wherever he wants—whether it's a desk at headquarters or a table in a coffee shop—and whatever days and hours he chooses.

    "It used to be that I had to schedule my life around my work," he says. "Now, I schedule my work around my life."

    Welcome to Best Buy's Results-Only Work Environment, or ROWE, a radical experiment whose aim is to reshape the corporate workplace, achieve an unparalleled degree of work/life balance and redefine the very nature of work itself. In ROWE, most of the rules, restrictions and expectations within which corporate workers traditionally labor—such as keeping regular hours and showing up at the office each morning—are discarded.

    Instead, employees are allowed to decide how, when and where they get the job done. Whether they choose to work in the office or somewhere else, such as a spare bedroom, 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 still get to choose when they do it.)

    Physical attendance at meetings usually is optional. As for supervisors, they no longer give the hairy eyeball to anybody who lingers too long at the water cooler or occasionally dares to leave in the middle of the afternoon to watch a child perform in the school play. The only yardstick for evaluating employees is whether they meet goals for productivity.

    "In the standard corporate work environment, you have to put in face time because that's how you show your commitment to the organization and your level of dedication," Hance says. "When you come into the office, you've got to make sure you're always seen by the right people. That becomes the goal, rather than actually getting things done. With ROWE, all those little rules that we've grown used to living by are out the door. Instead, the work itself is the only thing that matters."

    Since Best Buy began switching to ROWE on a division-by-division basis in 2002, 2,400 employees, or 60 percent of the 4,000 people at its headquarters campus, have converted to the new way of working, according to Cali Ressler and Jody Thompson, two former Best Buy employees who now run CultureRx, a Minneapolis-based consulting firm that is managing the process.

    Already, they say, ROWE has had a significant impact. Employees in divisions that convert to ROWE report in surveys that they have better relationships with family and friends, feel more loyalty to the company and feel more focused and energized about their work.

    And more important from a business standpoint, there are some financial payoffs. CultureRx does the math this way: The per-employee cost of turnover is $102,000, and ROWE teams have 3.2 percent less voluntary turnover than non-ROWE teams. So once Best Buy's 4,000-person headquarters is completely converted to ROWE, the company stands to save about $13 million a year in replacement costs. Also, when workers switch to ROWE, their productivity jumps by 35 percent.

    "Basically, we're rewiring people's brains, getting rid of an old belief system from the 1950s that is no longer relevant to the technologically advanced business world we have now," Thompson says. "We want people to stop thinking of work as someplace you go to, five days a week from 8 to 5, and start thinking of work as something you do."

Flexibility, but accountability
   An increasing number of companies are experimenting with nontraditional work arrangements—43 percent of U.S. employees now have conventional flextime, in which they select their own starting and quitting times around a core of regular working hours, according to the New York-based Families and Work Institute. That's up from 29 percent in 1992. Nine percent of employees work at least part of the time at home, rather than in the office. Seventy-nine percent of employees say they would like to have more flexible work options, as long as it doesn't negatively affect their careers.

    But Best Buy is taking flexibility much further than the rest of the corporate world, according to institute president Ellen Galinsky.

    "Most companies basically play with their traditional schedule and try to make it a little looser," she says. "You can start at a different time, or you can do some work outside the office, but you're still basically keeping to a schedule. ROWE, in contrast, completely alters the way people work. You're in control of everything—not just where and when you work, but whether you go to meetings, for example. The only thing you're judged on is whether you get results. It's flexibility—and accountability—to the fullest."

    Al VanArsdal, a Minneapolis-based management consultant who is chairman of the Minnesota Organizational Development Network, a professional group for those working in the field of organizational development, says ROWE is a radical departure from the way most companies bring about cultural change.

    "Usually, change is top-driven," he says. "At Best Buy, they're doing it from the inside out. Department by department, they're letting people blow up all the rules and redesign things in a way that makes sense for them. They're deciding what they need to be successful, and creating it."

    ROWE's origins date back to 2001, when Best Buy management did a survey of headquarters employees and received some disturbing results. "Basically, the employees said they didn't think their supervisors trusted them to do their work, that someone always was looking over their shoulders," Ressler recalls. "They felt they couldn't live healthy, happy, productive lives the way that they saw fit."

    In an effort to find a solution, Ressler, who at the time managed Best Buy's work/life balance programs, began experimenting with flexible work arrangements for one particular headquarters group, the 320-member retail operations division. She soon was joined by Thompson, then working as Best Buy's "large-scale organizational change agent."

    Ressler and Thompson looked at optional flextime and telecommuting of the sort that other companies had instituted, but decided that such measures would only put a Band-Aid on Best Buy's real organizational woes.

