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That is the new way of working at Best Buy, which was written up in both Business Week and the New York Times.

Imagine this – not getting rewarded for face-time in the office but instead for getting projects done, all meetings are optional, work from the beach, work while hunting, work from the road, you chose – as long as your projects get done!

This new work environment at Best Buy is called Results-Only Work Environment, or ROWE. By next March, 75% of all Best Buy corporate employees will be on the program. A modified version of the program is also under development for people who work in stores – although it is a little harder to imagine how face time will be eliminated in those customer-facing positions.

Sure, there are a lot of companies that have gone virtual over the years, including pioneer HP, IBM and Sun Microsystems. But no company of this scale has ever taken it to this level – allowing for a great deal of employee self-organization.

Interestingly enough the program did not come from the top down but instead began as a covert guerrilla action that spread quickly and eventually became a revolution within the company. The top brass at Best Buy really needs to be commended for embracing this change instead of killing it. These practices have been tried in many start-ups, only to be killed when VC’s bring in the “professional” or “seasoned” “senior” managers.

Come to think of it, many innovative things get killed or never see the daylight when those “guys” move in…

[Tags: virtual office face time future of work self organization]

Communities are hot – with every other company rushing to deploy them to enhance their innovation processes, their new product introduction success ratios or their customer satisfaction ratings. Yet at the same time most companies seem to be very busy destroying what is perhaps their most important community – their employee community. And they are doing it by affecting one of the fundamental forces that drive communities – trust.

Indeed, according to the American Management Association (free but requires registration – via “It’s time to start trusting the workforce” article by Jeffrey Pfeffer in Business 2.0 – not yet online), 76% of companies monitor employee web site connections and 55% retain and review email messages. The number of companies tracking telephone calls, including amount of time spent on the phone and phone numbers called has grown to 51%, up from 9% in 2001. And this does not include companies who require periodic medical checks and random drug usage tests.

So while the balance of power between consumers and companies has shifted towards the consumer in the last few decades, the balance of power between employees and companies has clearly shifted towards the employer. We have to give up our right to privacy in return for a paycheck. And what good does that do? Employees at companies like that feel disenfranchised, lack motivation, distrust their company and management, badmouth the company, etc… Not exactly the motivations that can lead to great results.

The good news is that employees can bail – and with a strong economy, hopefully many at those “big brother” shops will do just that. According to the Business 2.0 article, signs of this happening are already here, with the number of executives, salespeople and production personnel exiting their companies more than doubling since 2003, and with the number of technical and professional people who leave going up 70% in that same time period! Maybe someone will start realizing that the cost of labor in high employee turnover environments goes through the roof. Just ask Walmart – where recent research on their low wages vs. employee turnover compared to Costco’s makes for a well documented case study on the impact of employee turnover ratio vs. the real cost of labor.

It all comes down to “return on information.” If employees do not see personal benefits in return for the personal freedoms they give up – they will bail. With employees being perhaps the most valuable asset a company can have, it is amazing how many of them squander it in the name of “control.”

[Tags: employee communities employee relations work environment trust]

Are you afraid of speaking up at work? That is the topic of ongoing research reported in the Harvard Business School Working Knowledge. Quoting from their research paper (abstract here) Amy Edmondson from Harvard Business School and James Detert from Penn State, the two researchers, made some interesting observations in this email interview.

While there are individual and contextual reasons why some people speak up more readily than others, the main reason why people do not speak up is “fear” – something that we inherited from our earliest ancestors. As the researchers point out: ” it seems we’re all hard-wired to overestimate rather than underestimate certain types of risk—it was better (for survival) to “flee” too often from threats that weren’t really there than to not flee the one time there was a significant risk. So, we’ve inherited emotional and cognitive mechanisms that motivate us to avoid perceived risks to our psychological and material well-being…Thus, fear of offending those above us is both natural and widespread.”

The interview talks about some ways to change a company culture so that people speak up more frequently. The reality is that changing a culture of hard-wired fear is very difficult. Add to that the fact that change hurts and it may be impossible to really change a company culture without also changing the fundamental hierarchical nature of companies.

[Tags: fear company culture hr change]

CEO’s are supposed to be like conductors, impresarios, major league sport team coaches, or movie directors – you pick the analogy that works best for you. The bottom line is that they need to coordinate disparate and sometimes dysfunctional groups of people – including stars (who frequently have good-size egos all by themselves), connectors, and losers – into doing great things! And they cannot limit themselves to internal resources only. The good ones will do it with externalized communities of people that include employees, customers, suppliers, partners, and resellers. And the best ones will even integrate competitors into their cast of characters that they can influence to achieve their goals.

So what happens when a CEO has a big ego? The answer is simple – a CEO with a big ego cannot play that role!

CEO’s with big egos will inevitably clash and compete with other egos in their ecosystem – be they stars in research, marketing, engineering, or other successful CEO’s in their industry or region. Those people are their true competition. Big egos do not collaborate – they compete on the ego level. So what comes first in the case of a CEO with a big ego is not the company, the employees or the customers – it is their ego. What is important is how they will look in the eyes of constituents that they deem influential or important when it’s all said and done?

