Reference no: EM131072674

ROWE Program at Best Buy

Jennifer Janssen works in the finance department at the headquarters of Best Buy, located in Minneapolis, Minnesota. One of Best Buy's electronics suppliers is furious because he claims he has not been paid. Janssen states: "He told me, 'I'm not going to ship any more products to your company unless I get this issue resolved.'" She has to resolve the problem by the end of the day. The mother of twins also has to pick up her children from day care. What choices does she have? Perhaps Janssen makes a call to her husband, asking if he could skip out early while she puts out the fire at work. (Again?) Maybe Janssen scrambles to find someone who can handle the issue in time for her to leave at 4:00 p.m. (Did anyone see me?) Or perhaps, after another late night, Janssen spends the car ride home wondering whether she should just quit. (This time, I swear!) Janssen is calm as she looks around the finance department, trying to find someone who can cover for her. As she figures out what happened to her vendor's payment, Janssen knows that she can leave the office at 4:00-without guilt, without looking over her shoulder. Even if a solution isn't found by then, she can keep working on it from her laptop at home. No one remarks that she's leaving and no one notices. Janssen is part of the program to solve the problem of overwork at Best Buy. Like many other U.S. companies, Best Buy strives to meet the demands of its business-how to do things better, faster, and cheaper than its competitors-with an increasingly stressed-out workforce. The company's culture used to embrace long hours and sacrifice. One manager even gave a plaque to the employee "who turns on the lights in the morning and turns them off at night." Darrell Owens, a Best Buy veteran, once stayed up for three days in a row to write a report that was suddenly due. He received a bonus and a vacation. But, Owens stated, "I ended up in the hospital." Cali Ressler, a human resources executive, had noticed an alarming trend: Women were accepting the reduced pay and status of a part-time position but doing the same work because it was the only way to get the family flexibility they needed. Ressler states: "If we keep moving the way we're moving, women are going to be in the same place we were 40 years ago."

ROWE Program

The number of people in the United States who say they are overworked has been rising, from 28 percent of Americans in 2001 to 44 percent in 2009, according to the Families and Work Institute. Instead of launching a "work-life balance" program, Best Buy rethought the very concept of work. Under the Results-Only Work Environment program, or ROWE, employees can work when and where they like, as long as they get the job done. As of 2009, the program was six years old and was started at Best Buy's Minneapolis headquarters, which has 4,000 employees. Recently, Best Buy started introducing the ROWE program to its 150,000 employees in retail stores. The firm is still figuring out how the program can be applied in stores, since retail requires "time clocks" and working to schedules, which are against the program's operating philosophy.

The ROWE program is based on 13 principles and rules. The key ones include:

• There are no work schedules in the traditional sense.
• Every meeting is optional, with a few key exceptions.
• Employees are not to judge how colleagues spend their time. Thus, there is to be no focus on "how many hours did you work."
• Work is not a place you go, it's something you do.
• As long as the work gets done, employees do whatever they want whenever they want.
• In brief, ROWE is all about results. No results, no job. It's that simple

Entire departments join at once, so that no single employee is left out and made to feel less dedicated. Thus far, 75 percent of the 4,000 employees at Best Buy's headquarters are in the ROWE program. Each group finds a different way to keep flexibility from turning into chaos. The public relations team has pagers to make sure someone is always available in an emergency. Janssen has software that turns voice mail into e-mail files accessible from anywhere, making it easier for her to work at home. Many teams realized that they need only one regular weekly or monthly staff meeting, so they eliminated the unproductive ones.

Early Results

Results from and reactions to ROWE have been encouraging. Productivity increased an average of 35 percent within six to nine months in Best Buy units that implemented ROWE. Voluntary turnover has dropped between 52 percent and 90 percent in three Best Buy divisions that have implemented ROWE. The three divisions were chosen because they were otherwise unaffected by company reorganizations or other initiatives. This voluntary turnover figure is viewed as an indication that employees who once would have left Best Buy decided to stay put after ROWE was implemented. One procurement division saw voluntary turnover drop from 37 percent a year to less than 6 percent annually.

Jody Thompson helped introduce ROWE and is now a principal of Culture Rx, a division of Best Buy. Culture Rx offers customized consulting services tailored to the needs of clients with ROWE at the core of its philosophy. A Culture Rx study of attitudes of ROWE participants found that feelings of pressure and a sense of working too hard have changed. Thompson states: "They feel happier about work. They feel more ownership of their work. They feel clearer about what they're doing for the company, and they see ROWE as a benefit that's almost more important than any other. They talk about it as if to say, 'Someone else could offer me more money, but I wouldn't go because I now have control over my time.'"

