Author: Ed Frauenheim

When Chuck Robbins took over as CEO, Cisco Systems hosted a series of huge events, including a concert at Levi’s Stadium.
Photo courtesy of Cisco Systems Inc.

When technology giant Cisco Systems Inc. promoted Chuck Robbins to the CEO post in May 2015, the move wasn’t a quiet celebration confined to the C-suite.

No. The global company of some 70,000 employees came together and partied.

The data-networking specialist held what it called “Cisco Rocks” events around the world. These began with a July 27 concert for 30,000 employees and their guests at Levi’s Stadium, the state-of-the-art home of the San Francisco 49ers football team. The event honored former CEO and current chairman John Chambers, and included performances from pop star Christina Aguilera and country star Keith Urban.

Then, over the next four days, Cisco threw 46 more parties in locations ranging from Foxboro, Massachusetts, to Bangalore, India, to Beijing — each featuring music, food and drink, games and live entertainment.
Fifty thousand people celebrated together at their local sites.

Here’s what one employee said after the Cisco Rocks Santa Clara event: “Seeing Christina perform was obviouslygreat, but just hanging out with colleagues in a venue like this has been amazing!”

It might seem Pollyannaish to think employees want a festive, inclusive sense of camaraderie — similar to the CiscoRocks events — more than they want individual benefits. And to be sure, employees care about their paychecks, personalized professional development plans and unique, customized perks. But these sorts of solo rewards were not as critical as social workplace features in a study of 507,392 employees at the 25 Best Multinational Workplaces by the Great Place to Work Institute. (Editor’s note: Ed Frauenheim is a former Workforce senior editor and currently works for the institute.) 

An analysis of employee survey responses across 47 countries found that people at Great Place’s 25 World’s Best list— including Cisco — cherish the ways their companies act as “communities.” Companies the world over would do well to focus on this driver of workplace greatness as well as on the trusting relationships that are the foundation of a strong culture. That’s not just for the benefit of employees but also for the business benefits that come from a high-trust workplace. A growing mound of evidence from Great Place to Work and other experts shows that a great culture pays off in areas ranging from higher revenue to lower turnover to better stock market performance to superb customer service.

Broader Trends Related to Community

Our study examined which of the Great Place to Work Trust Index survey statements best predicted employees’ response to the overall statement, “Taking everything into account, I would say this is a great place to work.” (There are 58 statements in all.) Six of the top 15 drivers of workplace greatness at the World’s Best indicate a fun, egalitarian community is key to what makes the world’s top employers great.

Top 10 Workplace
Greatness Drivers 

Great Place to Work conducted a statistical analysis to determine the strongest drivers of overall workplace greatness at the World’s Best Multinational Workplaces. That is, Great Place examined which of its Trust Index survey statements (there are 58 in total) best predicted employees’ response to the overall statement, “Taking everything into account, I would say this is a great place to work.”

1.  want to work here for a long time.

2. This is a fun place to work.

3. I am given the resources and equipment to do my job.

4. People look forward to coming to work here.

5. I am treated as a full member here regardless of my position.

6. Management does a good job of assigning and coordinating people.

7. You can count on people to cooperate.

8. his is a physically safe place to work.

9. nagement shows appreciation for good work and extra effort.

10.anagement trusts people to do a good job without watching over their shoulders.

—Ed Frauenheim

 

The notion that a sense of community drives workplace greatness at the World’s Best makes sense in light of a number of social and economic trends affecting the global landscape. One of these is the millennial generation’s highly social character. Consider this finding from a 2013 global study of the younger generation by consulting firm PricewaterhouseCoopers, the University of Southern California and the London Business School: “Millennials place a high priority on workplace culture and desire a work environment that emphasizes teamwork and a sense of community.”

The kind of community linked to a great workplace at the World’s Best is a fundamentally fair one— one that’s inclusive to people of all ages. This feature fits the way the millennial generation can feel unfairly maligned as well as the way older employees can fear they will be discriminated against even as they want or need to remain in the workforce.

