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Ways of Working (WOW) has been so much talked about, that you may feel it is time to move on. That however would be a mistake, because while a lot has been said about Ways of Working, not much has been done, at least not yet!
Newsflash: Ways of Working is still a priority! Indeed, it remains one of the greatest opportunities and challenges facing not just organizations, but economies too.
9 Reasons Why Leaders Still Care About It
It is the perfect storm as regards ways of working. Among the words that are being used are: ‘crisis', ‘disruption', ‘revolution' and ‘battle'. As we may not see anything like this for another 75 years, another word is ‘historic'.
‘Ways of Working' is topping the business agenda. Moreover, it is no longer just an interesting conference topic, but a business imperative.
For the first time Executive productivity and performance are being linked to business performance.
To understand why this is happening and why it is important, there are 9 trends to be aware of.
Scroll down to go through the trends one by one, or use the menu above to jump to the trend that most interests you.
1. PRODUCTIVITY PLUMMETS
It has been 75 years since productivity has fallen at the rate equivalent to 2022.1. The newspaper headlines are startling:
The numbers can get confusing and they are subject to adjustments quarter to quarter, however taking a big picture view it is clear that productivity is under pressure. As productivity drives economic prosperity and standards of living it is a topic that concerns economists as much as business leaders.
2. SHOCK RISE IN UNIT LABOR COSTS
Labor costs are the single largest cost for many organizations and they are rising faster than for 40 years.
The combination of falling productivity and rising wages resulted in the biggest jump in Unit Labor Costs since 19822. Again, here is an example of the headlines:
3. CRISIS OF ENGAGEMENT
Due to its long history Gallup is widely quoted as the key metric on engagement. The organization's research puts levels of ‘quiet quitting' at over 50%3 and ‘loud quitting' (actively disengaged) at 18% (the highest in a decade). Combine the two numbers and that is 68% disengaged.4 By contrast, just 32% are ‘actively engaged'.
4. ‘BATTLE’ OVER RETURN TO OFFICE
Remote Working – workers like it, managers don’t – that is a simplified version of the present reality in many organizations. Yet, read the headlines and the battle lines are being drawn:
Here is the crux of the issue: ‘WE WORK BETTER AT HOME’ SAY 87% OF EMPLOYEES, 80% OF SUPERVISORS DISAGREE5. The trends regarding productivity, labor costs and the economy generally mean that employers are right to be concerned, even paranoid, about performance. It is ok to be paranoid about performance.
5. ‘TALENT SUPERSTARS’ IN CRISIS
As if there wasn't enough happening with respect to Ways of Working (i.e. the above trends), there is a level of economic pessimism that hasn't been seen for over a decade.
The impact on big tech has been greatest. Here is what has happened to share prices in the period Jan 2022 to Jan 2023.
As one BIG tech giant after another announces major layoffs in Quarter 1 of 2023, large numbers of people – 10,000 here, 18,000 there – have lost their jobs6. That is very disruptive for all those involved. But the rest of us have lost something too – our role models and heroes.
So much of what has been written about business, leadership, talent and strategy has focused on big tech. They have been held up as the shining examples of leadership, talent, teamwork and of course innovation.
For over the past 20 plus years, it has been difficult to find case studies or inspiration from anywhere other than Google, Facebook, Salesforce, Amazon, and so on. What every they said about talent or just about anything else, people sat up and listened.
It is not just share prices that have been tumbling, so too has the reputation of big tech. The more cynical would say that ‘the emperor had no clothes' as stories emerge about how these organizations and their leaders fell into crisis and struggled to get out. That includes PR disasters such as:
- Salesforce's Marc Benioff arriving 20 minutes late to a town hall meeting to announce the layoff of 18,000 people,
- Media reports describe Meta as becoming ‘more hostile towards employees‘ and Mark Zuckerberg shows visible irritation in employee briefings.
- Elon Musk's handling of Twitter.
As last year's big names in talent come up short, who will be the new ‘poster-boys' for ways of working?
You may be thinking what have the fortunes of Big Tech got to do with me? Well, perhaps more than you think. Big Tech accounts for a major slice of the economy. It employees almost 9 million in the US and adds $1.8 trillion to the American economy7. Moreover, it often acts as an economic bellwether for the rest of the economy – with wide reaching influence on corporate investment decisions as well as investor strategies.
6. PRODUCTIVITY TOPS THE BUSINESS AGENDA
The boost to online during the pandemic led to expectations of continued fast growth and fuelled ‘hiring binges’ in organizations such as Google and Facebook. Today, growth expectations are much more cautious, resulting in productivity drives, consolidation, and job cuts. This started in Big Tech but has spread industry-wide.
In the focus on productivity, some CEOs have been talking about ‘blood on the streets’ (Alphabet/Google). Others are using more euphemistic language such as:
- ‘A fork in the road’ (Twitter)
- Simplify (Google/Peloton)
- ‘Disciplined prioritization’ (Meta/Facebook),
- ‘Adjustments/structural adjustments’ (Amazon/Microsoft)
- ‘Consolidation’ (Netflix).
