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February 12, 2007 Results Only Please
If you were to guess were I was last Monday at 8:00am, most likely the answer would be work. However, at Culture Rx, a Minneapolis based consulting firm, the contention is that your work is not where you go and when you get there, but what you do. Recently, Culture Rx's philosophy of Results Only Work Environment (ROWE) has taken hold at Best Buy, with some interesting results. Culture Rx claims (as do their clients) that by measuring employees performance by their results and not the actual time spent physically at the office, workforce productivity has increased and turnover, decreased. Best Buy's initial pilot of ROWE was so successful, that 60 percent of the company's workforce is now measured based on ROWE.
From a global perspective, the United States already boasts some of the world's most productive workers, enabled in great part by continued advancement in technology. However, while technological advancement has greatly benefited employee productivity, I doubt it has had much effect on happiness and motivation, two important and sometimes neglected catalysts for a productive workforce.
So what are the implications of a shift in how we think about corporate culture? Imagine increasing productivity 35 percent (which was the average increase in productivity cited by Culture Rx for teams in a ROWE), while also retaining your employees for far longer periods. Under this scenario it's hard to believe that the bottom line would not improve. How does this impact valuation, well from the initial results, increased expected return and less risk mean squeezing more value from a universal asset, people.
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