Jim Ware - Distributed workforces and business performance

Steve

Hi, this is Steve Hunt with Business Execution Radio. This week we spoke with Jim Ware, who's the Executive Producer for the Work Design Collaborative, and what Jim shared is the discussion of distributed workforces, and the advantages of going to a distributed workforce, that is having people work from home or multiple locations, as well as some of the challenges to doing it in terms of having really good performance management, and some of the change management nature, in terms of how it affects people established in relationships with one another, some really interesting and often counter-intuitive observations based on their extensive experience working several organizations that have really gone to this more distributed workforce. So a very interesting focus on execution, sort of the role that, how you literally place people in the world affects the execution of your organization, and talking about facilities which are often varies from a cost control administrative standpoint, actually where you put people has a big impact on what they do, and I think that's a really obvious statement when its made, but we forget about it in organizations, so an interesting take on business execution this week with Jim Ware from Work Design Collaborative.

Hi, welcome to Business Execution Radio. This is Steve Hunt, today we're talking with Jim Ware, who's the Executive Producer for the Work Design Collaborative. Jim, welcome to the show.

Jim

Thanks Steve, pleased to be with you, thanks for having me.

Steve

So can you tell us a little bit about what the Work Design Collaborative is, and what you do there?

Jim

Well, we're a small research and advisory organization focused on the future of work. We've been in existence for eight or nine years now, we have run a series of consortia of corporations who come together around a common desire to explore and understand the changing nature of work, the workforce and the workplace. Our mantra, if there is one, is that it's essential for companies to comprehensively integrate their human resources, information technology and facilities and services organizations, not necessarily organizationally integrate them, but to co-ordinate and make sure they're collaborating effectively, because it's those three resources that have to come together at the level of the individual or the team in order to produce an effective work environment.

Steve

So when you're talking about work environment, workspace, you mean the literal space?

Jim

Well, we mean it a little more than literally, we do a lot of work with architects and designers around physical space, but when we say work environment, we're deliberately trying to broaden that to include the management context, the human resource policies and practices, and the technology environment as well.

Steve

Fascinating. Well, as you know, Jim, this show, Business Execution Radio, is sort of talking about, when you look at successful organizations, there's two things that are required: one is figuring out what you need the company to do, but the second thing is executing on it, getting people to actually do it. Given your experience, what are some places where organizations really could be changing their approach to how they run their business to drive better execution on their strategies?

Jim

Well, let me preface a response to that by saying that a good portion of our work is really about helping organizations establish flexible work programs that enable mobility and flexibility, and where, when and how people get their work done, so that we're often helping companies transition employees into work at home, or at least work out of the office, part of the time, and dealing with all of the support issues that that entails, both technology as well as management practices and policies, but when we do that kind of work, and as we think about the increasingly mobile workforce that we're all seeing all the time these days, the single most important thing that we emphasise and focus on is establishing very clear performance management systems, so that individuals and distributed teams have a very clear understanding of what constitutes success, and achieve an understanding with their managers. So a portion of what our training and our transition programs are all about is really establishing clear performance objectives for individuals and for teams as they move into a more distributed workplace and work environment.

Steve

So that's interesting, I think that your comment about distributed workforces is really interesting, about performance management, because I've always felt the ultimate test of a good performance management system is its ability to manage a distributed workforce, and just want to hear you expand a little bit on this, but my thought is saying that managers, when their employees are actually sitting in front of them, they can get lazy, they can sort of look at the person, as opposed to when you don't see your employees every day, you have to get much better at defining what they need to be doing and how to define success, so when you look at organizations that do distributed workforces well, can you give some very specific examples of some of the things that they do in the area of performance management that allows them to really maximise the productivity of these distributed workers?

Jim

Sure, and I agree with you completely Steve, the single most important, or most frequent, challenge that we get to the whole concept of distributed workforce is, how can I manage them when I can't see them? And I agree with you completely, managers get lazy, the old idea of managing by walking around, by looking over people's shoulders and ensuring that they're in their seats and working from eight to five or whatever, is a sorry excuse for what I would consider effective management. So the thing that we focus on and emphasise is that performance management and work expectations have to be done at an individual level. There have been reams of studies and articles written over the years about the difficulty of measuring knowledge work, because it depends so much on the individual and work styles and different people approach tasks differently, and it's very difficult to set out goals for researchers or for problem solvers, but nevertheless what we have done with our clients is to very clearly establish a program, and literally an agreement, often in writing, or usually in writing, between managers and individual subordinates, that they have to sit down and talk through what constitutes success on this job, what are your goals, what do we need you to achieve? Now, that's easier if the individual is doing something that's repetitive and easily measurable, like call centre work or something, that's pretty routine, number of calls, levels of customer satisfaction, and that sort of thing. In some other kinds of jobs, it's much more difficult, but our experience has been that when managers and subordinates sit down and talk through, they both develop a much better understanding of what the job is about, and how we're going to know whether or not it's been successful or not.

