Evidently, America isn’t in IKEA’s manufacturing future …

Going, going, gone …

Over the past several years, the political mantra has been that jobs are now coming back to the United States – particularly manufacturing ones.

That may well be. But this past week we’ve learned that IKEA plans to close its last remaining U.S. production facility.  The iconic home furnishings company has announced that it will be closing its manufacturing plant in Danville, Virginia by the end of the year.

The Danville plant makes wood-based furniture and furnishings for IKEA’s retail store outlets in the United States and Canada.

The reason for the plant closure, as it turns out, is a bit ironic. According to IKEA, high raw materials costs in North America are triggering the move, because those costs are actually significantly lower in Europe than they are here.  Even accounting for other input costs like labor that are higher in Europe, shifting production to Europe will keep product prices lower for U.S. retailers, IKEA claims.

So much for the notion that imports from Europe are overpriced compared to domestically produced ones!

The Danville plant isn’t even that old, either. Far from being some multi-story inefficient dinosaur left over from a half-century ago, the manufacturing facility opened only in 2008, making it only about a decade old.  At its peak the plant employed around 400 people.

IKEA made staff cuts or around 20% earlier in the year, before following up with this latest announcement that will wipe out 300 more jobs in a community that can scarcely withstand such large economic shocks.

With the closure of Danville, IKEA will still have more than 40 production plants operating around the world. It employs around 20,000 workers in those plants (out of a total workforce of ~160,000, most of which are employed in the company’s vast retail and distribution business activities).

So, it doesn’t appear that IKEA will be exiting the manufacturing sector anytime soon.  It’s just that … those manufacturing activities no longer include the United States.

As a certain well-known U.S. political leader might say, “Sad!”

Open office concepts: Employers love ’em … employees hate ’em.

You probably suspected this already, but employee surveys continue to show that open-plan workplaces are a source of job dissatisfaction.

One of the most recent research studies surveyed ~4,000 adults who work in offices and found that employees dislike open office concepts for a host of reasons, including:

  • Lack of privacy
  • Interruption and/or distraction from fellow employees
  • Noise levels
  • Inescapable odors
  • Temperature control issues

In fact, feelings run so strongly against open offices that employees would prefer to give up the following perks as a tradeoff:

  • Vacation days
  • Year-end bonus
  • Office coffee machine
  • Access to a window or natural light

And for the cherry on top, a significant percentage of respondents claimed that an open office environment would be a deal-breaker when considering a new job — either inside their current company or going someplace else.

At a time when companies are having a difficult time finding qualified candidates to fill open positions, that factor is perhaps the most impactful one of all.

Against this backdrop of “passive-aggressive” attitudes about open-plan workspaces, many companies keep on merrily designing open-office environments or renovating existing spaces to conform to new open-plan design schemes.

Purportedly the reason for open office environments is to save money — but is that really the case? It’s true that some building and partition costs can be reduced, but how about the impact on worker productivity?

Actually, there’s another, perhaps unspoken reason why companies love open offices: they can monitor (read: spy on) their employees more easily.  That’s something most people find quite distasteful — at least here in America where “individualism” continues to thrive as a bedrock cultural principle.  And the plain truth is that people like having some control over their workspace.  After all, it’s a place where they spend eight hours of every workday.

But even with these basic truisms at work, there are new developments that could be changing the whole notion of the office environment. It’s more than just conceivable that we’ll be seeing more spaces adapt to accommodate workers who move from environment to environment based on the needs of the moment.

As more of the “guts” of the office are housed electronically — and portably — the whole notion of a “home desk” may be becoming less and less relevant. Jay Osgerby, a partner in workspace design firm Barber & Osgerby puts it this way:

“The desk is dead. I don’t even know if the office building as we know it today will be in existence.”

I’m not at all sure that Osgerby’s prediction will come true any time soon. Who knows, his view might turn out to be as off-base as the open-office concept.  But it is interesting to observe how the office environment is changing as the nature of business evolves.

What about your own office environment? What’s good and not-so-good about the concept?  What sort of personal horror stories do you have — or conversely, do you have good tales to tell?  Please share your observations with other readers here.

“Wake me when it’s over”: Corporate podcasting goes over like a zinc zeppelin with employee audiences.

