To the casual observer, it would seem fitting that Edmunds.com Inc., a Santa Monica, Calif.-based technology company with surf-centric executives and a website conceived in a pool house, would eventually go ROWE.
That is, ditch the stodginess of the time-centric, conservative model of how work is done in favor of the more hip and modern Results-Only Work Environment. In this environment, calling into a meeting from a conference room is just as acceptable as dialing in at a beach bar during a surf trip to Bali, Indonesia — as long as the work remains top-notch.
But unlike the swiftness of cutting through a gnarly wave or the fail-fast culture of the California tech scene, Edmunds’ implementation of ROWE was a deliberate and calculated process that took a few years to pull off, with a few bumps along the way.
In January 2012, Edmunds, an online resource for information on the U.S. automotive industry, officially instituted its companywide ROWE policy. Now, more than two years later, executives say the payoff has come in the form of an enhanced recruiting profile in the hyper-competitive tech space as well as increased retention, engagement and productivity among its 550 employees.
The management credo, coined by former Best Buy Co. employees Cali Ressler and Jody Thompson about a decade ago, aims to measure employees’ performance entirely based on what they produce. Not time spent in the office. Not face time with the boss. With ROWE, where and when you work is practically worthless. What you produce is everything.
“A ROWE work environment is one where every employee is free to do whatever they want, whenever they want, as long as the work gets done,” Thompson said. “What this means is each person is 100 percent accountable and 100 percent autonomous in equal measure.”
And, as it turns out, managing such accountability and autonomy in a company culture takes equal parts patience and training.
Making a Splash
Five years ago Edmunds was looking for a competitive edge in attracting hard-to-come-by tech talent. Its first crack came in the form of an organizational flextime policy, with hopes that providing workers the ability to slightly adjust start and stop times — among other options — would change the culture and lead to an advantage in recruiting.
But for Karren Fink, Edmunds’ chief human resources officer, flextime was too cumbersome and loaded with policy.
“We experimented with many flexible work arrangements,” Fink said. “We had different policies where people could have one day a week at home, three days a week at home. Frankly, they were of mild success. To me, they became more focused on what you can’t do vs. what you can. We had five- to 10-page policies of all the do’s and don’ts.”
Edmunds wanted something more. Inspired by Internet video streaming provider Netflix Inc., Edmunds decided to up the ante on flextime and offer unlimited vacation days. Avi Steinlauf, the company’s CEO, said the idea came to light after he and the rest of the C-suite caught wind of a 126-page slide show of Netflix’s cultural manifesto, titled “Freedom and Responsibility.”
Netflix’s cultural platform as seen in the slide show speaks of an environment where performance is the ultimate measure of an employee’s success — nothing more, nothing less. Steinlauf said the idea of creating a work environment of trust and treating employees like adults resonated strongly with Edmunds’ cultural values. Therefore, offering unlimited vacation days was the first logical step in trusting the workforce and focusing on things that matter — results — and not things that don’t matter, like counting days off.
The policy, he said, might also act as a differentiator in attracting talent in the competitive Silicon Beach area of Los Angeles.
But to Fink, the unlimited vacation day policy ultimately became another line item in a thick employee handbook. Believing the company could offer more than just a no-vacation-day policy and flextime, Fink started to look into other, nontraditional work styles. She eventually came across the ROWE model, at the time being used at Best Buy.
Ressler and Thompson developed the working model as employees for the electronics retailer, which adopted it in 2005. (Ressler and Thompson left Best Buy in 2006 to start their own ROWE-centric consulting firm, CultureRx.)
And even though Best Buy dropped ROWE amid sagging business results and a new chief executive looking to shake things up in 2013, the CultureRx website says the management model produced $2.2 million in savings for the company in more than three years.
One of the goals of ROWE is to make all employees feel a greater sense of purpose by ensuring their careers don’t hold them back in their personal lives. In some instances, Thompson said ROWE is misunderstood as a flextime policy. But while a flexible work schedule gives employees the opportunity to work from home, they’re still bound to the traditional notion of working 9 a.m. to 5 p.m.
With ROWE, time and place are taken entirely out of the equation; all that matters is that employees get their work done when it’s due and that it is of sufficient quality.
