In 2008 Eric Severson, head of HR for one of Gap Inc.'s fastest growing businesses faced a crisis: turnover among the production team had spiked to almost 40% annually. Gap had just launched an important e-sourcing initiative- their San Francisco employees were pulling all-nighters at the office to supervise e-sourcing auctions in Asia then returning to work early the next morning. The stress and overwhelm was burning employees out at an alarming rate and Eric needed to find an immediate solution.
All of his life Eric Severson knew his calling was to transform workplaces so that both businesses and the people in them could thrive. His fluency in the science of motivation and performance, and in depth knowledge of even the most cutting-edge management practices had played a big role in his success to date. The crisis at Gap Inc. would now either make or break the rest of his career.
Immediately, Eric and his team started implementing every solution at their disposal:
Although every initiative showed promise initially, none had any lasting effect on employee engagement or retention. Things were getting desperate and Eric decided it was time to try something radical.
In the mid-2000s, Eric had learned of Best Buy's quantitative results with ROWE (Results-Only Work Environment) at the National WorkLife Conference. ROWE is a management strategy where employees are evaluated on job performance, not workplace attendance: a decentralized leadership approach that gives employees the freedom they need to better balance their lives. “I knew it was the holy grail of work-life solutions, because it was the only one that got at the root cause of burnout: lack of freedom to integrate one's life,” explains Eric. However, the program was so radical that he knew there would be a lot of resistance from the rest of the leadership team.
Big change is almost always rejected initially, and the idea of complete worker autonomy can be downright scary. Eric had to get the buy-in of the senior management team so he had outlet leaders participate in a ROWE Leadership Summit led by CultureRx. During the summit the leaders realized the value of having employees focus on outcomes rather than just making sure they were at their desks during work hours.
ROWE helps to enable a culture where employees partner with their leaders to focus on measurable results and ensure autonomy in their jobs. With ROWE managers become “Results Coaches.” They transform into highly motivated individuals who enable a culture of competence by treating everyone as adults and responsible for their work. With management aligned Gap launched a pilot program that became an immediate success. They then scaled it to the entire division, then throughout the company.
To be their best, most productive and happiest selves, employees needed more freedom. With increased autonomy came increased job satisfaction and productivity. As one manager put it, “I love ROWE and I have never seen my employees happier, while at the same time having a rise in productivity.” The benefits were equally lauded by employees with one stating, “ROWE really lets me prioritize my time. I feel empowered and actually more responsible at my job. It makes me feel more in control and in charge of my work.”
The belief that being happier and more balanced at work yields better business has been reflected in Gap's corporate wellbeing brand, “Better You. Better Gap.” Gap understands that employees cannot be productive at work without being happy and engaged at home.
Today, many at Gap consider ROWE a cultural revolution. Three out of four employees say that the most special aspect of Gap’s work environment is ROWE. The complete autonomy over how they employees do their work and are held accountable has both managers and employees feeling more energized and engaged. They have even reported a greater focus on quality and an increased sense of trust with their coworkers at all levels.
ROWE created a true culture transformation at Gap and a distinct competitive advantage in talent acquisition, engagement, and performance. The environment has now become key in attracting and retaining current and potential employees, as well as a market differentiation–even among brands under the Gap umbrella.
According to Eric, within one year of implementing ROWE the Gap brand reached its best performance in ten years. “While I would never try to argue that ROWE is singularly responsible for this performance, there is no doubt in my mind that it is a significant contributing factor.” Eric is still confused as to why more companies don’t try ROWE. “Part of me loves that they don’t because of the competitive advantage it gives us. The humanist in me, though, is sad that most people don’t have the freedom to work this way.”
Eric Severson was appointed by US Commerce Secretary Penny Pritzker to the National Council on Innovation and Entrepreneurship (NACIE) in October 2014.
Eric, senior vice president of Global Talent Solutions for Gap Inc., joins 26 other members in providing advice and counsel to Secretary Pritzker and the Department of Commerce on issues that will help U.S. communities, businesses, and the workforce become more globally competitive.
“Through our ‘Open for Business Agenda,’ the Commerce Department has prioritized supporting entrepreneurs and helping foster innovation, which are key drivers of America’s global competitiveness,” said Secretary Pritzker. “I look forward to working with the Council to advance innovation and cultivate a skilled workforce for today’s 21st century jobs.”
Ascanio Pignatelli helps Fortune 1000 companies unlock the full promise, energy and creativity of their millennials. Ascanio is an award winning speaker, workshop facilitator, coach, and author of the forthcoming book “Engaging Millennials: How to attract, retain and fully engage the most talented millennials." His company E3 Solutions helps executives improve their leadership and communication skills to create more engaging workplaces.