Distance Working - The Corporate Perspective
The following paper was delivered to the European Distance Working Conference, Robinson College, Cambridge (April 1993).
Many large organisations have been slow to adopt distance working as an accepted way of operating. However, the combination of networking technologies, global competition, market and socio-demographic factors means that the adoption of practices such as teleworking and geographically distributed teams is both practical and can give a strategic advantage. This paper describes the experiences of the UK subsidiary of Digital Equipment Corporation (DEC), who have adopted distance working as a key part of their organisational strategy. It also suggests ways to bridge the gap between policy making for rural development and employing organisations.
There is a considerable ongoing interest in teleworking and other forms of distance working. Part of this interest arises from the fact that advances in technology, such as telecommunications, portable PCs and computer networks, make such practices ever more cost effective. Other concerns, such as those of those of the environment and of lifestyle have also influenced individual interest. Policy makers involved with regional development also see the employment opportunities that these new ways of working can bring to less prosperous regions.
None of these factors, by themselves, is sufficient to cause large corporate organisations to take up such working practices in any significant way. There are, however, a number of changes in the broader business environment that make adoption of distance working a viable strategic option for such organisations. Further, when implemented in an appropriate manner, there are considerable business benefits to be obtained.
This paper therefore gives a perspective on distance working from the corporate viewpoint. It draws heavily on my experience as the Strategic Planning Manager of the UK subsidiary of Digital Equipment Corporation in the late 1980s, and my subsequent ongoing involvement in its flexible work practices programme.
From these experiences I then offer some personal observations on the challenges facing those who want to bridge the rural employment - employer gaps that is a key theme of this conference.
Today's environment is one of continual change and uncertainty. Every enterprise, whether commercial or public sector is facing a number of challenges. They vary from industry to industry, and from organisation to organisation, but a typical list will include:
- Pressures on overhead costs of all descriptions: this includes people and property (office space)
- Need to increase employee productivity
- Emphasis on customer and market orientation (e.g. offering 'round-the-clock' service)
- Simplification of business processes
- The need for increased organisation flexibility and responsiveness
- Environmental concerns and legislation (e.g. air quality laws and reduction of commuting by cars)
It was an investigation of such business drivers as part of the strategic planning process that led Digital UK into deeper consideration of how to link human and organisational strategy more closely with business strategy. As a result, Digital's UK Director of Strategy and Marketing, and UK Director of Human Resources jointly sponsored the 'People for the 90s' programme in 1988.
One of it's early conclusions was that if Digital was to successfully address the business challenges of the 1990s, much more attention would need to be given to the future nature of business activities and work, and what accompanying changes would be needed in human resource strategies. In turn this led to an extensive review of flexible work practices of many types.
Flexible Work Practices
The review of flexible work practices followed detailed analysis of several dependencies linking business strategy-human resources:
- Future skill needs
- Labour Supply
- Organisational Culture
- Impact of IT on Organisations
The project on labour supply rapidly came to the conclusion that we needed to look beyond traditional recruiting and training methods in order to access the people and skills needed for the future. Part of the solution was tapping into resources not normally considered, such as women returners. The main focus, though, was on the question "how can we get work done more effectively".
Many standard organisation practices today, including employing people full-time and working in offices are relics of the needs of earlier eras. Some of the characteristics of work in the future are:
- a large proportion of work will be information or knowledge based rather than physical
- some statistics estimate that even today 75% of work falls into these categories
- the remaining tasks are of a more unstructured nature - not easily procedurised - or will rely on human interaction.
Add to these considerations advances in telecommunications and facilities such as groupware, that permit working across time and geographic boundaries, then the different possibilities for organising work are enormous. Work can be contracted out or outsourced; it can take place around the clock and in different locations.
At Digital we identified 22 different types of flexible working, involving different employment practices (such as job sharing and contracting out) and different work locations (home, office, customer sites etc.).
