Smart Working

Creating the Next Wave

Anne Marie McEwan

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9781409404569
• eBook ISBN: 9781317054122
• Topic: Business
• Subtopic: Business General
• Index: Business

It is more possible than ever to influence and shape our working environments, our experience of work and each other. Business leaders who set the conditions and create engaging, meaningful work through organisational design and use of the knowledge and creative potential of their workforces are engaging in smart working. In Smart Working: Creating the Next Wave, Anne Marie McEwan explains how smart working is more than just flexible and mobile working. It is about flexibility and autonomy - how people work, not just where and when. She argues that systems, working environments and governance are more likely to lead to effective performance if they maximise self-determination and choice. She describes how collaborative communication technologies create possibilities for stimulating and harnessing collective intelligence, within and beyond organisational boundaries. In short, smart working is an outcome of designing organisational systems that are good both for business and people. McEwan warns that the tendency to talk about new management paradigms risks overlooking insights derived from years of academic research, and particularly from lessons learned from process innovation methodology. This rigorously researched but intensely practical book examines current workplace trends relating to people, technology, place and space. It reviews what we already know about effective management and high performance work methods and shows how those insights can be used to advantage in contemporary workscapes. It will help those with responsibilities for the strategic direction of their organizations. Learning and development and HR professionals will understand how to interpret these insights for their own business.

PART I
Legacy of Learning

1
Setting the Context

Introduction

The objective of this chapter is to provide initial justification for proposing that principles and practices from the past remain highly relevant for the current context. This theme will be further developed throughout Part I.

The global business environment at the beginning of the second decade of the twenty-first century is evolving simultaneously on many fronts: economically, technologically, demographically, structurally and environmentally. Some of these issues are coming over the horizon. Others are already here and gathering pace. Yet others will be increasingly felt in the coming decades, and include energy, waste, climate change, acidification of the oceans, water, food and urbanisation.1

China and India are phenomenal innovators. We won’t just go down, we’ll go down big time if we don’t watch out. We have to think of the clever new ideas and be ahead of the game while we have the affluence and economic growth to invest in way-out concepts. That includes the way we work. (Cooper 2005)

There is urgency in recognising a changing economic world order. The affluence and economic growth conditions that Professor Cooper spoke of at the beginning of 2005 are now fond memories for many Western businesses. The Confederation of British Industry (CBI) in the UK concluded in 2009 that post-recession operating conditions would continue to be volatile and risky. This was partly attributed to more expensive and regulated capital conditions, linked to constrained capacity to fund innovation, and the longer-term and inevitable shift to low-carbon energy usage (CBI 2009).

Business leaders, who were caught unprepared for a global financial crisis, need to adopt new mindsets to cope with the extreme short-term and long-term pressures that are creating harsh operating environments (PWC 2009). These are exacerbated by many governments being saddled with unprecedented levels of debt and a consequent need to consider how to deliver public services more cost-effectively, which is creating further potential difficulties and uncertainties for the private sector as governments reduce spending and consider raising taxes to fund their deficits. What the CBI could not predict as a further contributing factor to volatility was the crisis in the Eurozone, triggered by fears over national debts. At the time of writing, this is ongoing and adding to economic uncertainty and disruption.

Meanwhile, the signs are that Asian economies continue to prosper, led by India and China, with home markets providing strong drivers of business expansion.2 The emerging economies have the benefit of large domestic markets, growing consuming middle classes, and young populations at a time when populations in the West are ageing. If clever, well-educated Indian, Chinese and other emerging-economy workforces have phenomenal innovation capabilities and are eager for economic success, businesses in the developed economies are going to have to mobilise all the energy, passion and knowledge available to them to stay in the game, never mind being ahead of it.

Writing this book has been like trying to analyse a rapidly moving target. The one thing that is clear is that complexity, instability and uncertainty are the new norms. How well equipped are enterprises to deal with these potentially overwhelmingly complex environmental conditions, which require vigilance, agility, adaptation of systems, management practices, attitudes and methods to cope with increasingly unpredictable global business environments? The signs are not good.

Failure of Governance

One consequence of the crisis has been widespread reflection on and analysis of what went wrong in the global financial system and what it all means for business. Reading surveys of CEOs and discussion documents, you could be forgiven for thinking that developments in the external environment are entirely responsible for current pressures.

