Reinventing Work for the Digital Age

I recently had the pleasure of speaking in Boston at the USA launch of a new book “Reinventing the Company in the Digital Age”. The book was put together by the Spanish bank, BBVA as part of their Open Mind project (see https://www.bbvaopenmind.com/en/)

This was a great opportunity to reflect on how organisations are changing “in the Digital Age”. It’s easy to think of this as just being the impact of technology on the way we carry out our tasks. In fact the Digital Age is as much a social change as it is a technological revolution in the way we work.

Take the example of social media. This has revolutionised the way some people communicate with their friends and colleagues. They share views, express opinions, join in discussions, send congratulations and celebrate life’s achievements without the physical constraints of the “Analogue Age”. They are using the internet to cut through the barriers of time and distance to share experiences with others and make real friends.

So it’s hardly surprising to find that the “Facebook Generation” are much more comfortable than their predecessors in expressing their views through blogs, discussion forums and video clips. They can see the benefits in these being available to a wide audience instantly and being a lasting resource. Compare this with the traditional business meeting with its constraints of time and place. The digital alternative wins out much of the time.

Yet many organisations see social media as a waste of time and insist on cramming everyone’s diaries with inefficient face-to-face meetings. Sometimes, maybe, there is a need to get people together in the same room, but for many business decisions and sharing of opinions there is a better digital alternative.

We are also now living in the age of ‘Skype’ video conversations.  I’m amazed at the number of people who use Skype in their personal lives but never use videoconferencing at work. Whilst Skype is free and easy to use, the view on video meetings in the office is still that it’s complicated and expensive. So, again, we have a generation of people living in the digital age at home and turning the clock back when they go in to the office.

So “reinventing the company” has to include radical changes to the way work is performed in the digital age.  Not just to use the technology more effectively, but also to keep up with the expectations of the new generation of digital natives. For business to succeed it needs to engage with this workforce, and it won’t do it using out-dated ways of working.

Another step towards Future Work

I'm writing this blog on December 1^st, the day the new regime of Shared Parental Leave came into effect in the UK. Employment legislation now recognises that fathers and mothers can share responsibility for caring for a new baby. This is a period of 50 weeks, in addition to the 2 weeks of paternity leave, which means a father can potentially take a whole year off to look after a new baby whilst the mother goes back to work.

This is another sign that the old assumptions about flexible working are no longer valid. Since professional women are now quite likely to be earning more than their male partners, there are economic pressures for fathers to take a major share of the parental leave whilst the mothers return to their careers. Since July this year, UK legislation has also recognised that it’s not just parents who want to work flexibly. Now all employees have equal rights to request flexible working and employers cannot discriminate on gender or parental grounds when considering a request.

These changes mean that employers need to be more prepared than ever to manage flexible workers. However, there is mounting evidence that many companies have not planned for the new world of agile working. In particular, there are still many organisations that don’t allow people to work from home, or from any remote location, because they are unsure how to make it happen.

To provide guidance on remote working, the Telework Association is planning to update the Telework Handbook. This will give practical advice to companies and individuals wanting to set up remote working schemes and will contain up-to-date examples of how it can be done. The project is being funded through the crowd-funding website Kickstarter and can be found at http://kck.st/1FzFuu0.

Is flexibility becoming the norm?

We have lived for the last 200 years with a model of work that involved a fixed contract of employment for the majority of employees. In exchange for an individual's time an employer is prepared to pay them to do a job. That is usually based on a fixed number of hours per week and a fixed location to do the work.

Now, however, we have technology that allows us to do a high percentage of work without having to be in a fixed place. We also have flexible working schemes that allow people to vary the hours that they work. But we still suffer from rigid work patterns based on the assumption that the norm is fixed time and fixed place. Any other arrangement is an exception to the rule.

