Future Work (Expanded and Updated)

Changing organizational culture for the new world of work

A. Maitland, P. Thomson

• Publisher: Palgrave Macmillan
• Year: 2014
• Print ISBN: 9781137367150
• eBook ISBN: 9781137367167
• Edition: 2
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

The way we work is overdue for change. This newly updated guide to the challenges you will face in the 21st century world of work sets out a compelling case for change in organizational cultures and working practices to boost output, cut costs, give employees more freedom over how they work and contribute to a greener economy.

CHAPTER 1

Time for change

Bram Meulenbeld and Martijn van der Linden, two Dutch men in their 30s, started out in traditional high-flying corporate careers, working for ING bank and Philips among other employers. During the global economic crisis, each concluded it was time for a change. ‘I didn’t want to go to an office all my life,’ says Martijn.

The two friends heard about a young firm called Amplify Trading, in London’s Canary Wharf, recruiting people to trade financial futures electronically from wherever they were located. They moved to a remote chalet high in the Austrian Alps, enjoying mountain sports in the mornings and switching on their computers in the afternoons to earn a living by trading shares on the New York stock exchange. They worked for as much or as little time each day as it took to make enough money.

A year later, they returned to the Netherlands to embark on new careers in sustainable development. Bram set up a consultancy and website and Martijn turned to writing a book, both working mainly from their homes.

Bram says he is grateful that he can work in a way that would not have been possible 20, or even 10, years ago. ‘I decided that “structured” life in an organization did not meet my requirements. I moved to Austria to benefit from two valuable things in life: a very interesting and challenging job and at the same time being able to fully benefit from all the things I value in life.

‘Now, as I’m working from home, I can offer lower hourly tariffs because I don’t have an expensive office. I use all kinds of online tools – Skype, Dropbox, Prezi – to work with others, while having all the freedom that I want around my work.’

Martijn coordinates the Platform for an Economy based on Sustainability and Solidarity and chairs the Our Money (Ons Geld) foundation which campaigns for reform of the financial system. He still works mostly from home, collaborating with a wide range of people in the Netherlands and abroad. ‘We share information and knowledge online instantly between international specialists,’ he says. ‘It’s a competitive advantage for those who are involved.’¹

We are living in a time of exponential technological change. All around us there is evidence of digital breakthroughs. Whether it’s an octogenarian ordering groceries online, a celebrity encouraging a mass protest through Twitter, or a young man reconstructing his past through Facebook after illness wiped out his memory,² the Web and its applications have rapidly and fundamentally altered our lives. They are having a profound effect on the way we communicate, learn and socialize. You may well be reading this book electronically on a Kindle, iPad or other e-reading device.

As the experience of Bram and Martijn illustrates, there is enormous scope for the way in which we work to change as well. Many people have choices unimaginable a decade or two ago. Some companies are responding by radically rethinking how they organize and manage people. They are at the forefront of a revolution in how we work.

Many organizations, however, remain stuck with a model of employment and management practices that were appropriate for work in the nineteenth and twentieth centuries, but are no longer so for the twenty-first. People are still expected to be present at their workplace for fixed periods of time and are paid by the hour, day, week or month for turning up. Long hours are often required and rewarded without any measure of the productivity involved. Getting the job done in half the time and going home early, instead of winning people praise, is more likely to see them sidelined as ‘slackers’.

Yet there is overwhelming evidence that employees are more productive if they have greater autonomy over where, when and how they work. It should not be surprising to find that people feel motivated to produce their optimum when they are trusted to manage their own work patterns. There is nothing new in the concept of empowering employees. Progressive management thinkers have been preaching this since the middle of the last century.

What is new is that we now have the technology to enable a major shift in the way people work. It has already transformed how hundreds of thousands of self-employed individuals carry out their jobs. But many large organizations are struggling to make the transition to more efficient business, better working lives and a healthier planet.