The way increasing amounts of work are done collaboratively also helps explain the importance of camaraderie and community among the World’s Best. When people know and enjoy their colleagues, joint projects tend to be done with greater ease and satisfaction.

A word about a “fun” workplace. While we called out Cisco’s series of global celebrations as an example of a playful company culture, it would be simplistic to think that holding lots of parties makes a workplace fun. When people experience their culture as fun, “fun” activities typically are the tip of an iceberg made up of positive relationships and healthy workplace practices.

A fun culture is fun because people have the time and space to take a break at work, senior leaders participate in the activities and model the way, and people are generally positive about the future of the organization and not worried about losing their jobs. There may be friendly sports competitions among internal groups or team lunches at local restaurants. Employees also may have chances to contribute new ideas or participate in innovation contests. In sum, the culture of the workplace values people and relationships.

Consider Cisco, which has cut jobs in recent years. But the Cisco Rocks events of the past year came in the context of a company that has adopted flexible work arrangements, that is offering mindfulness programs at work to boost employee well-being and that is increasing skills training for staffers.

At the same time, Cisco has continued to stay on the cutting edge — with Boston Consulting Group recently naming the company the 14th most innovative company in the world. And 86 percent of employees in the 12 countries in which Great Place recognizedCisco as a Great Workplace say that “people care about each other here.”

“They say good people are valued,” one Ciscoemployee in the United Kingdom told Great Place. “I feel like a treasure at Cisco!”

How to Build a Great Global Culture
(Hint: It doesn’t have to break the bank.)

Based on Great Place to Work research into the drivers of workplace greatness at the World’s Best Multinational Workplaces, here are several actions to take … and avoid. The good news is that building a great global culture doesn’t have to cost a lot.

Do: Cultivate community. Great Place research suggests global organizations should seek to foster a festive, inclusive, welcoming, collaborative and familylike workplace. The message is that employees thrive when their team is friendly, fair and fun.

Do not: Lose sight of the group by focusing too much on the individual. Organizations that only pay attention to individual benefits or rewards — especially those that pit employees against each other — actually may fail to bring out the best in individuals.

Do: Set clear strategies and organize teams smartly. Employees want to see that leaders have a vision and plans to achieve it. They also care about effective use of talent.

Do not: Micromanage. Providing a measure of autonomyis vital to motivating employees.

Do: Get the basics right. Make safe work conditions and proper equipment a priority.

Do not: Chain employees to work. People want to work hard, but they need to be able to take breaks without fearing for their jobs.

—Ed Frauenheim

In this kind of highly personal, high-performance climate, the kind of companywide, global celebration seen in the Cisco Rocks event becomes the cherry on top of a sundae of workplace fun. It reinforces and caps off an enjoyable culture made up of many positive elements.

Workplace bonds also may be important at the World’s Best in part because of the atomization of society in many parts of the globe. In other words, a sense of community at work may be of growing value to people as traditional family and community ties fray.

Economic ties at many companies also are disintegrating. Organizations throughout the globe have been dismantling traditional employer-employee relationships in favor of temporary contractor arrangements. The shift to what is sometimes called the “gig economy” is driven largely by a desire to cut costs and increase agility.

But there are questions about whether it is wise for companies to distance themselves from their labor force, including their extended, contingent workforce. And research indicates that social cohesiveness among co-workers boosts employee happiness and effectiveness. Adam Grant, management professor at the University of Pennsylvania and author of “Give and Take: Why Helping Others Drives Our Success,” noted in a recent New York Times article that research shows that groups of friends outperform groups of acquaintances in both decision-making and effort tasks.

“When friends work together, they’re more trusting and committed to one another’s success,” Grant wrote. “That means they share more information and spend more time helping — and as long as they don’t hold back on constructive criticism out of politeness, they make better choices and get more done.”

As this comment suggests, company communities that are friendly, fair and fun not only fuel employee perceptions that their workplace is great, but also foster better business results.

Take No. 1-ranked Google Inc. The tech giant has topped Great Place’s global list for three straight years, and ranked as the No. 1 desirable employer for engineering and business students globally in a recent study by consulting firm Universum Global. Google enjoys the fourth-highest market capitalization in the world, and the nearly 20-year-old company continues to enjoy soaring sales. Google reported 2014 revenue of $66 billion, up 19 percent year over year.