Just because podcasts have become a popular means of communication in a broader sense doesn’t mean that they’re the slam-dunk tactic to successfully achieve every kind of communications objective. Still, that’s what an increasing number of large corporations have decided to do.

And yet … an article by writers Austen Hufford and Patrick McGroarty that appeared last week in The Wall Street Journal paints a picture of what many of us have suspected all along about podcasts that are produced by corporations for their employees and other “stakeholders.”

These self-important testaments to “corporate whatever” have as much impact as the printed memos of yore – you know, the ones with sky-high BS-meter ratings – had.

Which is to say … not much.

Invariably, podcast topics are ones which next to no one in the employee trenches cares anything about. As a result, corporate podcast open stats are abysmal – running between 10% and 15% if they’re lucky.

And the paltry open rates alone don’t tell the entire story. How many people are tuning them out after just a minute or two of listening, once it becomes clear that it’s yet another yawner of a topic that senior leadership deems “important” and that corporate communications departments try mightily but unsuccessfully to bring alive.

More often than not, the production values of these corporate podcasts have all the pizzazz of a cold mashed potato sandwich. Consider this breathless declaration by PR director Lindsay Colker in a December 18th Netflix podcast:

“I think that Netflix has taught me so much more than information about a job. The person that I was, coming into Netflix, is an entirely different person than the person I am now.”

This response, posted by a Netflix employee on the Apple iTunes store site, is all-too-predictable:

“Hard to follow, boring and dry hosts, and tooooo long.”

Or this recent American Airlines podcast that covered the company’s three major strategic objectives for 2019. After company president Robert Isom described the strategies for the podcast audience, host Ron DeFeo, an American Airlines communications vice president exclaimed, “That’s awesome!”

Employee reaction was far different. Here’s one response from an American Airlines pilot:

“How about you tell me why I should listen to this? A healthy employee doesn’t live and breathe their job 24/7, and the last thing they’re going to do after being on a plane for 12 hours is listen to a podcast.”

Ouch.

Perhaps because of this kind employee pushback, one company, Huntington Ingalls Industries, permits its workers to count the time they spend listening to the company’s podcast on their time sheets.

One suspects that absolutely every HII employee is posting 15 minutes on their timesheets each time a podcast is released – whether or not they’re actually listening to it. (That may also explain why each HII podcast is strictly limited to just 15 minutes in length …)

Every company interviewed by the writers of The Wall Street Journal story admitted that engagement levels with their corporate podcasts are disappointing.  PPG Industries’ response is illustrative.  With only a few hundred listeners tuning in each month out of a total employee base of more than 47,000 workers, “We have a ways to go,” admits Mark Silvey, PPG’s director of corporate communications.

What do you think? Will corporations find themselves riding a wave of success with their podcasting?  Or are they swimming upstream against the triple currents of apathy, ennui, and snark? Will corporate podcasting become tomorrow’s “obvious tactic” or end up being yesterday’s “glorious failure”? Feel free to share your perspectives with other readers.

Chief Marketing Officer: The most thankless job in the corporate world?

Few people I know would claim that being the Chief Marketing Officer of a company is a job without risks. Indeed, numerous articles in the business press point to an average length of tenure in a CMO position that is often measured in months rather than in years – indeed, the shortest length of time among all C-level jobs.

And now, a recently completed survey of CMOs  underscores just how wide-ranging the reasons are for those employment characteristics. Branding consulting firm Brand Keys tested a number of issues to see which are the ones that keep CMOs “awake at night.”

Three-quarters or more of the respondents to the Brand Keys survey reported that every factor presented was significant enough to cause them to lose sleep.  Leading the list with near-universal high-alert concern is ROI factors. Other factors of concern to nearly every respondent in the survey are big tech and data security issues.

Listed below is how each of the factors tested by Brand Keys turned out with CMOs in terms of “losing sleep” over them.