“It’s a mindset of not having the clock be your master, but having the work be your master,” Thompson said.
Putting the Pieces in Place
Fink bought in. And after convincing Edmunds’ senior leadership team of the idea and piloting the program with a few select teams, she decided to implement ROWE across the board.
Because ROWE enables an unprecedented level of freedom in how, when and where work is done, Thompson said implementing the model requires a massive cultural shift. For some, making the change from having a clearly defined work schedule to the freedom of ROWE can be overwhelming. Shifting to a companywide ROWE philosophy without proper training can easily lead to mismanagement and abuse.
Edmunds worked with CultureRx during its shift to ROWE. The first step came in implementing a six-month training period, much of which was spent teaching employees to change the way they think about work and the vernacular traditionally used in corporate offices.
Namely, one of the challenges that occurred during the implementation was getting employees to rethink how they approach their jobs outside of a traditional work environment. ROWE is “all about what you have to get done,” Fink said, “taking ownership of your team and how it’s going to work together. They also need to discuss team agreements in terms of hours of availability, how they are going to connect and where they are going to work together.”
ROWE training at Edmunds came in the form of doing “scary things,” as Fink put it, referring to the CultureRx model. For instance, Fink said they challenged employees to go to the grocery store during the middle of the work day or not to set an alarm clock in the morning. In other instances, employees were even encouraged to go see a movie during traditional work hours.
Doing “scary things” is intended to show employees they can pursue personal interests while also getting their work done. The exercise also illustrated the importance of employee communication and collaboration in a ROWE environment; projects need to be clearly defined by a group so each person knows what he or she is responsible for and can plan personal activities without jeopardizing individual and team results.
Another challenge, according to Steinlauf, came with pairing ROWE with the concept of unlimited vacation days. Because employees no longer had a defined period of vacation time, Steinlauf said some felt as though they weren’t able to take any time off, as not to appear like they didn’t want to work or disappoint their teams.
Also, “they were afraid they would be working more,” Steinlauf said. “We coached them that results are important, but so is your well-being. You need to take time off from work to recharge and refresh, so when you do come back to work you’re more productive.”
The training first took place during an initial pilot run with ROWE using a top-performing project team as a three-month guinea pig.
To test if the ROWE pilot was working, Fink said they looked for three things. First, they compared the results of the ROWE team against some of the teams working more traditionally. Second, Edmunds asked the team piloting the work style what they thought of it. And finally, the company asked non-ROWE employees their impressions of the work style and if it would be something they would be interested in having.
At the end of the three months, Fink said Edmunds’ executives were impressed by the pilot team’s results. The initial group “happened to be a challenge team that works through agile methodology, where they have three-week measurable deliverables,” Fink said. “Over three months, we observed several cycles of deliverables. We saw the employees delivered sooner, earlier, got more done and were able to move further than some of their counterparts who had not yet moved to ROWE.”
After the success of the first pilot, Edmunds found the employees were happier than they were three months prior. Additionally, Fink said the company noticed a buzz of excitement spreading among all of its employees.
Three other pilot groups — one of which was the human resources department — were given the green light to implement ROWE. Although Fink said it was more difficult to measure the results of the HR team compared to other ROWE pilot teams with more quantifiable goals, all three secondary pilots were declared successful.
At that point, the Edmunds’ executives could either conduct more pilots or make ROWE a companywide policy.
“We felt confident in the results, both from the deliverables to the organization and employee satisfaction,” Fink said. “In January 2012, we moved to a full ROWE. We trained every employee. It took about six months for the consultants to train them on the concepts of ROWE. By mid-2012, we were fully ROWE.”
ROWE a Mainstay?
Since coming onto the scene at Best Buy in 2005, ROWE has been examined by management thinkers and academics looking into if the model actually boosts results.
According to a 2011 University of Minnesota study by sociology professors Erin Kelly and Phyllis Moen, ROWE is able to redirect the focus of employees and managers toward measurable results and away from when and where people will be working. Additionally, the researchers found ROWE alleviates the pressure of choosing between work and family, leading to a reduction in turnover. The study found that when Best Buy was still using ROWE, the policy reduced its turnover by 45 percent.
