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The challenges for Mabel’s Labels cofounder, Julie Cole were: 1) objectively measuring the benefits of Results-Only Work Environment (ROWE) and 2) resolving the perceived concessions the company made to maintain ROWE as well as removing threats to the original culture and vision.

The concept for Results-Only Work Environment is that the ends are what matter and the means are at the discretion of the employees. Konrad and Birbrager use this definition for ROWE:

“ROWE focused on clarity in setting outcome-based goals, expanding individual and team capacity and infusing equal amounts of autonomy and accountability”. (Konrad and Birbrager, Page 4)

In Mabel’s particular application of this concept or technique, there are many appealing (at least on the surface) benefits: work as much or as little as needed to meet objectives; work remotely as much as needed unless face to face time is required, provide managers decision-making authority through decentralization, create an environment of workplace committees dedicated to cohesion, and foster mentoring relationships so that employees are coached during problem solving. These are practices that are associated with forward-thinking companies and are a departure from Frederick Taylor’s principles of Scientific Management, which emphasized the need for management to strictly define the work and bound the frontline employees’ efforts to the simple, predefined task at hand. The ROWE method emphasized Terminal Values over Instrumental Values; this means that management is more results oriented (ends) than process oriented (means) (Uhl-Bien, Schermerhorn, and Osborn, page 43). In the same discussion, these authors indicate that research finds higher levels of satisfaction when there is “congruence among the four values of achievement, helping, honesty, and fairness” (Uhl-Bien, Schermerhorn, and Osborn, page 43). The following paragraphs will demonstrate the challenges to maintain congruence among the above four values in the Mabel’s method of implementing ROWE. Continuous improvement cultures like Toyota and Harley Davidson, who also value frontline employees as knowledge workers, believe that companies that are results focused are short term oriented versus long term oriented, and fantastic results alone will not sustain a company.

The founders of Mabel’s Labels had good intentions when they chose to deploy ROWE at Mabel’s Labels. They wanted to select a management style that neither conflicted with their culture nor their values. The workplace principles and core values were emphasized in every new employee orientation, and the founders were careful to tie aspects of their implementation of ROWE to support of each value or principle.

Mabel’s Workplace Principles (Konrad and Birbrager, Page 2):

• Trust

• Respect

• Teamwork

• Empathy

• Excellence

Mabel’s Core Values (Konrad and Birbrager, Page 2)

• Delivering Excellence

• Integrity

• Open Imaginations and Open Minds

• You be You and I’ll be Me

• Best People

• Learn from Experience

These principles and core values are generally accepted as positive goals or characteristics. They also connote a workplace that values its workers’ differences and what they have to say. In fact, Mabel’s Label’s founders deliberately seek out new hires who think differently from them, using the resulting heterogeneity as a springboard for new thoughts and products.

One of the first considerations when assessing the cost-benefits of a process is its impact to the bottom line. The customer service manager of the department that was using ROWE (not all Mabel’s departments used ROWE) commented that “her unit was now accomplishing more projects and product launches, resulting in more sales and increased income” (Konrad and Birbrager, page 5). While Mabel’s Labels senior leadership indicated that “ROWE appeared to be having a positive financial impact” this had not been “directly measured” (Konrad and Birbrager, page 5).

Management directly credited ROWE with increased employee productivity (Konrad and Birbrager, page 5). This was the result of fewer distractions from co-worker interruptions; employees were more efficient with their time. There were no mandatory meetings. It was at the employee’s discretion to determine if she needed to attend a meeting. The employees were treated like adults, and this freed managers from spending time on employee time management and allowed them to focus on higher level tasks.

Mabel’s Management also noted that the employee’s morale seemed to be improving with the new freedoms and flexibility. A production employee said he “now felt more motivated and loyal to the company” (Konrad and Birbrager, page 6). The managers claimed they noticed a change in the employees and attributed it to better work-life balance and more opportunities for employees to influence other work and develop themselves professionally (Konrad and Birbrager, page 5).

