Moving Past the Office Occupancy Scorecard

While there may have been a Labor Day bump in return to office occupancy, rates have remained steady, and a variety of data indicate “where” we work patterns appear to be stabilizing somewhat. Hopefully, we can now move beyond RTO/hybrid limbo and start to answer these important questions:

  • How are team-based decisions about “where” people will work best being made?
  • Is the work (what we need to do) or the where/location leading these decisions?
  • Do these decisions reflect the core values of the organization? (Read last week’s newsletter on why this matters.)
  • When (hours) are employees working?
  • How are they using technology to enable efficient communication, coordination and collaboration while working flexibly?
  • And, have processes, such as meetings, scheduling and onboarding, been reimagined and updated to support, or be supported by, new work patterns?
  • Do managers and teams have the skills and tools needed to flexibly work with strategic, coordinated intention?
  • Do individuals have the skills and tools they need to flexibly fit their work and life together in a way that considers their needs and the needs of the business?

“The office” is a location. It’s ONE enabler of work, and will continue to play an important, albeit reimagined, role, but it’s not the work itself.

 

Optimizing flexibility to achieve high levels of performance and well-being requires three stages that leaders, managers, and employees need to be trained to execute:

Stage 1 – Define: Use of a CONSISTENT PROCESS (not a policy) to define the unique “how, when, and where” guardrails within which the organization as a whole and individual teams will operate based on the work that needs to get done.

Stage 2 – Operate: Actively plan and coordinate the work, day-to-day, within those flexible operating guardrails.

Stage 3 – Review and Recalibrate: Evolve the guardrails and flexible way of operating as realities and needs change. Because flexibility is never “done.” It’s a continuous loop of improvement and innovation.

More on the role of the office and occupancy rates

Just as work has as fundamentally changed since the start of the pandemic, so has the role of the office. This was a topic I explored with Ryan Anderson, VP Global Research and Insights at MillerKnoll on a recent “Looking Forward” podcast episode (link includes audio and transcript links). Give it a listen or a read if you haven’t yet.

Understandably so, there’s a lot of interest in office occupancy data. But we must remember, pre-pandemic office occupancy was not 100%. Check out my twitter feed for this interesting exchange as Nick Bloom and I try to understand the 100% occupancy on the ‘Y” axis of the often-cited Kastle occupancy barometer:

Our Flex+Strategy Group research found that as far back as nearly a decade ago, one-third of full-time U.S. employees did most of their work from a remote location other than their employers’ office. This aligns with average pre-COVID occupancy rates that ranged between 60%-70% (we have confirmed this pre-pandemic rate with reputable commercial real estate sources).

While occupancy data is important and helpful, if organizations continue to look to it as a scorecard of who’s winning and losing the RTO tug of war, they’ll remain stuck where they are – trying to force an outdated work style that was disappearing even before the pandemic and is no longer valued or understood by most employees.

Hopefully, now that there’s more clarity about the “where” we work, we can focus on:

  • What it will take to work (and live) across workplaces, space AND time successfully and flexibly, and
  • How to make it a win for the business and employees?

The good news is there is answer, and it lies beyond “where.”

Why Flexibility Matters to Corporate Boards and Governance Execs

As oversight of talent and human capital issues become front and center for corporate boards, I joined KPMG Board Leadership Center’s (BLC) Spring Directors Roundtable as a panelist for a discussion about “What workers want – Understanding the new employee/employer dynamic.” We explored the factors driving employees’ needs and expectations—from personal well-being and work-life fit to alignment with the company’s purpose.

Moderated by KMPG BLC Senior Advisor Stephen L. Brown, the panel also included Columbia Business School’s Todd Jick. Todd is the Reuben Mark Faculty Director of Organizational Character and Leadership and a former independent director of Claire’s Stores, Inc. Our other panelist was Eskalera co-founder and CEO Dane E. Holmes, who is also an independent director of KKR & Co., Inc. and Goldman Sachs’ former global head of human capital management.


We all agreed regardless of how directors structure their oversight of human capital management and talent strategy, it should be part of every board discussion. And as I noted, that includes work flexibility.

When people say, “I want flexibility,” they really want to be able to have some control over how, when, and where they’re going to do their jobs best. That means flexibility is not an HR policy or program that sits outside of the business. But unfortunately, that’s why a lot of organizations are stuck.

Why does this matter now and going forward? Because institutional investors and regulators are increasingly focused on ESG and human-capital metrics, all of which are directly impacted in some way by flexibility in how, when, and where we work.

