SMI10 | Cover Story

How we work has changed fundamentally in recent years and the younger generation in particular is questioning the meaning and purpose behind it. If businesses want to remain fit for the future, and if they want the workforce of the future to see them as attractive employers, they need to face up to their social responsibilities and establish sustainable business models. The concept of New Work is a useful way of approaching this new reality, but many managers are unsure about what it actually involves.

On the face of it, Robert Kelly was completely in his element. A seasoned professional, the political science professor was giving a video interview to the British television broadcaster BBC on the conflict between North and South Korea. This is Kelly’s field of expertise and he had previously given dozens of interviews on the relationship between the two countries. What he wasn’t expecting on the day in question, however, was for both his children to suddenly burst into his office. Viewers saw Kelly try to keep them at a distance and avoid being distracted – and they saw that he wasn’t entirely successful, particularly when one of them made a beeline for his desk and then knocked over some books.

If the interview had taken place nowadays, nobody would have batted an eyelid; video calls have become the norm and we can work from anywhere. From Teams and Google Meet to Zoom and Skype, a whole host of software programs has been developed to handle calls like this one. But Robert Kelly actually gave that interview back in March 2017. The video went viral around the world, to the embarrassment of the professor, leading to a follow-up interview with the BBC soon afterwards.

A lot has happened in the intervening five years. A multitude of external events has ensured that an incident like that in a video interview in today’s world would not stand out at all. First we had the COVID-19 pandemic, which exiled many of us to working from home and acted as a catalyst for remote working. Since then, we have faced a succession of crises – supply shortages, energy shortages, inflation, the economic consequences of the Russian invasion of Ukraine – that have presented procurement with fresh challenges on a daily basis. It is vital for businesses to respond as quickly as possible and remain agile, and that is precisely why we need ways of working that suit the world we live in now.

Events in recent years have already driven fundamental economic and cultural change and even now, as we have regained a degree of normality, it is clear that remote working is here to stay. It is therefore high time for procurement to actively help reshape working relationships to involve suppliers and partners as well as employees, given that procurement is the common point of contact between all parties. This will help to withstand stakeholder pressure and enable businesses to continue to operate successfully in the future. It is crucial that New Work becomes a part of everyday life and that we improve how we work on an ongoing basis.

With all the zeal for new work, it is important not to disregard interpersonal relationships.

New Work is More than Simply Remote Working

New Work means much more than simply putting a tabletop football game in the office and working in digital networks. The concept was originally political in nature and the term was coined by social philosopher Frithjof Bergmann. After visiting the Eastern Bloc countries between 1976 and 1979, he concluded that socialism no longer had a future and that an alternative plan was required: a paradigm shift in the West in what work might look like.

These days, the concept of New Work has reached the business world and it has a range of different aspects. Most importantly, it is about self-determination and self-fulfilment and it puts the focus on people. This means that employees accept responsibility for themselves and take advantage of the scope available to them in order to structure their own personal development. Instead of work being solely to earn money, it becomes something that has a purpose, where personal and professional development are aligned. This requires flexibility and adaptability – and being able to work wherever you want, including from home, is a result of these ideas.

But New Work also involves working in a variety of teams instead of in homogenous departments. So people with diverse skills and competencies come together to work on projects, paving the way for fresh perspectives and potential solutions. This heterogenous approach boosts creativity and encourages innovation. Design sprints, design thinking and other agile working methods follow on naturally as part of this concept.

Creating an Equal Footing

The most important factor in making this new way of working successful is finding a new style of management. Those who micromanage their teams and assign tasks to specific people are outdated and do not fit into this new working world. Modern managers are much more likely to be mediators who also have coaching skills, trust their employees and seek to empower them to make their own decisions. This kind of working relationship requires an equal footing.