Steve

What are some of the typical excuses or reasons managers and employees give for saying, well this won't work for my job? And how do people overcome them?

Jim

It's usually something around how do you put a number or a measure on quality of work, it's one thing to talk about a software developer who writes so many lines of code, it's another to talk about the effectiveness of the program, or how long it goes without crashing, but again there are ways that you can do that. It usually is, it's difficult for individuals often to acknowledge that there are objective or external measures of the quality of what they do - writers, for example, anyone who's doing graphic design or writing, whether it's for marketing or for technical manuals or whatever, there's a gestalt to the product that is in some respects rather subjective, but that's what the manager's job is, to determine that, and if you've got clear expectations up front, and that's complemented by a clear process for conducting performance reviews that includes a conversation about the quality of the work, and its impact, I think these things end up taking care of themselves over time.

Steve

Do you have an example? - I so agree with those, and I think it's interesting what you were talking about, that a lot of the challenge of this is on a manager getting good at defining what success looks like, and helping employees with that. You were talking a little bit, before we started the show, that there had been a company you'd worked with that has recently really done this effectively - can you take us a little bit through the story of this organization, kind of where they started from, and where they got in terms of moving to this more effective ...?

Jim

I can be very public about it, because the organization is Scan Healthcare, they're an HMO based in Long Beach, California. They have a corporate office that is right literally at the Long Beach Airport, it's not in a particularly good location, there's a large oil storage facility, gasoline and oil storage facility, next door, and they were very concerned about risk of natural disasters or terrorism, they were also outgrowing their space, so there were a number of factors affecting senior management's interest in starting to enable some of their workers to work from home part-time, so business continuity was a factor, they were also having trouble attracting and retaining staff, in the Los Angeles area, as you know, commuting can be horrendous. So we worked with them to establish a cost saving projection opportunity, spent about a year developing a flexible work program, got working through all the policies and procedures, what kinds of support would the company provide to people working at home in terms of office equipment, technology, etc - what were the expectations? We trained the managers in how to sit down and have performance planning sessions with their staff, and then the company did a pilot program about two years ago, they sent out, I think, about 20 people initially for a couple of days a week, this is not full-time work at home by any means, because there are reasons where people have to be in the office for physical meetings and that sort of thing as well, and then we followed this pilot for four or five months, we met every month with the managers of the distributed workers, we met for about an hour a month with the individuals themselves, so we were getting in process feedback along the way. We also were collecting on a monthly basis performance and productivity data, and the thing that really sold the project and the concept to senior management was that we were able to show, without any question, that the folks working at home were about 18% more productive than their office-bound counterparts. On a regular basis, on a consistent basis, all of them were producing more work working at home, they were much happier about it, there's a lot of other subjective criteria that we were tracking as well, but the most important message was that these folks were definitely and clearly more productive working at home.

Probably the most interesting outcome of all of this was that, at one point, one of the department managers made the comment in a management meeting that the folks working at home were doing so much better than the folks in the office, that she raised the question, why aren't we measuring folks in the office the way we are the folks at home? And so they're actually now in the process of establishing a company-wide performance management system, which they really didn't have before.

Steve

That's really interesting, you're talking about that, it's like saying again, going back to going to a distributed space requires companies to get really really good about performance management. If you look at this, so the company said, well, that makes lots of sense - we want to go to a distributed workforce, I'm guessing it's not something you can just do automatically?

Jim

No.

Steve

There probably are mistakes that can be made - what are some of the mistakes or change management issues that companies really need to be thinking about as they're moving into more of a distributed workforce?

Jim

There's two or three that occur to me right away: one is, there's a tendency sometimes to think that it's just a simple process of saying, you can work at home two days a week - just go do it; one of the mistakes that's often made is not paying enough attention to some of the legal issues, in Scan Health's case, most of the people they were enabling to work at home were non-exempt, hourly employees. There are Fair Labor Standard Act laws that had to be tracked, and there are requirements around taking breaks and a number of other things that apply to hourly employees that are not applied to salaried employees, so there's a set of issues around human resource management practices and policies and legal issues.

