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Flexibility rules at Unilever—as long as the work gets done.
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Woody Allen's observation that "90 percent of life is just showing up" has resonated in the world of work. Be there, preferably early. Stay at least as late as your boss. Be visible. Look busy. But expectations may be changing for almost everyone.
If HR leaders at Unilever have their way, face time won't matter. While many employers debate and cautiously implement various flexible-work strategies, the Anglo-Dutch consumer goods company with 171,000 workers is engaging in a flexible revolution. Claiming a competitive advantage, Fiona Laird, an HR senior vice president, predicts, "Ten years from now, the world will be working this way."
A companywide Unilever policy permits 100,000 employees—everyone except factory production workers—to work anytime, anywhere, as long as they meet business needs.
To support the effort, the company is investing in laptops, videoconferencing, softphones and smartphones, remote networks, webcams, and other technologies that help curtail travel. Employees say using the equipment is nearly as good as being there. Voices come across clear; images are life-size and razor-sharp. In addition, individual offices and cubicles are being phased out, replaced with open-use spaces for conferencing, quiet work and contemplation, phone calls, chatting, recreation, and exercise.
The Agile Working program was piloted in August 2008 by technology workers at Unilever's Englewood Cliffs, N.J., site. As of January 2013, 90,000 employees worked under this flex policy. Executives even plan to offer some flexibility to factory workers, especially those in plants with seasonal peaks.
This approach represents a paradigm shift in how Unilever executives view workers' responsibilities and how they expect managers to do their jobs. Traditional indicators of performance—being on time, looking your best, being present—don't count. Outcomes or deliverables matter most. In live and online training, managers learn virtual management techniques and technologies that support virtual work. They're rethinking leadership strategies and recognizing that their teams must focus entirely on producing measurable results, such as making sales targets or meeting production quotas.
Driving the Change
Unilever HR professionals have done all this with aggressive leadership, says former Chief Human Resource Officer Sandy Ogg, now an operating partner at The Blackstone Group LP.
Ogg was part of Unilever's executive team from 2005 to 2011 as it drastically redesigned operations. The HR, IT and Finance departments were centralized, regional supply chains were created, and about 130,000 jobs were eliminated, including those at 82 factories, says Ogg, who orchestrated HR staff cuts during the reorganization. The HR head count alone declined from 3,000 to 700, with many who remained becoming business partners or experts for three global regions. Twelve of 17 senior HR vice presidents were axed. Most HR services were outsourced to Accenture.
As Unilever was emerging from the wrenching downsizing and reorganization—and facing turnover among the leadership team—Laird and her HR team sought to address two urgent challenges: boost morale and employee satisfaction, and demonstrate that HR could have a positive impact on company performance. Flexibility, it seems, is just what the doctor ordered.
Today, Laird reigns as the queen of flex. "Fiona deserves the credit," Ogg says. Absent her passion, the initiative would not exist. With Ogg's encouragement, Laird crafted the business case, laid the groundwork and engineered the rollout that continues under Douglas Baillie, current chief human resource officer.
A 20-year company veteran, Laird trained as an engineer and a lawyer. "If there's a big, complex problem, she's the one people seek out," says Chris Raia, the global Agile Working program leader. "She'll stand up to anyone."
"She's good at working through the politics and willing to cut a deal," observes Jacobina Plummer, global change and communications manager for Agile Working. Behind a flashy exterior lies a calculating executive comfortable with compromise. Agile Working has become a testament to Laird's zeal.
The Big Idea
The idea for Agile Working emerged in 2007 when Laird attended a retreat at Unilever's executive development center in London. "Look at younger workers," she says. "They're rebelling against punching the clock and staying in one place. Workers with families and other commitments are frustrated by the regimentation they're forced to knuckle under to. What if we freed individuals and teams to work when and where they choose? And what if we retrained managers how to create and manage by metrics that were performance-based?"
Raia says "the concept hit home" for Laird, "a working mother [with] three teens and a busy husband."