Employment legislation reinforces this assumption. People now have a right to 'request' flexible working from their employer on the basis that they are asking for something out of the ordinary. The 'norm' is still seen as a contract that defines the time and place of work and any variation on this is a concession by the employer and a 'benefit' for employees. Well, maybe this is about to change.

On November 9th the Confederation of British Industry (CBI) launched a report 'A Better Off Britain' in which it calls for employers to "Challenge outdated assumptions around flexible working in firms and, where possible, adopt a presumption in favour of flexibility from job advert onwards, to help employees manage their work-life balance effectively, including childcare costs." So, they are saying that flexibility should be taken as the norm. They are also implying that it should be offered to new recruits ('from job advert onwards') as well as existing employees. So it's not something an employee has to earn or only get after 6 months in the job, it's the basis of the relationship from day one.

Managers will struggle to adjust to this new regime. It's harder to exercise control over people if they choose when and where to do their work, But is should be easier to motivate them and engage them by showing they are trusted.  There are also practical issues to be addressed and one current initiative that will help is the re-write of the teleworking handbook. This will help to reassure managers and employees that the new world of work, where flexibility is the norm, is not a recipe for chaos.

The handbook is being funded through a crowdsourcing initiative which will only succeed if there are enough backers. If you would like to support this initiative from the Telework Association you can do so for as little as £5.00.

Peter

Flexible working is no longer family friendly

For the last decade flexible working has been officially ‘family friendly’. In the UK we have had legislation that gave the right to parents to request flexible working since 2003. That gave a clear message that the reason for allowing someone to vary their work pattern was to accommodate family commitments and this was reinforced in 2007 when the legislation was extended to carers for adults as well.

This has led to the inevitable link between flexible working and other benefits such as maternity leave, designed to accommodate people who have children. Many organisations introduced policies and procedures that simply complied with the law and allowed parents to ask to vary their hours, or maybe do some work from home, but did not allow other employees this opportunity. As a result, thousands of people are now benefitting from a flexible working arrangement because their employer was obliged to listen to their request. The vast majority of the proposals from employees turned out to be reasonable and have proved to work well for both parties.

 However, the world of work has moved on. Now people who don’t have children are asking why they too can’t work flexibly. They may want to avoid commuting every day and have a different work pattern. They notice that their colleagues who are parents still manage to get their work done effectively and that many of them say they are more productive. And finally legislation has caught up with the realities of working life in the 21^st century. Now all employees have the right to request flexible working, so those employers who were simply complying with the legal minimum have had to update their policies.

For those organisations that already gave and equal ‘right to request’ to all employees this may not be a dramatic change. However they are still likely to get an increased number of applications from non-parents as the idea of flexible working for all takes over. For those employers who have so far treated this as a ‘family friendly’ policy there is a bigger shift involved. No longer does it make sense to discriminate on the basis of the family situation. The reason that someone wants to work flexibly becomes irrelevant and employers should not be putting themselves in the position of judging the value of one employee’s personal life versus another.

So finally, employers are being forced to view flexible working as something other than family friendly. If they take the time to look at the evidence they will find that it is actually ‘business friendly’. There is now a wealth of evidence to show that giving people choice over when and where to do their work, results in improved productivity. Those organisations wanting to attract and retain the best talent (and who doesn’t?) will recognise that saying ‘yes’ to requests makes business sense. And as we move further away from the ‘family friendly’ era we will move closer to the day when the idea of fixed working patterns becomes the exception and it is assumed that all work arrangements are flexible as long as they meet the business requirements.

Flexible working for all

Today is a key date in the evolution of work. In the UK there is a change to the legislation giving employees a right to request flexible working. It will now apply to all employees not just parents and carers.

You could just dismiss this as a minor change which will involve a quick revision of the appropriate HR policy. Or you might see it as a fundamental change in our assumptions about work. I think it’s the latter.

For the last 200 years we have made the assumption that work consists primarily of full time, permanent employment. Flexible working, temporary jobs, part-time working, job sharing and working from home have all been exceptions to the norm. So employees have to ask permission to work differently from the standard ‘9 to 5’ routine at their employers premises.

