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Creative Management Through a Flexible Work Program


Oct. 29, 2009

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Flexible work programs are increasingly being adopted by global companies. From 1996 to 2005 alone, the percentage of US companies with such programs more than doubled to 74% from 31%. In Japan, telecommuting, or working from home, is being promoted in a joint government-private sector effort to cope with the nation's low birth rate and aging population. The "e-Japan Project," aimed at raising telecommuters to 20% of the working population by next year, has enlisted corporate pillars like Panasonic, NEC and NTT. In Korea, Samsung Electronics adopted a flexible work schedule scheme in April 2009 on a trial basis and plans to gradually expand the system to other business divisions.

The spread of flexible work programs is aligned with structural changes in the business community, which needs more and more "knowledge workers," those engage in R&D, design and other areas requiring specialized skills. From 1994 to 2007, the share of knowledge workers increased from 27.7% to 36.3% in Korea, 34.9% to 37.8% in Japan, and 45.8% to 49.5% in the US. In addition, with the axis of global competition tilting from labor and capital to knowledge and creativity, it has become all the more important to change from strictly managing time and place to one that fosters a creative work environment.

Moreover, as work-life balance becomes a major catalyst to elevating employee commitment, molding a working culture that respects individuals' autonomy and diversity is gaining more emphasis. Such a culture has become an "employ ment brand" that can secure and retain core talent and female workers. In particular, flexible work hour enhances employees' work satisfaction and commitment by reducing possible conflict s between work and family life.

In Korea, flexible work schemes were first introduced in the late 1990s, led by foreign-invested companies, including IBM Korea, P&G Korea and Yuhan Kimberly. Yet, overall acceptance remains fractional. Only 0.7% of companies have telecommuting, which is only 1/20 of those in developed countries and particularly low given that Korea has the world's best IT infrastructure.

Thus, a shift in thinking is crucial, especially considering the nation's rapidly aging society, the tilt in business structure toward knowledge workers, and the key competitive edge firms gain through creativity and diversity. Korea is expected to be an aged society by 2018 and super-aged in 2026, with the elderly (aged 65 and over) accounting for about 20% of the population. By 2050, the elderly population is forecast to be nearly 40%. Under these circumstances, it is indeed necessary to prepare for an alternative work system that can cope with the coming losses in working population and labor productivity.

What steps should Korean companies take to lay a foundation for a flexible work system? First and foremost, top management should realize that a flex schedule not only nurtures worker satisfaction, but also improves productivity. A successful case is Sun Microsystems, where 40% of employees telecommute under a program called "Open Work." It has reduced 60% of commuting costs and US$6 8 million of real estate costs, while raising productivity by 34%. This means that flexible work schedules, combined with a strict performance-based system and web-based work environment, can deliver win-win results for both employees and the company. IBM Japan, in an effort to overcome negative views on flexible work schedules, supported managers who supervised employees through a remote, shared system. Employees working at home write their daily work on the calendar of the company intranet, which can be accessed by co-workers. Also, instant messaging through the Internet facilitates real-time communication between telecommuters and managers.

Second, a company's organizational culture, structure and leadership approach must be rewired in order for a flex system to gain a firm foothold and solidify. Employee evaluation must be based on performance, rather than number of hours logged. Also, leadership training is needed to teach managers how to supervise telecommuters and resolve problems that are off site. Moreover, an organization of horizontal relationships is needed that empowers employees and reduces decision-making processes. BestBuy, a US consumer electronics retailer, has established an innovative flexibility initiative called ROWE (Result-Only Work Environment), removing the concept of defined time and place for work. Un der 13 action guidelines - m eetings, for example, are not mandatory ("Everything is optional") and employees decide when to start and stop work ("No judgment about how colleagues spend their time") - the company has firmly planted a performance-based work culture.

Last but not least, companies that adopt a flexible work schedule should first conduct a trial run with a limited number of employees to detect any negative side effects and confusion. Once the system is installed in earnest, regular monitoring is needed to mitigate any problems.

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