Google is not alone. Company after company on the list of 25 is at or near the top of their industries, from top-ranked Google to professional services giant EY to hospitality companies Marriott International Inc., Hyatt Hotels Corp. and AccorHotels, to retailer H&M.

Collectively, the 2015 World’s Best already are changing the world. They are the vanguard of a more hopeful economic era defined by great workplaces for all.

Consider the reaction of another Cisco employee to its Cisco Rocks event in San Jose: “Beyond EPIC @cisco day today. #NewCEO & new day for an amazing place to work! Thanks for the fun!”

In other words, party on.

Ed Frauenheim is director of research and content at research and consulting firm Great Place to Work. To comment email editors@workforce.com. Follow Workforce on Twitter at @workforcenews.

Much that we hear about the workplace these days is gloomy.

“Why You Hate Work” read the headline of a 2014 New York Times article about the way many employees toil to the point of exhaustion at jobs with little appreciation or meaning but plenty of distractions. Also last year, The Conference Board reported that — for the eighth straight year — less than half of U.S. workers were satisfied with their jobs. And Gallup Inc.’s “2013 State of the Global Workplace” report showed that just 13 percent of employees were engaged at work.

But quietly, amid all the overcast news, a sunnier story is taking shape. A variety of forces are pushing the work world in a better direction. These factors include the rise of balance-minded, meaning-seeking millennials, increased transparency into organizations, and mounting evidence that high-trust cultures lead to better business results. Thanks to these and other positive trends, we’re at the beginning of what my organization, the Great Place to Work Institute, calls the Great Workplace Era. In it, all people can expect to work for an organization where they trust their leaders, enjoy their colleagues and take pride in what they do.

The Great Workplace Era is in keeping with the rise of business sustainability, the emergence of the “purpose economy” and the attention to reciprocity’s role in success — captured by Adam Grant’s best-selling book “Give and Take.” What’s more, signs of this new era’s dawning can be found in many sectors of the economy. Even the hardheaded finance sector is finding a heart, in part because blending head and heart pays off.

Reader Reaction

What area of workforce management is most in need of a reboot and why?

@SelvanMurugan_:
Top management not committing to internal workforce development.

@InjuredFed:
#WorkersComp every dollar spent on benefits is a failure of safety and training programs. Most claims I see are preventable.

Katja Dehn:
The biggest challenge is the fear and lack of digitization.

Join the discussion at tinyurl.com/rebootworkforce or follow us on Twitter @Workforcenews.

Former Citigroup Inc. executive Sallie Krawcheck is now calling on Wall Street to embrace workplace diversity, noting that women are more client-focused. “The financial industry, despite its bad reputation, can do a lot of good in the world. But it has defined itself about money and not about meaning at all,” she said in a recent issue of Fast Company. That issue of the magazine focused on the power of mission-driven companies, and being a great workplace is central to such visionary firms as Google Inc., St. Jude Children’s Research Hospital and Whole Foods Market Inc. 

With companies like these at the vanguard, the Great Workplace Era is taking shape. This happier age, it should be noted, has a hard edge: low-road employers who fail to build a healthy workplace culture will find it increasingly hard to stay in business. But the overall arc is encouraging. Increasingly, workplaces will make the world better by making people’s lives better.

Names and Numbers

To be sure, there are countervailing forces to the Great Workplace Era. Shortsighted investors can oust leaders who push too hard to invest in their people. Economic slowdowns can make it hard to retain the long-term vision that’s needed to build a great workplace. Political and religious conflicts around the world can destroy workplaces and diminish trust in societies overall.

But we see the positive trends outweighing the negatives. And we’re not the only ones with a hopeful assessment. Prominent business leaders at companies such as Daimler Financial Services,  Microsoft Corp. and NetApp agree that a Great Workplace Era is at hand. Among them is Microsoft CEO Satya Nadella. “More than ever before, today’s top talent is not just looking for great work, they’re looking to create a great life and a better world — and their work is part of how they achieve that,” Nadella told us.

