Father of telecommuting Jack Nilles says security, managing remote workers remain big hurdles

Nilles talks about rocket science, the growth of telecommuting and major challenges facing that community

Father of telecommuting Jack Nilles says security, managing remote workers remain big hurdles.

The question was, Is this possible? When I started thinking about this, the issue was you had to have some flexible communication point that goes to the worker at home or nearby, rather than having everything concentrated in a downtown office. In 1973, I started a program at USC with a grant from the National Science Foundation. USC had lots of contacts in the business world, so we arranged with an insurance company to test this thing out. The insurance company couldn’t care less about this crazy idea I had of substituting telecommunications for transportation. What they were interested in was reducing the turnover rate of their employees, which was running at about one-third. They had to hire new employees every year, most of whom were data-entry workers. And their facilities in downtown L.A. were getting too expensive and were costing too much and they wanted to look for better real estate somewhere else. So I said, “Look, why don’t you set up some offices near where your prospective employees live?” It solved several problems, one is at the time it would be too expensive if people needed computers to have them work from home because essentially the technology of the day was dumb terminals that were hooked up with a 300 baud modem to a mainframe someplace and you’re paying message rate phone bills, so the phone bills would far outweigh the savings you’d get from having them do this. But if you have the employees walk or bicycle or take local buses to a local office, we call them satellite offices, they could use a minicomputer locally as a concentrator and do all the data-entry stuff into the local machine, which would download or upload to the mainframe downtown a couple times a day or overnight. That solved the problem. So they said, “OK, we’ll try it.” And it worked.

Productivity of those employees went up 18%, the turnover rate went to zero and facilities costs were much lower, and everything worked fine. During this whole period, we were calling this project the Telecommunications-Transportation Tradeoff Project, and when I tried to explain to people what we were doing, I’d reel out that name, and their eyes would start to glaze over. So I said, 'Well I’ve got to think of a catchy name for it for marketing purposes.' So, we were talking about telecommunications and commuting and possibly with computers, so why don’t we lump that together and call it telecommuting. It appears to have taken hold. So we proved it was successful. As a matter of fact, I’m in the process of reissuing the book we wrote about it that was published in 1976. So 30 years later, you’ll be able to download that book for historical purposes from Amazon.

So back then you considered it telecommuting, but the idea was to have people go to a satellite office?

Yeah, because the technology for working at home wasn’t there.

Did you envision that eventually it would be telecommuting from the home office?

Yes, that was always one of the main goals. And then the personal computers came upon the scene that was sort of the eureka moment. The problem with a dumb terminal is you still have to have basically your office there with all your reference materials and all that stuff. Whereas with a PC, you can have your office wherever the PC is, because most of the references materials and the software that you need are built into the PC, so now you’re freed from much of the need to be connected to a mainframe somewhere else and now all that’s happening is you’re transferring changes to something rather than the whole content all the time. And that really made a substantial difference in where you can telecommute from.

Do you think things have been progressing with companies supporting telework or telecommuting as you expected?

It was slower than I expected at first, because I underestimated the magnitude of inertia in those companies and in particular the reluctance of midlevel managers to change the way things are done, and that has been the primary barrier to expansion ever since and it still is.

Why is that there? It’s it just the fear of, if I can’t see you, you’re probably not working?

Most people are relatively clueless about the human-interaction aspects and supervision techniques and so forth required to be good managers. And so the fallback position is, well, if they’re all in the office and I can walk around and see them – the management by walking around system – then I can tell if they’re goofing off and do something. We started to invest in a new management system that says, look, management requires coming to some agreement with your employees as to what it is they’re supposed to be doing and what tools they need to do it and what skills they have to have in order to make it happen. And if you do this properly, you decide among yourselves what’s supposed to happen and where they’re supposed to go and what the output is supposed to look like, what the success criteria are, quality factors, etc., then your job as a manager, once you’ve got all this agreement and you know they can do it and you know they have the tools to do it, is to get out of their way. If you do that, it’s now their responsibility to produce because they’ve agreed with you that this is what’s needed and here’s where they should be going. So you’re headed in the same direction. It doesn’t make any difference to you where they are when they do it. And that’s a hard message to get through to people, but it works. And that’s basically the key to successful telecommuting. Where you see programs that have failed, it’s because either they didn’t understand that and they didn’t train the people, particularly the managers, or there were some technological problems. The other part of this is if they're going to work remotely, you’ve got to make sure you’ve got the technology so that remote access is as transparent as possible, that it’s no harder to communicate with each other than if they were in the office next door.

So what do businesses need to think about when it comes to their network and their computing infrastructure if they decide to do allow telecommuting?

The crucial thing that gives most IT managers nightmares is the remote-access issue. But since companies are increasingly using mobile workers of various sorts, sales people and so forth, essentially any company has to attack this problem of how do you give remote access to your employees? How do you maintain security, how do you make sure that the employees’ kids aren’t installing viruses into your network – all the common security problems that are there regardless of whether you have any telecommuters. It’s the same issue for providing any kind of remote access.