Fifty years ago, Douglas McGregor, the MIT management professor, wrote in The Human Side of Enterprise: ‘Many managers would agree that the effectiveness of their organizations would be at least doubled if they could discover how to tap the unrealized potential present in their human resources.’³ Managers often pay lip service to his proposition that people tend to be self-motivated and that management by empowerment is more effective than command-and-control (McGregor’s Theory Y versus Theory X). When it comes to putting it into practice, however, old habits die hard.

In this book, we challenge those old habits. We explain why they have to change if companies are to keep pace with the competition in the networked world. Drawing on a wide body of research, and on interviews with organizations at the leading edge, we reveal the culture, approaches and skills required to make the transition to more effective ways of managing people and to organizing work for the overall benefit of business, individuals and society.

The new workforce

There are powerful reasons why companies and managers need to think differently about people and work. Tectonic shifts are taking place in the composition of the workforce, and in attitudes in wider society, which demand a response from any organization that wants to secure talent for the future, as we explain in Chapter 2.

Women now make up between 40 percent and 50 percent of the workforce in most developed countries,⁴ as well as half or more of the employees inside many organizations. They represent the majority of the educated talent pool – around six out of ten graduates coming out of universities in the developed world, and a rising force in many parts of the developing world too.⁵

As women’s earning power grows to equal or even outstrip that of their partners, the other side of the coin is that more men are taking on greater responsibility for childcare and are willing to be active fathers. In the US, the conflict between work and family commitments, felt acutely by working women during the late twentieth century, is now shared by men in dual-income families.⁶ In the UK, fathers and mothers who were questioned about what would most help in achieving a better balance in their lives wanted ‘a wider range of flexible job opportunities in all types of jobs’ – a finding mirrored in the Shriver Report, A Woman’s Nation, in the US.⁷

The fact is that the traditional male career model – which assumed people would have an unbroken full-time career and a steady rise to a peak of performance and earning power in their late 40s or 50s, followed by retirement around 60 – does not fit the new majority of the workforce.

Our aging societies pose both a huge challenge and an opportunity for better ways of working. From Japan and Australia to Italy and Germany, countries are grappling with how to support a generation of old people, as the population of working age shrinks and fewer young people enter the workforce. The extension of working life is now inevitable in many parts of the world to maintain pensions and old-age care at acceptable levels.

Fortunately for governments and employers, this lengthening of working lives coincides with a desire on the part of many mature people to work past traditional retirement age, whether for financial reasons or to stay active and fulfilled. Many of them do not want to work in the old way, however, with fixed, full-time hours. Research shows, for example, that American baby boomers who continue working want greater control, autonomy and choice about where, how and when they work.⁸

This is a desire they share with others, notably the youngest people in work. This youthful cohort, variously called Generation Y, Millennials or digital natives, takes the greater flexibility afforded by technology for granted. They have grown up with the means to connect with their peers anytime anywhere, and they expect to be able to work this way too. Young ‘knowledge workers’ are as likely to want to work while munching a sandwich over their laptop in a wireless-enabled café as behind a desk in a traditional office.

Many companies are inadequately prepared for the cultural changes that will take place as these younger workers move into leadership roles. According to one survey, over two-thirds of senior executives think their organizations are too reliant on male CEOs from the baby boomer generation and only 41 percent say they are ready for the coming demographic changes.⁹ ‘Companies which don’t change are always vulnerable,’ says Richard Boggis-Rolfe, chairman of Odgers Berndtson, the executive search firm that commissioned the research.¹⁰ ‘But they will change, the successful ones will.’

Motivation is more than money

Demographic shifts, globalization and cost-cutting have already led to significant changes in the contractual models between employer and employee, with the growth of temporary agency work and the rise in part-time jobs in regions like Europe. The economic downturn following the global financial crisis saw an increase in insecure employment such as ‘zero-hours contracts’ in the UK and ‘mini-jobs’ in Germany, which earn less than the tax threshold.

