Why Does Flexible Working Improve Business Outcomes?
Flexible Working, a term that covers remote working, hybrid working or any other format that does not conform to the traditional 9-5 in-office-hours scenario, to me, seems to be very poorly understood. I’ve read many sweeping generalisations decrying flexible working without any supporting evidence, when the inescapable reality is it makes measurably good business sense.
Let’s explore this now.
Business Strategy
The model below is based on a matrix by Professor Tim Knoster, who discovered the correlation between the components of strategy and human fallout, which ultimately determine the level of success or failure in any endeavour. I’ve modified it considerably for a business context, however this is a valid model for any individual, team or organisation in pursuit of a specific outcome. This can be anything from delivering a career defining presentation to a large enterprise pivoting in the market. In the context of this article we are only interested in the column labelled Capabilities & Skills.
Capabilities and skills is where Flexible Working actually slots in to a business strategy. Flexible working is a means to an end, not the end itself. It’s something you CAN do, which will become apparent later on. It must generate a demonstrable ROI for your business to justify its’ implementation.
So, let me give you and example:
A few years a go, long before COVID19, I supported a CEO to grow their tech company and be successfully acquired. To achieve the growth required we needed to solve 3 key problems:
Expansion required larger premises, resulting in overheads increasing by a factor of 3.
Recruitment for the skills and headcount required was slow, typically 6+ months, therefore expensive.
Retention, particularly of young women, had its challenges having lost several to larger companies.
Flexible Working
Below is the same model as above displayed in the form of a hierarchy populated with all the information already mentioned, demonstrating the relationship each level has with the one above and below. At the top we have the abstraction of growth and at the bottom we have the manifestation of outcomes.
Implementing flexible working became the obvious solution, manifesting in these 3 significant benefits:
100% hot-desking would allow us to retain the same premises, so no increase in facility overheads and continue to provide a space for those preferring the buzz of an office environment.
Our recruitment strategy would cast a wider net attracting top tier talent from diverse backgrounds who would otherwise pass us by due to lifestyle commitments, men and women alike.
Our existing people would be able to balance work and family life as they became fully location independent, saving them time and money on commuting, which is essentially a pay rise as disposable income goes up.
Performance
Below is a representation of an ideal growth scenario using a simplified version of Prof. Mihály Csikszentmihályi Flow model, which he originally discovered in 1975 after identifying the components of high performance. I have updated this for use in a business context to demonstrate the relationship between Strategy, Operations and High Performance, which can be applied to an individual or an entire organisation.
The key to unlocking Flow was rebuilding the company operating model, which we had been doing anyway. Flexible working was simply another tool in the box to support our overarching objective. We redefined everything starting with company vision and mission all the way through to measures of success: Customer Satisfaction, Employee Satisfaction, Helpdesk Query Resolution, Management Reporting, Organisational Design, Learning & Development, Recruitment, KPI's, you name it, we reworked it to ensure congruence. After all, our systems and processes needed to be robust enough to support team members, no matter where they were.
The most important change was the introduction of MBO's A.K.A. Management by Objectives. Objectives made it easy to monitor performance. It made no difference where or when someone worked as objectives were either delivered or they weren’t. Either way it made the conversation easy to determine what support an individual required. The impact was immediate and significant. We experienced:
60% saving in overheads by retaining original site.
35% increase in revenue in one year due to increased capacity.
50% time saving in recruitment, not to mention quality of candidate, due to a superior offer to market.
As we were a managed IT services company it meant we walked the walk, leading by example and supporting other SME's to follow in our footsteps. They too could leverage the cloud based technology we offered the same way we had. We became our own case study, and as it happened a text book case study for the Scottish Government.
Conclusion
Flexible working isn’t the goal. It’s a lever to pull to achieve the goal. This is something any company can add to their ways of working to become more efficient and effective, i.e. more competitive. It’s just a case of taking the time to understand how to apply the concept of flexible working to the nuances of your organisation. An example might be company’s affected by seasonal change in terms of weather and daylight, such as construction. The way forward might be annualised hours to allow for seasonal variation, shorter working days reduce downtime in Autumn & Winter and longer working days increase uptime in Spring & Summer.
Focus on equality of opportunity as opposed to equality of outcome, for example: A manufacturing site has office workers and plant operators. Due to the nature of their work, both groups cannot be given the same flexible working offer. They can be given an offer that suits their respective scenarios. For example: A manufacturing plant in my hometown recently staggered the shift change for their plant operators due to the volume of car park arrivals and departures when the shifts changed. This added up to 40min travel time to an individuals commute just to get in or out of the car park, which occurred twice a day. Staggering the shift change by 10 mins across different groups within the shift eliminated car park congestion and gave each plant operator 1hr per day of their life back, which equated to roughly 600 commuting hours per day saved based on their current headcount. The change in employee engagement was immediate.
The typical skills gap that creates barriers to success with flexible working, that I’ve found, is in line manager capability. If your culture rewards line managers that measure productivity by monitoring time spent at a desk, as opposed to output and outcomes, that are specific, measurable and time bound then you will have an uphill struggle with changes to your ways of working.
I strongly believe this is one of the reasons we are witnessing the return to office debate. The necessary and rapid adoption of digital over the last couple of years simply shone light into cracks that were always there. Any leader that states “I don’t trust my people to work remotely” is publicly and unwittingly advertising their incompetence at organising and leading people. This behaviour is the evidence they do not possess the leadership skills required to adapt to market changes or an organisational overhaul.
If you want to learn more about leadership styles, their impact on organisational culture and business outcomes then please do check out: Leadership: Styles, Cause & Effect.
If you would benefit from support on how to tailor flexible working for your organisation to ensure you take a strategic approach to measurable business and employee benefits, then please do schedule a call with me by putting a 60mins in my diary at a time that suits you. We can discuss your situation and options over an eCoffee.
Best Wishes
Kenny