Read more about our Spring Directors Roundtable in this Insight recap that was published in the July edition of KMPG’s Directors Quarterly publication and is also available at the KMPG Board Leadership Center. Additionally, you can watch webcast replay of the full Roundtable.

Flexibility was also on the agenda at the recent Society for Corporate Governance National Conference where I was a panelist for the general session, “The Modern Workplace” along with Randy Clark, CAO of Sempra Infrastructure, Geralyn Ritter, Head of External Affairs and ESG at Organon, and Adam Kokas, EVP and General Counsel of Atlas Air. We all agreed whether it’s cybersecurity to DEI to pending SEC rules regarding human capital metrics, the flexibility at the core of the modern workplace impacts a variety of management and corporate governance issues.

Lastly, the update of a popular corporate finance textbook reinforces the role strategies such as work flexibility will play in the operational, cultural, and financial success of organizations. The 14th edition of Principles of Corporate Finance (Brealey, Myers, Allen, Edmans) was released earlier this month.

Read more of my thoughts about this.

The days of flexibility as the sole responsibility of HR and thought of as nothing more than an employee perk or policy are long gone. If flexibility isn’t an all-C-suites hands-on-deck issue at your organization, you’re at risk.

Was it ever OK to go camera off?

I’m consistently asked this question: how do we communicate most effectively as we transition to working across different onsite and remote workplaces and spaces?

Many of the default communication norms adopted during the crisis-driven shift to remote work no longer serve us. They need to be reviewed and, possibly, revised.

Thank you to ROY MAURER for asking me to share my thoughts on virtual meetings, video conferencing and the need to intentionally clarify norms like, “cameras on or cameras off?”

Full article can be accessed here

“Flex” Your Business Model to Seize Market Opportunities and Address Challenges

Several segment leaders across different industries made headlines for “flexing” their traditional business models to seize market opportunities and address operating challenges. These nimble businesses reimagined how, when and where work could be done. In the process, they showed that work flexibility is much more than an HR perk, digital app or workspace redesign.

Instead these savvy businesses used work flexibility as a powerful strategy to respond rapidly and creatively to market shifts.

CVS Matches Talent to Regional, Seasonal Shifts in Customer Demand

CVS noticed two trends. First, a large percentage of their older customers in colder regions migrated south for the winter. The challenge then became how to temporarily staff up stores in the south and skinny down in the north to match those customer shifts. They also noticed that older pharmacy staff were either retiring to join the winter migration south or would be open to the opportunity. Solution: The company decided to allow interested CVS employees from the north to temporarily relocate and transfer to a store in the south during the winter.

The result: CVS retains and relocates experienced talent to match regional shifts in their customer base. 

Esquire Deposition Solutions Uses Remote Work to Address Talent Shortage

Esquire Deposition Solutions also faced two related challenges–increased demand for reporters across the court system, and a shortage of court reporters to meet that demand. A talent gap that is projected to worsen with a workforce averaging 55 years old.  In response, Esquire Deposition Solutions “flexed” their traditional business model to no longer require court reporters to be physically present in the courtroom at all times. It now allows certified stenographers “who have been trained in remote court reporting by Esquire” to work in one of the company’s 35 U.S. offices instead. They will have shorter commutes and the ability to process a variety of depositions a day, depending on the legal matter’s length and complexity.

Not only does this shift address the mismatch between the supply of and demand for court reporters, but advocates see potential gains in productivity and ongoing technological innovation.  

Shake Shack Pilots Four-Day Workweek to Attract and Retain Managers

If you are an expanding restaurant chain, like Shake Shack, you can’t grow if you can’t find experienced general managers. According to company leadership, “the chain will open 26 to 40 new stores this year. But it could open 100 new stores if it could hire all the general managers it wanted.”

In response, Shake Shack decided to “flex” their five-day, 40-hour workweek business model and pilot a four-day, 40-hour workweek to attract and retain general managers with three to five years of experience. 

This shift is modeled after a similar change successfully implemented by a smaller Alabama-based chain, Aloha Hospitality. When discussing the strategic shift to a four-day workweek for managers, Aloha CEO Bob Baumhower said, “You’ve heard the phrase, ‘it takes a village,’ well in our case it takes a team. Everyone has to buy in, go the extra mile and support each other to make it work.”

That’s true for any flexible work transformation, including those above. Success ultimately requires a realignment of all aspects of an organization including culture, work processes, policies, workforce, workspace, technology, and operations. Assuming that happens, these companies will set an example for others to follow.