    "Flexible work arrangements usually turn out to be a con game," Thompson explains. "It's only for certain jobs and you have to apply to your supervisor to get them, so often there's favoritism involved."

    It can create a stigma that drives a wedge between employees.

    "Your co-workers start looking at you as that person who's not loyal to the company, because you're not there at the same time in the morning that everyone else is. And eventually, it dawns on you that you're trading one box for another, that there isn't much difference between working 8 to 5 on Monday and 7 to 4 on Tuesday."

    Just as important, Ressler and Thompson realized, such programs didn't change the way leaders managed their teams. Managers still assessed employees' engagement on whether they looked busy and filled up the days with meetings that created the appearance of work.

    Instead, they decided, the only solution was to get rid of the old structure altogether.

    "Instead of giving flexibility to a few select people, give it to the whole department at once," Ressler says. "Managers can't turn anybody down, and nobody has to ask permission. If you want to work from Starbucks on a PowerPoint presentation, that's OK. If it's a nice day and you feel like taking a walk in the park, nobody's checking on you. People can do what they want, as long as the work gets done."

Outcomes, not appearances
   Shifting from a traditional office culture to ROWE isn't necessarily an easy process, explains Jeff Johnson, Best Buy's director of human resources. "With any organization, you're going to have a mix of managers—some early adopters who are open to trying something new and others who are traditionalists, the ones who feel comfortable with what they have and are worried by change," he says.

    Either way, ROWE requires a commitment from the leader of a group that is converting to the new way of doing things. For that reason, instead of forcing the entire organization to convert all at once, Best Buy is allowing departments—and even teams within departments—to gradually migrate to ROWE.

    Converting to ROWE is roughly a six-month process. The first phase is leadership training, in which Thompson and Ressler work to get managers to rethink their concepts of what work means.

    "You can spend lots of money equipping your people with laptops and cell phones," Ressler says. "But if you're the manager and you cling to the old definitions of working, then everyone is going to know that being in the office every day is the basis for good reviews and promotions, and nobody is going to dare do anything else." The trainers also do a cultural audit of the department or team to get the sense of how they are performing in the old environment and set up a baseline against which changes wrought by ROWE can be measured.

    The second phase is training for the team itself. Employees go through role-playing exercises and "sludge sessions," in which they learn to cope with negative expressions that cast judgment, place guilt or add stress in the workplace. ("Ten o'clock and you're just getting in? Wish I had your job," is a typical example.)

    To playfully reinforce the change, such "sludge" expressions are written down and thrown into a large silver trash can provided by Ressler and Thompson. After that come "culture clinics," in which they discuss the details of making flexibility work—how to use e-mail and voice mail, for example, to make one's location irrelevant.

    Then the group "goes live" and tries ROWE for six weeks before returning for another debriefing. "That's when all hell breaks loose," Ressler says. "They have to take a deep breath and do things like working from home one day without telling anybody where they are. They have to trust that their manager isn't going to get upset. And their manager has to trust them."

    Employee relations manager Jennifer Martin realized that sometimes she was better off calling in to a meeting rather than rush to the office.

    "Say it's a rainy morning and your dog doesn't want to go outside," she explains. "If you go in, you might spend the rest of the day worrying that the dog didn't get a walk, instead of concentrating on work. Instead of having to be someplace, I'm focusing on what I need to accomplish."

    Once freed from the old rules and obligations, employees and managers also find ways to become more efficient. One Best Buy team, for example, realized that they had been wasting huge amounts of time creating unnecessary PowerPoint decks simply because they needed something to fill space at equally unneeded meetings. In another department, an employee freed from the 9-to-5 routine came up with the idea of splitting the work of online order fulfillment between a U.S.-based team and another based in Shanghai, China, so the process could continue around the clock. As a result, customers began getting products they had ordered online more quickly.

    "You start looking at everything and saying, 'Is this really going to help get me to my desired outcome?' " Ressler says. "Pretty soon you've cut out 10 of those unnecessary things that used to fill up your week, and you're getting a lot more done."

    Best Buy is so enamored of ROWE that it is in the process of marketing the system to other companies, and is even considering trying a modified version in its retail stores. There are skeptics who wonder whether ROWE will work outside of a relatively homogenous corporate campus.

    But then again, as Best Buy manager Steve Hance recalls, many people, himself included, weren't sure ROWE would work at headquarters either. "Being able to take an extra-long lunch or get off work early if you wanted—it sounded like a utopia, but could people really do this?" he says. "As it turned out, they could."

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