Siemens readies a bold approach to the future workplace. Will others follow?
- Work is changing and this goes well beyond the issue of where people work. How is this working its way into the manner by which work is organized?
I've been noodling on what 'work' looks like going forward and had not intended to write up my thoughts until late the other day when an interesting Twitter exchange with Vijay Vijayasankar got underway. It involves this largely unnoticed announcement from Siemens. Quoting from the announcement:
Siemens will establish mobile working as a core component of its “new normal” and will make it a permanent standard, both during the global pandemic and beyond.
This is summarized as follows:
- Mobile working two to three days a week as worldwide standard
- Managing Board approves new model for working independently of fixed locations
- Model based on transformation of leadership and corporate culture
- Siemens among first large companies to adjust working models permanently
As Vijay said, it is a 'brilliant policy' but he questioned whether it provides the kind of freedom of location implied in the announcement and which Inc's Justin Bariso described as a 'masterclass in emotional intelligence' that boils down to two factors that Siemens assumes:
- Focus on outcomes rather than time spent in the office.
- Trust and empower your employees.
Interesting? My current point of view is that if you're not studying what Siemens is doing then you're missing the opportunity to learn from a company that has been transitioning itself for the modern world for some years, guided by Jim Snabe, its chairman. Earlier in the year, I commented on what Snabe argued:
Central to Snabe's thinking is the thought that globally, we will not return to what went before but that we will enter a period of change ushering in opportunities to develop new and sustainable business models but transparently. In his mind, transparency is central to understanding both the good and not so good while at the same time making it possible for operational staff to make decisions, the outcomes of which can be shared widely in the business.
It is the opposite of a centralized bureaucratic system. You become a hub of interconnected creative people.
Snabe goes on to argue that the role of the board is to focus on the long term intent. A short term shock runs the risk of defocusing on this, yet it is that long term intent to which stakeholders look. At the same time, Snabe believes that a corporation's purpose needs to be demonstrated by action, and here, he cites the commitments both Mærsk and Siemens have undertaken to help society.
This is part of the line of thinking Siemens is pursuing. Is it a done deal? No. Is the policy a done deal? No, it's a work in progress, a point I made to Vijay where I said:
The focus on outcomes combined with emotional intelligence allows them flexibility to discover which way works best for people AND Siemens.
For its part, Siemens confirmed adding in a response to comments by Vijay:
These are the general aspirations for the entire business. Other working models can be discussed between manager and team member, depending on the job function in question.
On its face, this sounds tepid but I see it as brave and bold at a time when there is tremendous uncertainty and where there are no obvious work patterns upon which to draw a sense of what the future holds. For example, Google announced that it was allowing people to work from home until June, 2021. Other technology companies have taken broadly similar lines but it's not consistent. Twitter has said that some people may never return to the workplace if they don't wish to. Workday's CEO Aneel Bhusri said much the same thing to me in private conversations.
All change or...?
Last month Cath had this to say in: Is the traditional office dead? Experts predict major change ahead in the workplace:
Unsurprisingly then, based on data points analysed by commercial real-estate services firm Cushman & Wakefield (C&W) and compiled into a study called The Future of Workplace, nearly three quarters of workers globally now believe their employer should embrace some form of flexible or remote working.
According to McKinsey, many employers can also see the benefits of such an approach too, believing it will enable them to:
Access new pools of talent with fewer locational constraints, adopt innovative processes to boost productivity, create an even stronger culture, and significantly reduce real-estate costs.
But in cultural terms, there are decided question marks over certain aspects of home working's impact. On the plus side, task-oriented, team collaboration has proved more effective than expected, personal productivity has in the main remained high and mutual trust between staff and their employers is strong, C&W indicates.
However, cracks are starting to show in other areas. For instance, remote working has had a negative effect on employees' sense of personal connection with each other. The problem here is that this kind of personal connection is an "extremely important component of employee experience under any circumstances, and even more so in the current environment", the C&W report points out.
In conversation with one executive, the question of what I term 'work-work-life' balance was mentioned. This term describes a situation where work at home is substituted for work at a workplace as a way of relieving the tensions of trying to manage (among other things) increased family responsibilities while at the same time completing work tasks. In short, for those accustomed to attending offices working at home is problematic. The reality for many, including those who are used to working remotely, is that the additional impacts of the COVID-19 pandemic are factors that make remote working more stressful. In my own case for instance, I didn't realize how much I'd miss the distraction of my occasional evenings in the local pub talking about nothing in particular to others. Or that the risks of even local travel would make it much harder to organize a diet that matches our needs.
But there are other factors in play. The issue of what it means to work coming out of the pandemic has taken on a dimension that challenges the status quo. The supremacy of the Protestant work ethic which has shaped much of what is understood to underpin the American Dream is questioned. It is no longer enough to work hard to get on, you have to work safely, a topic to which employers have often chosen to pay lip service. CXO's who previously have repeatedly said that they think highly of their employees now have to give meaning to those words. In my view, it will be those companies that demonstrate a clear sense of care beyond work location who will win the best talent.
