5 Good Reasons Why ROWE Hasn’t Quite Caught On Yet

Results-Only Work Environment (or ROWE) has been something I’ve always been extremely fond of in theory but extremely skeptical of in practice. If you haven’t heard about ROWE, it is the idea that the hours your employees work don’t matter as long as you get the desired results.

I love the idea. And it even works in some environments. That is amazing in and of itself because it is such a paradigm shift. But to call it a revolution like the Star Tribune called it last year is more home cooking and less about being data based. NPR reported that 3% of companies were using ROWE in their workplace but that doesn’t give any indication as to the number of employees covered by the progressive workplace management system. If you believe (like I do) that smaller businesses are naturally more capable of deploying a program like this, a fraction of a percent of employees would be covered under that plan.

Is the idea dead? Not quite, but there are a few reasons why you haven’t seen widespread adoption of it just yet:

It doesn’t work everywhere

Any situation where timing at your place of business is an issue is going to be unfriendly to a true ROWE implementation. What does that include? How about manufacturing when thousands of employees are working in unison to ship a product? How about retail when you need your doors open and appropriate staffing levels for the traffic you will receive at various times during the day? How about a doctor’s office when part of the job is actually being there to see patients? Sometime, having employees physically at work is a legitimate and desired result.

The economy hasn’t helped

When the economy tanked, most companies looked to traditional (and generally proven) ways of shedding costs. This did not include implementing a program with an unproven track record. Call it right or call it wrong, but companies go back to the basics and the known and proven when there is fear or they are coping with significant change. And, 2009 was a whole bundle of fear for many companies.

Reversing decades of management practice

Even if the economy was in better shape, the whole reversing of management practices handed down through generations would make it tough on the ROWE crowd. Change is almost always tough, but when you’re talking about culture, I don’t think you are talking about a six to 12 month implementation period that is often touted with ROWE programs. You are talking about multiple years to get it done, along with some un-fun, un-ROWE-like management turnover.

Employees love it for the wrong reasons

When I hear an employee talk about ROWE, they always talk about the unlimited PTO, the lack of mandatory meetings, and losing that whole “you’re leaving early?” judgmental vibe. What don’t I hear about? How you’re still responsible for your results, even if grandma died or you just decided you needed a shopping break. ROWE flexibility also requires flexibility from employees to get the job done no matter what, because that’s what you’re being judged on. That’s no walk in the park.

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Ironically enough, the results just aren’t there yet

I’ve read the case studies. The most dramatic numbers supporting ROWE come from employee engagement and turnover statistics. Yes, there are modest gains in productivity too, but they aren’t the eye popping numbers that the other ones are. Most managers are going to downplay those numbers as not being substantial enough to push for change.

The turnover statistic is practically useless unless you are also measuring whether you are retaining the right people, and the employee engagement score is squishy and can be manipulated by an employee base looking to keep (or change) the status quo. It would also be wise to start figuring out how companies are making more money by using ROWE. The cost savings argument (when most companies are cut to the bone as it is) has been severely weakened due to the recession.

Nobody is sending out press releases when they discontinue using ROWE , or when they let a test of it simply die, so it is hard to get a sense as to how often companies get a negative result from using ROWE. However,  you would assume that if it were so brilliant, easy to sell to management, and fantastically simple to implement that it would be going like gangbusters throughout Corporate America.

It isn’t. What has to change for that to happen, or is ROWE simply not going to survive?


14 Comments on “5 Good Reasons Why ROWE Hasn’t Quite Caught On Yet

  1. Lance, I think you've done a great job hitting this topic from a high level perspective, but there are always at least two sides to every story. You're absolutely right in stating that ROWE doesn't work everywhere, but when it comes to the impact of the economy and the results, I think your perspective is based on a rather limited vantage point.

    Just as the federal government grossly understates the percentage of the workforce engaged in contingent work, the percentage of ROWE situations is grossly underestimated. Formal ROWE programs are rare but informal ROWE situations and ROWE alternative engagements are skyrocketing. One need only look at the rapid escalation in the use of consultant and independent contractor work relationships as an indicator that managers are using alternative methods to establish micro ROWE's. During and emerging from every recession in the past thirty years, the US workforce has become more fluid, more agile, and productivity gains have been realized. This past economic down cycle is no exception. All of the analytical frameworks in use by organizations today mask informal ROWE's from view, just as the narrow labor metrics used by our government mask the real size of the contingent workforce.

    As for the performance issue, the vast majority of HR organizations couldn't measure real world performance of a work team if it were as simple as basic addition, so it comes as no surprise that most of the publicly available case studies revert to simple transactional measures. As mentioned on another post a few days ago, every performance culture project I have witnessed in the past few years has produced at minimum double digit productivity gains and in many cases, triple digit gains. These experiments are happening at the org unit level, often invisible to the HR function, and rarely as part of a formal management theory change at the org level.

