Define your objectives

Determine where you stand vis--vis objectives

Develop premises regarding future conditions

Analyze alternatives and make a plan

Implement the plan and evaluate results

Define your objectives

Determine where you stand vis--vis objectives

Develop premises regarding future conditions

Analyze alternatives and make a plan

Implement the plan and evaluate results

Betty Jane Punnett wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveypublishing.ca. Our goal is to publish materials of the highest quality; submit any errata to publishcases@ivey.ca. Copyright 2022, University of West Indies Version: 2022-06-27 Corina Ludwig, president of FunctionFox Systems Inc. (FunctionFox), was sitting in her home office, thinking about an upcoming meeting with colleagues and trying to decide what to recommend regarding remote work. It was early 2022 , and the COVID-19 pandemic finally seemed to be abating, although no one could really be sure about this, especially with new variants of the virus appearing. FunctionFox had decided in late 2020 to become a fully remote company and sell its office building. Now, after almost two years, it was time to consider whether FunctionFox should continue with 100 per cent remote work. Ludwig knew the benefits of remote work well. Her own situation demonstrated these. She was comfortably dressed, she had just had a home cooked lunch, and her dogs were sitting next to her. From an individual perspective, there was no question: remote work gave you more time for yourself, your family, and your friends; it freed you from the hassles of commuting; and it allowed you more flexibility. Ludwig did not think this gave the total picture, however. In many ways, as a leader, she was always pro-office. She felt the corporate culture at FunctionFox was rated at 9.5 out of 10 when everyone worked together but that this score might now be substantially lower. Remote work provided opportunities for neither ad hoc interactions nor the learning and team spirit that came from these interactions. Ludwig believed a remote working situation was particularly difficult for newly hired employees, as they did not get to really bond with other team members. And she knew some of her team found it difficult to be highly motivated when no one else was around, or if there were too many distractions at home. Ludwig did not think the FunctionFox team could ever go back to 100 per cent in-person work-the team would never agree to this - but was there some kind of hybrid approach that might work for them? Would such an approach be the best of both worlds, combining the benefits of both? Or would it perhaps be the worst of both worlds, with no one really satisfied-some people liking it and some people not liking it? And what about the details? FunctionFox now had staff in Ontario and still had staff in Calgary (Alberta) and in Comox and Richmond/Burnaby (British Columbia), as well as one person occasionally in Mexico; what would happen to them? Would a hybrid model lead to a sort of in-group, out-group situation? There were so many angles to consider. Perhaps Ludwig should just lay out the pros and cons of various alternatives for her colleagues. But she knew she could not do that; they were expecting a recommendation for a decision. They might not be in favour of her recommendation, but she and the management team needed to make one, nonetheless, and it needed to be detailed in terms of making it succeed. BACKGROUND: REMOTE WORK Reporting on a survey conducted in May 2021, the Economist Intelligence Unit's "Reshaping Productivity: A Changed Workplace after COVID-19" stated, "What began as one of the greatest experiments in recent times [working remotely] could well become a norm in the future." " The survey found that two-thirds of respondents believed working from home/remote work would continue. There were different perceptions regarding productivity, however, with 39 per cent of respondents reporting an increase in productivity and 33 per cent reporting a decline. The survey showed that the size of the company and the nature of its business were important; larger organizations and those in financial services had more positive productivity experiences. There was also a strong positive correlation between the acceptance and use of digital tools (such as programs, websites, and online resources) and increased productivity. Among those who believed productivity had decreased, 38.7 per cent attributed the decrease to employees not having access to tools for information management. Business leaders generally did not believe remote work could completely replace in-person work, particularly in terms of team management and fostering a positive corporate culture, and it was not necessarily the future they wanted. The Economist Intelligence Unit concluded that it might not be the future these leaders wanted but it was likely the future they would get, at least in some form, and that organizations that had adapted during the crisis would successfully transition to whatever model became the reality. 