There's also a set of issues around technology, in Scan's case, because they're dealing with highly sensitive and confidential medical information, they had to ensure that they had a virtual private network with adequate security, so that people from their home offices could access the company's databases, but not simply be randomly downloading data and using it in inappropriate ways, so there was a whole technology security issue.

Then I think the other one is that again, not taking enough time to train and educate both the managers and the distributed workers around the practice, not just performance management, but the whole set of expectations that come out of people working this way. There's a tendency in many companies to think it's much simpler and easier to do than … and then it's also a matter of getting people actively engaged in exploring the process. One of the things that Scan did was publicise the results widely across the company of that pilot project, and in particular internal communications featured interviews with some of the distributed workers, so that they were building the case that it's not only good for the company, it's good for the individuals, people really like it, and those are all, I think, change management issues.

Steve

I think the key to this so much is getting managers, when I've seen a distributed workforce, is getting managers comfortable with not having people visible in the office, and, as you mentioned, it forces them to get better about defining performance management. Are there any specific tricks, techniques, things that you've seen, that really the managers that are really good at this that they do, maybe some little things that people would say, oh, that's something that I could immediately apply to my own workforce?

Jim

Well, yeah, it's interesting, I'm in the middle of writing a research report for a different client right now on how to keep your distributed workers connected to each other and to the company, and it really comes back to some pretty basic principles about good management: one is to be willing to reach out, managers have to be much more pro-active in reaching out to connect with distributed workers on a regular basis, and actually again, it's good management, but because you don't have the same opportunities for the unplanned, informal interactions in the hallways or the coffee parlour in the company cafeteria, managers need to just reach out and be a little more human with their distributed workers, checking in with them - how's the family and how are the kids? - all of those kinds of things, and for some managers that's not natural, for the good ones, I think it is, they're used to doing it anyway with people when they're in the office.

There's also the matter of planning ahead a bit, when team members are back in the office, to make sure that lunches or breaks for coffee and whatever are planned so that they get a chance to just interact informally with their staff, and the staff gets a chance to interact informally with each other, and with the folks who aren't working that way.

Steve

I think that's interesting, sort of really saying that, when you have this distributed workforce, the natural social bonds that will happen naturally if people all work in the same location, they will talk to each other about their kids and stuff like that, and going beyond work you kind of have to put more effort into creating that?

Jim

That's right.

Steve

I have a quick question on that - how has this been affected by all the social networking, Facebook, texting, instant message stuff?

Jim

Very interesting question - one of the most counter-intuitive things we've found at Scan Health was that there was one department where a number of people in the same department all went out simultaneously, and a month or two later we asked them whether they were feeling disconnected from each other, and in fact they reported just the opposite, which really took us a little bit by surprise. It turned out, as one of them said when they were in the office, yes, they had, once in a while they'd see each other in the hallway or in the company cafeteria, and catch up that way, but if it was a work-related interaction, they would often get up, walk to the cubicle of the person they wanted to talk to, and see that other individual on the phone or on their keyboard clearly doing heads down work, and they didn't want to interrupt them. When they're physically separate, and they can't walk down the hall and see them, they're much more comfortable sending an email, or even picking up the phone and calling them, and as a result of the request from the distributed workers at Scan, the company installed an instant messaging system that it hadn't had before, and so these folks are learning to use these tools and actually feeling that they help them to stay almost more connected to each other than when they were in the office, which is a bit of an unusual situation perhaps, but the combination of all these social networking tools is clearly a powerful way to enable people to connect not only with each other, but with the company as a whole.

Steve

Wow, that's interesting. Are you finding differences, like generational differences or anything like that, in terms of people's comfort? Are older people less comfortable with the whole distributed workforce than younger people, or are you not finding any differences at all?

Jim

Well, we haven't studied that terribly systematically, and some others, I think, have, and there is a general belief, and I think it's an accurate one, that younger folks are more comfortable with the social media, with instant messaging and things like Facebook. On the other hand, folks at the top end of the demographic age group, some of the baby boomers and so on are finding that it's a wonderful way to not have to get in the car and commute every day, and they're just as attracted to these things as the young folks. I suspect that it's a bit of a U-shaped curve, that younger, and then folks either at retirement or near retirement, are more comfortable with it than most people think, although the usage isn't as widespread at that level yet, but it's growing faster among 55 year olds plus, I think, than any other age group right now.

Steve

That's interesting, my experience a little bit, and again it's just anecdotal, is actually a lot of people more recently, younger people entering the workforce, actually want to go to meetings, because they've never experienced meetings as much, I think the office is, I think the joy of meetings quickly wears off, but there is something to the degree that, well, I've never gone into an office, so this is kind of, I want that experience.