Our own data at the Great Place to Work Institute backs up what Nadella and others observe. Our research shows that the best workplaces around the world are getting better. That is, levels of trust, camaraderie and pride are increasing at the best workplaces. In a solid majority of the 50 or so countries where we operate, we see rising scores on the Trust Index, our 58-question employee survey tool that measures the extent to which employees trust their leaders, take pride in their job and enjoy their colleagues. In addition to improvements within countries, we have documented increased improvements at the companies that make up Great Place to Work’s annual World’s Best Multinational Workplaceslist. See “Global Trust” chart, p. 34.

Seven Reasons Trust, Pride and Camaraderie Are on the Rise

We see a combination of factors behind improvements at the best workplaces around the globe:

1. Awareness:There is increased awareness among company leaders globally of the importance of a great, high-trust workplace culture. Trust is top of mind for today’s executives worldwide, according to a 2013 PricewaterhouseCoopers report, which surveyed 1,330 CEOs in 68 countries.

This awareness is taking root in India, among other places. It can be seen in an emerging approach to management that some scholars have called the “India Way.” That “way” includes investing in talent and building a stirring culture, along with creating a strong sense of public mission and national purpose.

2. Evidence:Evidence is mounting that great workplaces lead to better business results. For example, a paper published last year by the European Corporate Governance Institute studied data from 14 countries and concluded that higher levels of employee satisfaction corresponded to stock market outperformance in countries with high levels of labor market flexibility, such as the United States and the United Kingdom.

That research is part of a growing body of evidence that better workplaces produce better results, including improved financial outcomes and increased employee retention. For example, publicly traded companies on the U.S. Best Companies to Work For list have nearly doubled the performance of the stock market overall from 1997 to 2013. And a 2013 report from research and consulting firm Interaction Associates found that “companies adept at practices that reinforce strong leadership, trust and collaboration enjoy better financial performance.”

3. Millennials: The millennial generation is demanding better workplaces. Around the world, the cohort of people in their mid-30s and younger is pushing employers to pay more attention to work-life harmony and social responsibility. A 2013 study from employer branding company Universum found that the top career goal for U.S. undergraduates is work-life balance, followed by job security and then “to feel that I am serving a greater good.”

4. Well-being: The emergence of a “well-being” movement is nudging organizations to improve their cultures. Levels of stress have risen at organizations globally as companies have asked employees to do more with less, and the growing use of mobile devices has led employees to feel pressure to be “always on.” Stanford University professor Jeffrey Pfeffer has estimated that there are more than 120,000 excess deaths annually in the U.S. alone because of unhealthy work environments, which include features such as little control over one’s work, conflicts between work and family, and job insecurity.

Partly in response to stressful work climates, people have placed more value on physical and mental well-being. Great workplaces around the world are embracing this trend. Among the three Trust Index scores that have risen most among the World’s Best Multinational Workplaces is this statement: “People are encouraged to balance their work life and their personal life.”

5. Momentum:Once an organization develops a positive workplace culture, that culture tends to continue getting better. This positive, upward spiral owes both to management and employees. Managers make improvements to the work environment based on measurements of their culture. And employees of great workplaces take increased ownership of their cultures. They participate to advance the organization and feel greater appreciation for their work setting.

6. Innovation:Innovation has come to be the lifeblood for many businesses, especially those operating in global, competitive markets. And innovation success depends crucially on high levels of trust, pride and camaraderie in an organization. Individual employees are more likely to risk sharing novel ideas in a climate in which they feel a measure of security and are proud of what they do. In addition, collaboration, which is increasingly central to effective innovation efforts, is fueled by friendships among co-workers.

7. Transparency:Technologies such as social media and mobile, personal devices that can easily record images and audio are providing unprecedented transparency into organizations. So is the pressure put on organizations to disclose information related to labor relations and environmental impact. The result is that the sunlight of transparency is exposing and punishing less-than-great organizations and rewarding good ones. The best workplaces around the globe are adapting to and taking advantage of this trend. Another of the three Trust Index scores that have risen most among the World’s Best Multinational Workplaces is this statement: “Management keeps me informed about important issues and changes.”