90%+ lose sleep worrying about:

  • ROI/ROMI factors
  • Big data, big tech and big security issues
  • Establishing trust with customers
  • Innovation, AI, technology and marketing automation developments
  • Consumer expectations regarding privacy and transparency

80%-90% lose sleep worrying about:

  • Managing social networking
  • Creating relevant advertising content
  • Successfully deploying predictive consumer behavior analytics/technologies
  • Dealing with consumer advocacy and social activism
  • Developing long-term strategies that align with corporate growth goals
  • Having the ability to engage with audiences – not just find them

At the “bottom” of the pile … 75%-80% lose sleep worrying about:

  • “Democratization” of the digital world and protecting brand equity within it
  • “Political tribalism” and its effect on brand reputation
  • Being relevant when tweeted about
  • Keeping consumers engaged with the brand
  • Creating better cross-platform synergies for marketing campaigns
  • Creating an “unlearning curve” to move away from legacy marketing metrics
  • Creating marketing synergies among different generational/age cohorts
  • Being replaced by the chief revenue officer

This last worry factor – losing their job – seems almost preordained given the tenuous circumstances more than a few CMOs deal with in their positions.

… and likely made more so because CMO’s are quick to be blamed when things don’t go well, even if they aren’t in the strongest position to effect the changes that may be needed. “Responsibility without authority” is the stark reality for too many of them.

What are your thoughts about the dynamics faced by CMOs in their companies?  Whether you speak from personal experience or not, I’m sure other readers would be interested in hearing your views.

 

The closed world of open office environments.

If you ask company managers and CFOs if they prefer “open office” concepts over private offices, you may well get a different answer than if you ask the people who actually work in open office environments.

There are two attractive aspects about open office plans that surely warm the hearts of many business managers. One is the notion that an open office environment encourages more interaction and spontaneous collaboration among employees.

The other is that open office concepts don’t cost as much to build and maintain as do private offices.

So … let’s break this down a bit.

Speaking personally, I’ve visited numerous company headquarters and branch locations where open office plans are prevalent … but what I see and hear isn’t interaction. Instead, it’s more likely to be mounds of white noise with employees sitting at their desks focusing intently on their computer screens.

Any interaction that may be happening is closer to the hushed sounds of a reference library — or even the confessional zone in the back of a Roman Catholic or Anglican church — than it is to any kind of bright, casual conversation with ideation happening all over the place.

This can’t be what managers had in mind – even if they’re shaving 25% or more off of their facilities management budget.

Now we have some new evidence to support the anecdotal evidence. Researchers at the Harvard Business School studied two Fortune 500 companies that made the transition to an open office plan from one where workers had more privacy.  The firms agreed to allow themselves to be the subjects of before/after evaluation.

The research wasn’t done via a survey, which would likely be susceptible to respondent bias (a fear of being honest and saying something that goes against the common managerial POV). Instead, the actual worker behaviors were charted using “sociometric” electronic badges and microphones that were worn by the employees for several weeks before and after the office redesigns.

The badges worn by the participants included an infrared sensor, a Bluetooth® sensor and an accelerometer that, when combined with a microphone, could discern when two people had a face-to-face interaction (but without recording the actual words spoken).

The Harvard research also studied before/after data pertaining to the volume of e-mail and instant messenger use by the employees.

Even though other variables remaining the same in the before/after evaluation (the same employees … before/after study periods occurring during the same business cycle), the changes in behavior were startling:

  • Employees spent ~73% less time in face-to-face interactions
  • E-mail use rose by ~67%
  • Instant messenger use grew by ~75%

The research also looked at shifts in interactions between specific pairs of work colleagues, where it found a similar dropoff in face-to-face communications along with increased electronic correspondence (although not to the same degree as the overall research results showed).

Furthermore, the research determined that workers tended to interact with different groups of people online than they did in person, which opens up even more potential concerns about the reduction in collaboration that would be happening as a result of moving to the open office concept.

Speaking in a post-study interview, Harvard Business School professor Ethan Bernstein’s conclusion was that there’s “a natural human desire for privacy — and when we don’t have privacy, we find ways of achieving it.”

In the case of preferred office configurations, people simply don’t like fishbowls. Deskside chats don’t happen, and other face-to-face interaction is severely limited as well.

In other words, open office plans don’t result in increased personal interaction, but they do create a more digital environment.  That seems like the polar opposite of what management wants.

