Reference no: EM132595350

Best Buy's Almost Transformation

You may know Best Buy as the mega store for electronics or the place you, or maybe your parents, used to buy CDs, but in the management and particularly human resource management world, Best Buy is also knows for the ROWE-Results Only Work Environment- program. Best Buy broke the mold of the 8-to-5, five-days-a-week workweek, a staple of the U.S. workplace, in 2005 and allowed its corporate employees to decide when and where they wanted to work and evaluated them on the results of their work, not the time they put in at the office (CultureRx, 2013). The program not only changed how people work, but it also changed the culture of the company, and yielded some significant performance improvement early on. Production improved by 35 percent, employees on ROWE processed 13 to 18 percent more orders than those not in the program (Conlin, 2006a), and it led to an 8 percent decrease in turnover, thereby reducing hiring costs. Then CEO Brian Dunn said: "The improvements in turnover were nationwide and at all levels" (Everitt, 2008).

No more. With less fanfare and less press coverage than a similar decision by Yahoo, Best Buy did away with ROWE in early 2013. New CEO Hubert Joly considered ROWE to be flawed from a leadership standpoint because it took away management control and used delegation as the only method of making decisions (Schafer, 2013). Matt Furman, the company public affairs officer, believes that organizations should focus on both the end results and the process by which things get done, which requires everyone to be around to connect and collaborate (Pepitone, 2013). Company spokesperson, Jeff Sherlman, further added that working from home used to be a right, but now it will be a discussion: "We believe in employee flexibility but it needs to come in the context of a conversation . . . about what the results are and how the work gets done" (Stuart, 2013).

The decision, although not officially linked to it, comes at the heels of several years of poor performance at Best Buy (Matthews, 2013). The change for Best Buy employees is as drastic as it was in 2005 when the program was instituted. While for most managers and corporate employees, the clock extends well beyond the 40-hour week and being seen, getting to the office before everyone else, being the last one to leave at night, and working on weekends are all considered a badge of honor and necessary to success in corporate America, Best Buy had bucked that trend, at least for a few years. Through the ROWE program, corporate employees of the Minnesota-based electronic store threw out the time clock, and set their own work schedule. "No one at Best Buy really knows where I am," said Steve Hance, Best Buy's employee relations manager (Kiger, 2006). This revolutionary approach focused on evaluating employees based on meeting their goals rather than worrying about how much face time they put in the office. The difference between ROWE and many innovative programs Best Buy instituted was that ROWE started somewhere in middle and lower management, was intentionally kept secret from upper management, tested in a few teams; and then presented to the leadership. The former CEO did not know about the program until two years after it had been implemented in some of the corporate offices with some success.

ROWE was the brainchild of two Best Buy HR employees, Jodi Thompson and Cali Ressler, who discovered they shared similar views about working in cubicles and how technology and wireless access could change how people work (Conlin, 2006a). They relied on the results of a 2001 survey that indicated widespread employee dissatisfaction and a perception of inability to balance work and life and developed the flexible work program (Kiger, 2006).

The results were positive, and word got out about the new way to work. Those working under ROWE guarded their secret, fearing a reversal from upper management. Those who didn't convinced their managers to join the program, slowly spreading word about ROWE throughout Best Buy's corporate office. In the early days, Thompson and Ressler were viewed by some as subversives who were "infecting" the company (Conlin, 2006b). More traditional managers felt threatened that they are losing control and power. Others worried about employees never being able to get away from work. Those who were in the program and the company clearly benefited. But Thompson and Ressler left Best Buy and founded their own consulting firm CultureRx, have taken their ROWE concept outside Best Buy, and are working on spreading the unique work model to other organizations (CultureRx, 2013).

By all accounts, having employees spend more time at the office is not going to help Best Buy. Instead, analysts blame the leadership and the competition (Upbin, 2012) and the corporate culture of the company and suggest that cutting ROWE may actually negatively affect turnover, trust, and the company's ability to groom future leaders (Peterson, 2013).

Questions

1. What are the internal and external forces for change at Best Buy?

2. How were the two changes (ROWE and its removal) implemented?

3. What role did leaders play in each of the changes?