/ How people would work if they had a choice

/ Desired work model in procurement

87%

Would like to work remotely in whole or in part

46%

currently work remotely in whole or in part

These new management approaches and strategies, and the resulting working processes, are what we really need right now. Employers facing the challenge of introducing new working models must weigh the level of success that hybrid working can deliver against the level of alienation that employees may feel from businesses. Poorly thought-out models could result in employees leaving to look for new jobs, and working situations where colleagues never get to meet each other in person can quickly create a sense of isolation.

This means that managers have to choose solutions that are meaningful and appropriate for their particular situation. But one thing is certain: young employees want modern working methods, and businesses that fail to provide them could find themselves struggling to recruit good candidates in the future. Flexibility, for example, is something that many employees are looking for, especially in terms of the working model. Instead of a 50-hour working week, they want a better work-life balance, part-time or flexible working hours.

Managers Need to Step Out of Their Comfort Zone

If businesses are to adopt a modern management style, things need to change at upper management level, especially in companies that are steeped in tradition and based on hierarchical structures. Managers need to listen to their teams and what is driving them, lead by example and, wherever possible, get all their stakeholders and/or decision-makers on board. The first step might be to create a small pilot group, but managers need to set out clear rules to prevent a transformation from getting off to a promising start before quickly falling flat. And remember that transformation always starts from the top!

Management Tasks during the shift to NEW WORK

Anchoring the vision: setting out the business’s purpose, values and goals and bringing the team on board with them
Defining the rules of the working relationship: increasing flexibility and developing new role models
Leaving the ivory towers behind: creating flat hierarchies and communicating on an equal footing
Developing acceptance: creating a culture of appreciation, openness and respect
Encouraging independence: recognizing the team’s autonomy and transferring responsibility to team members
Introducing an error culture: ensuring that people feel comfortable learning from mistakes and through trial and error
Setting new performance goals: encouraging and supporting employees on an individual basis

Keep People at the Heart

It’s important that we don’t forget interpersonal relationships in the rush to a new way of working, especially when people are working remotely. Small talk and “water cooler conversations” were part and parcel of daily office life and finding an online equivalent is essential. One option is to chat about little things like the weather now and then during a video conference, but boundaries need to be set here too. It’s particularly tough for managers if they want to get a feel for what’s worrying their employees, as that’s not so easy to do during a video call. It’s also difficult for new recruits to find their feet, since they don’t have the social relationships that existing colleagues have already developed with each other – and that was when most people were in the office every day. So, since fully remote teams are not ideal, we need tailored solutions; for example, fixed days of the week when the team meets up in the office.

These days, teams are often spread across Europe, but regular meetups should still be held to build and maintain strong and productive working relationships. These could alternate between the headquarters and branches in other towns and cities. This ensures that the office remains an important place for people to interact with each other and work creatively; a place where the corporate culture is preserved and celebrated, so that everyone takes it home with them afterwards.

A whole range of tools and strategies has been developed to help people transform how they work quickly and sustainably. Conducting regular anonymous surveys is a good way to make sure that everyone’s on board with the shift to New Work. Questions should include what is going well and what isn’t, as well as what could be done to improve workflows. Employees are a business’s biggest asset, so employers need to fulfil their requirements.

With any transformation, it is also important to remember that employees all have different expectations that all need to be considered. Some are highly ambitious and want to be promoted quickly, while others might have just started a family and thus have different priorities. Managers should familiarize themselves with their employees’ personal objectives and how they can be aligned and balanced with their job.

The role of the CPO and how they relate to their employees also needs to change. If contact with their team members happened as a matter of course in the past, they must now manage it proactively. The important thing is that they build and maintain a relationship of trust with their colleagues and give them the opportunity to continuously progress. Maintaining an overview of all projects must also be prioritized. Holding regular team video conferences and ensuring clear lines of communication can help with this, but the focus is on working together to define goals, and then using this information to formulate tasks and responsibilities for every team member. For many people, this will be a new way of involving employees, but it will only succeed in large organizations if the CPO involves department managers and works in close consultation with them.