Change Process

The ROWE experiment started quietly. Cali Ressler used to manage Best Buy's work-life balance programs and is now a principal with Thompson at Culture Rx. She helped a troubled division of the retail group in Minneapolis deal with poor employee morale. Ressler encouraged the manager to try flexible scheduling, trusting his team to work as it suited them. As she recalls: "He said, 'Well, trust doesn't cost me anything.'" The innovation was that the whole team did it together. While the sample size was fewer than 300 employees, the early results were promising. Turnover in the first three months of employment fell from 14 percent to zero, job satisfaction rose 10 percent, and team-performance scores rose 13 percent. When Jody Thompson, who then led Best Buy's "organizational change" initiatives, heard about Ressler's work, she pushed the company's top management to make total flexibility available to everyone. No one is forced into it; teams sign up when they're ready. Best Buy expects that ROWE one day will apply to the whole company in one form or another. The transition to a flexible workplace in Minneapolis was slow. "There was a lot of trepidation," says Traci Tobias, who manages travel reimbursements for Best Buy. "A lot of 'Can I really do this? Do I need to stop and tell someone? What will people think of me?'" Each ROWE team had to deal with those fears. "We took baby steps," Tobias says. The first step was an online calendar in which everyone entered exactly where they were at any given time. After a few weeks, the employees abandoned the calendar and now just use an ad hoc combination of out-of-office messages and trust. "There is no typical day," Tobias says. On a recent Wednesday, she slept in, went to a doctor's appointment, and arrived in the office around 10 a.m. When Tobias needs to find people, she checks the whiteboards hanging outside their cubes, where she and her coworkers write down where they are on any given day: "In the office today." "Out of the office this afternoon, available by e-mail." The impromptu meetings are gone, but business done by cell phone is way up. Because she no longer assumes that everyone is around, Tobias makes more of an effort to catch up with her colleagues by phone or e-mail instead of just dropping by someone's office. "You can still have those conversations," she says, just not always in person. She noticed that e-mails have gotten more concise and meaningful, with much less "FYI." And as everyone started to rethink their priorities, Tobias states: "We spend a lot less time in meetings." They used to have a two-hour weekly staff meeting that often devolved into chit-chat. Now, if they don't need to meet, they don't. The transition required a lot of changing of old attitudes, and it produced a lot of stress. Some employees broke down and cried in ROWE training sessions. Ressler states: "People in the baby-boom generation realize what they gave up to get ahead in the workplace, and a lot of times it's their families. They realize that it doesn't have to be that way." In particular, men thank her and Thompson, who run the sessions, for giving them permission to spend more time with their families. "They know now they can do it and not be judged," says Thompson.

The change also has exposed some ugly attitudes among managers. When Thompson proposed extending flexibility to hourly workers, the managers resisted, arguing that "there are certain people that need to be managed differently than other people. 'Because we believe that administrative assistants need to be at their desks to serve their bosses,'" she says. That issue is not yet resolved, but Thompson says ROWE is requiring the company to confront it. Denise LaMere, a Best Buy corporate strategist, has struggled to figure out how to prove herself in the new environment. "It made me very nervous," LaMere says. Without children, she once had an advantage-she could always be the first one in and the last one out. She states: "I had all this panic. Everything we knew about success was suddenly changing." The change begins with what Best Buy calls "sludge sessions." These sessions are where employees dig out the cultural barriers to change-the jokes and comments that reinforce overwork. Tobias comments: "It's like, coming in at 10 o'clock and someone says, 'Wow, I wish I could come in at 10 a.m.' It's really hard to let that bounce off and not be defensive." LaMere admits that she used to gossip about who was taking an extra-long lunch break. "We were all watching each other. You don't want to be seen eating in the cafeteria." LaMere always ate at her desk. During the first few weeks in ROWE, employees call "sludge" out loud when they hear an offending comment. They try to keep a sense of humor about it-some teams put a dollar into a kitty for every sludge infraction. Yes, it sounds weird, but it can help people break their bad habits, says Phyllis Moen, a sociologist at the University of Minnesota who has studied Best Buy's ROWE employees. "These are all examples of the way we use time to say how valuable we are," she says.