This obviously, and unfortunately, is not the case. Commenting on his experience of trying to report his concerns over decisions being taken and policies being pursued at UK bank HBOS plc, Paul Moore, ex-head of Group Regulatory Risk at HBOS, said:

I strongly believe that the real underlying cause of all the problems was simply this – a total failure of all key aspects of governance. In my view and from my personal experience at HBOS, all the other specific failures stem from this one primary cause. (Moore 2009)

A review of corporate governance in UK banks supports his view. In his foreword to the review, Sir David Walker says that he was asked to review corporate governance in UK banks ‘in the light of the experience of critical loss and failure throughout the banking system’ (Walker 2009). He continues:

The fact that different banks operating in the same geography, in the same financial and market environment and under the same regulatory arrangements generated such massively different outcomes can only be fully explained in terms of differences in the way they were run ... how banks are run is a matter for their boards, that is corporate governance.

Failure to Adapt

At the time General Motors filed for bankruptcy in June 2009, the rash of commentary on the company’s troubles is without a doubt linked to its iconic status; it represents a metaphor for the mighty fallen. There is shock that this could happen to an apparently invincible corporation. It is not as though the signs were not there. This is not being wise after the event.

Senge (1993) was writing almost 20 years ago, when the first edition of his widely known The Fifth Discipline came out, about the company’s inability to change its way of thinking and doing. Tactics that had served General Motors well in a previous era were even then no longer appropriate.

Hamel (2009c) compares General Motors to a ‘two pack a day smoker committing suicide by degrees’. He notes that its failure was the result of many decisions over a long period, and wryly concludes that ‘the company didn’t jump off a cliff. Instead, it meandered into mediocrity, one small short-sighted step at a time.’ To Kay (2009), ‘the history of modern business is the history of GM, and vice versa ... if the success of GM defined the management agenda for 20th century, then its failure defines the management agenda for the 21st’.

The ability to sense and respond to threats and opportunities, it will be argued later, is a core element of smart working. Two short quotes from an article in the Financial Times sum this up for General Motors:

Organisations fail not because they stray from their core, but because they stick to it too closely as circumstances shift ... the idea that focusing on the core is the best defence against failure is too simplistic for these complex and turbulent times.3

In an article following the filing for bankruptcy, the then CEO, Fritz Henderson, is reported as saying that the New GM would be ‘dedicated to building the very best cars and trucks – highly fuel efficient, world-class quality, green technology development and with truly outstanding design. Above all, the New GM will be re-dedicated in its entirety to our customers’. The article pithily observes that ‘quite why this wasn’t the case with the old GM will no doubt become the subject of many books and academic theses to come’ (Kahl 2009).

Failure of Systems

The environmental and public relations disaster associated with the BP oil spill in the Gulf of Mexico happened since writing the first draft of this chapter. As with the financial crisis, there is much wisdom after the event. From the final report into the incident:

The immediate causes of the Macondo well blowout can be traced to a series of identifiable mistakes ... that reveal such systematic failures in risk management that they place in doubt the safety culture of the entire industry. Fundamental reform will be needed in both the structure of those in charge of regulatory oversight and their internal decision making process to ensure their political autonomy, technical expertise, and their full consideration of environmental protection concerns.4

Systemic failures happen within organisations, across eco-systems of supply networks and in the external environment, and within national and international contexts. The global financial system is obviously the outcome of complex interactions between systems of systems, which cross national and cultural boundaries. Failure to think and act systematically contributed to the global financial crisis.

Gillian Tett of the Financial Times was one of the few to warn of impending dangers (Tett 2009). She saw that financiers operating within silos of specialised knowledge failed to understand how they interacted with each other and with the rest of society. An IBM global survey of CEOs agrees that thinking and acting with regard to systems dynamics is a crucial requirement, concluding that ‘our world is increasingly subject to failures that require cross-systems-level thinking and approaches’ (IBM 2010a).

Systems inter-connect and interact with each other in complex and uncertain ways, making it difficult to see what is going on. Take the Toyota product recalls of 2009. According to this report:

Experts say the sudden acceleration problem that has put the brakes on Toyota sales and production is likely not a single problem but an alignment of complicated interconnected conditions. ‘You’ve got a multitude of problems that are coming to the surface that result in one thing: unintended acceleration.’5

Failure of governance, adaptation and systems are in addition to the global workplace trends that were already unfolding and driving the next wave of process innovation and organisational reconfiguration, which are reviewed in detail in Chapter 5.