  2. That's fair though I have a couple quick clarifications:

    1. I don't know how fair it is to characterize the move to a flexible workforce (independent contractors in particular) as anything other than an employer driven flexibility matter and not for an employees benefit. Independent contractor arrangements are being widely abused by employers at this juncture. I can see these arrangements being more employee focused in the future but I'm not seeing a ton of it now. What are you seeing?

    2. I definitely focused on the pure ROWE aspect. Certainly I think you can have a wider adoption rate with informalized or deradicalized ROWE programs but these are seen as more flex-work arrangements. Those arrangements have continued to increase because of working parent household numbers.

    3. Don't disagree with you on the measurement part but I will say that most of the material on the ROWE website and the other case studies I looked at pushed much more of those transactional values because, again, they seem like better numbers at a glance. Unfortunately, those less mathematically challenged are going to be looking for bottom line performance metrics.

  3. Lance,
    I think you need to look at ROWE a bit more broadly. Have you heard of Semco? http://www.semco.com.br/en/default.asp

    It's a Brazilian company that's been using principals even more progressive than ROWE for 25 years. They use them in every aspect of the company including on the factory floor. It works. There's no reason it can't work in retail, sure the store has to open and close at certain times, but giving staff control over when they work is huge.

    ROWE's and variants do better in a down economy, as Semco has proven. When Semco has layoffs, the workers help decide how it will work out.

    Getting people to accept new ideas, especially ones that challenge what we think works, regardless of reality, is difficult. Whenever I talk to folks about ROWE or Motivation 3.0 they say, I can see how that could work for company x, but it could never work for us. These ideas will take years to be fully adopted. When command and control and carrots and sticks is the norm at home and at school, it's hard to sell intrinsic motivation at work. Behaviorism has really done us a disservice.

    I don't see a right or wrong reason to like ROWE. If the result is lower costs, higher productivity, High employee engagement, low turnover and happy people, the why isn't so important.

    You want years and years of data? I'll point you to Semco once again. Check out my reading list for books about Semco and related topics. http://www.eatinglightbulbs.com/reading-list/

    ROWE is just one tool in the Motivation 3.0 arsenal. Changing the mindset of an entire culture isn't going to happen overnight, but it will happen.

  4. Hi Eddie,

    Yep, I have heard of SEMCO. It's one organization that has taken a lot of time to perfect it. I'd also say that SEMCO also has a radicalized culture in general, moreso than nearly any other company of comparable size in the world. So the fact that it works in that factory environment seems to be more a case of an exception rather than rule. And again, a decades commitment to principle from management.

    Why don't more businesses evaluate deals like Warren Buffet does at Berkshire Hathaway? I think like SEMCO, it's both radical, successful and works for them. That doesn't necessarily translate well elsewhere (but it might).

    I like the idea of ROWE but I do think my article stands as many of the reasons businesses are still not adopting it wholesale. There is hesitation and there are both legitimate and non-legitimate reasons why it is happening. And I'm not saying it won't ever happen broadly across industry. Just saying that it has seemed to have stalled.

  5. Hi Lance,

    I worked as a designer (R&D), but in a certain occasion I had to go to the floor and perform some work “in the line” for a couple of hours. I noticed two things: the majority of the people were not very engaged with their job, and that I engaged with the task at hand the moment I made a tiny improvement on it.

    If ROWE engages people on the task at hand, I can assure you that it would lead to results. But if you try to implement ROWE with a “you must do what I tell you” attitude, it is certainly going to backfire (that's what happened, IMHO with the implementation of Kaisen in western companies).

    ROWE is about responsibility of your own work. That was what occurred on SEMCO (or at least that's what you can read on Semler's book) and that's the reason it worked. I don't see why it couldn't work elsewhere, except for an excessive insecurity translated into a need for control.

    Ups… that's what you find in most of the workplaces I've known

  6. “I don't see why it couldn't work elsewhere, except for an excessive insecurity translated into a need for control.”

    It just may be my crotchety nature coming out but this seems overly simplistic. We bash one size fits all work initiatives unless it is ROWE (or 6S or Kaisen)?

    Employers are certainly culpable for the command and control culture but employees are as well. I've seen many employees uncomfortable in progressive, non-controlling environments. They ultimately leave for a job where a boss tells them what to do for eight hours a day. We can have a chicken and egg argument about it all day but both pieces will have to move for it to be truly a success.

    Again, SEMCO is special. You look at these few companies that get brought up every time and there is a reason for that. There has been a willingness of both employee and employer to engage and change the workplace for the better. I think people underestimate how difficult the change in culture and expectations really is. You can see the benefits at the end but the real pain is getting there.

  7. Lance,
    Thanks for your thoughtful comments. What do Semco, WL Gore and Zappos have in common? Culture. They all have their own unique culture. They may be special, but the lessons they have learned can be used by others to learn and change.