“By showing that a policy initiative like ROWE can reduce turnover, this research moves the ‘opting out’ argument — whether one chooses family over work — from a private issue to an issue of how employers can change the workplace to better meet the needs of employees,” the researchers wrote in the study.
ROWE is especially beneficial to working women with children, the Minnesota study showed. People with high levels of work-family pressures tend to sacrifice a career for the sake of their family.
Moreover, a 2014 Harvard University study by economics professor Claudia Goldin on flexible work schedules found women with children are most likely to be affected by work-family conflict. Therefore, a ROWE environment allows women to protect their careers and their wages by staying in the workforce, according to the study.
And a Boston College analysis found productivity increased by 35 percent for workers with a results-only work environment.
Despite the academic research supporting ROWE, the number of organizations using the management strategy remains small. Critics say the model has a long way to go before it becomes a mainstay in corporate America.
“In theory, I think it’s a great thing,” said J.T. O’Donnell, a workplace and career consultant and founder and CEO of Careerealism Media. “As long as everybody is playing by the rules and is respectful, ROWE is amazing.”
Still, O’Donnell argues that ROWE — like flextime and work-from-home policies — can easily disintegrate if it’s not embraced by an entire organization or positively enforced by managers. When managers and co-workers neglect the accountability aspect of ROWE, other employees can easily start to take advantage of the system and it could spiral out of control.
She also said ROWE might only work in organizations already experiencing success. “When your company’s killing it and people are proud to work there, ROWE works really well. But things begin to change when the company isn’t doing well,” O’Donnell said, indirectly referencing Best Buy and, to a lesser extent, Yahoo Inc.
Best Buy abandoned the practice in 2013 amid a prolonged period of poor business results. Yahoo ended its telecommuting program in 2012 when Marissa Mayer took the helm, reportedly in an effort to reignite a culture of unity and face-to-face collaboration.
Policies like ROWE can potentially lead to a complacent and stagnant workforce, O’Donnell said. At companies that offer great perks, burned out employees may not want to leave because they know it’s unlikely they’ll find a similar employment deal elsewhere. In turn, a company with a ROWE environment can be left with coasting employees doing just enough to keep their jobs but not enough to be innovative.
“Before implementing something like ROWE, a CEO or executive team needs to think about the ramifications if that model needs to be repealed,” O’Donnell said.
Fink said there have been some bumps along the way in implementing ROWE. Some employees have felt unequal access to working whenever, wherever due to the nature of their positions or teams. Meanwhile, others have experienced anxiety because they’re not sure when it’s safe for them to “unplug.”
To confront these issues, Fink said Edmunds stresses that ROWE is not a work-from-home policy. The organization recognizes that there are some people who need to be in the office to do their jobs. All employees, however, are allowed to be flexible in their schedules and are not bound to a system that tracks their vacation time.
Furthermore, employees nervous about being disconnected from the office are reminded that an important aspect of ROWE also is to cultivate a rich personal life and well-being.
“What’s interesting is people think that ROWE is just giving people a lot of flexibility,” CultureRx’s Thompson said. “It isn’t at all. It’s nuanced, how a ROWE workplace operates effectively. It’s a bunch of little things: How you do email and voicemail, for example. How you think about setting goals is totally different. The managers are managing work, not people. People manage themselves.”
While the transition to this sort of work mindset may be arduous for organizations used to the traditional notion of work, Edmunds said it has been happy with the impact ROWE has had on its workforce.
“We’ve been a results-only workplace for the last two and a half years, and frankly, we haven’t looked back,” Steinlauf said. “It’s been a fantastic opportunity for us. It helps to differentiate us in our industry, which is a highly competitive place for talent.
“ROWE has not in any way slowed us down. If anything, it’s made us better and faster. Over the last few years, we’ve grown as a business, and I think ROWE is an element that has helped us in that.”
- 5 Forces Shaping the Future of HR
- Why ‘Leaders Eat Last’
- Creating an environment for effective learning measurement
- Honest feedback plays a critical role in building cultural D&I
- Progressive Insurance gives interns an entry-level lesson in the new reality of office work
- Digital transformation through mindset, delivery and content
- Cloudy with a chance of budget approval