Sources of Resistance

Managers have put up the most resistance. The hardest part of the transition to ROWE, says Tom Blesener, one of the first to go through it, was accepting responsibility for the stress his employees felt. "It was me," he says. "That was hard." Blesener also had to learn how to stop treating his employees as if they were "unruly children," he says. Blesener manages 27 people who handle the company's extended-warranty services. His 20 hourly employees told him they were sick of punching time clocks. "They felt it was almost inhumane," he says. Now these data-entry clerks and claims processors focus on how many quality forms they get through in a week, rather than when they do it. They still count their hours (Best Buy has to follow governmental overtime rules for hourly workers), but they have more freedom to schedule their work around their families' needs.

In the end, Blesener had to give up some of his control. When a client needed someone to be available on Saturdays,

Blesener left it up to his team to decide how to handle the coverage. Under ROWE, he can't stop by his employees' desks and spring deadlines on them-they might not be there. He now plans his whole team's work more carefully and meets with each of his direct reports weekly. "It requires you to get to know your people on a much deeper level," he says. Total flexibility may not be for everyone. For instance, Best Buy's legal department so far has resisted the new way of working, partly because the in-house attorneys are worried that it will reduce their pay, says one of them, Jane Kirshbaum. Best Buy's lawyers are compensated in part based on how well they serve their clients-other departments that have legal issues-and they are not connected to any revenue-generating part of the business. Kirshbaum wonders if they will be criticized as unresponsive if they take off one afternoon. She admires the freedom the employees in the ROWE program seem to enjoy. She changed to a four-day schedule after the birth of her second child and struggles every day with the push of work and the pull of family. Still, she is not convinced that ROWE will work for her. She already checks e-mail and voice mail on her "day off." Will ROWE push even more work into her downtime? Without everyone in the office, she asks, "How do you make sure that the person who's left is not the person who's dumped on?" In exchange for more autonomy, Best Buy employees give up the guidelines that signal where work ends and leisure begins. Janssen says the hardest adjustment was "not working 24 hours a day. Because you have that ability now. I had to learn when enough is enough." Moen says the old rigid system is comforting for routine-loving workers. ROWE, she says, "could be harder for people who want order in their lives." Despite all the challenges, employees who have already made the switch say the benefits of "ROWE-ing," as they call it, are profound. Tobias says she has stopped avoiding her children. "I was getting up in the morning, rushing to get out of the door before my kids were awake," she says. If her children saw her, they would beg her to stay for breakfast. Now, because her quarterly goals are very clearly spelled out, she knows exactly what she has to finish in a given week-negotiate a rental-car contract or audit expense reports, for example. She can decide how and when to do it. If she wants to have a leisurely breakfast, she will. "My kids have stopped saying every morning, 'Mommy, I don't want you to go to work,'" she says. It isn't perfect. "The family doesn't always win," she says. But the family doesn't always lose either. "I don't feel guilty anymore."

Janssen, for her part, had considered leaving when she was pregnant. "Now, it's not even an issue," she says. As for Blesener, the retail supervisor, he went to his first parent- teacher conference, a task that had always fallen to his wife, a stay-at-home mother to their two sons. Joe Pagano, a vice president who works in merchandising, looks back in sadness at all the sacrifices he made. His wife stayed at home with their son and daughter. He states: "I basically worked every Saturday, and some Sundays. It's one of the biggest regrets of my life." After his department switched to the new system, he started taking an afternoon here and there to play golf. He went to Special Persons Day at his grandson's school. Pagano continues: "If things had been different, I probably would have been a better father and husband, and a better manager. I'm doing this so other people do not do what I did wrong."

Key Rationale

The corporate management team, led by CEO Brad Anderson, was initially skeptical about the ROWE program and whether it should be expanded. The initial experiments with ROWE showed that it helped to reduce voluntary turnover, improve productivity, and increase employee morale. As a result of these outcomes, top management allowed managers throughout corporate headquarters to adopt the ROWE program at their discretion. As noted, experiments with the introduction of ROWE in retail stores are in the early phase. Ultimately, for Best Buy, the new approach to work is about staying competitive, not just helping its employees. Like many other companies facing global competition, Best Buy expects more training, more initiative, and more creativity from all of its employees. The company doesn't guarantee job security: Management has realized that it can't expect so much from its employees without giving something in return. "We can embrace that reality and ride it, or we can try to fight it," says Shari Ballard, an executive vice president.

Questions

1. What approach to organizational change does the ROWE program illustrate?

2. Identify some resistances, both organizational and individual, that the ROWE program had to overcome.

3. What sources of stress are apparent in this case?

4. How would you describe the culture of Best Buy? How has the culture helped the change?