Whether you are consolidating, adjusting, prioritizing, or simply cost-cutting, it is ‘back to basics’ for many CEO’s with a focus on boosting efficiency & cutting costs. This is fueled by economic uncertainty and pessimism – including concerns about inflation and the possibility of recession.
The drive for greater productivity has attached a dollar sign to ways of working. Optimizing ways of working has become an economic imperative. For many it has been the number one ‘go to' strategy in an era of resource constraints and economic uncertainty.
There is going to be a lot written and talked about ways of working, but not all of it is going to make sense. It will take some time before leaders can bring the same level of science and sophistication applied to other areas of business.
7. ‘SPYWARE’ SALES ROCKET
2022 gave us a range of new buzzwords, including quiet quitting and performance theater and most important of all ‘performance paranoia‘.
Many managers fear their people are not working as hard or as smart from home, as they would if they were in the office. One of the implications is the adoption of productivity tracking software (spyware):
- Sales are reported to be up 65% of 20198
- Estimates suggest that 8 out of 10 of the largest US private sector employers are tracking white-collar worker productivity metrics9
A word of caution: Executive productivity is an entirely new area of research. As it is new, it will be some time before people figure it out. For example, what exactly is productivity when it comes to the knowledge worker? How is it measured? Until these issues are clear tracking will pose challenges – that is even if it is the right strategy in the first place.
8. EMPLOYEE WELLNESS CONCERNS
While much of the focus has been on the productivity imperative in respect of ways of working, there is another issue that steals the headlines – employee wellness.
For example ONLY 59% OF EMPLOYEES SAY THEIR WELL-BEING IS ‘GOOD’ OR ‘EXCELLENT’ that is according to Deloitte research.10 This is not just a matter of philantrophy, but is connected to organizational performance in many ways (ranging from productivity levels to employee turnover, absenteeism/presenteeism and the employer cost of sickness benefits).
9. TSUNAMI OF COLLABORATION
The biggest shift has gone unnoticed—the rise and rise of collaborative working. It has now come to dominate now accounting for 70% of all work. The implications are huge and leaders are still grappling with them. For example, by focusing on individual performance, traditional organizational leadership, culture, and even structure, often promote competition ahead of collaboration.
We call it a ‘Tsunami of Collaboration' because of it sweeping effects – impacting on all aspects of work and the work experience.
Teamwork doesn’t just dominate our calendar – taking up 70% of our working week. They are the primary means through which we experience our organizations. Teams have the power to elevate our performance or to depress it. They can frustrate us too!! For example, leaders say that (on average) 50% of internal collaboration adds little or no value!!! That’s an alarm call for all leaders!!
Poor collaboration can represent a major tax on performance, as well as well-being and engagement.
Here is a quick recap on the trends that have pushed Ways of Working to the top of the business and even the economic agenda.
What are the implications for you as a leader?
As an issue Ways of Working is going nowhere. It is still a key business priority, as well as an important economic issue. From productivity to engagement and wellbeing, there is much more that needs to be done.
Having explored these ‘macro level' trends, pause for a moment to consider:
- What are the implications for you as a leader?
- What is it costing your organization & its people?
Pitstop Analytics can help you to answer these questions with numbers and data.
Pitstop Analytics is a world-beating analytics solution to illuminate Ways of Working & Interacting. Plus, a powerful methodology to energize your team in optimizing its Ways of Working.
SOLUTIONS & SERVICES: Here are some of the ways that our research & insights are put to work by our clients:
- See how this was reported on CNBC https://www.cnbc.com/2022/05/05/labor-productivity-fell-7point5percent-in-the-first-quarter-the-fastest-rate-since-1947.html
- See how this was reported on Bloomberg here: https://www.bloomberg.com/news/articles/2022-08-09/us-productivity-falls-for-a-second-quarter-labor-costs-surge#xj4y7vzkg
- See Gallup Quite Quitting estimates here: https://www.gallup.com/workplace/398306/quiet-quitting-real.aspx.
- see https://news.gallup.com/poll/241649/employee-engagement-rise.aspx
- Microsoft Survey, September 2022 . Link https://www.microsoft.com/en-us/worklab/work-trend-index/hybrid-work-is-just-work
- See the latest data on layoffs here: https://layoffs.fyi/
- See ‘5 takeaways from the massive layoffs hitting Big Tech right now; by Bobby Allyn on NPR Jan 26, 2023: https://www.npr.org/2023/01/26/1150884331/layoffs-tech-meta-microsoft-google-amazon-economy
- That is according to internet security and digital rights firm Top10VPN as quoted by The Washington Post’s Danielle Abril in an article titled ‘Your boss can monitor your activities without special software’, October 7, 2022 Link: https://www.washingtonpost.com/technology/2022/10/07/work-app-surveillance/
- See: ‘The Rise of the Worker Productivity Score’ By Jodi Kantor and Arya Sundaram, Aug. 14, 2022 Link: https://www.nytimes.com/interactive/2022/08/14/business/worker-productivity-tracking.html
- See Deloitte statistics on wellness here: https://www2.deloitte.com/us/en/insights/environmental-social-governance/employee-workplace-wellbeing-metrics.html