But it doesn't stop at your place of work. As the pandemic prevented people from going to a place of work, or having work to do, companies scrambled to keep their businesses afloat. We have seen the impact of that in the last couple of months where organizations have accelerated ongoing digital projects rather than, as was expected, pushed them onto the back burner. Only yesterday I spoke with an executive who mirrored what we've heard from the mega vendors: Q2 wasn't exactly stellar, but it wasn't bad and customers whose projects were in flight urged their vendor/consulting partners to get the job done. 'Phew' you might think but make no mistake, with digitization comes cost reduction and that falls on the heads of people.
Show me the money
Over at CNBC, Bob Pisani writes: Lots of companies are saying they have ‘operating leverage’ — that’s just code for firing people. As might be expected, the financial markets love the sound of that because in the long term, technology is seen as a lower cost line item, the flip side of which is more profit. It at least partially explains why the tech sector has held up comparatively well against other parts of the economy. But that's not sustainable. What financial analysts forget is that once people are removed from the labor market, spending decreases. So like it or not, both people and business have to find new work. Are there responses to this dilemma?
According to a survey among 250 CFO's and sponsored by Tipalti, a specialist in accounts payable software:
- 72% of finance organizations spend as much as 520 hours per year on manual accounts payable tasks
- Amid COVID-19, 75% of CFOs said their finance teams have been able to fully function and complete all processes on time while working remotely but only after making significant changes.
- Just 14% of finance teams were ready to work from home without making changes to existing processes.
- Among the forward-looking CFOs who have automated some or all of their finance processes, 47% saw an improvement in the customer experience, and more than 40% benefited from providing an improved supplier experience.
- More than half (57%) are worried that automated solutions could replace their jobs.
- However, 62% of CFOs stated they plan to switch the focus of their employees that currently handle manual finance tasks to higher-value work.
- If there is full elimination of a job due to automation, 77% of respondents said they plan to transfer those workers to a different department
- 50% of respondents said they would retrain their team members to develop new skills.
The survey's intent is clearly to push a technology driven automation agenda and while the talk of transferring and/or retraining employees is heartening, it is disappointing to see no meat put on those particular bones. In the alternative, the report says that AI has created far more jobs than it has destroyed. Well that's OK, isn't it? Maybe but we are living during a period where the concept of work is in flux.
A different way?
In a conversation with Jana Tepe and Anna Kaiser, founders of Tandemploy, a Berlin based technology firm that creates internal job markets, I discovered a refreshing approach to the concept of work. The central idea is that work needs to fit life in a sustainable manner. The history of the company is interesting in that the founders initially created a B2C market for job sharers. That doesn't translate well to the B2B market, their current focus, but taking the thought process behind job sharing does in the context of topics like project delivery and on to internal work markets. As we talked, I recognized some of the ideas Tandemploy is thinking about.
For example, I remember many occasions where I would either be brought into or assemble a team for a specific piece of work which would be disassembled once the job was completed. The idea was always to match the best people for each component of the work. You can readily see how this might operate inside any organization. Construction teams for instance require different trades but also gangs within trades. In healthcare, cardiac teams are different to those managing cancer treatments. In public sector, managing specific crime type require different police expertise. The list goes on. And if you take the view that a significant part of what work means for the future consists of projects, then it is not hard to see how systems of the kind Tandemploy offers will hold attraction - especially for large companies. But what of the employee/worker?
Here, Tandemploy says it encourages workers to talk about their skills they have as well as the ones they would like to acquire. This provides two parts of the people 'graph' from which project leaders can draw. In an novel extension of this concept Tandemploy offers a generational exchange facility that continues the idea of matching but across generations. You can easily see how this might make the basis for mentoring, or, perhaps more important, the passing on of institutional knowledge.
I was curious to understand how well this is working in Germany, where there are strong labor protections and where significant portions of Mittelstand are described as conservative in nature but with a long term view. Why for instance would a works council accept that the inclusion of personal data is a net good, when there are enough examples of data abuse in the world. The answer is remarkably pragmatic: if the gathering of data and use of technology serves to help a worker then there can be no objection. According to the founders, German companies recognize the value of having systems that match people and skills because it helps them to maintain and build the kind of efficiency for which German industry is known. It also helps save money in the long haul.
There is just one problem. The approach Tandemploy takes requires a bottoms up acceptance and adoption. Top down acceptance isn't enough. This has proven to be remarkably difficult as community experts like Rachel Happe will testify. In her view, community doesn't have the right metrics with which to switch on decision makers to the potential. I wonder whether technologies like Tandemploy will help solve that problem while at the same time helping workers? Past efforts have not gone so well.
Where to now?
The American model of hire and fire at will is not going away anytime soon, as is evident from the expectations the financial markets have on how business will continue to react to the pandemic. That in itself seems to drive an expectation, at least by some, that we will see a return to the old normal. But then I don't know anyone who really believes that to be either desirable or possible. The pandemic has demonstrated the fragility of business in ways that many never expected. More to the point, it has also brought the question of what work is, what it means and how it is conducted to the front and center of pretty much every business I come across.
Technology will provide some of the answers, but, as we are seeing, change in the way people are managed is inevitable.
This is a long running topic and I'm not sure I have a clear understanding where this leads. Responses will vary from industry to industry and within industries. My hope is that the example that Siemens is setting takes root because it ia a first step to treating people as humans, and not just an asset or liability in the financial balance sheet, even if the need to put a number on people remains.