Of course, to reduce a company’s facilities budget, an open office environment remains the preferred thing to do.  So maybe companies need to drop all of the pretense about “facilitating positive collaboration and spontaneous brainstorming.” Just tell employees what’s really behind shifting to an open office concept:  spending fewer dollars.

At least employees might appreciate the honesty rather than the obfuscation …

A detailed article summarizing the research, co-authored by Harvard researchers Ethan Bernstein and Stephen Turban, can be accessed here.

Re-imagining the rules for company leadership: Rajeev Peshawaria’s prescriptions.

As the nature of how companies do business changes, what about time-honored managerial styles? Do they need to change as well?

Open Source Leadership is a newly published book by business author former Coca-Cola and Morgan Stanley executive and Rajeev Peshawaria.  Published by McGraw-Hill, Peshawaria’s book contends that many of the many management practices that persist today are no longer well-aligned with the reality of current workplaces, current employees … or even society in general.

One fundamental change that has happened just in the past generation is what Preshawaria labels “uber-connectivity.” Thanks to the Internet, mobile phones and other communication technologies, people are able to access information on nearly any topic and obtain answers to any question — wherever they are and whenever they want.

According to the author, this near-limitless access to information empowers people to an unprecedented degree – and it narrows the gulf between “experts” and “regular folks.”

As for “guru-worship” – the inclination of at least some people to seek out and learn from the soothsayers in the business world … that’s yesterday’s bread.

Lest Peshawaria be accused of being what he himself declares irrelevant, he remarks, “The guru is dead. Long live the Google.”

Rajeev Peshawaria

Couple uber-connectivity with increasing world population plus the concentration of that population in urban areas, and the result is companies that are now able to source talent and knowledge from wherever they exist.

How do these changes affect the theory and practice of business management?

In Peshawaria’s view, company leaders are still called upon to provide steadfast leadership about “purpose and values,” while at the same time acting with “compassion, humility and respect for people.”

Some of this may sound something like the “autocratic” management style that was prevalent in business until the 1980s – but not exactly. At the same time, it’s different from the “all-inclusive” democratic style that became ascendant in the world of business during the past three decades.  Let’s call it a hybrid.

One other important factor addressed by Peshawaria in his book is that employee motivation remains a nettlesome issue for companies – and far more complex than most management theories and stratagems account for.

One prescription from Peshawaria is for managers to dump the notion of giving “stretch goals” to all employees in an attempt to foster high performance. He argues that stretch goals work only for “the small percentage of employees [who] have the creativity, innovation and drive to truly relish and achieve stretch goals at any one point in time.”

According to Peshawaria, for the majority of employees stretch goals end up “causing stress, anxiety, or poorly thought-out behavior.”

Open Source Leadership is a book that’s worth a read – and it’s readily available from Amazon and other online retailers.  For those who have read about Rajeev Peshawaria’s theories in this new book or in his earlier volume Too Many Bosses, Too Few Leaders – or if you have years of experience working in business organizations, what do you think about the author’s perspectives and prescriptions?  Are they on point … or off-base?  Please share your views with other readers.

Business owners give the lowdown on workplace — and their own — productivity.

The owner of a business is arguably the single most important employee on the payroll. As such, the findings from a recent survey of business owners conducted by The Alternative Board are revealing.

According to the survey, which was conducted in May 2017, the typical business owner reports having only about 1.5 hours of uninterrupted, high-productive time per day.

Four in five of the business owners reported that they feel most productive in the mornings. It stands to reason, then, that nearly nine in ten respondents reported that they prefer to get the most important tasks of the day out of the way first.

The majority of respondents reported that they are most productive working from the office, but nearly one-third of them reported that most of their work is done from their home.

A majority of the respondents also reported that they spend the biggest block of their daily time on e-mail activities.  Tellingly, less than 10% feel that this is the most important use of their time.

Asked to report on what factors are working against their employees achieving a high level of productivity in the owner’s business, these following four factors were named most frequently:

  • Poor time management: ~35% of survey respondents cited
  • Poor communications: ~25%
  • Personal/personnel problems: ~18%
  • Technology distractions: ~16%

Taken as a whole, these findings suggest that while there are certainly issues that affect business productivity, business owners have it within their power to improve time management, foster better communication between employees, and ultimately run a tighter ship.

More findings from the TAB research can be found on this infographic.