Cole and her fellow co-founders were faced with the challenge of justifying and defending continued application of ROWE in the face of multiple downsides and lack of an objective measurement method. Cole’s primary concern was the difficulty in applying ROWE consistently across all departments in the company. Not all functions could benefit from the same offsite work benefits; some positions needed to be in the office. Even with management efforts such as the “coverage system” -a system in which in office employees could change any of their shifts provided that they could find someone with whom to switch- the process seemed unfair when compared to the positions that had no geographical/in office limitations. The customer service department – the same department whose manager claimed increased productivity – “was restricted to pre-determined office hours” and needed to use the covering system to approximate workplace flexibility (Konrad and Birbrager, page 6). This created a felt negative inequity for the customer service employees who thought that this was a breach of distributive justice as defined in Organizational Behavior by Uhl-Bien, Schermehorn and Osborn. Put simply, the extent to which employees benefitted from ROWE varied by department.

Employees who could work from home chose to do so quite often. While this did not appear to keep the at-home employees from accomplishing their goals, it created challenges for employees who needed in-person interaction or who needed a quick turn-around response. This meant that not all recipients of the outputs were able to accomplish their work if they required clarification or further interaction from at-home employees. Departments were reporting a “burden of communication”. The lag mentioned previously slowed productivity for those that needed the information from the employee who might be out fishing, or at the gym, or doing any of the limitless activities one might choose to do with a flexible work schedule, many of which placed them out of pocket for extended periods. One of the benefits of an email work queue was that employees could respond to emails as they were able to and not be distracted by “drive-bys” or even phone calls. This was more straightforward when employees were at their desks 90% of the time between 8am and 5pm, but challenging when employees could be anywhere at any time. The lag in communication then led to employees looking for other employees to get the job done, employees who perhaps were not designated for that function, but on whom they could depend on getting a timely response.

An additional complication was that with so many employees working at home, new employees (new since the inception of ROWE) might not meet their coworkers for a long time. This impacted team cohesiveness and retarded the process of employee assimilation by coworker influence. Human Resources was concerned that Mabel’s emphasis on cohesiveness and collaboration would be watered down; when they had 44 employees (and prior to ROWE) these values pervaded the organization. Now expanding to a much larger group that even included hiring seasonal staff, management faced yet another challenge in creatively conveying values and guiding principles. The new-hires would have to depend on their orientation process, during which Mabel’s talked about ROWE and their guiding principles to understand the culture and what was expected of them. This meant that employees who spent time in the virtual workplace had to exercise care to make certain that electronic communications were clear and free of any potential to upset or confuse the recipients. Cohesiveness would have to develop virtually. Management had to develop a marginally successful protocol for communicating under ROWE by “providing additional coaching for those in need of guidance” (Konrad and Birbrager, Page 7). The gradual integration of new employees onto teams with employees they rarely saw in person posed a challenge to team cohesion and created a disadvantage for performance outcomes. Uhl-Bien, Schermerhorn, and Osborn indicate that teams that know each other tend to perform better (Uhl-Bien, Schermerhorn, and Osborn, page 142). HR and management disbursed rewards individually now instead of in teams. Increased cohesion, however occurs when teams are rewarded; rewarding individuals leads to decreased cohesion (Uhl-Bien, Schermerhorn, and Osborn, page 175).

Finally, management identified an unexpected downside of the flexible work-from-almost anywhere approach: employee burnout. Many work-from-anywhere employees who were organizational citizens under the pre-ROWE environment did not have an “off button”. They were technically always on call, especially in the cases of those who were subject matter experts and whose approvals were the gates to the next activity. The HR manager, Sarah Barclay indicated that many of these very efficient employees, now in charge of their own flex-schedules and their own destiny would gladly take on more work “if an employee can achieve their goal in 20 hours” (Konrad and Birbrager, page 7). This created a challenge for HR to know when individual full-time-equivalents were operating at capacity and it was time to hire more. Revisiting co-founder Juile Cole’s need to justify the preservation of ROWE, Mabel’s Label’s still had no objective way to measure the performance improvements in so that they could state with conviction that the benefits outweighed the costs. Additionally, Mabel’s management appeared to continue struggle to mitigate some of the residual downsides of deploying ROWE, leaving some employees unhappy through perceived negative inequity, others lost in terms of making the tie to the values and principles shared at orientation, and many of their pre-ROWE employees either on the verge of burnout or finding themselves distanced (not just physically) from their teams and the “collaboration and cohesion” culture they embodied when they had under 100 employees. The department that claimed increased product launches and productivity was the same department who felt negative inequity due to their need to observe actual office hours. Julie Cole may need to consider if there is an alternative workplace method that maintains the tie to their culture, values, principles and vision. This would have to be a method with concrete and measurable results; one that shifts management’s attention from mitigating the negative challenges of the present workplace method to identifying ways to quantify their team’s output and to be able to continuously improve their standard processes.