When businesses reimagine how, when and where work can be done, not only do they respond more nimbly to market opportunities and challenges, but they give their people what they want, which is a win for all. 

What are some other examples of businesses “flexing” their traditional business models?

Click HERE to be added to the Flex Strategy Group Newsletter and receive periodic updates and insights from Cali Williams Yost.

Fast Company: Quarterly Earnings Kill People-Based Innovation…

Do a quick search in The New York Times and The Wall Street Journal and you will find numerous articles by very smart people pronouncing that only “innovation” will lead to an economic recovery.

Yet, it’s ironic to read these articles at the same time that Hewitt releases its most recent quarterly global employee engagement survey. In the first quarter of 2010, the trend lines of companies reporting increases and declines in engagement converged and crossed. For the first time in 15 years, the companies experiencing declines far outpaced those reporting improvement. Houston, we have a problem. As Hewitt correctly states in their report,

“This highlights the growing tension between employers—many of which are struggling to stabilize their financial situation—and employees, who are showing fatigue in response to a lengthy period of stress, uncertainty and confusion brought about by the recession and their company’s actions.”

Yup.

Now we could argue the point about employers are “struggling to stabilize their financial situation” when 3,000 non-financial firms hold an estimated $1.6 trillion (yes, trillion with a “T”) in cash and equivalents, but I want to focus back on one simple question:

How do companies across the globe expect to innovate on the backs of an increasingly demoralized workforce that’s stressed, overworked, undercompensated, unrecognized, lacks career opportunities, and doesn’t trust leadership?

As I said before, how do we square this circle?

Now, I’m not an expert on innovation strategy, but I’m pretty sure that it’s not, “Be sure to overwork and undercompensate your employees. Make them really afraid. And then, when they no longer trust you, put everyone in a room and let the magic begin!”

So, what’s the answer?

Let’s go back to the articles begging for more innovation written by those very smart people. What do they say?  (Click here for more)

Work+Life Flexibility “How to” in Pictures: #4 Making it real takes more than traditional policy, toolkit and training

Work+Life Flex “How to” in Pictures: #1 Don’t get stuck on innovation curve

Work+Life Flex “How to” in Pictures: #2 Change requires employee+employer partnership (some gov’t) and shift in broader cultural conversation

Work+Life Flex “How to” in Pictures: #3 Focus on fact that same flexibility keeps business open in a snowstorm, cares for aging parents (and more)

Work+Life Flexibility “How to” in Pictures: #1 Don’t get stuck on innovation curve

Work+Life Flex “How to” in Pictures: #2 Change requires employee+employer partnership (some gov’t) and shift in broader cultural conversation

Work+Life Flex “How to” in Pictures: #3 Focus on fact that same flexibility keep business open in snowstorm, cares for aging parents (and more)

Work+Life Flex “How to” in Pictures: #4 Making it real takes more than traditional policy, toolkit and training

Fast Company: Squaring the Circle…in 5 Minutes! Expected Innovation/Quality vs. Employee Fear/Distrust

For the last few days, I’ve been prepping for an upcoming panel at Columbia Business School entitled, The Post-Recession Workplace.   My message is going to be simple—the world has changed; therefore, we need to change.  I will explain the new work+life flex normal, and what individuals and organizations need to do differently to succeed.

Here’s my challenge: There’s a canyon-sized chasm between how we need to manage our work, lives, careers and businesses in a post-Recession era, and where we are.  How do you square the circle…in 5 minutes, which is the length of my introduction?

First how big is the chasm? Big. You need to look no further than The Conference Board’s 2010 CEO Survey and the 2010 Towers Watson Global Workforce Study to realize it’s huge.

On one side: Leaders want, growth, innovation, quality and customers (Conference Board)

Every year The Conference Board asks hundreds of executives, “to identify and rate their most pressing concerns.”  In 2010, executives said they were primarily focused on:

  • Sustained and steady top-line growth
  • Customer loyalty and retention
  • Profit growth
  • Corporate reputation for quality products and services
  • Stimulating innovation and creativity and enabling entrepreneurship.