At the extreme, the only way for CEO’s with big egos to achieve their goals – come out ahead of other stars, or worse, eliminate the other stars while coming out ahead – is by weaving webs of deceit, building a protective cocoon around themselves, and by ensuring that there is a podium/pedestal for them to step on. They surround themselves and protect people who will foster their agenda blindly – in the process creating executive echo chambers and increasingly removing themselves from business realities.

Even though some are really good at hiding their true nature, there are so many tell-tale signs that can point to bad behavior and real bad news in the future. When a new CEO of a well known brand tries to inject himself in the brand by appearing in TV commercials – what do you really think the motivation is? Help change the appeal of the brand in the youth market? A subservient chicken or an office chimp seem to achieve that goal much better… And you know you’re in trouble when your CEO tries to limit access to certain people – like the board. Or when she starts bad-mouthing other CEO’s who happened to be ex-colleagues and who are now very successful and get a lot of credit for their achievements. And we can go on and on with early warning signs of leaders who can do more damage than good to their organization.

There are a lot of examples of companies with CEO’s with big egos that ended up in disasters, and many others where ego-less CEO’s are achieving beyond-great results. And as always, there are the exceptions – but we can not all aspire to be like Steve Jobs. But besides these extremes, and because of ego-centric leaders, there are too many companies who never achieve their true potential and too many reputations that get tarnished in the process for no good reason.

[Tags: leadership organizational structure ceo hr hr management]

Jim Lavoie and his partner Joe Marino from Rite Solutions presented at the Business Innovation Factory’s second annual meeting today (which is being live blogged on the Corante Innovation Hub)and talked about how they were able to create a corporate environment which is totally project-based and where leadership “authority” is based on employees’ “sphere of influence” at any point in time during a given project rather than on the results of more traditional “pyramid” based games.

To make new employees comfortable with the fact that pyramid-based schemes of career advancement are not the way to go and to constantly remind existing employees of that fact, both periodically put on skids to make fun of the more traditional antics of command and control/hierarchical organizations.

They performed one of their songs at the event and keep a web site – called tombtunes – with all their current executive musical productions. The first song is supposed to go up tomorrow – it’s a an absolute “must hear” for everyone with experiences in corporate life, especially for those who might have become “unemployable” because they got disgusted with the way those corporate games work. If you are a “company-man,” you will not enjoy it!

Note that both those guys acknowledged being really good at playing the pyramid game

[Tags: business models organizational structure hierarchy hr bif business innovation factory]

Fortune’s most recent issue has a number of articles on the increasing chaos in markets, technologies customer behavior, and products. Business models that sustained companies for decades no longer work. Companies can now enter and leave markets at a moment’s notice. Market disruptions happen faster and faster.

According to the article, the way to manage chaos is not by retraining managers, it’s by changing people’s mindset and assumptions about business, management, and most economic principles we grew up with. Successful companies are meeting the challenges of a chaotic environment with chaos – by loosening controls, getting rid of hierarchies & titles, providing full transparency into all aspects of the business and more.

What causes all this change? For starters, the fact that companies can now operate free of physical assets makes them both more flexible and vulnerable at the same time. Next is the fact that with the advent of the Internet we have witnessed a dramatic power-shift towards the consumer. Information about products and services, which used to be controlled by the seller – giving them an unfair advantage – is not only widely available, it is complemented with free flowing consumer generated content that gives the consumer the upper hand in the power play.

And the chaos is here to stay. As the article points out “the forecast for most companies is continued chaos with a chance of disaster.”

The only way to survive is to allow your company to operate at the edge of chaos – something that nature knows all to well how to do. Perhaps the best training for company executives and employees will not come from business schools but from science departments who are studying complexity theory and how self-organized systems can thrive in nature -even in the worst of circumstances.

If you are starting a new company it may be easy for you to inject that right kind of culture in your company’s DNA. For existing companies the only answer is change, dramatic change that is – and as scientists have found, change hurts, and people naturally resist it.

So should we get ready to see many corporate icons dissapear in the near future?

[Tags: business models chaos complexity theory edge of chaos]

Crowdsourcing has been a popular term ever since it appeared in a Wired Magazine article earlier this summer. This past week, Business Week jumped on the crowdsourcing bandwagon with an article in their second issue of Inside Innovation (may require subscription – but you can find a good description of the article by Renee Hopkins Callahan over at IdeaFlow).

What is confusing about the “crowdsourcing” terminology in both articles is that they use “crowd” to refer to the “wisdom of crowds” – a term introduced a few years back by James Surowiecki to describe the fairly simple idea that large groups of people are smarter than an elite few. Many of the crowdsourcing examples used in both articles, however, like the use of iStockphoto to source images cheaply, do not rely on wisdom of crowds at all. Getting your images from iStockphoto instead of from a professional photographer is like outsourcing your photography to the public – where everyone can be a semi-pro with high end cameras below $1,000 these days. In the end you still buy your images from individual photographers. There may be a crowd, but there is no wisdom of crowds involved here.