Kaizen, or Continuous Improvement Workplaces are founded on principles similar to Mabel’s Labels. They value the employees as knowledge workers and invest in their development through the concept of personal mastery in their craft. The Toyota Production System is among the most benchmarked Kaizen workplace; their founding pillars are 1) Continuous Improvement, and 2) Mutual Respect (Liker, J.K. and Hoseus, M. page 14). Respect is one of Mabel’s founding principles as well.

Harley Davidson, on the brink of extinction in the 1980s, adopted a similar cultureto Toyota and made a remarkable comeback. Former Harley Davidson Product Lead, Dantar Oosterwahl wrote in The Lean Machine that “Business success is derived through the repeated execution of and the continuous improvement of key business processes” (Oosterwahl, page 99). Standard, documented processes are required for 1) performance measurement and understanding of process capability, and 2) the basis for a Kaizen or continuous quality improvement culture. Oosterwahl expands upon this by stating “The creation of standardized work (is) based on the premise that workers closest to the work know the work the best” (Oosterwahl, page 77). The concept that the frontline employees are valuable knowledge workers aligns with Mabel’s Labels core value of “Best People”.

Kaizen workplaces emphasize teamwork, coaching and shared learning. These values are consistent with Mabel’s founding values and principles, but are difficult to optimize in a ROWE environment. Kaizen workplaces are process focused. An excellent product can be developed both by wasteful processed and efficient processes. The means are what lead to shared learning and process improvements that create for the consumer and manufacturer a benefit called mutual entitlement. This is a condition whereby process efficiencies are passed on to the customer is the form of a better price while the seller still earns a respectable profit. The flipside of this is an inefficient manufacturer whose processes are plagued with rework – although they still manage to get an excellent product out the door – who must then sell the product for a higher price to earn a small profit.

A key tenet of Kaizen cultures is long-term thinking. As stated previously, instrumental values are a key to this. Mabel’s values are instrumental, but their execution through ROWE is terminal value centric. Long-term thinking, coupled with emphasizing the shared vision provides workers a “why” or reason for doing good work; it also provides a series to targets which they must meet together to close the gap between their present process capability and their longer term process goals. “Why” goes a long way. In Productive Workplaces Revisited, consultant and author Malcolm Weisbord endorsed the use of employee surveys that “illuminate systems where goals are concrete, formal authority is easily recognized, people must work together to get results and output is easily measured” (Weisbord, M.R., page 221). Again – contrast this last assertion with the management challenges that Mabel’s Labels was facing under ROWE.

While transitioning to a Kaizen workshop would almost certainly require Mabel’s Labels to radically alter or altogether eliminate the allowance for working remotely, it is likely that the Kaizen work environment would satisfy 1) alignment with Mabel’s principle and Core Values, and 2) a platform that is conducive to measurement and evaluation through rigorous standardization of process and continuous improvement cycles.

On the subject of measurement, Cole still needs and objective manner of evaluating employees satisfaction under ROWE and then again under the new process, should Mabel’s Labels choose to adopt an alternative. Regardless of the method choses, Mabel’s should administer a survey to evaluate 1) employees growth needs and 2) the job’s motivating potential through a questionnaire like the Job Characteristics Model (Konrad and Birbrager, page 131). The respondents may find that they derive more satisfaction from the Kaizen structure than the flex work schedule available under ROWE. They key here is that Mabel’s needs an objective way to assess their employee’s motivation and coach and perhaps reassign those whose growth needs do not align with their present position.

1. Konrad A., Birbrager, L. (2015). Richard Ivey School of Business. London, Ontario: Ivey Publishing.

2. Oosterwal, D.P. (2010). The Lean Machine. New York, N.Y.: American Management Association. p. 99

3. Weisbord, M.R. (2004). Productive Workplaces Revisited. San Francisco, CA: Jossey-Bass

4. Uhl-Bien, M., Schermerhorn, J. R., & Osborn, R. N. (2014). Organizational Behavior (13th ed). Wiley.

5. Liker, J.K. and Hoseus, M. (2008). Toyota Culture: The Heart and Soul of the Toyota Way. New York, NY: McGraw-Hill