Then the government, in its wisdom decided to introduce some ‘family friendly’ legislation to encourage employers to at least consider that work could be done differently. This reinforced the view that flexible working was only applicable to people who had children and didn’t really apply to everyone else. So up to now it has been seen as an employee benefit along with items such as maternity leave and therefore a cost to the business.

Now we are about to enter an era when people without children or other caring responsibilities will start to ask for flexible working. It will become more acceptable for ambitious, career minded professionals to work in non-standard ways. Employers will come to realise that by giving people more choice over when and where they get the job done they will get a more effective workforce.

By giving people more freedom over how they get their job done their productivity will increase and employee turnover and absenteeism will reduce. So flexible working will move from the current situation, where it is the exception, to being the norm. This means that managers will need to develop new skills to cope with the increased variety in the way their people work. And that also provides a great opportunity for HR to guide the organizational culture and management behavior to reflect the new world of work.

Webinar about the changing workplace

I've had the pleasure of being on a couple of panel discussions run by Philip Tidd of Gensler and know that he has an informed view of the way the workplace is developing. So I'm delighted to be running a webinar with him where I will be covering the changing world of work and he will be looking at the implications for the workplace.

It's happening on Thursday May 22^nd 18.30-19.30 UK time

I will be basing my contribution on the latest version of my book ‘Future Work’, co-authored with Alison Maitland (www.futureworkbook.com) and my extensive experience in helping clients to implement flexible working. Philip will talk from his experience as Head of Consulting, EMEA at Gensler where he advises organisations on all aspects of how improved working environments can lead to enhanced business performance.

This session is not just about new office design. It’s about the changing nature of work and the implications on the places it can now be performed. It will therefore cover developments such as hubs and shared space as well as working on the move and at home.

There are just 25 places on this webinar so attendees will get an ample opportunity to ask questions and comment if they wish. To book a free place please email me (peter.thomson@me.com). We will be recording the event so if you can’t make the date let me know and I can point you at the video afterwards.

Why I’m no longer hitting my head against a brick wall!

I have spent the last 20 years trying to get managers to change old habits. I ran the Future Work Forum at Henley Business School in an attempt to collect the best research information on the changing world of work and use it to show managers how work is changing. I kept asking the question – If it’s so obvious that work is evolving then why are managers not grasping this as an opportunity to change the way they manage? Surely they can see that their employees will be happier, more effective and more loyal if they are treated differently. They must be able to see that the way we manage today is a hangover from an earlier era when people were content to do mindless routine jobs and were grateful for the money. Now we are surrounded by technology that has freed up all sorts of work to be done at varying times and places, isn’t it obvious that management has to change?

I guess that after 20 plus years of banging my head against a brick wall, I’ve finally sat back and looked rationally at the situation. I can continue to produce logical arguments as to why our management practices are outdated. I can use the best research in the world to show that autonomous employees are more productive that those under close supervision. I can point to numerous management gurus over the last 50 years, all of whom have said the same thing - give people responsibility and freedom, trust and empower them, and you will get a high performance workforce. I can cite successful examples of agile working, self managed teams, diverse leadership, mobile technology, flexible workplaces and results based management systems. But managers still continue to do the same things they have always done, oblivious to the changing world around them.

I’ve come to realise that it’s not in the interest of managers to make any change. They are happy with the status quo. For them any change is potentially threatening. Particularly change that may strip them of power and even question the need for their job at all. They are comfortable in their current positions of authority, giving orders to their staff and checking that they have carried them out. They have probably risen to their current position by being good at doing the work they now manage. The Finance Director is likely to have been a successful Accountant, the Research Director will have come up through the labs and the Sales Director was once out on the road himself. They are experts at the work done by their employees. So managing them involves telling people how to get the job done – in most cases the way they used to do it. After all, they got to be the manager by being the best Accountant, Salesman or Engineer.