At the same time, new web-based companies are springing up to challenge incumbent, or ‘legacy’, organizations by offering competitive rates based on their relatively low overheads and lack of hierarchy. These firms often assemble individuals or teams to work on specific projects and then disperse and regroup, giving the workers a high level of autonomy but lower job security than traditional employment contracts.

As economies become more knowledge-based, there will be a decline in permanent employment, predicts Denis Pennel, managing director of the International Confederation of Private Employment Agencies (Ciett). The future, he suggests, may look like a throwback to the past – to before the Industrial Revolution when most workers, such as farmers, artisans and shopkeepers, were self-employed and responsible for their own output. ‘They will have work to do but with several different employers,’ he said in a Financial Times interview.¹¹ ‘Technology enables this. It means people can be based anywhere and gives organizations access to global expertise.’

One of the chief preoccupations of business leaders is how to attract, motivate and retain skills and talent. The excesses uncovered by the global financial crisis triggered a fundamental questioning of reward and motivation, management styles and dominant models of work. It is perhaps no coincidence that the investment banks at the heart of the crisis were among the most extreme proponents of command-and-control management, short-term results and huge rewards, with the expectation of exceptionally long hours and ‘face-time’.

Since the crisis, there has been widespread questioning of the conventional view that success is measured solely by the size of one’s salary or bonus. Public discontent, even outrage, continues to be expressed at the high compensation that many executives receive. There has been a powerful backlash against ‘rewards for failure’, especially when contrasted with the impact on ordinary people of government measures to reduce public spending and budget deficits.

A new branch of social science, the economics of happiness, is attracting increasing interest. Ever since Abraham Maslow introduced his Hierarchy of Needs in 1943, psychologists have been studying how people gain satisfaction in life. As Richard Layard points out in his book Happiness,¹² we are no happier now than we were 50 years ago, even though our incomes have doubled. The ‘Happiness Index’ produced by City & Guilds, a UK vocational education body, underlines how money does not buy happiness.

‘For the last five years, sky-high salaries have rated pretty low on our list of reasons for feeling fulfilled and satisfied in our careers,’ it says.¹³

Given the urgent need for talent and skills, many organizations are worried about the big challenge they face in keeping employees motivated and committed. Only 40 percent of employees in North America are fully ‘engaged’ with their work, according to a report by the global consulting firm BlessingWhite.¹⁴ Engagement levels range from 42 percent in India to just 22 percent in China, with Europe at 31 percent and Australia and New Zealand at 37 percent.

Research indicates that both baby boomers and the young workers of Gen Y, particularly in advanced economies, place at least as much importance on having flexible work, high-quality colleagues, recognition and access to new challenges as they do on financial rewards.¹⁵ The new generation joining the workforce is also much more concerned about environmental issues and likely to look closely at the ‘green’ credentials of a potential employer before applying for a job.

Rewarding work, not time

An important way to motivate people is to trust them with greater autonomy over how they get work done. Doing so will reap dividends for managers and organizations, as the many case studies in this book demonstrate.

What we are proposing goes beyond arrangements typically known as ‘flexible working’. Since the turn of the twenty-first century there has been a surge of interest in alternative working practices. The topic is moving from being a curiosity represented by a few supposedly quirky companies such as Semco in Brazil or Happy Computers in the UK to being part of mainstream human resources management.

The trouble is that mo...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Illustrations, Figures, Tables and Case Studies
• Foreword
• Authors’ Preface and Acknowledgments to Second Edition
• 1 Time for change
• 2 How work has evolved
• 3 Turning convention on its head
• 4 Why it makes business sense
• 5 Leaders for the new world of work
• 6 Changing workplaces
• 7 Culture is critical
• 8 Strategies for change
• 9 Making it happen as an organization
• 10 Making it happen yourself
• 11 Looking over the horizon
• Notes
• Further Reading
• Index