New Work in Procurement

The Stereotypical Management Consultant is a Thing of the Past

No more stereotypical consultants arriving at the airport every Monday morning, suitcase in hand, off to visit clients. These days, our clients and staff members expect greater flexibility from us as well, so we are increasingly shifting away from in-person client visits. But we are still 100% focused on what they want and need from us; if they experience a business emergency, then we are obviously there at their side, but that is no longer necessary for the majority of everyday project work. And that approach benefits our customers first and foremost – they no longer have to pay travel costs, or organize access passes and project offices, or make sure that someone from the client team is on-site. And, ultimately, it also means that we can really help to reduce CO2 emissions.

The Foundation for New Work

The biggest challenge involved in implementing this working model is that it brings the corporate culture alive for every employee. So, the first step needs to be to define what your particular corporate culture stands for. At INVERTO, we worked together to write down our values. The vast majority of them are already embedded in our corporate DNA, so our operations have been aligned with them for many years already, and others are values that we want to increasingly align ourselves with in the future. It is particularly important to us that these values are also reflected in how we work together.

We have set these out in our NGWOW (Next Generation Ways of Working) program. The objective of NGWOW is to strengthen open communication, transparency, and a focus on both teams and their individual members. And this is more than just a paper exercise, so we will achieve this by implementing very specific actions and measures.

To ensure that all our colleagues are committed to this transformation, we have also established a PTO (Predictability, Teaming and Open Communication) process. We will be conducting weekly anonymous surveys on employee satisfaction, we will publish the results transparently for all team members to see, and we will use them to guide discussions and then decide together on subsequent actions and measures. It is important that everyone’s voice is heard, from interns right through to managers. A dedicated PTO Coach will act as a neutral yet confidential representative to provide support both to individual employees and the team as a whole.

We will facilitate this open and constructive dialog by using methods from our NGWOW program and taking steps including initiating measures to increase psychological safety.

Implementing Specific Actions and Measures

The goal of PTO is to transform how we work within our teams. When a project is launched, the team will take both client requirements and the team’s personal and individual preferences into consideration when deciding whether the focus will be on travel or on working together in one of our INVERTO offices. The result will usually be a hybrid model that combines working together with the client at their site, working as a team in INVERTO offices, and working from home.

Our priority is to ensure that the actions and measures benefit every single team member. Everyone should have the opportunity to develop on an individual level, supported by our working from home regulations as well as our flexi-time models and wellbeing provision. And our regular internal events – switching between being held within project teams, at the local office, and even across regions and offices – will obviously remain an essential way of maintaining our corporate spirit and encouraging personal contact.

By the way, we’ve replaced winding down in the office with a “beer cooler” and all INVERTO employees have a standing invitation to join us on Friday evenings to see out the week together and have a chance to chat and catch up.

Modern Working Methods Offer a Host of Opportunities for Procurement

New working methods have many benefits, including saving time and increasing efficiency. Video conferences, for example, are a potential way for procurement to negotiate with several suppliers at once. Remote negotiation meetings have now become part of everyday life and many companies actually encourage them, since flying halfway around the world for a meeting that lasts an hour is now viewed as inappropriate and – from a sustainability perspective – unreasonable. However, it cannot be disputed that a Teams call or Zoom conference cannot always adequately replace a face-to-face meeting.

If this new, increasingly remote way of working is to be successful, it is important that all parties follow a certain etiquette and are prepared to adapt to the new circumstances. Nobody wants to talk to a screenful of black squares on a video conference, so you should ideally turn on your camera. Equally, if you share your screen, you should ensure that you do not inadvertently share private documents with your colleagues. Generally speaking, virtual meetings require a different approach to handling confidential documents.

On the other hand, there is no problem with buyers carrying out routine tasks like project scheduling or supplier research from their desks at home, and site visits are no longer necessary to view documents, price catalogs and so on, because that can now all be done online. Digitalizing these processes also frees up capacity that buyers can then use to progress strategic issues.