And who promoted these managers on the first place? Obviously their superiors, who themselves were chosen by their bosses – and so on. So we have a formula for appointing managers that reinforces the current values and behaviours of top management. Unless you are prepared to admit that you are a poor manager (in which case you shouldn’t be in the job) it is perfectly normal to select people who act like you. So no wonder it’s difficult to change organizational cultures. They weed out the ‘misfits’ who do not agree with the prevailing regime and reinforce existing practices that have been around for decades.

So when I talk to a group of middle managers and tell them about the changing world of work, I get polite nods. They agree that the younger generation have different values about the place of work in their lives. They understand that technology is freeing up people to work very differently.  They listen politely to the examples of companies that are reaping the benefits of agile working. And they already know that trusting and empowering employees makes them more engaged and probably more productive. But when they get back to the ‘real world’ of their office they have no incentive to rock the boat and try out new ideas.

If you are a manager why should you empower your employees? That means losing power by giving it away. It means admitting that individual members of your team know their own work better than you do. It could mean allowing people to choose when, where and even how they get their work done. Then what is left for you to do? This looks like you’ve lost control and are no longer managing the operation. That’s not the way your boss did it when he was in the job and it’s certainly not what he now expects from you. Unless there is a major disruption to the business forced on it from the outside (competition, regulation, takeover etc) your career is dependent on supporting the existing values, systems and behaviours and not introducing radical change.

This has led me to the conclusion that the work revolution has to be driven bottom up. Employees need to be pressurizing their bosses to manage differently. They need to point out the outdated work practices and the barriers to improved productivity. They need to express their frustration at the long hours culture and the lack of personal time associated with success. They need to show that they can take on responsibility and become more effective, given the chance. And when they get rebuffed by entrenched management they need to vote with their feet.

I may have been a bit slow in getting there, but I now realise that I have to change tactics. Yes, I will still keep on giving presentations to senior management about the importance of addressing the work culture as a business priority. I will probably still be talking to middle managers about moving from ‘command and control’ to ‘trust and empower’. But I am now going to address all those people stuck in a job under a traditional management system. I’m gong to point out how outdated our management practices are and show them there is another way. Then the combined pressures of Directors who ‘get it’ as a business strategy and employees who ‘want it’ as a way to live their lives will overcome the inertia of the managers between them.

In my survey for the book, ‘Future Work’, I asked an audience of 350 junior/middle managers (mostly MBAs) if they agreed with this statement “There will be a revolution in working practices in the next decade”. To my surprise, two thirds of them agreed, or strongly agreed, with the statement. So they recognise there is a revolution on the way which will effect the way they manage. But they can’t make it happen whilst they are in the middle of a system that resists the change. So, I’m now setting my sights on the working population as a whole, who stand to benefit from the revolution, instead of the current generation of managers who do not.

Why should we take employee engagement seriously?

There are lots of surveys showing that employees are not engaged at work. It varies a bit by country, but as a rough guide only a third of employees are fully engaged.  So what?

The consultancy Blessing White regularly surveys 30,000 people across the world and measures levels of engagement from fully engaged to fully disengaged. The figures for Europe show that 31% are engaged and a further 24% are almost engaged.  But that means that just under half the workforce are not even ‘almost engaged’.

Should we care? Does some theoretical measure of engagement actually matter to employers? Are we aiming to keep people happy or do we have a business to run? Why should leaders worry about this when there are more pressing issues to manage?

To answer these questions it’s worth taking a moment to look at the relationship between engagement and business results.

One example is is employee turnover. 81% of engaged employees definitely intend to stay with their employer for the next 12 months compared with 23% of the disengaged. Plus a mere 2% of the engaged are definitely planning to leave compared with 32% of the disengaged.  So an employer with a demotivated workforce is likely to have an employee turnover 16 times that of a fully satisfied one.