Laird asked Raia to study the idea, and he spent almost a year doing research. Among his models was Best Buy's Results-Only Work Environment for its Richfield, Minn., employees. ROWE, operating since 2003, yielded positive feedback from employees. The results were validated in 2011 by University of Minnesota professors Phyllis Moen and Erin Kelly. Their research for the National Institutes of Health compared traditional workers with 600 ROWE workers, finding that the latter are more likely to seek medical attention when needed and less likely to come to the office when ill. They exercise more, get more sleep and say they have less family conflict. They do not, however, report working fewer hours. The independent study shows measurable benefits of a flexible-work program similar to Unilever's.
Yet, despite the positive results, in March, when company performance flagged, Best Buy executives suspended ROWE, deciding that face-to-face collaboration and having workers physically around one another matters in tough times. Now workers can still telecommute, but only with managerial approval.
Making the Business Case
To sell the idea of a flexible-work program to corporate leaders, Laird needed more clout. She recruited treasurer Mark Smith as co-sponsor so "it wasn't just coming from the HR lady." Together, they drew up the business case. Among the selling points:
Retention and engagement.
In summer 2008, the leadership team authorized moving ahead. "The business case was so strong, even executives who may have privately opposed it had no choice," Laird says. She recruited executives from the HR, Finance, IT and Enterprise Support departments to co-sponsor the program. "As long as you have a multifunctional team and unwavering support from the top—which we did—you don't worry about a naysayer here and there," she says. "Work on converting people as you go."
When Raia surveyed 250 workers participating in the 2008 pilot project, he knew that Agile Working was destined to be a winner: Workers said they were more productive, preferred the Agile Workplace office configuration to the traditional one, and were better able to meet professional and personal demands.
By October 2008, 1,700 United Kingdom employees were dropping into Unilever's first "Agile-designed" office in Leatherhead, Surrey, with the majority—including office workers, sales staff, executives, managers, supervisors and technicians—working from home two days a week.
Their jobs vary greatly. Some work alone; others work on teams. Those who work alone set their own schedules and work at home, at the beach or on the bus, as long as they meet deadlines set by managers and show up or are available when needed. Team members have the same flexibility and are responsible to other team members as well as managers. When employees need offices, they use shared spaces at sites around the world converted for Agile Working.
By December 2009, Agile Working principles were adopted globally.
Workers in the program are expected to reduce, but not totally eliminate, travel away from home. Sixty-four telepresence (virtual reality technology) and more than 300 traditional videoconference studios support 1,000-plus virtual meetings per month. In 2012, remote conferencing eliminated more than 5,000 flights, saving an estimated $111.5 million.
Last year, Alan Jope, president of the North Asia region, held a conference for 445 managers and used technology to connect six sites. He says the conference "proved we can do these large meetings virtually and still make them great."
Raia says workplaces are designed around activities, not individuals. He estimates Unilever will reduce its office footprint by at least 30 percent through the Agile Workplace design from 2008 to 2018. Real estate expenses will
continue to drop dramatically unless offset by company growth. However, construction of Agile workplaces costs 30 percent more than traditional facilities.
HR professionals say the following guidelines have empowered Unilever's managers and workers to quickly change the corporate culture:
Embrace flexibility without sacrificing core principles.
The U.S. government, for example, does not impose safety standards on home offices. In the United Kingdom, however, regulations require certification of certain health and safety measures.
Similarly, cultural norms dictate use and head counts for facilities. In some countries, workers cannot connect to the Internet at home, or their homes may house too many family members to allow a work area, or going to an office denotes status. In these locations, such as Shanghai, more workers ask for offices, and executives allow managers to adapt arrangements.
Talk tough, but be pragmatic.
Assess outcomes later.
Make training line managers a priority.
Implement proactive public relations.
Reactions from many workers and managers are positive, and there are signs that Agile Working is attracting top talent. Recently, two female executives jumped to Unilever from competitors, enticed by flexibility for them and their families.