2 The COVID-19 pandemic of 2020 and 2021 had forced many companies to move to remote work. According to one survey, one in four Americans was expected to work remotely in 2021. The 2021 Work Trend Index was based on findings from a study of more than 31,000 people in thirty-one countries and perspectives from experts who had studied collaboration, social capital, and workspace design. Outlining the findings of that study, the 2021 Work Trend Index shared that 73 per cent of employees wanted flexible, remote work options to continue. It concluded, however, that remote work was different from what used to be the normal in-person world of work, and that policies and practices based on long-held assumptions would need to change accordingly in order for organizations to be successful in the new world of work. 3 A major Canadian study in early 2021 looked at the impact of the pandemic on a number of workplace factors, with a particular focus on employee well-being. The study found that stress levels were high among remote workers, especially those balancing work and family/home demands, raising the possibility of a growth in mental health issues for these employees. Those likely to be most effective and successful working remotely had a home office with a door that closed. This was in contrast to those who worked in their bathrooms, sitting on their beds, or in other uncomfortable spaces, raising the possibility of a "pandemic" of physical problems. Overall, the study found that a quarter of those surveyed wanted to continue working remotely, a quarter wanted to go back to in-person work, and the rest wanted some kind of hybrid model. The authors of the study asked "Who decides?" and "Who chooses the kind of hybrid model?" stressing that relatively little was known about the reality of this new mode of work. 4 Another workplace trend attributed to COVID-19 was a growing number of people leaving the workforce. It was not clear if their decisions to leave the workplace were long-term or permanent, but at least in the 1 Economist Intelligence Unit Limited, Reshaping Productivity: A Changed Workplace after COVID-19, 2021, https://reshapingproductivity.economist.com/wp-content/uploads/2021/07/reshaping_productivity.pdf. 2 Economist Intelligence Unit Limited, Reshaping Productivity. 3 Microsoft News Center, "Microsoft Releases Findings and Considerations from One Year of Remote Work in Work Trend Index," News release, Microsoft, March 22, 2021, https:/ews.microsoft.com/2021/03/22/microsoft-releases-findings-andconsiderations-from-one-year-of-remote-work-in-work-trend-index/; Remoters, "Remote Work Trends \& Stats for 2021: The Present \& Future of Remote Work after Covid," Remoters (blog), accessed December 10, 2021, https://remoters.net/remotework-trends-future-insights/. 4 Anita Grace, Linda Duxbury, and Andre Lanctot, Work, Family, Life during a Pandemic: Wellbeing Report (Ottawa, ON: Carleton University, Sprott School of Business, April 2021, https://sprott.carleton.ca/wp-content/uploads/2021WorkFamilyLifeDuringPandemic-WellbeingReport.pdf. Page 5 of 17 Page 3 W27361 short-term, they were making it difficult for companies to hire new employees. Some people had found short-term, they were making it difficult for companies to hire new employees. Some people had found during the pandemic that they had more time to devote to their personal interests and enjoyed what they felt was a better work-life balance. They were able to save money during the lockdowns and now found they spent less and therefore could make do with working part-time (e.g., taking neighbours' dogs for walks) or by establishing barter systems (for instance, someone who was good at woodworking could fix their dentist's kitchen cupboards in exchange for her cleaning their teeth). It seemed that, if companies were going to attract and retain talented employees, they would need to give more thought to how they could make work attractive. Professor Elizabeth Christopher discussed the reasons for companies' resistance to remote work, despite its demonstrated benefits. 5 She quoted the Washington Post as saying that many managers held to the theory that "a fanny in the seat prevents the kind of slacking off that can happen if no one is watching." .6 Remote work was difficult for many supervisors and managers accustomed to checking on their subordinates by seeing them physically at their desk or workspace. Some companies had resorted to remotely viewing their employees' activities as a means of maintaining control, a practice that in turn raised privacy concerns. Companies faced challenges in the new world of remote work. This was especially true for smaller companies. Companies wanted to ensure productivity and high performance. They asked questions such as, "How do we measure productivity/performance remotely?" "How do we ensure employees are motivated remotely?" "How do we manage effectively at a distance?" "How can we ensure a positive corporate culture and team spirit without in-person interactions?" and "who pays for and provides home office equipment and supplies?" Researchers were trying to answer these and other similar questions, but remote work on a large scale was a new phenomenon, and the answers were still tentative. From a corporate perspective, the objective was to make the most of the benefits while managing the challenges (see Exhibit 1). FunctionFox, a small information technology company, shared in a blog post, The unprecedented global health crisis is changing the way we work at truly astounding speeds. Suddenly, whether by choice or necessity, many of us find ourselves negotiating the new reality of remote work. As a technology supplier to the creative community, the FunctionFox team wondered how best to support our current users, and make the transition to remote work easy, affordable, and intuitive for those that haven't worked in this way before. With a recent survey showing that up to 90% of creative companies are working remotely during the crisis, we wondered how we could help these teams to ride out the storm and prepare for recovery. 7 Clearly, FunctionFox was facing the reality and challenges of remote work and looking for innovative solutions (see Exhibit 2 for FunctionFox's advice to its customers). 5 Elizabeth Christopher, "Diversity in International Management: A Silver Lining to the Covid-19 Cloud-Overcoming Management Resistance to Employee Telework," in Intercultural Management in Practice: Learning to Lead Diverse Global Organizations, ed. Meena Chavan and Lucy Tansa (Bingley, UK: Emerald Publishing, 2021), 53-68. 