Creating a Customer-Driven Intelligence Community by Unlocking the Full Potential of Human Capital

NOTE:  This white paper was originally written by me for a the Galileo Award contest in 2008.

Creating a Customer-Driven Intelligence Community by Unlocking the Full Potential of Human Capital

“True innovation always comes with challenge and change… We have embraced [ROWE]… because it’s good for business.  Engaged employees are more productive, more innovative, more committed.  It all gets back to the idea of unleashing the natural strengths and talents of your people… our people are what matters most.”[1]

Brad Anderson, CEO Best Buy Inc.

Problem Statement: 

The United States Intelligence Community (USIC) does not have the most effective, customer-driven intelligence business processes.

Goal: 

The USIC must unlock the full potential of its Human Capital in order to achieve a customer-driven business model.

Solution: 

Introduction

The USIC has focused much attention in recent years on creating new business processes and restructuring organizational diagrams.  While these achievements were undertaken with the best intentions in mind, I believe most attempts at building a system before empowering its assets is putting the cart before the horse.  The prime asset of the USIC is the people working within it – its Human Capital.  If the Office of the Director of National Intelligence (ODNI) intends to build the best possible business model for the future, it should consider using other successful, customer-driven businesses as inspiration.  At the end of the day, the USIC creates products and services in the same way as many profit-driven businesses.  The main differences between the USIC and profit-driven corporations are the extremely high stakes.  The costs of doing bad business in the USIC could be in human lives rather than dollars.  Therefore, the USIC must adopt a Results-Only Work Environment (ROWE), where employees are empowered, yet held accountable and rewarded for achieving specific objectives based upon organizational goals.

This paper will ask readers to set aside personal biases about what the workplace should look like, and open their minds to a radical, but common-sense approach to workplace structure.  At first review, the approach I will discuss will seem like a trivial way to make the workplace softer, happier, or easier — something unnecessary for the serious business conducted within the USIC.  In order to achieve the best business practices and remove barriers built up by half a century of bureaucracy, we must strip down to the core of what work is and should be, and ask ourselves, is there a better way to ensure that employees thrive, and perform at their highest level in the stressful environment of the USIC?  My answer is yes, there is, but it will require an entirely new way of thinking.  It will require common sense.  It will require a Results-Only Work Environment (ROWE).

The Needs of Human Beings in the Modern Work-place and the History of ROWE

In 2001, leaders at Fortune 100 company Best Buy formed a committee with the ultimate goal of making Best Buy an Employer of Choice, or a top consideration of the most talented potential employees.  The committee conducted a survey of current employees asking them what they most wanted from work.  The overwhelming response was employees asking managers to trust that they knew how to do their jobs, that they could deliver results, and knew how to manage their own time. [2]  This survey led to a few trial incarnations of a flex-time program with some twists.  Employees, not managers, would determine when the work day would begin, and the flex program was open to all employees, no exceptions.  Most companies, including the US Federal Government, provide flexible work schedule programs.  Almost all of these programs seem great from a distance, but close inspection reveals they are riddled with flaws, primarily that 1) not all classes of employees are offered a flexible schedule, 2) those that are must obtain permission from management, and 3) when permission is granted there is often a stigma applied from non-flexible schedule employees that these “special” workers are not working as hard as everyone else.  From those revelations – that employees wanted freedom to choose and to be trusted to perform their jobs — ROWE was born.  After ROWE’s implementation, productivity shot up more than thirty-five percent, voluntary turnover (good employees seeking other jobs) dropped dramatically, and involuntary turnover (under-performing employees being terminated) increased.  Employees were happier and so were Best Buy’s corporate customers.  This was the ultimate win-win situation.