Jim

Well, there's another thing too - we heard a story at a professional meeting last year of a large east coast insurance company was recruiting new employees (this was maybe two years ago) from a number of small colleges in rural Maine and New Hampshire, and they were offering them the opportunity to work at home, and because they figured that would be viewed as a benefit, and it turned out that those young folks really all wanted to, when they graduated from college, they wanted to go to New York or Boston, major cities, because they were looking for the urban life, so it is a mixed bag, and I think it's dangerous to generalize about these things.

Steve

Yeah, that last statement's probably the most safe one, but I think what you have pointed out that's pretty clear is that going to distributed workforce in general, when you do it, it does lead to a lot of benefits, and far more, would you see it was an 18 to one increase in productivity? - is that right?

Jim

18% increase in productivity, and yeah, it's huge, and I will add to that a couple, I mean our cynical friends here, well, that's because they're not wasting their time in meetings, but the other thing is they're not wasting their time commuting. Again it depends a lot on what people's commute patterns are, but at Scan Health they have estimated recently that they now have well over 100 people working this way, that they're saving something like 450 thousand gallons of gasoline a year, something crazy like that, the reduction in commuting is tremendous; that's saving employees' money, it's taking cars off the road, and it's also saving employees time. One of the individuals at Scan reported that she had lost almost 15 pounds in the three months after she started working at home, because she wasn't eating junk food any more, instead of getting in her car and driving an hour in the morning, she was going out walking a couple of miles, so there's health benefits, there's economic benefits, both to employees and to the company, and, by the way, the company is now able to attract and retain people that they were unable to attract before, because they can offer them that kind of program.

Steve

Wow, that's fascinating, it's like we can change the planet, save the planet through telecommuting.

Jim

I do believe that, it sounds a little ridiculous sometimes, but when you get going on it, it's a win for the individual, a win for the company, it's a win for the planet in terms of gasoline and air pollution, it's also a win for local communities, because they've got more people staying closer to home.

Steve

Well I agree, as a person myself who telecommutes, I definitely have experienced all of those benefits. Well, Jim, I wanted to thank you for appearing on Business Execution Radio, you also mention there's a book coming out - can you share the title of the book, for people that are interested?

Jim

Yeah, sure, it's called, "Cut It Out - Save For Today and Build for Tomorrow", it's really aimed at facilities managers, it's an eleven chapter book with a whole series of things that folks can do in workplace services and facilities to reduce cost almost immediately. It's about energy conservation, it's about telecommuting, there are two chapters on that, there are chapters on tracking the paper flow in offices and reducing paper through automation and things like that, there's a chapter on lease management, there's a number of things that are really aimed very narrowly at facilities managers, but it's an exciting book, because it's multi-authored, there were I think ten or eleven of us that came together to write the book collaboratively, and it will be officially published next week at the World Workplace, sponsored by the International Facilities Management Association in Orlando. And thanks for asking!

Steve

Well congratulations, and I think that's a good point too, people often forget that facilities can play a powerful strategic role in organizations, yet they often aren't used that way when it comes to execution.

Jim

That's very very true, I think historically most people took buildings and office space for granted and everybody had the same kind of cube farm, and we're now discovering that there's just incredible opportunities to save money, reduce the space needs, by enabling distributed work, and it is also, I think, just a growing recognition that even the companies that don't have formal distributed work programs, an awful lot of their people are working out of the office. In fact, our research showed us several years ago that almost two-thirds of the work that knowledge workers are doing is happening outside the corporate facility, and that leads you right in to how do you manage a distributed workforce? How do you know those folks, all over the place, are doing what you need and want them to do at any given moment? It's all about performance management, I think.

Steve

That's interesting, it all comes back to getting really good at defining what you need people to do, and if you define what you need them to do, you don't really care that much where they do it.

Jim

Exactly. Anybody who's been a college student knows how to work that way, college professors typically don't tell you where to be when you're writing the paper, or you may have to be in the classroom to take that test, but they'd just say, turn the paper in at noon on Friday - do it wherever and whenever you want to, so it's already there, it's already in our culture.

Steve

That's interesting, that's a good point, and if you're, certainly like I was in college, you get really good at finding all the places where you shouldn't try to do work.

Jim

That's true too!

Steve

Well Jim, thank you, a fascinating coversation, and we will post a link to your book on the website.

Jim

I appreciate that very much, thanks again for inviting me, I appreciate the opportunity.

Steve

Absolutely, OK, well hey, take care, thanks for appearing on Business Execution Radio.

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