The Great Workplace Era

The factors above aren’t just pushing the best workplaces to get better — they are affecting all companies. That’s why we believe we are at the beginning of the Great Workplace Era, which represents a more harmonious relationship between shareholders and stakeholders, between managers and employees. But this concept is not just a feel-good dream. It is a hardheaded reality.

Three Keys to a Great Workplace

1. Trust

Trust is developed over time as employees experience leadership through a manager who:

• Promotes two-way communication.
• Demonstrates competency.
• Maintains a clear vision.
• Matches actions to words.
• Treats employees with respect and fairness.

2. Pride

In order for employees to feel proud of their work, they must:

• Believe that the work they do is meaningful.
• Feel they are making a difference in their organization.
• Take pleasure in team accomplishments.
• Believe their organization positively affects their community.

3. Camaraderie

Employees need to feel a real connection with co-workers.
This is accomplished when they can:

• Be themselves.
• Experience a sense of fun.
• Engage with friendly co-workers.
• Experience a sense of community or family.

—Ed Frauenheim

Companies that embrace the Great Workplace Era will be the ones with the greatest trust in their cultures. These organizations will not only be doing the right thing by employees but also positioning themselves to win in the marketplace. They will see higher engagement scores, which have been linked to better business outcomes. They will see a variety of business benefits, ranging from recruiting advantages to more effective innovation to higher revenue to better stock performance.

We hear lots of excuses for why an organization can’t become a great workplace,but our research suggests that these common objections can be overcome. 

Among the key first steps in the journey to greatness is for leaders to commit themselves to being trustworthy: to living up to their word, to treating staffers with respect and to being even-handed with people. By demonstrating credibility, respect and fairness, leaders will do right by their employees, managers and shareholders — and get on the right side of history.

Another CEO who sees the Great Workplace Era on the horizon is Terri Kelly of W.L. Gore & Associates, the maker of Gore-Tex fabric and many other high-tech products. “Our founders explicitly believed that our company was created to make the world a better place, not only by building great products that enhance lives, but by building an organization that makes our associates’ lives and communities better,” she said.

Plenty of organizations are not great workplaces, but we are confident the workplace weather is changing; powerful forces are propelling all companies to become better workplaces.

Besides flexible schedules and flexible work-at-home arrangements, another kind of workplace flexibility is emerging. Call it the flexible office.

You can see its contours on the eighth floor of a San Francisco skyscraper. Walk into the offices of Ernst & Young there, and you enter a space that resembles a college campus center much more than a corporate cubicle farm.

In what Ernst & Young consciously calls its “Workplace of the Future,” employees first see a lounge with a wall of big screen TVs, comfortable benches and café-style tables. Move past that into the more formal work areas and you see desks without cube walls juxtaposed with couch and chair areas. There also are phone-boothlike micro-rooms, larger offices and “collaboration rooms” outfitted with tools such as teleconferencing equipment and technology for easily sharing computer displays on larger LCD screens.

As striking as the layout is how employees at the professional services firm use the space, which is designed to accommodate 215 employees. None of the desks or offices is permanently assigned to anyone. Employees reserve desks or rooms based on their needs—a tax specialist may join a group of peers in a conference room for the morning, make a sensitive call to a client in one of the private phone rooms in the early afternoon and later occupy a desk in a common area.

The idea is to marry the physical layout of the office with the way work gets done best—with plenty of collaboration by frequently mobile workers, says Brian May, a partner in the firm and leader of Ernst & Young’s financial services practice for the U.S. west region.

“It’s not one size fits all for anyone, and it’s not one size fits all for any day,” says May, who served as the executive sponsor of the new office design in San Francisco and whose team began working in it last October.

Ernst & Young is launching a number of “Workplace of the Future” pilot environments around the world. And it isn’t alone in rethinking office space layouts. Other organizations doing so include consulting firm Accenture, software giant Microsoft Corp. and office furniture provider Steelcase Inc. Reasons to shake up traditional offices—dominated by cubicles, executive offices and occasional conference rooms—include better tapping the power of face-to-face teamwork, reducing real estate costs and making it easier for telecommuting or traveling workers to “touch down” in offices.