The work practices that were particularly attractive to us were the ones that reflected our organisational values and that were enhanced by information technology, namely:
- flexible offices
- distributed work groups
Over the period 1989-91, several pilot projects were implemented under controlled research conditions. These pilots were with groups of from 13-130 people. This allowed us to measure the business benefits and to derive lessons for successful implementation that we could carry forward on a wider scale.
One of the key lessons that we learnt is that none of the practices must exist in isolation. They benefit from coexistence with each other, and all must derive from the nature of the work and the people involved rather than the technology. In other words, a project to introduce distance working is unlikely to succeed if viewed simply as that - a distance working project. It must be part of some wider work and organisational review. Let me now turn to a specific example that illustrates this and other lessons learnt.
The Crescent Experience
The original Crescent in Basingstoke was one of Digital's newest offices. One morning in March 1990, it burnt down displacing 450 people from their work-place. Yet within two working days, all business systems had been fully restored and within a week most occupants had found alternative work-places, either at other Digital facilities or at home. The ease with which this happened raised questions as to the need for a replacement office.
Prior to this calamitous event, there had already been top management discussions about reducing costs and developing a more flexible work-force. Thus, when the decision was taken to rebuild a new Crescent office, part of the decision was that it should be built to embrace Flexible Working Practice principles.
Earlier pilot projects in the Flexible Working Practices programme had shown that utilisation of people's personal space in an office was typically 40% or less during normal office hours. By adopting more flexible layouts and practices there was potentially a huge saving to be made in real estate costs. One of the principles therefore adopted was that the more time a person spent in the office the more claim they had on personal work space. In practice, this means that secretaries are more likely to have their own desk than managers (none of whom has an enclosed office).
The office was also rebuilt as an 'intelligent building'. Today it hosts 700 people instead of the original 450. Those people live in many communities - both rural and urban. Many look after customers who span the globe, so the notion of an office in a particular community as a 'best location' for work starts to seem outdated.
Communications for people 'located' at The Crescent are managed through computer integrated telephony that routes phone calls around the building, to mobile phones or to homes, controlled from screen menus on the ALL-IN-1 office computer system. Many facilities (e.g. printers) are shared. More use is now
made of FAX cards in computers than separate FAX machines. Many people work part of the time from home and there is increasing use of portable PCs.
- over #163;2m a year saving in office costs
- more variety and choice in office space (meeting rooms, quiet areas, soft seating etc.)
- improved communications
- organisation change proof' environment
- low cost of internal moves (less than 1/10th of former levels)
- work patterns can be more tailored to suit individual's domestic needs and lifestyles
Advanced telecommunications removes the constraints of time and space and offers improved communications and information access. However, this alone does not account for success of this project. Most important is the careful management of a wide variety of different factors:
- Human and Social Factors: From the outset employees were involved in a participative programme of change management. Much effort went into personal and team development associated with the changing facilities arrangements. Groups were given some freedom to create their own work environments that met their needs. Flexibility was actively encouraged. Individuals were helped to assess their own needs - teleworking is not for all - and contracts made with the rest of the group about working 'norms' in and out of the office;
- Technology: Much thought has gone into how voice and electronic mail communications coexist, particularly on how to handle and forward messages at different times and in different situations. A variety of home and portable 'workstations' have been configured to accommodate different types of information work in a cost-effective way. The primary emphasis has been on enabling the worker to be in touch with their work from almost anywhere which has a telephone access point. Technology is well on the way to enabling location independent working.
- Office Facilities: The Crescent has many shared resources such as meeting rooms. Moreover, individual workspaces are both fixed and flexible - those who spend a lot of time in the office opt for more permanent arrangements, those who travel a lot share desks. In general, though, the Crescent is more and more being viewed as a 'service point' or 'virtual office' for both those for whom it is a 'base office' and those who are visiting. Other service points are other Digital offices, or even other places such as business centres or 'telecottages' that can offer the right kind of office, computing and telecommunication facilities.