Plummer says Agile Working enables her to arrange her schedule to meet global work commitments and stick to an exercise plan. She has lost 33 pounds in 14 months since beginning a flexible schedule. Furthermore, she says, "I find it much easier to meet my commitments with my line manager in the U.S. Being online later in the day gives us more shared time during our working day, despite a five-hour time difference."
Agile Working also eased the anxiety that Astarita experienced away from the office. "Two years ago, if I handled work by phone at home, I would feel obligated to drive to the office and let my boss know I was there. Today, I have license to do it my way," she says.
Unilever's employee satisfaction scores are high. In the 2012 survey, 80 percent of surveyed employees said they were "extremely satisfied with Unilever as a place to work," up from 78 percent in 2010.
Muting the Noise
Still, some professionals and executives are not happy. They value the status and trappings of a nice office. They find communal desk-sharing and floating space uninspiring at best. Some enjoy corporate travel to upscale hotels and other perks. "Some have not accepted it; they are paying lip service but not leading by example," Plummer says.
Raia prefers to see the glass as half full. "About 50 percent of senior executives are enthusiastic," he says. "The remaining 50 percent are agnostic or unsupportive."
Murray Dalziel, director of the University of Liverpool Management School in the United Kingdom, says: "Winning some of these people over could be crucial long term. Of these, the passive resisters are the worst. You can cope with critics who come forward."
Laird notes that objectors tend to be older workers who see no reason to change.
That's not surprising, observes organizational design consultant Kreig Smith, principal at AlignOrg Solutions. "If you made your career managing flesh to flesh, through humor, intimidation and the strength of your personality, how would this change look?" he says.
Laird understands this dynamic and is open to compromise around office space, agreeing to let some executives retain their turf. But she is unyielding about excessive travel. "Corporate tourism is not acceptable anymore," she says.
The pace of implementation amazes observers. They wonder if it is too much too fast. They are wary of the shifts in responsibility from boss to worker that evolve with flexible-work arrangements. Can managers really keep tabs on performance from afar? Will the work get done, or will people goof off?
"Organizations are incredibly social," Kreig Smith says. "When you change the way people interact, you have to look carefully at unintended consequences."
He also points out how complicated managing teams can be when people spread out and work at various times: "If your customer has complex needs, aligning everyone to deliver what's required makes the manager role particularly
Another potential problem: Imposing change quickly can cause morale problems that will fester, professor Moen observes. To reduce the problem, some companies, like grocer Supervalu Inc. of Eden Prairie, Minn., let employees ease into flexible-work arrangements. "In the transitory phase, it may be a good idea to let people choose if they want to keep working regularly," Moen adds.
The Bottom Line
Unilever officials say they don't have up-to-date productivity metrics to determine the results of the Agile Working policy. In fact, very few employers can identify the return on investment from flexible-work programs. Yet Unilever's performance has steadily risen as this approach to using human capital has gone into effect:
Unilever, which ranks 139 on the
Fortune Global 500, continues to pursue its chief financial goal of doubling revenues from $54.4 billion to $108.8 billion by 2020. Last year, revenues increased by $6.8 billion, continuing the company's steady financial growth since Agile Working became policy.
John Finnigan, professor of finance at Marist College, says Unilever's performance has been phenomenal, moving its stock price/earnings ratio higher than competitors Nestle and Procter & Gamble.
In 2011, "selling and administrative" costs, including outlays for travel and real estate, dropped by 12.9 percent, Finnigan says. "When you see a drop in expenses, you'd think revenues would drop. But here, revenues went up by 10.2 percent," he notes.
Meanwhile, plaudits such as "most admired" and "best place to work" pile up. In January, nonprofit organization Catalyst lauded Unilever for gender equality, fostering diversity and opportunities for women.
Ogg says Laird "is changing the Unilever culture. She gave it a spark, put life behind it. As a result, the company is reaping a triple benefit—for the business, its employees and the environment."
The author, a contributing editor of
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