Moving away from fixed desks comes with challenges. “Lounge” areas can get noisy. And workers can miss their own dedicated space. Ernst & Young officials, though, say that after an adjustment period most of the employees assigned to the novel San Francisco space appreciate the environment—which has more collaborative spaces and more options for “head-down” work, including setting up in the Wi-Fi-enabled lounge.

In some ways, the space is a rebuke on the era of the cubicle. The face-to-face collaboration prized today calls for open, shared spaces where two or more people can comfortably sit at a desk or table. And nowadays many employees, not just executives, need solitude behind closed doors—for concentrated work or to make discrete calls of a personal or professional nature. Nancy Altobello, Ernst & Young’s head of people for North America, South America and Israel, makes the point that cubicles typically provide neither real privacy nor real opportunities for people to gather around the same workspace. “A cubicle is not open, nor is it private,” she says. “That’s why we’re continually providing innovative new options for our people to both collaborate and concentrate in an evolving workplace, whether that’s through unique meeting space or leading technology.”

At the new San Francisco office, workers on a recent morning took advantage of the range of spaces available. They made confidential phone calls, worked at desks in common areas and gathered in various conference rooms.

The “Workplace of the Future” also helps attract Ernst & Young’s workforce of the future, May says. Job candidates shown the new digs are excited by what they see, he says. “They come in and say, ‘This doesn’t feel like an accounting firm,’ ” he says.

Ed Frauenheim is associate editorial director of Human Capital Media, the parent organization of Workforce. Comment below or email him at efrauenheim@workforce.com.

Despite blows to flexible work at Yahoo Inc. and Best Buy Co., the practice is alive and well at medical device-maker Medtronic Inc.

About 150 of the roughly 1,000 employees at Medtronic’s operations in Santa Rosa, California, have been designated home-office workers. Those employees generally come into the office just once or twice a week. Many telecommute from San Francisco, which is about an hour to the south. The 3-year-old program saves Medtronic some $1.2 million a year in leased office space, boosts productivity and improves the company’s ability to attract top job candidates, says Victor Assad, the company’s senior human resources director.

The company has no intention of rolling back its flex-work effort, even though earlier this year Yahoo CEO Marissa Mayer curtailed telecommuting and Best Buy quit its pioneering program to let employees pick their hours and when they would come to the office. Assad says Medtronic has taken pains to prevent common problems associated with teleworking, such as bosses’ fears that they will lose control over their direct reports. If anything, the program has improved the way some supervisors manage their people, Assad says, because the company urged leaders to make home-office employees’ goals crystal clear.

“With flex work, you need to be more purposeful in setting objectives and milestones,” Assad says. “Some managers have come up to us and said, ‘This has helped me be more intentional.’ “

Medtronic isn’t alone in championing flexible work arrangements. Although such practices have come under scrutiny of late, there’s little evidence flexibility is faltering overall. If anything, a mend-don’t-end shift is underway.

During the past 15 years or so, some firms pushed virtual teams to an extreme, losing sight of the benefits of face-to-face collaboration. Companies also have paid scant attention to the training that may be needed for employees and managers to succeed with flex work, and firms are rethinking overly broad initiatives that ignored which job roles are right for telecommuting. But businesses generally realize that workplace flexibility is a key to attracting, retaining and engaging talent, that employee mobility is here to stay and that well-designed, dispersed teams can be highly productive.

“What Best Buy and Yahoo have shown is we aren’t doing this very well,” says author and workplace consultant Cali Williams Yost. But, she says, “The flexibility horse has left the barn.”

Flexible work generally refers to arrangements in which employees have options regarding when and where they do their jobs. The term includes reduced-hour schedules and telecommuting, where workers connect to their employers and the rest of the business world from home offices or cafés. Flexible work began to take off with the widespread adoption of the Internet in the late 1990s. The emergence of nearly ubiquitous wireless connectivity and a generation of smartphones and tablet computers bolstered the trend.