It is important for the success of this new way of working that everyone involved adheres to a certain etiquette and adapts to the new circumstances.

It Comes Down to Finding the Right Balance

Procurement is currently facing significant challenges: supplier markets are highly volatile, supply chains need to be adapted, preventive risk management is the order of the day, along with the implementation of sustainability strategies. Procurement will only overcome this increased complexity by building strategic partnerships with suppliers and other stakeholders, so the focus is on developing strong networks and agile working relationships, both within the company and beyond. Regular communication, openness and transparency are essential – and all three require an appropriate level of personal contact.

Using regular, personal interaction to build up a close working relationship is important – particularly when it comes to key strategic partners in the value creation chain. But transforming suppliers into partners and working with them to find innovative solutions requires face-to-face meetings, and that adds a further strategic aspect to the procurement role. Procurement staff need to maintain close contact with both their suppliers and their own departments so that they can prioritize where to hold on-site workshops to deliver maximum benefit.

Workation

Under the term workation, employees are now also taking work on a trip and combining a stay in a special place with their professional activities. Trusting that freedoms will be used, but not exploited, promotes employee motivation and thus benefits companies again.

(Source: Zukunftsinstitut)

In theory, a radical approach to remote working could even include conducting quality assessments online, as there are already good virtual solutions available that give an insight into supplier production processes. On the other hand, visiting suppliers in person ensures that everything is in order before long-term procurement contracts are signed. In-person visits are often challenging enough for procurement staff, who have to use a one-day supplier visit to determine whether their supply chain is actually designed the way procurement thinks it is. Having to do that virtually would be even more difficult. After all, although a face-to-face meeting won’t always provide conclusive impressions, even a short visit can give you an initial sense of whether a potential supplier is a good fit. Gut instinct is not something that can be replaced by a digital solution.

Conclusion: New Work Involves a Fundamental Transformation

New Work is a continuously ongoing process. As new generations have new demands and expect their work to give them a sense of purpose, businesses that demonstrate they take responsibility for their employees and society as a whole will appeal to the future workforce and potential customers.

Equally, the importance of team members physically spending time together must not be lost in all the hustle and bustle of new working methods – the office will remain a hub for creativity and personal interaction. Implemented properly, the concept of New Work can create a more forward-looking mindset within businesses, ensure that employees are motivated, and give them greater responsibility. Rather than simply checking off the tasks they are assigned, employees will then highlight inefficient processes, suggest improvements, and assume responsibility for achieving success.

Authors

Frank Wierlemann

is a founder and Managing Director at INVERTO. He is an experienced retail expert who advises companies on all issues relating to strategic procurement and supply chain management.

contact@inverto.com

Lina Tilley

is a Principal at INVERTO’s London office. She has extensive procurement experience and advises companies from the industrial goods sector on transformation issues and raw materials procurement. She also has a particular interest in promoting diversity within INVERTO and continuing to develop the team in our UK office.

lina.tilley@inverto.com

Experts on New Work

New Work Was Never Intended For Business

Without new work offerings, companies can't find talent

Mr Väth, New Work is more prevalent in business than ever before. Has it flourished because of the Covid pandemic?

To be totally blunt, it isn’t New Work that’s gained momentum from Covid, but what people think it means. We’re talking about issues like digitization, but that is, at best, the foundation on which true New Work can be built. This debate has been severely cut short.

What’s wrong with this debate?

Many people forget that New Work was not developed for business at all. Frithjof Bergmann (the founder of the New Work concept) thought of it more as a blueprint for society as a whole. All the measures that we are now discussing have just evolved from this basic idea. They include terms such as “home office”, “new office” or “activity-based working”.

So, are you saying that New Work can’t really be done on its own in a company?

No, I wouldn’t say that either. A company can certainly successfully implement New Work methods, if it’s culturally prepared for it. But that’s the bare minimum: you would have to change something in the fundamental notion of human beings. In business, however, this is often still dominated by thinkers like Michael E. Porter, who work with metaphors of battlefields, victory and defeat. New Work does not work in an environment like that. For New Work, the aspects of society, emotion and humanity have to be considered.