While Best Buy was conducting its own research of its own employees, and taking action, several academic studies had already, or would soon, come to the same conclusions as ROWE’s creators about what makes workers happy and more productive.  In 1979 Robert Karasek found that workers whose jobs rated high in job demands yet low in employee control (as measured by latitude over decisions) reported significantly more exhaustion after work, trouble awakening in the morning, depression, nervousness, anxiety, and insomnia or disturbed sleep than other workers. When workers facing high demands had more control, their stress was lower.[3]   In their book, Christina Maslach and Michael Leiter[4], revealed many surprising truths about “job burnout,” namely that it is often not caused merely by over-work (though it can be), but is rather usually an organizational, or systemic problem that happens when people have an overloaded work schedule, have a lack of control over their work and decisions, and among other factors, the rewards don’t outweigh the costs (not enough pay, acknowledgement, or satisfaction).  Recently high turnover rates among analysts in some USIC organizations have been discussed in the media.  As an analyst in one of these organizations, I personally believe that the symptoms of job burnout among the workforce are at a higher level than is commonly acknowledged.  The USIC cannot afford to not take care of its employees.

In March 2005, researchers from the University of Minnesota undertook a preliminary study that focused on how ROWE affected employee well-being and their work experiences.  The researchers found that in an astonishingly short period of time, once employees migrated to ROWE, people experienced significant changes in their schedule control and work patterns, their work-family interface, their health and health related behavior, and work conditions and effectiveness.  For example, employees reported: a decrease in negative spillover from work-to-family; exercising more frequently; gains in energy; sleeping more than seven hours per night; feeling less pressure to work overtime; having greater organizational commitment; having lower turnover intentions; and more job satisfaction.[5]

What is ROWE?

So far, I have discussed the overwhelming body of evidence supporting the idea that the more control employees have over their daily work-life, the happier and more productive they are.  How does this evidence address the central problem of the USIC not having a customer-driven intelligence model?  The biggest mistake any organization can make when undertaking massive changes is not allowing the individuals who actually do the work (ie. its Human Capital) decide what business processes make the most sense.  Instead, focus groups are created, studies are commissioned, and a consensus is finalized to reengineer workflow.  Some business processes will make the cut, others will not, and some entirely new ones will arise.  Unfortunately, in a complex organization (or in the USIC’s case, many complex organizations) with many moving parts and many unique objectives, the consensus model is likely to produce average results and miss the needs of many employees and many sub-groups within its own organization.  Once Best Buy implemented its Results-Only business model, the company was astonished to see individual employees coming up with, and using, entirely new ways of getting their work done.  Not only were these processes new and creative, but they were more effective and efficient than those created by the group-driven machine of organizational reengineering.

How can this work?  In a ROWE, the only measurement is success.  Employees are judged solely on whether or not they accomplish results.  When an employee is judged entirely on output and job performance, he or she has a much greater incentive to accomplish high quality work in a shorter period of time, because in a ROWE hours worked are irrelevant.  Employees who finish work more quickly are rewarded with time.

In the modern workplace, employees are typically judged on a combination of job performance and hours worked.  The concept of the 40-hour work week actually comes from the Industrial Age, when most workers were laborers or craftsmen and physical places were the only places where work could be completed.  You had to be on the line at a factory or the work would not get done.  Factories knew that in forty hours the average worker could build X number of whatever product was being produced.  Hours worked translated directly into profit gained.

Today, we live in the Information Age where ideas are as valued as any product.  Products are still created, but often they are service or knowledge-based.  Rather than producing parts for an automobile, employees in the USIC create Intelligence Information Reports and Bulletins, and they respond to Requests for Information.  Creativity and innovation are paramount to sheer volume output of unskilled laborers.  Ideas and information are the driving forces in America’s corporations, but even more so in the USIC.  I would argue that the USIC has always been a part of the Information Age, and has in many ways always worked as a ROWE.  After all, the latest threat does not usually conform to business hours.  However, the USIC has simultaneously been forced to work as an Industrial Age factory – paying its workers by hours in the office – and as an Information Age, idea-driven community, in essence serving two masters, but never focusing on the needs of one.

