Louis and why IBM should introduce it?Coined by
Louis V. Gerstner has just become the chairman and CEO of IBM. The company, a former pacesetter in its field with a sterling reputation and with more than 300,000 employees is slowly fading into history and losing billions of dollars. A change can be excruciating, even more when everyone at the company knows the organization must change or die. However, a change in culture is necessary. What is the remote working and why IBM should introduce it?Coined by Nilles, 1975, teleworking is a cure for a variety of organizational and social ills. It has been lauded as a strategy to help organizations decrease real-estate costs, a respond to employees’ needs for a healthy work–family balance and a way to reduce air pollution and traffic congestion.In the light of what stated above, IBM should consider a combination of factors in order to evaluate the introduction of remote working: economics (the global economic crisis and resulting budget shortfalls have added to the urgency of reducing costs in both the public and private sectors); demographics and traffic congestion (at the global level, all future population growth will be in towns and cities while world’s rural population is expected to decrease significantly. One of the resulting crises from the migration to cities is global traffic congestion with its ripple negative effects on commuters, C02 emissions levels, and energy consumption. In the Institute for Electronic Government’s survey of 4,000 drivers in ten U.S. cities, thirty percent surveyed said they want to work at home to avoid traffic congestion and commuting costs. Four-dollar gas prompted an outcry from both public and private sector employees demanding economic relief and telework options); climate change (cities, states, and federal governments across the globe have passed executive orders and legislation mandating the reduction of greenhouse emissions within specified deadlines); attracting & retaining employees; globalization and collaboration; technology. To bring IBM back to profit, transformation and cost cutting are fundamental. One of cost cutting opportunities is real estate. IBM owns or leases more than 185 million square feet of office space. Therefore, IBM Coupled with the growing popularity and success of the work-at-home programs, the corporation should add real estate considerations to the mix and began an aggressive global rollout of telework. 1992: introduction of a dedicated team, with representatives from sales, real estate, technology, finance, HR and customers with the aim of identifying and examining the above issues around teleworking. The first outcome concerns the fact that the remote working is not intended for all jobs: teleworkers are those employees who, by the nature of their jobs, can work anywhere and are fully capable of performing all job duties and interactions with their employers outside a traditional office. In practice, home office is more common for managers while for average employees is still low diffused. In addition, the researches done by the focus team show advantages and disadvantages of the implementation. Among top teleworking advantages there are the improved productivity, organizational loyalty and belonging, job satisfaction, and employee retention and attraction. Other benefits concern cost savings in real estate, energy consumption, capital assets, training, employee cost savings in commuting expense, continuity of operations during disasters, remaining competitive in a global labour market that values work/life flexibility. At the same time there are some costs such as the limited control and supervision, talent development becomes difficult, corporate culture might be lost, no identification with company or team, possible exploitation by lazy employees, innovation suffers under missing collaboration and face-to-face interactions. In the light of what stated above, it is evident that the seismic shift in the definition of work and the workplace has numerous challenges, unexpected outcomes, surprising beneficial ripple effects and requires focused and coordinated planning to execute. In the early 1990s, no role model exists.The first step in order to implement it is to develop an overall robust framework for thinking about telework. What are the goals and expectations? What are the guiding principles? One key principle is that performance measurement should be based on results, not where an employee works. To develop a telework framework requires a cross-discipline team with expertise in real estate management, human resources, finance, and information technology. Assign responsibility to the team to conduct a coordinated and systematic analysis across functional areas. What job categories are good candidates for telework? Where are the real estate opportunities? How will employment policies, practices, and processes change? What technology platform will enable an employee to work anyplace? What are potential cost savings as well as projected implementation costs? Organizations, just like individuals, have learning curves. Once the framework is developed with measurable goals and clear direction, the second step is to educate the workforce about telework and communicate the organization’s vision using proven culture change techniques. Launch a campaign to highlight telework benefits. Dispel conventional wisdom to reassure managers and employees: teleworkers report the same or higher job satisfaction as those who work in an office in terms of informal interactions with coworkers, sense