Smart Working

What should businesses be doing to prepare leaders and managers operating within increasingly complex, uncertain and highly connected external environments? And what help are they getting from management thinkers, academics and consultants in improving their capabilities to adapt rapidly? How are they being equipped to perform within environments that consist of systems of systems, where complex inter-personal dynamics are influenced by those performance environments?

Among the responses to current conditions are calls for smart working. Some use the term to describe flexible ‘anywhere, anytime’ ways of working. For example, a smarter working initiative by Hampshire County Council in the South East of England was based on smart work as ‘meaning all forms of Flexible Working (flexible hours, job share etc.) with a major focus on ICT enabled occasional or permanent Home or Mobile based Teleworking’.6 Working remotely is linked to smarter working practices in an article from the Department of Transport in the UK, although the article does also stress that remote working needs organisational cultures to change.7

Although flexible working, or smart working as understood in this specific and limited way, has been the focus of interest for a long time (Huws et al. 1990), it is enjoying a resurgence in the public sector as deep cuts to public services are anticipated and attempts are made to reduce the overhead costs of property.

PERFORMANCE ENVIRONMENTS

More holistic views than a narrow focus on flexibility of time, place and employment contracts are emerging, encompassing psycho-social attitudes to work and relationships (CIPD 2008a, CIPD 2008b) and re-configuring business processes (Pearson et al. 2010). The Chartered Institute of Personnel Development (CIPD) in conjunction with CAP Gemini focus their interpretation of smart working on organisational systems that create enabling performance environments, which influence psycho-social attitudes to work and working relationships.

Smart working in this view is about ‘managing and optimising both the physical and philosophical work environment to release energy that drives business performance’. They say: ‘In particular, we believe that a focus on the core beliefs and culture of the organisation is the underpinning factor that makes an organisation “smart”. It is a “smart mindset”.’

The CIPD proposes a four-pillar framework of multiplicative relationships, which can alternatively be seen as interacting sub-systems (see Table 1.1).

Table 1.1 CIPD four-pillar framework of multiplicative relationships

The authors’ depiction of their framework in the conclusion as multiplicative relationships among sub-systems is conceptually similar to the Matthews model of organisational strategy.8 The CIPD/Cap Gemini framework is a very useful tool in identifying high-level topics that can be drilled down to greater detail, allowing links and dependencies to be mapped. Systems, working environments and governance principles are more likely to lead to effective performance if they are designed in a way that is consistent with self-determination and choice for people in where, when and how they work. These in turn are determined and influenced by organisational culture and core beliefs.

DYNAMIC, DISTRIBUTED PROCESSES

Whereas the CIPD proposes smart working in terms of enabling systems, the authors of an IBM research report define smart working in terms of dynamic, distributed business processes and knowledge flows (Pearson et al. 2010). They identify 15 smarter working practices that are crucial in making enterprises more:

• dynamic – enabling people, processes and information to adapt rapidly;

• collaborative – facilitating learning and problem-solving;

• connected – enabling access to timely and appropriate information.

Both the enabling performance environment and the dynamic interactions perspectives provide a foundation for further detailed analysis as specific components and interactions among them are considered in greater detail in later chapters.

For the moment, it is enough to conclude that smart working practices are agile, dynamic and emergent. They are outcomes of designing organisational systems that facilitate customer-focused, value-creating relationships that are good for business and good for people.

Delusion with Novelty

In the face of tumultuous environmental change and organisational dysfunction, there are voices calling for management re-invention and new paradigms (Hamel and Breen 2007). Things we already know are presented as though they are new. Pettigrew and Fenton note that this obsession with novelty is delusional. Robert Sutton is a well-known Professor of Management Science at Stamford University in the USA, and he writes a popular blog. In one of his posts, he cites another respected management thinker, James March, as saying ‘most claims of originality are testimony to ignorance and most claims of magic are testimony to hubris’.9

Acknowledging that there is much more yet to be done in clarifying what is involved in smart working, the authors of one of the reports from the CIPD two-part investigation into smart working say that: ‘This second report draws on wide evidence to convincingly conclude that “smart working” represents a new organisational paradigm.’

FIRST WAVE SMART WORKING

The claim that smart working is a new paradigm is not helpful and is open to considerable debate. For example, the CIPD ...

Table of contents

• Cover Page
• Half Title page
• Dedication
• Title Page
• Copyright Page
• Contents
• List of Figures
• List of Tables
• Acknowledgements
• Introduction
• Part I Legacy of Learning
• Part II All Change
• Part III Creating the Next Wave
• References
• Index