- Variety: One of the notions expressed in the Crescent is that of diversity and variety. People work in many locations and with a variety of tools. Some people visit only occasionally, some very frequently. Many writers on the subject of teleworking seem to adopt an 'either/or' stance, suggesting that people either work at home or in an office. As a teleworker myself, I often felt I didn't spend much time at home - but I didn't spend much time in my Digital base office either! Teleworking should be seen as just one mode of location independent working.
Digital has learnt, and is continuing to learn, many lessons from The Crescent experience, in particular how to address a wide range of factors in an integrated way. This experience is now offered to Digital customers as part of a Flexible Work Practices consultancy service.
In the many pilots and experiments that Digital has now run, a number of benefits are consistently achieved, for both the organisation and the individual.
For the Business:
In every case, there have been significant bottom line savings for the group concerned. The typical benefits to the organisation have been found to be
- Space savings - typically 30% more people in a given space and a better quality of working environment.
- Personal Productivity - 20-40% improvement in personal productivity vs. working full-time in the office; improved match between the needs and work style of the individual and the facilities provided
- Motivation and Retention - people feel involved in choices about their work environment; those who otherwise would have considered leaving because of changes in domestic circumstances (e.g. mothers, looking after elderly relatives) can modify work arrangements; increasingly, relocation costs are saved since people do not relocate when they change jobs e.g. it is perfectly acceptable to carry out a European job from a rural location in Somerset.
- Organisation Flexibility - the networks allow distributed teams to be quickly formed and re-formed; properly designed flexible office allow for rapid reconfiguration of work-spaces.
- Social and Environmental - more stress free travel, outside of conventional office hours; less pollution from unnecessary journeys.
- Coping with crises e.g. transport strikes, blocked roads, fire; less dependence on a single work-place provides more resilience.
- Ability to arrange work to suit individual domestic needs and lifestyle; less pressure to move house when changing jobs.
- Increased effectiveness: once it is accepted that physical presence is not a measure of performance, individuals find it easier to find a work arrangement most suited to the tasks in hand.
- Greater empowerment and control over working environment and conditions.
- Enhanced quality of working life.
Achieving the benefits does not come without hard work - by individuals, their managers and top management. There are certain inhibitors that have to be overcome. Some of those commonly encountered are:
- Technology: The ones that held back distance working in the past are now largely disappearing - wide availability of high grade data lines into people's homes; global connectivity; low cost home office equipment (PCs, FAX etc.), universal and cheap mobile communications. Others though are emerging as information handling tasks (especially document management) demand ever higher bandwidths and multi-media.
- Organisational: The largest obstacles usually surround the organisational culture and middle managers attitudes. How can workers be controlled when you can't see them? How should employees be selected for home working without creating divisions? What changes are needed in employment and personnel policies?
- Social: New ways of working affect individuals differently. Many people like the social comfort and affiliation provided by a conventional office. Working individually at home can engender a feeling of isolation. How can this problem be overcome?
The Digital experiences have shown that it is the social and organisational factors that, in general, are the biggest obstacles to successful flexible work practices. These have to be addressed head-on as part of an effective change management process that draws on the expertise of organisational behaviour and development specialists with facilitation skills.
In order to learn more about how these social and organisational factors can be overcome, Digital has become a participating sponsor on the EC PATRA (Psychological Aspects of Teleworking in Rural Areas) research project.
The Global Workplace
Once organisations start looking seriously at the effectiveness of their work operations and working arrangements in a global context, distance working becomes an alluring proposition. Information and communications technology can bring work to the workers, rather than workers to a corporate work-place. It means that corporate needs can be linked to sources of labour and skills.
There are already several well publicised examples of corporate organisations managing work remotely e.g.:
- A New York insurance company that do their claims processing in rural Ireland;
- US airlines that process ticket stubs in the West Indies;
- Several UK companies that outsource certain computer programming activities to India.