of belonging, communications with managers, and career development. Implementation requires continued collaboration from a variety of perspectives. Although real estate, finance, HR, and technology activities are discussed separately below, they must occur simultaneously.Economic analysis: a comprehensive assessment of real estate needs is critical in conjunction with an analysis of how many employees may be eligible to telework. Do you or will you need all office space you own or lease? What is the current percentage of dedicated offices? What is the current ratio of employee per square foot? What will the ratio be once telework is implemented? Do you have obsolete properties, due to age, location, or underutilization? As a matter of evidence, savings in real estate costs and CO2 emissions far outweigh the cost to transition an employee to mobile status. Once the infrastructure is in place, marginal costs decrease.In the early 1990s, IBM owns or leases more than 185 million square feet of office space with a ratio of office space to employee of 1:1. The expected outcome of a shift to teleworking is uncertain and require a long-term plan. IBM can currently reduce office space by a total of 78 million square feet. Of that, 58 million square feet can be sold at a gain of $1.9B. Sublease income for leased space not needed exceeds $1B. In the US, continuing annual savings will amounts to $100M, and at least that much in Europe. In that case, more than 10,000 workers can be mobile. Dedicated office space per employee will be reduced from a ratio of 1:1 to 4:1. Over two million square feet of office space and 7500 work spaces will be eliminated. Consequently, the return on investment will be achieved in 1995: the total cost to transform 10,000 employees into mobile workers is $41.5 million and the resulting saving in real estate costs is $75M by closing floors of buildings and entire buildings when leases came due. If the transformation will be effective, telework should be institutionalized and implemented worldwide, growing at least to 88,000 employees in 1998. The plan is aimed to reach the 40% of IBM’s employees (around 150,000) in 173 countries having no office at all. Many more spend at least part of their time in non-IBM locations – at home, traveling, or in client locations. That ratio of space to employee if objectives will be achieved will be 8:1 with some facilities as high as 15:1.Starting from 2000 the benefits will also concern environmental issue and IBM is supposed to avoid more than 8.98 million metric tons of CO2 emissions through the mobile work program by conserving a cumulative 17.2 billion kWh of electricity within 2005. Increasing the total savings from energy management by $22.9 million within 2005 and reaching a saving of 5 million gallons of fuel and avoiding more than 450,000 tons of CO2 emission by 2007, in the US alone.HR analysis: establish criteria to select job categories that are good candidates for telework is basically focused on the role in the firm. Back office functions such as human resources, finance, remote customer service and executives are likely candidates. Before any category is eliminated, consider opportunities to redesign work processes that would make them good candidates: often, it’s only a matter of simply changing how work is performed that makes a job conducive to telework. For job functions that are ultimately deemed not good candidates for full-time telework (such as face-to-face counter service), consider other variations for those employees. For example, supplement full-time teleworkers with other groups of employees on flex work schedules (four-day work week). This strategy has a cumulative effect on real estate space requirements and savings. It also gives those employees some relief with regard to commuting and work/life challenges.The next step concerns a full range of HR policies and practices:Update performance measurement. Measure all workers based on performance results and goals achieved.Establish career development paths geared to a mobile environment. Move as much classroom training online as possible. This is a cost savings opportunity by reducing classroom course delivery and associated travel.Set clear parameters for expense reimbursement policies: will the organization cover the cost of cell phones, high-speed line in a home office, PDA, wireless cards?Survey employees on a regular basis. Take steps to increase informal communication and build camaraderie as a partial substitute for face-to-face communication. Findings suggest that workplace isolation may be more of a concern with new or younger employees. Match newcomers with a mentor to assist them in becoming effective in a mobile environment.Automate also every HR and administrative function so that teleworkers, including managers, can accomplish tasks online, anytime, anyplace.Implement on-going ‘telework training’ for both managers and employees. Include coaching tips in the new world of working outside an office: combat the tendency of teleworkers to overwork by encouraging employees to set routines and create boundaries between work and home life.Information Technology (IT) analysis: the ultimate critical success factor to restructure and transition a workforce into a mobile environment. At IBM, each mobile employee should have access to a personal laptop, standard software, a cell phone and printer. Technical assistance is available on a 24/7 basis through the intranet and help desk/call centre support. Include communications and collaboration capability in the telework.