In a true ROWE, hours worked are irrelevant.  Employees do not worry about filling out a time card, and managers do not waste time approving leave or checking the clock when their subordinates walk in the door.  In a true ROWE, employees are treated as adults with specific abilities who know how to do their jobs.  In a ROWE, managers are allowed to be mentors and leaders, not surrogate parents.  In a ROWE, managers along with employees create clear, specific objectives for their employees based on organizational goals and needs, and in turn, employees are free to achieve those objectives in the manner that they see fit (providing that manner is ethical, legal, and within proper security protocols).   In a true ROWE, employees are given freedom and control over their entire lives, including while they are at work.  In a true ROWE, the organization treats its employees as adults with specific skill sets it needs, but with lives it does not own.  In a true ROWE, employees either produce results, or they lose their jobs.  The only thing that matters is results.

Pay Banding or Pay-for-Performance vs ROWE

Recently the ODNI has concluded that the current General Schedule civilian Federal employee pay scale (or GS) system is inadequate, outdated, and that employees should be judged on their performance, not by how much time and dedication they have given to an organization.  I have one response: “Hurrah!”  It is encouraging to see this issue of pay-for-performance seriously moving forward in a positive way.  However, it is somewhat sad that pay-for-performance has been considered a revelation — that paying employees for how well they perform their job — is somehow radical.  That there is any opposition to this concept is astonishing.  The idea that the USIC cannot be judged on its performance is arrogant; however, opposition to the manner in which pay-for-performance will be implemented is understandable.  Employees are rightfully concerned that their performance will not be judged fairly, or by the correct standards.

In creating pay-for-performance, the ODNI has decided to adopt the SMART (Specific-Measureable-Achievable-Relevant-Time-bound)[6] method for determining how to measure an employee’s performance.  This is a good start, but I fear that it will not go far enough.  I fear that the infrastructure will not be put in place to allow employees to perform at their highest level.  I fear that the volumes of rules and regulations within the USIC will be too great an obstacle for true success, and that pay-for-performance will not go far enough in holding managers accountable for their employee’s successes and failures.  In order for pay-for-performance to work, the USIC must ensure that the correct performance benchmarks are measured, and that employees are part of the process for determining what those metrics are at all levels.

ROWE is not an alternative to pay-for-performance.  It is a more complete version of it.  Best Buy had also used the SMART method prior to ROWE, and found that managers almost always reverted to using time as a measurement of performance because it was easier.  With ROWE, managers were forced to think about what they specifically needed from their employees, and could not fall back into old patterns of setting imprecise objectives, or none at all.  Once time was removed entirely from the equation, goal setting became a “must-do”, rather than a “nice-to-do.”  When employees are given clear expectations about what is a successful outcome, and are given the maximum freedom and control possible over attaining those outcomes, the results are unparalleled levels of productivity combined with astonishing levels of job satisfaction and employee retention.  Without providing total freedom, it is impossible to hold employees completely accountable for their performance.  How can an individual be held accountable when blocked by a force he or she is powerless to move?

Unfortunately, the current 40-hour work week model limits the level of freedom and control employees have over their work.  In the current system, employees are paid for how many hours they work.  Even salaried employees are usually required to work a certain number of hours per week.  Typically, there is a start time of the day and a close of business time of the day.  If we really stop to think about this model, we will see how antiquated and ridiculous it is, especially for the USIC.  The threats our nation faces do not care about business hours.  The enemy does not care about “close of business” or weekends.  By the same token, the employees of the USIC are a diverse group, with different strengths and weaknesses and varying styles of accomplishing work.  Their work is largely based on ideas, imagination, and inspiration.  These intangibles do not always thrive in an 8:00 am to 5:00 pm day.  Sometimes the best ideas come to life in the middle of the night.  Sometimes one individual can accomplish research in an hour when another might need three, yet both are able to meet a deadline, and through completely different methods, knock out a world class paper pivotal to helping decision makers understand the threats.

With modern technology – email, faxes, voice-over-IP, secure teleconference, and cellular phones — employees are reachable nearly 24/7 in all parts of the world.  In the event something urgently requires an individual’s attention, immediate communication and action is possible more than ever in history.  Additionally, there are offices for many agencies within the USIC spread around the world.  If pay-for-performance is going to work, employees must be free to work when it makes the most sense for them, when they are at their best, as long as the work gets done.  So, why do we chain employee’s to their desks, stifling creativity and job satisfaction, and making cross-agency cooperation more cumbersome?