On the other side: Employees are afraid, insecure, distrusting and want stability (Towers Watson)

But what about the employees who need to execute this vision of growth, customer service, innovation, and quality?  Are they ready?  How do they feel? According to the 2010 Towers Watson Global Workforce Study of over 20,000 full-time employees in 22 global markets, they are afraid, insecure, and distrustful:

  • “(The) desire for security and stability trumps everything else right now, in part because employees see security as a fast-disappearing part of the deal.”
  • “Employees understand they are solely and chiefly responsible for ensuring their long-term financial and physical health and well-being, as well as career and performance—but have serious doubts about their ability to take on these roles.
  • “Mobility is at a decade-long low point—with significant numbers of employees sacrificing the prospect of career growth for a secure job right now.”
  • “Confidence in leaders and managers is disturbingly low—particularly in terms of the interpersonal aspects of their respective roles.”

Uh, oh. Houston, we have a problem…Not a recipe for the risk and creativity necessary for innovation.  And, fear, insecurity and distrust don’t usually lead to growth and quality.

How do you bridge this gap between what employers expect and what employees are prepared to deliver? (Click here for more)

Work-Sharing Policy as Flex Alternative to Layoffs Gains Steam, BUT Implement Strategically

As long time readers know, I’ve been a loud proponent of using flexibility in the form of reduced schedules, furloughs, telecommuting, job sharing and flex scheduling to minimize layoffs since the beginning of the recession.  And since the recession started two years ago, some innovative employers have indeed incorporated this more flexible approach to managing costs and resources into their downsizing strategy.

But more employers haven’t followed their lead because there wasn’t the incentive to move beyond the knee-jerk “cut” response that is rewarded, at least in the short-term, by the market (here and here).

As the internationally recognized management expert, Jeffrey Pfeffer, pointed out in a recent Newsweek cover story, “The Case Against Layoffs,” unless your industry is disappearing, layoffs do much more harm than good.   Thankfully it looks like an incentive to seek an alternative to layoffs has arrived, and not a moment too soon as early indications are that mass layoffs may be inching up again after a brief hiatus.

According to an article in today’s USA Today entitled, “Work-share program that cuts hours vs. jobs could grow,” work-sharing legislation may expand to more than half the states by year-end and provide employers the incentive they need to think differently and more flexibly:

“Seventeen states already have programs in which employers can cut the hours of all or most employees in lieu of layoffs. The workers get jobless benefits to recover part of their lost wages.

Work-sharing lets employers avoid the costs of severance and of training new hires when the economy rebounds. For workers, it eliminates the trauma of layoffs and helps preserve morale.

The number of employers in the programs soared last year as the recession deepened and the jobless rate climbed to 10%. A record 166,000 jobs were saved in the 17 states that offer the option vs. 58,000 in 2008, according to the National Association of State Workforce Agencies…

The Gear Works of Seattle, which makes gears for wind turbines, sliced workers’ hours 20%, skirting layoffs for about 15 of 93 employees, says executive Mike Robison. Machinist Robert Foster, 38, who worked four-day weeks for 10 months, says, ‘I like it vs. the alternative.’”

And our research has confirmed that employees do prefer flexible downsizing to the alternative.  Most respondents to our nationally-representative 2009 Work+Life Fit Reality Check study said they would accept a change or reduction in schedule, or take a cut in pay to save their jobs.

Work-share legislation can provide the much-needed incentive, but for flexible downsizing to succeed it can’t be a one-off  “program.” To be a strategic lever for managing through the recession, it must be implemented, reviewed and revised as operating realities change.  Here are some important insights and resources to help the strategic implementation process taken from previous blog posts I’ve written on the subject:

As Recovery Simmers, Limit Lagging Layoffs with Flexible Downsizing (Not Just Furloughs)

One Year Later–Flexible Downsizing and Hard Choices Post-Recession, Pre-Recovery

Get Started Tips to Navigate Post-Recession, Pre-Recovery Flexible Downsizing.  Highlights of the advice include:

  1. Go back and assess where you are.  Know where you stand in the business.
  2. Once you have the facts on paper, reset the organization’s flexible response to match today’s realities.
  3. Reframe and communicate the business case behind either the continuation or discontinuation of any type of flexible downsizing in the post-recession, pre-recovery era.

Finally, to help leaders work through a cost-benefit analysis of layoffs versus a more flexible approach to downsizing, I joined with a team of work+life experts to develop a tool  entitled  “Flexible Rightsizing as a Cost-Effective Alternative to Layoffs.”

Today’s news that work-share legislation is gaining steam across the country is very welcome.  However, for organizations, leaders and employees to truly benefit from the more flexible approach to managing costs and resources it must be implemented, review and revised thoughtfully and strategically.

What do you think?  How important is this legislative incentive to encourage a more flexible alternative to job cuts?