Measurement of the cost of employee turnover is an inexact science. Because it’s not as visible as a direct expense it tends to be underrated. And it varies a lot between jobs, depending on the ease of replacement. But if you make a very conservative assumption that people take three months to get up the full productivity, during which time they are at an average of 80% of output we can work out some figures.

In this case the engaged organisation loses 20% of productivity for a quarter of the year on 2% of the workforce; a hit of 0.1% on output. However, the same calculation for the disengaged workforce at 32% turnover gives a 1.6% hit. That doesn’t look like much until you consider that a labour-intensive business with a 5% profit margin is potentially putting a third of the profit at risk just through high turnover.

But the real problem with disengaged employees is not the ones that leave, it’s the ones that stay. They are not just going to be below average performers for a few moths they are likely to be permanently low performers. And they are also quite likely to bring others down as well. It’s interesting to see from the Blessing White data that 34% of engaged employees stay in the job because they like the work they do, compared with 16% of the disengaged.  But in contrast, 11% of the disengaged stay because they are ‘comfortable’ compared with just 7% of the engaged.
So however you measure it, engagement is likely to result in higher performance for the business. It’s not just some arbitrary concept invented by HR; it’s a real business measure. It should be right at the top of the priority list for senior management. But because it’s not as tangible as the financial results it rarely is.

If leaders actually cost the impact of low engagement they will take it much more seriously. They will reduce the need to replace talent and get more out of the people who stay. It will directly improve output, value for money and profits. So they should all remember– A COMPANY IS ONLY AS GOOD AS THE PEOPLE IT KEEPS.

Productivity and Pay

A new report has just hit the media in the UK defining the level of pay that constitutes a 'living wage'. Below this people are deemed to be living in poverty, so the idea is that employers should adopt this instead of the minimum wage already in force.
It would be great to have everyone paid more but I can't quite see how this will add up. If we increase the hourly rate of pay and people continue doing the same job then whatever they produce has to increase in price. I'm no economist, but it seems to me that if goods cost more then fewer get sold, or customers simply go to a cheaper source. Or if there is a fixed amount of money to pay wages (as in the public sector) then there are less jobs to go around and services have to be cut.
Worse still, many of our jobs are competing with low wage economies around the world. If we increase pay in the UK then work will be transferred overseas and we have lost the job forever. This is clearly what has happened in manufacturing and as more and more of our services are delivered remotely they are also vulnerable.
In order for the UK to maintain the standard of living we have come to expect, we have to increase productivity. We have to remain competitive in international markets for goods and services so our cost of production and delivery must be kept to a minimum. If we want to increase the rate per hour we pay people to a minimum wage that reflects an acceptable standard of living, we have to find the money somewhere. There is no point in pricing ourselves out of work as a nation.
So, how do we make a step change in productivity? We have to look at the way we get work done and find smarter ways of doing it. The whole idea of breaking down work into jobs and then employing people on a fixed salary in exchange for their time has to change. We have to pay for output not input. If you are paid by the hour the slower you work the longer it takes to get a result. The longer it takes, the more you are paid. So the least productive person is rewarded the most. If my lawyer is being paid by the hour to represent me (probably actually billing me by the minute) then he/she will get paid more for taking longer to sort out my case. The bad plumber who takes 2 hours to fix my leaking tap gets paid twice as much as the good one who fixes it in an hour.
If we encourage people to find smarter ways of doing their jobs we should let them share in the reward. Here's a simple way. Instead of encouraging people to work long hours we should have competitions to see who can go home earliest. If people can get their week's work done by Thursday they should be able to take Friday off. They should then be given the freedom to come up with smarter ways to get the work done. I bet a high percentage would find very inventive ways of increasing their productivity because they would have a reason for doing it. Then we could get better at rewarding results and people would be getting paid more per hour for the time they are working. That way we can afford the living wage; otherwise it remains a pipe dream.