Organizations also began to ask more of employees outside of regular work hours, thanks in part to increasingly global operations and more competition. Heightened demands on workers’ time fueled workers’ interest in programs and policies that gave them a measure of control of their schedules—flex work became a primary means for people to achieve a “work-life balance.” Parents in particular have treasured flexible arrangements so that they can manage busy family schedules even as they pursue careers.

Overall, academic studies suggest that job flexibility helps companies and workers. But research also indicates companies haven’t bent over backward for all their workers: One 2011 report said that 78 percent of companies offer reduced workload flexibility to at least 1 percent of employees, but just 16 percent offer reduced workload flexibility to at least 51 percent of employees. Among the jobs most closely associated with telecommuting and other flexible options are technology occupations and other “knowledge work”—where employees might just need a computer and an Internet connection to do their jobs.

That’s why it was a shock when Yahoo’s new CEO pulled the plug on working from home at the Internet giant. Mayer’s decision to do so earlier this year prompted much discussion, partly because she became a new mother at about the same time she was shutting down a program valued by advocates of women in the workplace. Commentary about Mayer’s move also suggested that Yahoo employees working at home were not working very hard, and that Mayer needed to shake things up amid stiff competition from the likes of Google Inc. and Facebook Inc.

A Yahoo spokeswoman told Workforce that the company doesn’t discuss internal matters, but she said the move was not meant to be a sweeping condemnation of flexible work. “This is about what is right for Yahoo, right now,” the spokeswoman said.

A similar story unfolded at Best Buy. For close to a decade, the electronics retailer conducted one of the most radical experiments in alternative work arrangements. Its Results-Only Work Environment, or ROWE, allowed employees at its Minneapolis-area headquarters to set their hours and place of work as long as they accomplished their job goals. But soon after Yahoo cut back on telecommuting, Best Buy’s CEO announced the end of ROWE.

Best Buy spokesman Jon Sandler says the program led to managers having a difficult time working with their direct reports. “It was a right, not a privilege,” he says.

In addition, Sandler says, “We didn’t end flexibility; you just have to ask your manager.”

These explanations rankle Jody Thompson, who co-developed the ROWE program at Best Buy and later co-founded CultureRx, a consulting firm that promotes the ROWE approach. Thompson hasn’t worked directly with Best Buy since 2007, and says turnover among the company’s executive ranks led to less support for the results-first philosophy. She says focusing on the term “flexibility” is misguided, because that means concentrating on workers’ schedules rather than their achievements.

“We’re talking about the wrong thing,” Thompson says. Demanding face time from employees is typically a sign that supervisors are unable to lead effectively, she argues. “They don’t know how to manage performance, so they manage people’s time.”

Ravin Jesuthasan, global practice leader at consulting firm Towers Watson & Co., makes a similar point. For telecommuting and other flexible work programs to work, managers must be prepared to have hard conversations with their direct reports. But companies often have simply written work-at-home rules without training their supervisors properly. “It’s much easier to push a policy than to enable and equip managers to make better decisions about talent,” he says.

Jesuthasan also says there are some jobs where telecommuting or virtual arrangements aren’t optimal. Innovation-related work tends to happen best with plenty of face-to-face encounters, he says. Yahoo’s Mayer said as much in an April speech. “People are more productive when they’re alone,” she said, according to Fortune. “But they’re more collaborative and innovative when they’re together. Some of the best ideas come from pulling two different ideas together.”

It’s a point borne out by hotbeds of creativity such as animation studio Pixar, where Steve Jobs deliberately designed the headquarters to foster impromptu encounters among employees. Increasingly, companies are coming to see the limits of virtual teamwork. It’s one of the factors behind a nascent movement to “reshore” more jobs in America rather than send as much work as possible to lower-wage nations.

To Jesuthasan, the Yahoo and Best Buy moves are prompting healthy reflection on virtual work. “We went headlong into it in a one-size-fits-all way,” he says. “We’re learning that one size does not fit all.”

