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Business Week has a fascinating piece about how Best Buy corporate headquarters in Minneapolis has adopted a revolutionary approach to the workday:

“The nation's leading electronics retailer has embarked on a radical--if risky—experiment to transform a culture once known for killer hours and herd-riding bosses. The endeavor, called ROWE, for ‘results-only work environment,’ seeks to demolish decades-old business dogma that equates physical presence with productivity. The goal at Best Buy is to judge performance on output instead of hours.

“Hence workers pulling into the company's amenity-packed headquarters at 2 p.m. aren't considered late. Nor are those pulling out at 2 p.m. seen as leaving early. There are no schedules. No mandatory meetings. No impression-management hustles. Work is no longer a place where you go, but something you do. It's O.K. to take conference calls while you hunt, collaborate from your lakeside cabin, or log on after dinner so you can spend the afternoon with your kid…The official policy for this post-face-time, location-agnostic way of working is that people are free to work wherever they want, whenever they want, as long as they get their work done…By the end of 2007, all 4,000 staffers working at corporate will be on ROWE. Starting in February, the new work environment will become an official part of Best Buy's recruiting pitch as well as its orientation for new hires. And the company plans to take its clockless campaign to its stores--a high-stakes challenge that no company has tried before in a retail environment.”

Business Week notes that in other companies that have adopted this sort of approach to working hours, the savings has run up to the hundreds of millions of dollars, much of it from real estate that no longer has to be rented or bought because people can work anywhere they want. And, it writes, “A recent Boston Consulting Group study found that 85% of executives expect a big rise in the number of unleashed workers over the next five years. In fact, at many companies the most innovative new product may be the structure of the workplace itself.”

A couple of other interesting points:

• This is not glorified “flex time.” According to Best Buy’s human resources managers, flexible work schedules “heap needless bureaucracy on managers instead of addressing the real issue: how to work more efficiently in an era of transcontinental teams and multiple time zones. They add that flextime also stigmatizes those who use it (the reason so few do) and keeps companies acting like the military (fixated on schedules) when they should behave more like MySpace (social networks where real-time innovation can flourish). Besides, they say, if people can virtually carry their office around in their pockets or pocketbooks, why should it matter where and when they work if they are crushing their goals?”

• The Best Buy system did not start as an edict from the top. In fact, CEO Brad Anderson “only learned the details two years after it began transforming his company. Such bottom-up, stealth innovation is exactly the kind of thing Anderson encourages.”

• One of the biggest impacts has been seen in turnover. While Best Buy used to be a place where people would quickly burn out and leave, that has changed dramatically.
KC's View:
It is hard to imagine how Best Buy will make this work in the stores, but we think that other retailers should be watching closely to see what the successes and failures are…especially if best Buy becomes a preferred employer because of its approach to human capital.

And if at first you seem skeptical, remember what we told you earlier this year about “Fart’s Law,” which states that “the likelihood of an innovation succeeding increases exponentially with the number of old farts who refuse to endorse it.”