This trend for remotely locating routine operations will accelerate. In addition, for more creative knowledge activities, much co-operative work already takes place across the world using networks such as Internet, and groupware such as computer conferencing. For example, Digital uses its internal network to operate projects on a global basis, and also to provide gateways to collaborating external partners. Some specific examples include:
- ;Customer sales and support being handled through 0800 numbers where support workers are both dispersed and located in other countries;
- Concurrent global engineering - for example, one award winning disk drive was developed by seven teams working co-operatively over three continents;
- Lights out' computer operations - where computers in one country are monitored after hours by operators in another country during their normal working hours;
- Project sales bidding - where working teams are composed of individuals in several countries
- Global account team management - where account sales managers manage a sales team distributed in all corners of the globe.
All of these examples suggest that global enterprises are ideally positioned to benefit from location independent work. To them it should matter not where the work gets done, as long as it does get done.
Their challenge is one of organisation and management. For many it means having to learn new ways of designing and managing work, workers and workplaces. Those that already have cultures that empower individuals, reward achievement rather than status, and operate in a loose federal structure and a organic networking style are generally better equipped. For example, Digital had an effective human network long before it introduced IT networks. Hence, distance working and teleworking were widely practised well in advance of them becoming more formally endorsed as part of company policy.
The Rural Dimension
So far in this paper I have made little reference to the rural environment. It is, after all, not a topic on the strategic agenda for most corporate enterprises. What is on their agenda, though, as I hope I have illustrated, are human resource and facility strategies that support business needs. It is in the consideration of these through the vehicles of flexible working and 'virtual offices' that there are implications for rural development. Therefore, let me suggest some implications that I think can be drawn from both my Digital experience and that of a Digital 'networker' running a private company from my home.
The first is that many of the lessons learnt during the change of working practices in large corporations are also appropriate for policy change in rural areas. Thus several factors must be considered in combination. For example, the technology infrastructure available to individuals in a rural community should be comparable to those available in a large corporation. Similarly there should be shareable physical resources within reasonable distance. Issues of human and social needs also need to be addressed.
Second, it is important that distance working is seen not as an end in itself, but as part of some wider strategy. Let me suggest some aspects of rural strategy that warrant further attention
- employment policy
- information market management
- partnerships between global corporations and local communities
What follows are some personal observation on these aspects.
- Employment Policy: It seems that many of the present public services and policies are geared more to traditional jobs and not those with flexible practices and teleworkers. How can an individual, ideally from their phone or terminal at home, find out about work assignments that corporations need doing (not jobs)? How can they pool their capabilities with others in their communities of interest (not locality)? Where can they advertise their skills and availability?
- Telematics seems to offer an ideal opportunity to set up an effective marketplace for matching labour needs with available skills, but it has not yet happened. Why not?
- Information Market Management: As work becomes more information based there needs to be more easy-to-use inter-organisational and public information sources. In running my small business I find that there are virtually no public facilities in my local community where I can access the range of business information I need. Those that do exist offer a narrow focus. None, as far as I know, offer 'one-stop-shopping' either directly or from home terminals.
- The large data-base providers really cater for the large corporates - the wholesale market. What small businesses and rural communities could benefit from are 'information retailers'.
- Hopefully the EC IMPACT programme will encourage the development of such a market, but rural policy makers also have a role to play.
- Partnership: The common interests of policy makers and business will only come to fruition with effective partnerships. Appropriate mechanisms must be found to forge and develop these partnerships for mutual interest.
This paper has highlighted the benefits of flexible work practices, of which distance working an important ingredient. The benefits, however, have to be earned. They come only with proper understanding of change management processes individual and group needs, the business environment and technology possibilities.
So many distance working initiatives have failed to meet expectations because they were just that - distance working initiatives. For corporations, they need to be part of a larger integrated programme of business-IT-human and organisational strategy management. For policy makers, they need to be part of a wider strategies of rural development, employment and information market management. In combination they offer opportunities for partnership that will further common interests. However, appropriate mechanisms for these partnerships must be found.
Today's event is one such mechanism, and I have been pleased to be part of it. Perhaps tomorrow, it will be telematics, that having made distance working viable, that will also prove suitable mechanisms for distance partnerships!
Last updated: 29th March 2011