When a company like John Fluevog Boots & Shoes asks its fans to submit and vote on new shoe designs – that is a model based on the wisdom of crowds. The wisdom of the mass is more likely to identify a winner than a select few (see also related post on when wisdom of crowds does not work).

The Business Week article spells out four rules for successful crowdsourcing – or should it be to outsource your task/process to an outside community.

First, be focused and provide clear guidelines to what you want to have done. Not really all that different from any outsourced project. If you give vague guidelines you will likely get something back that you did not expect.

Second – get your filters right. Since by outsourcing a task to a large set of people you will get a large number of ideas, you need to filter all those ideas so that you can find the gems. But why not use the wisdom of the crowd to do the filtering? IBM solicits ideas from customers and employees during two day innovation jams – which led to 37,000 ideas the last time around. They then use their own employee “crowd” to filter those ideas. As most companies do not have 140,000 employees to draw upon, they could use their fans and customers to select the best ideas. An idea could be emailed to a randomly selected set of active people for voting, rating or ranking.

The third is to tap the right crowd. Pretty obvious when you think about it. Just like you would not outsource a complex engineering problem to a company of 14 year old summer students, you need to be picky about the community you outsource your task to.

Lastly is to build your community into social networks. While this may be key to success in getting certain communities to function in the long run, enabling networks or teams to form within your community goes against the principle of the wisdom of crowds – adding to the terminology confusion.

Renee adds two more rules in her post - find ways to feed the ideas into your company’s existing processes and fund the process – as incentives fuel creativity.

In the end, successfully outsourcing product innovation and other processes to outside communities comes down to a deep understanding of two factors:

• understanding of the traditional keys to success for that particular process
• understanding of the fundamentals to successfully create (if needed), manage and interact with communities – virtual or otherwise

[Tags: crowdsourcing community community management outsourcing]

According to Spencer Stuart (via Brand Republic), the average CMO tenure keeps going down. A painful side effect is that marketing agencies have to defend their business sooner as well.

The changes are not that dramatic – with the new average tenure for CMO’s being 23.2 months in 2006, down from 23.5 months in 2005 and 23.6 months in 2004.

The whole shortening in tenure is likely due to a combination of things: the fundamentals of marketing going through a dramatic shift – leaving many CMO’s who are not permanent students of the industry in the dust – and the accountability of the CMO on the executive team being miss-aligned with what their real role should be.

[Tags: cmo tenure marketing accountability CMO marketing+changes ]

According to a recent article in the Harvard Business Review (requires subscription or can be purchased), you could and you should strive towards integrated sales and marketing departments as the benefits of having both groups work in harmony are plentiful.

Stop marketing departments who spend on advertising without tying the results to sales, stop sales departments that only fulfill demand instead of (co)creating it, and stop managers for whom marketing is nothing more than selling and sales support… p.l.e.a.s.e!

The authors see two main sources of friction between sales and marketing – one economic and one cultural. The economic one has to do with the power distribution between sales and marketing in three of the four P’s – promotion, pricing, and product. The cultural one, which may be even more entrenched, has to do with the fact that the two departments attract vastly different types of people – with different educational backgrounds, skill sets, etc.

The article offers a few suggestions to better align the marketing and sales departments:

• Encourage disciplined communication – and that does not mean more communication, which is expensive.
• Create joint assignments and rotate jobs
• Improve sales force feedback

Once you have your sales and marketing departments aligned you can go a step further and work towards achieving an integrated relationship. The authors suggest the following actions to achieve integrated departments:

• Appoint a chief revenue or chief customer officer – a CRO or a CCO
• Define the steps in the marketing and sales funnels
• Split marketing into two groups – strategic and tactical groups
• Set shared revenue targets and reward systems
• Integrate sales and marketing metrics

While some of the advise and terminology may seem a little staid or even passé (after all, is marketing still about the 4 P’s? and is the buying process still a funnel?), the advise is solid and practical and should benefit any company with dysfunctional marketing and sales departments.

[Tags: sales marketing hr organizational behavior]

In a recent Harvard Business Review forethought (here – requires subscription or can be purchased separately), Prof. Nitin Nohria from the Harvard Business School asks which of the following organizational structures would have a higher likelihood of surviving a pandemic or other disaster:

organization 1:

• hierarchical
• centralized leadership
• tightly coupled
• concentrated workforce
• specialists
• policy and procedure driven

organization 2::

• networked
• distributed leadership
• loosely coupled
• dispersed workforce
• cross-trained generalists
• guided by simple yet flexible rules

Which company would you bet your money on?

It does not require an advanced degree to realize that there are some fundamental lessons to be learned from mother nature…

[Tags: crisis management self organization pandemic]