6 Laurel Farrer, "Trump versus Telework. Federal Policy Retraction Will Cost Government Millions," Forbes, January 23, 2020, https://www.forbes.com/sites/laurelfarrer/2020/01/23/trump-versus-telework-federal-policy-retraction-will-cost-governmentmillions/?sh=11bfe637114e. 7 FunctionFox, "Remote Control: Supporting the New Reality of Working from Home," Stay Creative. (blog) FunctionFox, accessed April 5, 2022, https://www.functionfox.com/blog/remote-control-the-new-reality-of-working-from-home/. THE COMPANY FunctionFox was initially located in Victoria (on Vancouver Island) in British Columbia, Canada. The company was composed of a group of eighteen people, including four founding partners. It had been in operation since 2000, started by Mary-Lynn Bellamy-Willms, who was described on the company's website as follows: "The original FOX! Mary-Lynn had a dream that was TimeFox and she made it happen. She is smart, stylish, and loves shoes!" FunctionFox was a private company owned by Bellamy-Willms, employees, family, and friends. FunctionFox was an Internet business service serving the needs of smaller companies (up to 500 employees). It developed industry-specific applications and services and provided them to its customers securely over the Internet. Timesheet tracking and project management had always been problematic for small businesses yet were essential to ongoing productivity and profitability. FunctionFox was created to address this problem; it was designed to address these essential activities through systems that were simple to set up and use, effective, and affordable. In terms of the company's market, according to the president, Ludwig, "There are thousands of users who log in daily in over 120 countries around the world, and we have a referral rate of over 33 per cent, a high retention rate, and customers that have been with us for twenty+ years." The company promised customers a brand with unlimited free support and deep expertise from real people. Since 2001, it had been the leading choice for creative professionals, providing online project management, time tracking, and reporting tools. It described itself as "more than just a software provider," stating that "FunctionFox is committed to being a valuable extension of your business." Ludwig said, "We love making life easier for creative teams," and outlined the company's core values (HEART) as follows: - Helpful: We care about each other, our clients, the world. Caring, helpful, supportive, kind, developing, nurturing talent, mentoring, coaching. - Excellent: Our best is always excellent. Excellence, discipline. - Amazing/Attitude: We are fun, upbeat and have a positive attitude. Fun Foxes. - Resourceful: We make it happen. Driven, creative, agile. - Trustworthy: You can count on us. Trustworthy, honesty, integrity, credibility. The company's mission was to help creative teams stay creative. FunctionFox believed in keeping its customers happy, declaring, "We answer questions and solve problems quickly, provide free updates regularly, and always go 'the extra mile' to ensure that our products work well for each of our customers, no matter how big or small." The company was at the forefront of project management and timesheet software development when it began, but other companies/competitors had been growing and innovating. As a small company, FunctionFox prided itself on providing personal service to its clients. Once a new client came onboard, the new customer was given individual onboarding attention, and staff maintained this relationship over time through continuing personal interactions with clients. At its inception, FunctionFox was a product leader and first mover; over time, however, competitors had developed, and now many companies were offering comparable products and services. Some of these competitors were far larger than FunctionFox and had access to greater resources; thus, the company operated in a highly competitive environment. FunctionFox had a simple organizational structure (see Exhibit 3). FunctionFox Origins FunctionFox's current president, Ludwig, had been with the company for more than twenty-one years. She had returned to Victoria after working at an international agency in New York City, where she completed a bachelor's degree in advertising design at an art school and then was interviewed for a position at BellamyWillms' company. At the time, Ludwig felt the interview had not gone very well, as she believed she was not really suited to the position. To her surprise, she received a call back from Bellamy-Willms, who was excited by Ludwig's background and her experience in New York and felt Ludwig would "be good for the team." Ludwig was hired and had been with the company ever since. The original company that became FunctionFox had been looking for effective project management and time tracking software and was unable to find anything that suited its needs. So, it created its own product and found it worked very well. After discussions with other companies, it found that many companies like itself were also looking for appropriate project management and time-tracking software, and these companies liked what FunctionFox was offering. This led to more focused product research, which indicated there was a clear need for a product like the one it had developed for itself. Like many successful products and companies, FunctionFox had not set out to create a particular product for the market but had found a way to meet its own needs that also succeeded in the wider market. HUMAN RESOURCES According to the company's website, FunctionFox