One problem with flexible work programs is that they’ve been framed as an employment benefit, meaning everyone should be covered, Yost says. The better approach, she says, is for flexibility to be woven together with business aims. These could be saving money on office space, making the business more resilient in the faces of natural disasters or attracting talent more effectively. Even then, flexibility efforts generally require education for both managers and employees, Yost says. And this means more than simple time management, she says. For flex work to work well, employees must continually reflect on professional and life priorities and communicate effectively with managers and peers, she says.

“It falls apart because the individual employees don’t necessarily know how to handle it themselves,” Yost says. “It’s the modern skill set we all need but no one has.”

Medtronic took much of this emerging wisdom into account when it set up its flexible work program at the Santa Rosa offices. Among the factors behind the initiative was a desire to cut real estate costs at the operations, which focus on products including stents and a technique for lowering high blood pressure called “renal denervation.” Another goal was to make the company more attractive to young professionals who may want to live in the more cosmopolitan city of San Francisco, Assad says.

Even so, Medtronic took pains to figure out which of its Santa Rosa-based jobs made sense for telecommuting. For example, it required its research-and-development staff to continue reporting to the office. Employees with a high degree of face-to-face interactions also were ruled out. “We allow people to work from home if most of their work is done through the computer,” Assad says.

The home-office program is voluntary, and the company also provided guidelines to smooth the transition to telecommuting. Among these was reiterating to managers the importance of setting explicit performance targets and supervising to those goals. Another was promoting a set of “operating norms,” Assad says. These included responding to instant messages within an hour and to emails by the end of the day.

Medtronic also suggested a daily greeting by home-office employees when they first log on to their computers. “Have that conversation like you’d have it in the office,” Assad says. “Particularly at the beginning; that sort of broke the ice.”

The flexibility program works well for Mercy Tolve. A senior marketing manager for Medtronic, Tolve works most days out of her San Francisco home. “If anything, I’m more productive at home,” she says. Tolve also appreciates the way the flexibility arrangement allows her to avoid two hours a day of commute time and to consistently be on time to pick up her 16-month-old daughter from day care.

Assad says the program involved investing about $800,000 in facility upgrades. Medtronic created “flex rooms” that can serve as conference rooms or spaces for home-office workers to touch down when in Santa Rosa. Still, by assigning 15 percent of employees to home offices, the company was able to cut the number of buildings it leased to six from seven. “This program paid for itself in six weeks,” he says.

Medtronic is one of many companies committed as ever to flexible work.

Another is accounting and professional services firm Ernst & Young, which depends on employees working hours that can be long and unusual. Travel is common, as are virtual, global teams requiring early morning or evening phone calls. Making it easy for employees to take an afternoon off to see a school play or handle a cable installation appointment shows that flexibility is a two-way street, says Maryella Gockel, flexibility strategy leader for the Americas at Ernst & Young.

Providing employees with options about their hours and their work location is part of an employment deal the company seeks to strike with employees to create positive, lifelong relationships—such that even if they leave the company they will feel good about doing business with Ernst & Young. “We want them to think fondly of Ernst & Young and think of Ernst & Young as a great place to work,” Gockel says.

It’s a similar story at consulting firm Accenture. Employees don’t have to formally apply to telecommute or work reduced hours, says Ellyn Shook, senior managing director for human resources at the company. Instead, employees know they can make such arrangements informally with their managers. And despite the consulting industry’s reputation for demanding schedules, it is common for Accenture employees—both women and men—to set up reduced hours and workloads, Shook says.

As Shook sees it, the future of flexibility is about open-mindedness on the part of leaders. If they want to attract the best talent, executives must see that priorities around work and life will shift for people. “What people need to be successful and how they define success changes over time,” she says.

If Shook and others are right, the Yahoo and Best Buy moves of 2013 may go down as the death rattle of rigid work arrangements. Thompson of CultureRx says the flexibility news this year has served to put questions about work settings, schedules and productivity front and center. “It raised up the conversation,” she says. “I’m very hopeful.”

Ed Frauenheim is associate editorial director of Human Capital Media, the parent organization of Workforce. Comment below or email him at efrauenheim@workforce.com. Follow Frauenheim on Twitter at @edfrauenheim.