The Chopping Block Paradox: Why Companies Cut Programs They Can't Afford to Lose

Companies' choices about what to put on the chopping block reveal a resistance to change that is rooted not in economic necessity, but in outdated mores, habits and assumptions. The workplaces that will prove the most successful five, ten or twenty years from now aren't the ones that deal with economic crisis by pretending it's 1950.
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The CEOs of Best Buy, Yahoo!, and Hewlett Packard all nixed flexible work policies in response to financial downturns. "During this critical turnaround period, HP needs all hands on deck," said Hewlett-Packard CEO Meg Whitman. "[T]he more employees we get into the office, the better company we will be."

In times of economic woe, "non-essential" programs and people are eliminated, and programs to support workers are often ended or drastically scaled back. Employee flexibility is typically considered one of these "luxuries." In tough markets, employees are supposed to work harder, longer and more devotedly to renew corporate vitality.

These cost-cutting measures are not surprising. We might be awed by a layoff's magnitude, but are not astounded to see it used. Our acclimation to the items on the chopping block sheds light on the rigidity of work culture and the stigmas that keep work narrowly defined.

In many ways, work has not fundamentally changed since the 1950s, despite massive shifts in the workforce and industries. Technological advances have made global teams and remote work possible. Women have flooded into paid labor. The workplace contains more dual-earner couples, millennials and older workers -- groups that bring different values and needs into the workplace. Still, we continue to believe that "serious" workers are the ones who put in the most "face time" at the office, despite research documenting long hours' detrimental effects on creativity, accuracy and productivity.

Why has change been so slow? And how can we think in new directions to create the future of work? These questions are being addressed this week at the Redesigning, Redefining Work Summit organized by the Clayman Institute for Gender Research at Stanford University. Outmoded approaches are hard to abandon, but workplace redesigns hold the key to prosperity, well-being and innovation.

What's on the Chopping Block?

One innovative initiative, the "Results Only Work Environment (ROWE)," which originated at Best Buy in 2005, emphasizes concrete work goals instead of physical time in the office. Managers are trained to know what deliverables to expect, which allows them to quickly identify underperforming employees. Unlike the "back-to-work" mandates of HP's and Yahoo!'s CEOs, ROWE focuses on substantive results, not face time. An in-depth study of ROWE found that it improved workers' productivity, satisfaction, and health.

Despite the evidence of ROWE's success, however, conventional wisdom prevailed; Best Buy returned to a face time model, requiring employees to do their work at the office. This traditional approach caters to the myth of the devoted employee with a stay-at-home spouse to care for his needs outside the office. In effect, eliminating ROWE pits flexibility against corporate goals, instead of in concert with them.

Eliminating "non-essential" workers is another staple of corporate turnarounds -- but this wasn't always the case. Consider the approach taken by W. K. Kellogg in 1930, in response to the Great Depression and war. The company implemented a six-hour workday and a 30-hour workweek. With each employee working fewer hours, Kellogg could keep more workers employed. Productivity was high, as was morale. Tellingly, this arrangement was halted in 1947, not because of business needs, but because of social stigma; after the Depression, shortened workdays became associated with women, so men who worked short days came to be seen as insufficiently masculine. The Kellogg example underscores the influence of social stigma on business decisions.

Another financial "solution" is cutting programs designed to engage women and minorities. Ending these programs reinforces the idea that a diverse workforce is somehow a "luxury," inessential to business success. The needs of women, minorities and those with physical limitations are seen as requiring "special accommodations" that the traditional workforce does not require and that companies cannot afford.

Global software giant, SAP, disagrees. This year, SAP announced a new partnership with Specialisterne to employ people with autism. Their rationale? Competitive advantage. SAP "leverag[es] the unique talents of people with autism, while also helping them to secure meaningful employment." Initial tests showed that integrating people with autism increased team productivity and cohesiveness. In other words, harnessing diverse talent can be mission-critical, not a luxury.

Moving Ahead

Companies' choices about what to put on the chopping block reveal a resistance to change that is rooted not in economic necessity, but in outdated mores, habits and assumptions. The workplaces that will prove the most successful five, ten or twenty years from now aren't the ones that deal with economic crisis by pretending it's 1950.

We face real barriers to redesigning work, but we also face a convergence of opportunities for new thinking about work's very nature. Those born today enjoy thirty years more life expectancy than those born 100 years ago, creating an opportunity to reimagine how work might be integrated into a new life course. "Digital natives" have never known a world without technology that allows them to bridge global gaps with the touch of a button. Creativity, not face time, can fuel entirely new industries like social media and social marketing.

Make no mistake--the employees of the future will work every bit as hard as the employees of the past. But if companies use good judgment about which programs to axe and which ones to foster, tomorrow's workforce will have more independence and more scheduling control, and will be rewarded for smart, efficient, high-impact work. Employers will reap the benefits of an engaged, productive workforce where everyone -- millennials, men and women, older and younger workers, dual-income families, and people with diverse talents and needs -- will contribute and thrive.

This blog post is part of a series produced by Stanford University's Michelle R. Clayman Institute for Gender Research, in conjunction with the latter's "Redesigning, Redefining Work" summit (November 7-8). The summit aims to redesign work to better align with the needs and composition of today's workforce, creating environments where workers and businesses thrive. For project information, click here.

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