What does this human dimension include?

It’s about how managers are trained and how strong the collective processes are. It’s all about how autonomous employees’ actions can be. It’s crucial that employees know why they are working, and what for. And they must be given the opportunity to develop.

This clearly sounds more difficult than simply writing a home office policy. How can something like this be implemented in a company?

You need three things to implement any New Work idea. First: you have to include everyone in the company in its transformation. Otherwise, no fundamental cultural change will succeed. But you have to accept that you can’t take everyone along with you on the journey: there will never be 100 percent agreement. Second: the people in charge, whoever they are, have to go along with it too. If managers prescribe New Work, but don’t take it up themselves, it won’t work. And third: you have to create processes to support and steer the reorganization.

What processes are we talking about here?

First of all, processes are required for exchanging information. So you need to discuss the following: What do we want to achieve? How do we get there? What problems might there be? Subsequently, decision-making models should be set up that help to implement the results of this discussion. For example, you can look at the participation ladder, a model that shows how far individuals’ participation in a system has come. It begins at the bottom with external control and finishes with self-government on the highest rung. In New Work transformation, we want to move up this ladder.

You say that a transformation of this kind is possible. In large companies, however, it seems mostly limited to a few cosmetic measures.

Young companies are often further along with New Work, that’s right. There are people at the top who are frustrated with the existing system and are aligning their company with New Work principles from the outset. Of course, this is more difficult for classic, mature companies as they are faced with more inertia. They have to deal with employee organizations and other bodies, as well as with restrictions relating to labor law. There are also well-established processes in the company that you can’t change overnight. Honestly, it’s almost easier to leave it and start over from scratch.

But there are also examples of large companies that have successfully taken the step towards New Work. The building supplier Schüco and the retail group Otto are large companies that do this very well.

What’s the common factor with these examples?

The drivers. From my experience I know that individuals or a small group are almost always the triggers. Of course, they need goodwill from above, an executive management board that says, “just do it”. Ultimately, you need some highly motivated people to drive change.

Is a small group of companies enough to act as a New Work driver for the whole economy?

A system always does what makes sense. That sounds banal, but it means that if companies are successful with New Work, others will follow. At the end of the day, it’s about value creation. So far, however, there’s no evidence that New Work contributes to this, because the concept itself was never intended as a management model.

Won’t New Work become established in its current form?

That’s a good question. Especially in our current times, with our economy constantly reacting to exogenous shocks, it’s difficult to say how it will turn out.

I think we should work to ensure that everyone gets work that plays to their strengths and needs. That would help everyone – people, businesses, and society. At the end of the day, whether this is New Work, or is given the name New Work, doesn’t really matter.

Thank you very much for talking to us.

Ms. Stewart, many employees today want to work differently. How is that expressed? We are currently experiencing a change: a shift from the traditional 9-to-5 structure to flexible hours that fit our personal circumstances. From always working at a set location to working from wherever you want (when possible). From working solely as a means to earn money to working for a bigger goal or purpose. People want to feel a sense of belonging and to feel their value, but first and foremost they want to be perceived and respected as individuals.

You advise companies when it comes to implementing new work concepts. What mistakes do many make?

Systems and processes haven’t quite caught up with the cultural pace of change. Even pre-pandemic, nine in ten people in the UK wanted to work flexibly. But just six in ten companies offered it and only three in ten mentioned flexible working in their job ads. We’ve moved on since then – but not enough. Most companies are vague in their job descriptions when it comes to describing the kind of flexible working on offer, or end up doing what we call flex-washing. This is a term we use to describe flexible working being offered in a job description: but the reality being that the role remains full-time in scope and design. This makes candidates looking for new jobs feel wary of flexible working when it is offered. Is it genuine, will it work out? In research we conducted via our jobsite, nearly half of candidates clicked away from jobs that said they were open to flex. What attracted them were mentions of specific forms of flexible working, e.g. this role can be worked 3 or 4 days per week, late starts and early finishes are possible, or it is open to job share. The more precise an employer can be, the more likely they are to attract great talent. Without any new work offerings at all, companies simply won‘t find talent.

