Article: Wednesday, 16 November 2016
When does the creation of a digital workplace benefit not just the individual employee, but the company as a whole? Research by MIT’s Center for Information Systems Research and Nick van der Meulen of Rotterdam School of Management, Erasmus University (RSM) demonstrates that the best-performing companies not only have cleverly designed digital workplaces that facilitate flexible working; they are also run by managers who trust employees to work autonomously and dare to learn from mistakes.
Being able to work flexibly, either away from the office or in flexible zones in the office, has become the norm in many companies. At the same time, companies like HP, Best Buy and Yahoo have rescinded some of these practices, claiming that flexible working hurts collaboration and impedes innovation.
PhD Researcher Nick van der Meulen wanted to find out if the assumed benefits of having employees working in one location, such as improved knowledge sharing and better collaboration, could be reconciled with employees’ needs to be flexible and autonomous. In particular, he set out to reveal which elements of a digital workplace actually contribute to better company performance.
The first part of this study, taking stock of existing digital workplace initiatives, was conducted with Kristine Dery and Ina Sebastian of MIT’s Center for Information Systems Research (CISR). The researchers there interviewed 63 managers at 27 large global corporations about their digital workplace practices. They discovered that companies have six ‘levers’ to pull when they design and optimise their digital workplace. Four of the levers relate to actual design, the other two are management and leadership practices.
The study showed that many companies reorganise their physical and virtual workplaces to stimulate employee flexibility, for example by creating open-plan floors and enabling teleworking. Others will also invest in software and digital support systems that let people work securely wherever they are.
But many companies realise increased employee flexibility comes at a cost. Teleworkers have fewer informal conversations by the coffee machine; as a result, there will be fewer exchanges of ideas. To counter this, some companies invest in ‘enterprise social media’. These are closed-off digital environments in which employees and management can freely discuss new ideas to boost innovations and competitiveness.
Finally, the researchers noticed that some companies run branding campaigns and create symbols to embed the new, digital way of working firmly into the company’s culture. Some companies went as far as changing their logo to show long-term commitment to the new ways of working, the researchers found.
Van der Meulen studied 113 companies, comparing use of design levers to the overall company performance, using indicators like revenue growth, profit growth, and growth in market share. He found that changes to workplace design helped to improve company performance to some extent. But his results also showed that the most successful companies went one step further, adopting a more facilitative, leadership style in which managers trust their employees to work autonomously and let them decide when, where, and how best to work.
High-performing companies also have a more open corporate culture that is geared towards ‘systemic learning’, van der Meulen discovered. Management in these firms typically encourages employees to share mistakes and failures in a digital working environment, but is also interested in their innovative ideas. Under this type of leadership, a digital workplace allows employees to be flexible, while enabling the entire organisation to learn, innovate and remain competitive, van der Meulen concludes.
MIT Sloan School of Management
van der Meulen, D. (2016, November 11). The Distance Dilemma : the effect of flexible working practices on performance in the digital workplace (No. EPS-2016-403-LIS). ERIM Ph.D. Series Research in Management. Erasmus University Rotterdam.
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