In a ROWE, managers are held accountable for their employee’s accomplishments and failures, not by strictly controlling the methods used by their employees, micromanaging or monitoring time and attendance rosters.  Managers, along with the employees, develop realistic and measureable objectives that eventually lead to the organization’s broader goals.  Managers are freed up from mundane administrative tasks (such as approving time cards and leave) and are able to focus on developing their teams by encouraging training, and working with their employees one-on-one as much as possible.  This does not mean micromanagement.  Once specific objectives are in place, employees should be left alone to determine the best path to the required outcomes, and managers would act as mentors by providing solicited feedback on lessons learned and ensuring employees have the required training opportunities.  A manager’s role is to create clear objectives and benchmarks for success, and then to clear the path allowing employees to complete the jobs they were hired to perform.

Since 9/11, organizations within the USIC have undergone massive transformations, many involving Human Capital.  If pay-for-performance is to work, it is essential that the correct benchmarks for success are implemented.  One mistake I have seen throughout the many attempts to transform the USIC is organizations focusing too much on fixing broken processes before they define their goals.  In a ROWE, the organization creates the goals, but it is up to individual contributors and managers to determine the objectives that will result in successful achievement of those goals.  This means that while broad definitions of success can help managers determine which objectives are required, an agency’s role is not to create a cookie cutter template for specific groups of employees.  If everyone understands what success is, how success is attained should be left up to the individuals performing the job.  The ODNI’s Vision 2015 paper states that “… the key to achieving lasting strategic advantage is the ability to rapidly and accurately anticipate and adapt to complex challenges.[7]” ROWE is the most flexible approach for organizations of all sizes to achieving long-term organizational change, and ensure that the needs-of-the-customer is paramount to all other tasks.

An Example of a Real, Working ROWE

Ironically, although those of us who have attended college or a university essentially began our careers in a ROWE, we find it difficult to embrace the idea that measuring success by hours worked is outdated.  It is when we begin our journey into adult responsibilities that we are most free to work in the manner that makes the most sense to us.  College is the place where we had the most freedom and where creativity was highly valued, yet we were also held specifically accountable for our actions and abilities.  On the first day of class, the course instructor typically gives each student a syllabus.  The syllabus first states the overall goal of the course, then outlines exactly what is expected of the student, down to what how many points correspond to each grade level.  Merely showing up to class does not matter.  In fact, in most classes, especially at a large university, a student’s attendance (or lack thereof) would barely be noticed, much less tracked.  If the student attends every class, yet does not turn in a final, quality report and fails his or her exams, that student will fail the course.  In contrast, if the student slept through all of his or her classes, yet scored in the 90th percentile, that student would receive an “A”.  In college, all that matters is results.  This is how it should be.

The USIC has many similarities to college.  Ideas are our currency.  Knowledge and understanding are our paths to making pivotal recommendations and providing policy makers with sound analysis in our areas of responsibility.  In college, students sink or swim by their ability to achieve results.  It is a time of great pressure, yet from that environment, some of the most amazing discoveries and ideas have been generated throughout history.  The freedom to control how work gets done and when, while clearly understanding the measures for success is all the college student needs.  The student is not judged by how many hours he or she spent on homework (though longer hours probably correlate to a better grade), or by how many classes were attended.  If anything, the student has a higher incentive to complete homework more quickly and efficiently, because that student will be rewarded with free time to spend with friends and family.  When the student completes an assignment early, the instructor does not pile on extra work, or punish outstanding accomplishment, because the extra work was not a requirement for successful completion of the course.  It is up to the instructor to be organized and create specific goals for his or her students, just like in the workplace, managers are expected to do this for their employees.  Students are expected to complete specific outcomes, just like employees were hired to do a specific job, not count the hours spent at their desks.   If ROWE works for college students and staff, why should the USIC be any different?