Branch offices and telecommuting are similar. The technological issues are the same: You’ve got small groups of people, you don’t have IT staff there, and you’ve got to build a relatively bulletproof system to have those people get access to the company where they need it as transparently as possible. And once you do that, the other issue becomes important, and that is managing telecommuters. The two go hand-in-hand. We’ve had one program where we were setting up remote access for a bunch of healthcare data-entry people. They were scattered around various cities using DSL lines, and the problem was the DSL switches in the different cities didn’t talk to each other. So for three months, while these guys were supposed to be working remotely they were basically trying to get connected to each other. So technology is important.

Right, today there are parts of the country where broadband Internet isn’t available, and I would assume that is something you need to telecommute.

If you’ve got cable access, and cable supports broadband computer access, you’ve pretty well got it. Then the question is setting up your virtual private network so your employees can get to it and ensuring they have up-to-date virus protection, they’ve downloaded today’s upgrades to Windows, etc.

It sounds like most companies already have the technology in place to support telecommuters.

Yeah, fundamentally, we’ve found for more than 30 years now that generally technology isn’t the problem. It’s certainly not a fundamental barrier to more telecommuting. Management attitude is still the fundamental issue.

Speaking of that, one of my colleagues wrote a story about how the federal agencies have been mandated to support telework, but that a large percentage of the managers didn’t realize they were even offering telework options.

Same thing, I’m not going to tell people about it, because [I’ll be responsible] if there are any problems.

Government agencies are supposed to be the forerunners in all this, though, aren’t they?

One of the fundamental requirements when we [JALA] go into an organization to set up a program is first the CEO has to be not just in favor of saying, ‘Yeah, OK, try it.’ But he has to be in favor of it. This is going to happen, by God, or I have to know the reason why. That’s step one. Step two is to adjust the reward system in the organization so that this gets reinforced. Yeah, OK you can stick to the old way of doing things if you want, but forget about getting promoted – that kind of draconian measure. What we try to do is if a company is uncertain about spreading this out is to set it up in two or three divisions where, again, you have proactive senior management saying, “Yeah, this is great, we’ve been looking for this for years. Let’s go do it.”

We want to make success stories out of that by choosing the right supervisors. We try to make everybody a volunteer in this, because that’s important. When they become clearly successful, then both the danger of screwing up, and the impression of screwing up go away. People say, “Oh, it is possible after all, even for us.” And the idea that, “Gee, if I do this, maybe I’ll get promoted myself” starts to sink in and starts to spread around. We were dealing with some three-letter fortune 100 companies in the mid-'80s who were pretty reluctant at first, but when they discovered things like they could save tens of millions of dollars a year in facilities costs and productivity increases would occur, they became converts, although it may have taken a few years. We do forecasting, and the most difficult part to measure is the management reluctance part of the thing. My estimate currently is by the end of this year there should be more than 30 million telecommuters in the U.S. Maybe as many as 35 million.

How does that compare? Say, five years ago how many telecommuters were there?

2002, maybe 24 million. So it’s up around 10 million.

So, it’s steadily increasing?

Yes, it’s steadily increasing. The increase rate now is maybe one million or two a year now. Slowly, as companies gain experience with this, the number of days per week that you have telecommuting goes up. Of this 30+ million or so, the average is around two days a week. One of the arguments is the fundamental one: How do I know they’re working if I can’t see them. Well, you can see them on average three days a week or at least half the time, so what’s the problem?

Companies that are letting their employees work just a couple days from home, are they still seeing cost savings, because they still have to maintain the facilities?

Take the IBM example that has hot desks or something similar where if you have to come into an office it’s to a desk that’s assigned to you for the day, and it’s hooked into the network. You take your laptop with you, and you’ve got your office with you wherever you are. The main reason people need to be in offices these days is to go to meetings. That’s actually another part of the issue. You have to change the way people think about work. And one of these problems is, so what do you need to go to the office for. And the answer is typically either to have access to physical stuff like equipment you couldn’t afford to have at home or in a telework center or paper files or to go to meetings. We’ve even gone into redesigning office space so there are more conference rooms and fewer cubicles, because conference rooms are what you need the office for. If you need to sit by yourself somewhere to do your work, why do you have to get in a car to go and do it? So you try to segregate your job into the stuff that is location-dependent, like you’ve got to be together with other people for facilities. And the location-independent part, which it doesn’t make any difference where you are, if you’ve got proper connectivity to do your work.

Do you think IBM’s program is a good one?

Yeah, it’s pretty good. I talk to IBM managers who, the attitude has changed to when employees do go into the office, they ask, “Why are people here?”

I think people just want the social interaction.