    As far as Semco being a one off, I guess time will tell, I happen to believe more and more companies will use their model. One of the challenges companies have in trying to be less focused on profits and more focused on purpose is corporate structure. In response to that there are new corporate structures emerging. Ones that focus on purpose and the see profit as a beneficial side effect.

    I don't think it's important that a philosophy like ROWE work in every circumstance, even if it would only work in 30% of businesses, it would have a strong positive change in the world as we know it. While I like and admire the ROWE philosophy, I'm more focused on spreading the Motivation 3.0 gospel: Autonomy, Mastery and Purpose.

  8. Hi Lance,

    Seems like you've entirely missed the point of ROWE, which is of course INCREASED productivity. Now, the big question is, how do you measure INDIVIDUAL productivity? I contend that most don't know how, and if this area were given more attention, managers would be better prepared. Most managers and supervisors are largely not experienced in this area, substituting their subjective “impression” of an employees performance based on direct observation. But the business and the investors could care less about “subjective impressions,” which are just like opinions and we know how many of those there are. The business want results. Hiring a contractor or consultant is not that much different: Managers can sit down and consider the tasks they need to accomplish and can demand specific results. It's not that hard to apply it to your full-time staff too…but it takes practice.

    Your commentary reveals that you yourself may hold onto that “sticky” byproduct of the industrial revolution: the notion that controlling time equals controlling productivity. As you said, ROWE is a radical new approach. Since when has a radical new approach been easy to sell to management, or easy to implement? If “easy” is the price of entry for new ideas, we're all in big trouble.

    Are you really downplaying “modest” gains in productivity? You did say Gain, right? Isn't that what the company is after? Your question should have been; Is the gain worth the cost?” More importantly, “What is the cost?” Is it in weeding out those undisciplined employees who need to be told what to do for 8 hours every day and replace them with motivated workers who get the job done because they value their contribution? Is it weeding out ineffective managers who don't know or can't learn how to measure productivity?

    There are always naysayers, and maybe you just don't get it, and that's OK. There are serious employee trust issues that are exposed in this article, which is not uncommon among so many that have been immersed in a lifetime of Weber-style Bureaucratic management influences. I suggest you dust off the old theories of Druecker and Maslow and consider the possibility that ROWE might be the ultimate expression of empowerment, while at the same time crushing the “Peter principle.” Measurable, results-based productivity means no one can hide behind their desk anymore, protected by the “impressions” they work hard to leave with others instead of the actual work that they do. This is “Natural Capitalism” at its best, where businesses and employees alike can both chart their rewards as a function of their individual and collective energy and efficiency.

  9. Yes, my downplaying of the modest gains was due to the fact that there is a real cost associated with change. Those costs not only have to be offset but also improved significantly. Have you looked at the American business landscape recently? There isn't a ton of risk taking.

    I'm not just talking about desk workers either. There is a very substantial population of people who aren't knowledge workers and who work in arenas where time is critically important to results. There are alternative ways of engaging and gaining productivity when it is necessary that everyone be in the same place, at the same time to accomplish a task (like build an airplane, put out a fire or serve customers).

  10. Lance, thank you for dedicating this column to ROWE!  We always love it when people want to discuss the Results Only Work Environment.

    However, I need to let you know that you are missing some critical components of ROWE.  First of all, ROWE can work in ANY environment.  Since the only thing that matters in a ROWE is results, saying that ROWE won’t work in a given work environment is actually saying that employees in that environment can’t focus on results!

    The Results Only Work Environment is not a REMOTE ONLY work environment…therefore, in places like a retail store for example, a ROWE may not ‘look’ any different than a non-ROWE one. What is different, however, is that employees whose job dictates that they be in a certain place at a certain time in order to achieve a successful outcome, will CHOOSE to be where they need to be when they need to be there.  They are treated as adults and empowered to own their own job…which means making decisions regarding the best way to achieve their outcomes, not being told by their boss that they need to do so. We talk to employees who have location-specific roles all the time, and they all know where they need to be to get their work done. They just wanted to be treated as adults who make that decision.

    We have successfully implemented ROWE for hundreds of happy, engaged employees and are continuing to migrate companies all over North America and soon the world.  ROWE is in nursing homes, IT departments, government agencies, religious organizations, and more corporate environments than I can mention here.  We are consistently seeing productivity and engagement go up in every team that goes ROWE.

    ROWE is the future of work…just ask the newest generation to enter the workforce.  They have no interest in sitting in unproductive meetings, or putting in hours of ‘face time’, or working only within the walls of an office building.  They know the world doesn’t function only between the hours of 8 a.m. and 5 p.m., Monday through Friday.  They don’t tolerate time-wasting activities.  Considering that this Gen Y is 80 million strong, it is time for companies to move into the 21st century working world along with them.  Those who don’t will soon be extinct.

  11. This does not apply to many tech-related companies. Office space is expensive and often unnecessary. Meetings are expensive and often unnecessary. If you’re work can be done from a computer isn’t it adding insult to injury to have the person sit in the same place all day? 

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