Thinking about allowing your workers to work “flexibly”? Fiona Smith finds out why Australian businesses are leading this trend.
Treating employees like grown-ups and allowing them to make responsible decisions about where, when and how they will work has been the workplace trend of the decade.
Flexible working practises have moved beyond just offering part-time work for mothers and, now, some leading employers are making every job flexible by default.
Australia is leading the “all roles flex” movement, spearheaded by Telstra three years ago, when it put the onus on managers to prove that work could not be done on a flexible basis, rather than expecting employees to prove that they could manage it.
Telstra’s move was followed by some of Australia’s biggest and best-known employers, such as the Australian Stock Exchange, the ANZ Bank and Westpac.
At these companies, employees decide what hours they will work and where they will work from. They co-operate with their managers to make sure all bases are covered and performance targets are being met.
Other employers have extended the philosophy of workplace freedom to declare unlimited holidays – where employees can take as much (paid) time off as they want, so long as their work is being done.
What went wrong at Best Buy
In the US, electronics retailer Best Buy was the flagship of the “results-only work environment”, which allowed its 5000-person head office to work when and where they liked, all meetings were optional and people were discouraged from talking about how many hours they worked.
After ten years of working like this, Best Buy had recorded a 90 percent decline in attrition (which had previously been severe), accompanied by a 35 percent increase in productivity.
However, when management changed in 2013 and a company rescue effort was underway (due to competition from internet sales and “big box” stores), the results-only-work-environment was cancelled.
This was swiftly followed by Yahoo’s recall of home-based workers in an all-hands-on-deck emergency and it appeared that work freedoms were only on offer in large companies when there was “smooth sailing”.
‘Delegation is not for everyone’
The Best Buy CEO, Hubert Joly, defended his move, saying he cancelled the results-only work environment (ROWE) because it wrongly assumed that delegation was a management technique that worked for everybody.
“Well, anyone who has led a team knows that delegation is not always the most effective leadership style. If you delegate to me the job of building a brick wall, you will be disappointed in the result!,” he wrote in a column for the Star Tribune.
“Depending on the skill and will of the individual, the right leadership style may be coaching, motivating, or directing rather than delegating.”
Freedom can mean more work for managers
Those were high profile setbacks to the “workplace freedom” trend, to be sure. However, demand for flexibility and autonomy from Millennials means employers have been undaunted in continuing to reimagine the workplace.
One of the challenges of results-only workplaces is that they can be much more complex and labour intensive than the traditional rule-based command-and-control management styles that have been in place for many generations.
Setting clear and measurable goals, coming up with new job roles, scheduling meetings, developing trust and putting aside the time for ongoing performance management and coaching are some of the increased challenges for managers.
How Koda Capital manages by results
When the four founders of Australian investment management firm, Koda Capital, were setting up three years ago, they put some thought into the sort of work environment they were creating.
“We were a results-driven business, as opposed to a facetime–driven business” says partner and chief of staff, Quentin Reeve.
“We wanted to hire people that we thought were responsible enough to manage their own time and manage the work they needed to get done and manage the demands their clients had.
“It wasn’t up to us to say it had to be done between 8.59am and 5.01pm, Monday to Friday.”
Workplace freedom is commonly misunderstood to mean that employees can do anything they like. However, “unlimited” paid holiday policies, such as the one at Koda, do require that performance standards are also met.
And when employers scrapped performance reviews over the past couple of years, they did not stop measuring employee performance. Instead, they got rid of ineffective procedures in an effort to find something that worked better.
“We don’t think a one-a-year or twice-a-year performance review is as effective as an ongoing conversation with a new person involved in the company,” says Reeve.
People know how much time off they need
Reeve says that Koda has not yet had any issues with employees abusing the freedoms and he is pleased to be able to report that the average count of holidays taken is slightly above the industry average.
(Unlimited vacation policies have been criticised, particularly in the US, for actually decreasing average holidays taken – because it is thought that people need guidelines to know how much time off is acceptable).
Reeve counters that Koda has found that its people are good at knowing what the right amount of time off.
“We have a number of our partners who have spent upwards of a month out of the office or overseas and they have their laptops and mobile phones and they are accessible when they are meant to be accessible.”
When it comes to measuring employee performance, Koda looks beyond financial results, says Reeve.
“Some of the end goals can’t be measured strictly with a dollar sign. So, if there was a strategic initiative being worked on, we would have a different way of looking at how what was accomplished,” he says.
“[For instance], If someone is in a management position, you have to look at the relationships they have with the people they are managing.”
Koda’s approach appears to be paying off. Barely two years after opening its doors, it now has around 50 people in offices in Sydney, Melbourne and Brisbane and has plans to double in size in the next 18 to 36 months.
The company won the Australian Financial Smart Investor’s Best Private Wealth Manager award in August, 2016.
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