Work+Life Fit Ah-Ha’s of “Undercover Boss”

I am not a huge follower of reality TV, though I am a fan of Oprah’s.  I sat down to watch an Oprah episode a couple of weeks ago, and she was talking about the new reality series, Undercover Boss. I almost turned it off, but I’m glad my kids stopped me.  Highlights from the series offered surprisingly important insights.  I was struck by the fortuitous relevance of the show as we make our way through this post-recession, pre-recovery period of uncertainty.

The interactions between the employees and their “undercover boss” showcased the sometimes painful disconnection between the work+life reality employees actually experience and what senior leader know or intend.  I decided to tune in when the series debuted following the Super Bowl, and wasn’t disappointed.

In the first episode, Larry O’Donnell, President & COO of Waste Management, goes undercover and poses as new front-line worker in different divisions of his organization.   Obviously, reality television is contrived by the sheer presence of a camera, but perhaps the followings insights from the show will spark reflection.  Specifically, what’s really happening on the line everyday and what needs to change so that employees and employers benefit.  Here are my takeaways:

American employees work hard…very hard. Often in difficult circumstances.   Productivity grew by 9.5% in the third quarter of 2009, the largest gain in 30 years.  But unit labor costs fell 3.6% in that same period, the largest decrease since 1948.  What this means is that in the second half of 2009, employees produced more work in fewer hours and made less money.

Undercover Boss gives you a sense of what that really looks like.  Whether sorting through a rapidly moving recycling conveyor belt, cleaning 15 port-a-johns in a day, or doing four different office management tasks at the same time, people are working very hard .  And they are often doing it while managing some sort of chronic illness.  In most cases, O’Donnell couldn’t complete the difficult tasks his employees had mastered.  He was visibly surprised and humbled, as he should have been.

Small adjustments in work+life fit reality make a big difference. So often we talk about the big, transformational changes we need to make to improve the way we work and live.  But as the undercover boss learned firsthand, tiny, easy, low-cost adjustments can do enormous good.  There were two small fixes identified by O’Donnell that would make a huge difference to the work+life fit reality of workers.

First, when he rode in the residential sanitation truck with a female driver, O’Donnell was shocked to learn that she goes to the bathroom in a can because there isn’t enough time for a bathroom stop.  At the end of the show, he’d committed to fixing that.

Second, when a worker in the recycling plant panicked and ran to make sure she didn’t clock back in even a minute late from lunch, he was appalled.  He knew this wasn’t the corporate policy, and made sure that rule was reexamined.

Yes, these two small changes, if completed, will have a big impact in terms of morale, commitment, engagement, and lower stress, but chances are they are not isolated.  O’Donnell needs to make identifying and fixing similar work+life fit related issues an ongoing priority.  They may seem insignificant from the executive suite and are easy to pass over and ignore.  Don’t.

Involve line level employees in the creating the solutions. What sounds like a great idea to fix a problem from 30,000 feet up at corporate headquarters may not make any sense on the ground.  I was glad to see that O’Donnell engaged the employees in resolving the issues he observed.  Whether determining when or how to build a bathroom break into the truck route, or how to motivate the people who clean the port-a-johns, he asked the individual employees to participate in the problem solving process.  As a result, there’s a greater likelihood the solutions will work.

Attitude is Makes a Difference. There is no doubt that times are tough today, but attitude goes a long way in determining how we feel about the way work fits into our lives.  While I am sure the employees profiled adapted their behavior for the camera, they exhibited positive attitudes in often difficult work circumstances.  You could tell that they consciously thought about how they approached their jobs.  For example:

  • A man laughs and smiles and describes his job cleaning 15 port-a-johns a day, “an adventure.”
  • A young female cancer survivor takes pride in juggling the responsibilities of one office and three generations of her family alone.
  • The garbage truck driver makes sure to stop and visit with her customers, one of whom is handicapped, along her route, and
  • The proud landfill supervisor marches tirelessly up and down the hills of garbage even though he is on dialysis three nights a week.

The influence of film crews aside, undercover boss O”Donnell was visibly moved by the integrity and dedication of these individuals.  Their attitude offers an object lesson for us all, but you have to wonder how long they can keep it up.  In fact, it turns out the gentleman who cleaned the port-a-johns with a smile had left the company for another job by the time the show aired.

The series continues for the next few weeks.  I will keep watching and sharing any new insights.  Although engineered to make the CEO look like a good guy, it’s fascinating to watch the leader become follower, and the followers become powerful teachers.   Have you been watching Undercover Boss? What’s your reaction?