was made up of "a group of interesting, smart, energetic, and curious people who love to work together," and its passion was "to develop fantastic software for talented creative professionals." At the outset, all employees worked on site in the Victoria office, and prior to the pandemic, 25 per cent of its employees were working remotely. At the end of 2021, Ludwig said, "Now we are 100 per cent remote and have Foxes [employees] in BC [British Columbia], Alberta, and Ontario." Prior to becoming fully remote, FunctionFox owned the building where the company was located. The company sold this in 2020 and thereafter maintained a small, two-person office for anyone not able to work from home. FunctionFox's employee handbook stated that its official office hours were Monday to Friday, 7 a.m. to 4 p.m., Pacific Time, and that working hours were based on an eight-hour day, with up to an hour off for lunch. The workday at FunctionFox was based on a standard thirty-five-hour work week (five days a week of seven working hours per day), and salaries were based on a forty-hour work week with paid lunch. Salespeople were also paid a commission. FunctionFox hired based on need, i.e., for a particular job or location. For example, most of the group was in Western Canada but the company might need someone in the east of the country. It emphasized a commitment to people and said that it hired "people first" and skill sets second and that it promoted from within prior to looking externally. Its aim was to keep a small, strong, and solid team. The group was diverse and included different genders, ages, and education levels. It valued ethnic diversity and had several people who spoke at least two languages. FunctionFox had had a steady workforce with relatively little turnover. The four partners ( 20 per cent of the workforce) had been there over twenty years, 25 per cent of the group had been there between ten and twenty years, and 36 per cent between five and ten years. When people did leave, it was usually for diversified career growth, with no new role being offered at FunctionFox, or to pursue larger firms with higher base salaries. Interestingly, over the years, eleven people who left the company had asked to return. Ludwig described productivity/performance as follows: "At the end of the day it's about success. Success in happy customers, success in sales, and success in viable and functional products and services." Overall, employees kept logs of their activities (a log with symbols indicating whether someone was on the phone, sending emails, and so on), and these activities could be viewed remotely so that at any time supervisors could "see" what everyone in their group was doing. Performance metrics depended on an employee's role in the company. For example, for sales, the metrics could include the number of sales made, phone utility, lead conversion ratio, and so on, and for customer service, they could include customer response time, upgrades, solving customers' issues, and so on (see Exhibit 4 for a FunctionFox job description). The FunctionFox Employee Handbook An employee handbook provided standard policies and procedures for employees and was often a good indication of what the company strove to be. FunctionFox's handbook was titled "Stay Creative," and the first page began with "Welcome to FunctionFox" (see Exhibit 5) and went on to say, Please use this handbook as a guide rather than an absolute. We are reasonable people, and logic and common sense are our most important "policies." We trust the people we hire and believe that "Foxes" are responsible, mature and act reasonably. When there are questions, we use this handbook as a reference only. We will make exceptions to policies written here if it seems sensible to do so and invite you to provide additional details for discussion if you feel they are relevant. The Table of Contents included the following: Congrats!, Our Background, Our Mission, Our Core Values, Personality, Hours, Overtime, Pay, Performance \& Salary Reviews, Vacation Days/Days Off, PTO [Personal Time Off] Days, Parental Leave, Benefits, Short-Term Disability, Long-Term Disability, Critical Illness, Time Off for Services, Safety \& Security, Workplace Harassment, Equipment, Social Media, Travel, Expenses, Alcohol, Substance Misuse, Non-Disclosure, What's Left Unsaid, You Make the Difference. The handbook ended with the following statement: "We are proud to have you on our team and welcome you as a part of the FunctionFox family. You are a Fox-smart and clever-so we welcome your ideas, opinions, input, and feedback. Together we can continue to make FunctionFox an amazing place with an excellent team of professionals." Throughout, the handbook was illustrated with sayings like "Stay Calm and Fox On," smiley faces and the like, many sayings, and pictures including foxes. RESPONDING TO COVID-19 Speaking about FunctionFox's response to COVID-19-related restrictions, Ludwig said, "We have a solid and mature team. We've had to change our in-person methods to online. For example, [having] online summer and Christmas parties rather than celebrating in person. But management overall is very similar-just the delivery methods have changed to online." In response to COVID-19 and the move to remote working, FunctionFox introduced several initiatives and had others under consideration (see Exhibit 6). Many of these were traditions from before COVID-19 and were modified for a virtual delivery. Some involved the whole team (such as the Christmas party), while others (such as the weekly check-ins that had representation from all departments at all levels) involved a sampling of about five to eight team members. Some initiatives involved no time at all, while others lasted