Implementing a ROWE

Implementing a ROWE in the USIC will not be easy, however it is the only model that makes sense to ensure that the USIC will become a customer-driven community, and that pay-for-performance will not fail.  The largest obstacle will be changing the attitudes of managers and employees.  The 40-hour work week is ingrained in the American psyche.  It is very difficult for people to not measure work performance by time spent at the office.  This work culture has spawned numerous comic strips, and television programs based on the political games played at offices all over the country each day.  While it is easy for us to understand the humor in “cube-farms” and micromanagers, and water cooler discussions, we continue living each day the same way, never changing the core problem that these anecdotes have arisen from, which is that the 40-hour work week does not focus on results.

Offices around the USIC may not be driven by profit, but they are not immune to the same maladies afflicting the rest of the working world.  When work is judged by hours spent at the office, it is easy to lose sight of the goal and the reasons why an employee was hired in the first place.  When managers are too busy to mentor their subordinates because they must attend ten meetings in one day, the goals of the organization have been overshadowed by processes.  People are often judged by what work looks like, rather than what work they actually perform.  Who has not seen a case where the person attending the most meetings, (thus getting the most face time with upper management), get promoted over the hard-working, quiet employee grinding out results day after day?  When management is worried about what time an employee arrives at work, rather than what that employee has accomplished, the system is fundamentally broken.  This is not acceptable in the USIC.  Therefore, regardless of how difficult it will be to change our own biases and mindsets, it is essential to our mission success.

I recommend that the USIC adopt a Results-Only Work Environment within the next five years.  The first task would be to transform a small number of units, or sections within at least two different agencies into a ROWE, and study the results.  This should be accomplished within the first year.  The first few months would be spent educating employees and managers within each group what it means to be in a ROWE, and the specific guidelines that are essential to successful ROWEs.  Also during this time, managers are responsible for isolating what the required tasks of their employees are, and what it means to succeed or fail at those tasks.  Until managers know what work is needed, (that is what work is essential to achieve organizational goals), employees cannot be held accountable for that work.  If the focus is not on results and objectives, the customer will always suffer.

Simultaneously, the ODNI must make it easier for managers within ROWE systems to hold employees accountable.  This means that successful employees must be rewarded, and employees that fail must be removed or terminated.  Of course, it will be a difficult task for managers to determine what failure truly means (how many chances does an individual receive), but without rewards and consequences, pay-for-performance will not work, and the USIC will never be customer driven, or a results-only work environment.  One of the weaknesses of the US Federal Government is that underperforming employees are allowed to hide behind hours on the job and time in service.  The American tax payers demand success, and frankly the current system of coddling underachievers is not in the spirit of the American capitalistic culture.  This places a great burden on managers.  It is essential that clearly defined, measurable objectives within the control of the employee are created.  Managers should work with employees to create specific goal plans during yearly, semi-annual, or quarterly review periods.  The ODNI must remove any policy or legal obstacles currently in place that limit its ability to hold employees and managers accountable for job performance.

While these pilot trials of ROWE are progressing, it is important to study the effects ROWE is having on productivity, and employee job satisfaction and well-being within the USIC.  This study should be independently conducted, and preferably academically oriented, and produce results that can be shared with the American people.

After the successful completion of the pilot groups, (within one year) ROWE should be swiftly implemented in all remaining components of the USIC.

Conclusion

ROWE is not simply the only model that makes the most sense for the modern 24/7 Global Information Age workplace, but it has a proven track record of increasing productivity, and worker health and happiness.  ROWE allows the greatest level of organizational flexibility because it empowers workers at every level of an organization, while simultaneously focusing on an organization’s core goals and mission.  By giving control over the work environment to the people who must be within it, ROWE is the framework to maximize employee creativity and innovation.  With ROWE, organizations through individual managers are forced to create specific objectives and benchmarks for employee success.  In a customer-driven organization, this means that the needs-of-the-customer are paramount, and all work that does not drive towards that goal, are eliminated.  Most importantly, ROWE ensures that each organization within the USIC achieves results, which ultimately means American lives are saved.