That’s part of it. That’s why you still need some face-to-face time. Social interaction is important. We used to take tests during demonstration projects. Sometimes we’d keep going on things for as long as three years just to see how things change with time. In 1973, we had this big long list titled “Things That Could Go Wrong.” It was really long. It included things like people would feel left out, they would be out of touch with each other, productivity would go down the tubes, they would all get divorced or the birth rate would go up. And very few of the bad things happened with properly designed programs. But you have to make sure that people communicate with each other effectively.

You’ve mentioned a lot around management, but do you have a specific list of things people should keep in mind when managing telecommuters?

Well, number one is you have to manage by objectives, or at least by results. But point two is you actually have to do it. As contrasted with writing down something once a year, sticking it in a file drawer and saying, ‘Well, we’ve done that, and now it’s back to business as usual.’ You actually have to get things to where you’re settling on the objectives of the work and all of the criteria, with your colleagues and empowering them to do it and then letting them do it. It’s as simple as that. But you have to do it. You can’t just hope it will happen. You have to keep in touch with people. You have to make sure that if you don’t have people in the office all the time that they are clued into what’s happening.

It’s been 34 years since you started looking at this. Have there been any surprises as far as the way things have evolved?

No fundamental ones. The big surprise was that it’s happening even slower than I thought it might. But it’s still perking along. Cultural revolutions take longer than technological ones.

Originally, this was driven by environmental reasons.

I put a chapter of it in this book we’re reprinting, called, strangely enough the Telecommunications-Transportation Tradeoff, a whole chapter on energy. I was really worried in the early '70s about our energy use getting totally out of hand and its impacts on things like climate change and now, only 30 years later, people are starting to pay attention to it.

As far as surprises, there was an article on Network World about a guy that has a place specifically for teleworking in the nude. I don’t know if you saw it?

No, but it works.

Is that type of thing something you expected?

Well, I tried it. As a matter of fact, I have given a lecture to -- I will not name the country in Europe -- in which all I was wearing was my shirt. It was video, but I controlled the video. I was doing this from home. It was 2 a.m., and I'm not about to put on a suit and tie. It was 11 a.m. on the other end of this thing. As far as they could tell, I was in standard office attire.

So from your perspective, and this might be a corporation’s worst nightmare – I don’t want people working in pajamas or in the nude – but it’s really a liberating thing for employees, as long as like you said they’re meeting these objectives, as long as they’re getting the work done.

The point is if they’re producing the work, what do you care what they look like when they’re doing it? If they’re meeting clients in the nude, that’s a different thing altogether. But if they are otherwise not in contact with people physically, what do you care?

Do you have a number as far as what percentage of employees telework and what percentage of companies allows teleworking?

I’ve given up on trying to keep track of companies. Probably the number of relatively small companies is proportionately higher than midsize companies. Large Fortune 100, Fortune 500 corporations tend to have many telecommuters, some of whom they actually know about it. But it’s basically impossible to get good data. You ask the HR guy how many telecommuters they have, and they say, “I don’t know.” The facilities manager probably has a better idea about that, because he knows the facilities costs have stayed the same for 15 years, and the company has four times as many employees, so something must be happening. But the kind of data you need to get those numbers, companies just don’t want to release.

Has telecommuting taken on a negative connotation so companies don’t want to use that word, but they do have employees teleworking?

I’ve had managers say, “We will not have telecommuting at this company.” Why not? “Well, we just don’t want to.” Do you know what it is? “It’s bad.” So actually we went to the broader term, which is telework. Telecommuting is a form of telework. Telework has a nicer ring to CEOs because it has the word work in it. They don’t care about commuting, but work, that’s something they can think about.

So are you using telework more, is the word telecommuting falling out of favor?

Yeah, my latest book is called Managing Telework. But still most teleworkers are telecommuters.

Looking ahead, how do you see things evolving when it comes to telecommuting or telework? Do you think the number of teleworkers will increase more quickly now?

I think the rate is going to stay fairly steady for the next several years, somewhere around 10% annually, as far as the increase in the number of teleworkers. Broadband access is shooting down more and more arguments, which were never very good in the first place, that technology isn’t good enough yet, that it’s too expensive. So the technology is getting easier and easier, the percentage of people in the workforce who grew up with this stuff is increasing, and they’re beginning to say, “What’s the problem with this? I worked like this all the time before I had a job, so why go back to the old ways now?” What I expect to see is the terms “telecommuting” and “telework” sort of disappear over the next few years. I thought they would disappear about five years ago, but they’re still hanging around. It will be just the way companies do business. The technology is better and people are seeing the energy problem. We’re going to run out of oil in the not too distant future. My calculations say if we keep using oil at our current rate, there won’t be anymore by about 2047. So clearly, we’ve got to change the way we’re doing things. The sooner we change the way we’re doing things, the better off we’ll be.

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