What could companies do better?

Applicants need clear statements on what forms of flexible working are on offer, for example:

‘in our company, you can work at any time of day or from wherever you want’. The same applies to other aspects of new work: we encourage employers to articulate what they are doing in terms of diversity and inclusivity, to talk about their purpose and the future they are trying to build. And most importantly, we encourage employers to reflect inwards and really scrutinize what’s going on internally. If people are leaving, do you know why? If they are leaving because they don’t have the freedom in their ways of working, or don’t feel valued, or don’t see a sense of purpose in their work, you need to get that under control before you start looking for new employees.

Flexible working is viewed critically by some managers. How do you respond to this? Working in a new and different way always means challenging what has gone before. You have to break norms and stigmas that have been established over a long time. It is often said, for example, that flexible working would only benefit the employees, but not the company. This is wrong, as countless studies have shown. Part-time employees or those who work flexible hours are at least as productive or even more productive than their nine-to-five colleagues. Those in charge need to understand that and help change the narrative. It’s all about helping the culture to grow.

How long does such a process take?

Psychologists usually say that people need 60 days to change a behavior from scratch. I think it takes much longer in companies, depending of course on the size. Small companies will get it done faster than large ones, and relatively young companies will be even faster because they don’t have as many norms and standards yet. On average, we assume that successful change takes at least six months, but it is never really completed. You have to constantly ask yourself: are we working better now? Are we working more flexibly? It’s about constant reflection at all levels and being able to take countermeasures when necessary.

What is important to be able to demonstrate success?

You need to collect a lot of data. How productively did the team work before? How effectively does it work after the transformation? How has the level of satisfaction with the work developed? To argue only with a gut feeling is always difficult. It is better to have hard data that proves success through the changeover period.

What role does the leadership team play?

Of course, to implement this in companies, you need strong managers who put the issue on the agenda. But to do that, they also need to have the right tools. Today, we teach our managers how to fill out an Excel spreadsheet, but not how to lead diverse teams across different time zones in hybrid work situations. That’s where skills are needed and that’s where training is needed. In many companies, it is also the case that there is hardly any proactive change from within the organization. It is usually individual employees who cautiously ask their bosses whether they can work differently, for example part-time or working from home, because they have to care for a relative. Companies should be much more proactive in making offers or at least showing that they are open to suggestions. Otherwise, they will lose talented people who don’t dare to ask and are more likely to change companies.

Can role models help create acceptance for the new way of working?

Absolutely, personal experiences are always inspiring. It is important that you as a company focus on different role models from all levels of the organization. It doesn’t always have to be the mother who only works part-time because of her children, but also men who report on their flexible working hours. Not just employees, but also managers and directors. That’s important for breaking down prejudices and establishing flexible working as something quite normal.

Flexible working does not work in all industries. Can every company still become a New Work company?

Yes, by all means! Even in the hardest to flex industries – some leeway is possible. Of course, a construction worker can’t simply work from home. But they may be able to implement some form of time-based flexibility. For example, we worked on a groundbreaking project in Construction in the UK with the industry body Build UK and four major employers in the sector. We tested ways for teams to work different kinds of shifts onsite. Wellbeing scores shot up from 48% to 84% over the course of the 16-month project and the four employers are still rolling out flexible working. We also ran a large pilot with the NHS, in eight wards across three hospitals. Including on wards with patients with intense needs, such as cardio wards. By sharing the duty of rostering shifts out across the team, people’s work-life needs are considered more. Often, it’s little things that create more autonomy and satisfaction.

Thank you very much for the interview.

New Work and Procurement