Why Does Leadership Competence Determine The Success or Failure of Flexible Working?
Why?
Since 2020, debates about remote, hybrid, and flexible working have been dominated by opinion rather than evidence. Detractors often cite loss of culture, reduced productivity, or lack of accountability without recognising that these outcomes stem from weak leadership architecture, not from flexible working systems. In contrast, organisations that view flexibility as a strategic capability consistently outperform those that treat it as an optional perk.
What?
Flexible working describes any model that enables individuals or teams to control how, when, or where work is delivered. The strategic question is not whether flexibility works, but how well it is aligned and led. When mapped against my Strategic Blueprint, a synthesis of Dilts’s Logical Levels and Knoster’s Managing Complex Change adapted for scalable application, flexible working sits within the Capabilities & Skills domain: the how that converts strategic intent into measurable performance outcomes.
How?
This case study examines one of my pre-COVID projects in which flexible working was implemented to support rapid growth in a technology start-up. By resolving constraints in property, recruitment, and retention, the company achieved expansion, improved margins, and eventual acquisition. It demonstrates how flexible working, when treated as a strategic component of business design rather than a cultural experiment, directly translated into higher profitability, engagement, and organisational readiness. To explore this we will answer these three key questions:
Why does leadership competence determine the success or failure of flexible working?
How can flexibility be structured as a measurable business capability rather than a discretionary benefit?
What evidence links flexibility to productivity, retention, and commercial performance?
Business Strategy
The model below combines Robert Dilts’s Logical Levels and Professor Tim Knoster’s Managing Complex Change, who identified the relationship between the components of strategy and the predictable human responses that accompany their absence. I have significantly adapted this model for use in a business context, though it remains valid at any scale, individual, team, or organisational. It can be applied to anything from delivering a career-defining presentation, to preparing an athlete or team for a championship event, to steering a large enterprise through market change. In the context of this case study, our focus is on the column labelled Capabilities & Skills.
Capabilities & Skills | Strategy | Source: Lippit 1987, Dilts 1990, Knoster 1991 & Kenny Wallace 2021
Flexible working succeeds or fails on the same basis as any other strategic initiative, a cohesive strategy that enables and guides the conversion of aspiration to action, which this model excels at presenting when populated effectively. It offers the adaptability of functioning as a series of russian dolls, each nested within another.
To demonstrate this let’s apply the notion of russian dolls to a generic organisational structure. A business strategy version of this model would exist at the macro level. We would then recognise the capability of say, Finance at the meso level, within the overall business strategy. The Finance function would develop its own Finance Strategy derived directly from the business strategy, positioned within the Capabilities & Skills section of the business strategy.
The same pattern would cascade from function to team, and team to individual at the micro level, mapping out the entire structure of the Finance function while ensuring continuity and alignment with the business Vision & Mission. Every other Function within the business would follow suit, ensuring each function has its own clearly defined mission, role and structure derived from the needs of the business. In summary: Aspiration → Business → Function → Team → Individual → Action.
In practice, the same architecture that governs strategy design also governs its execution. Once leaders understand where flexible working sits within their wider business blueprint, in the Capabilities & Skills domain, the question shifts from why to how. The next step is to translate structure into action: to build a flexible working strategy that is both commercially viable and behaviourally sustainable.
Flexible Working
The model below presents the same framework as above, but in hierarchical form. It illustrates how each level supports and is shaped by the one above and below, from the abstraction of growth at the top to the manifestation of outcomes at the bottom. We will use this to represent our highly simplified Flexible Working Strategy.
Flexible Working | Strategy | Source: Kenny Wallace 2019
A Flexible Working Strategy follows the same logic. It has its own internal strategy to define and guide aspiration to action derived from the needs of the business, and positioned within the Capability & Skills section of the overarching strategy its designed to support. This ensures continuity and alignment with business need. Let me give you an example:
A few years ago, long before COVID-19 and remote working swept round the globe, I supported the CEO of a technology start-up to overcome a growth plateau and position their company for successful acquisition. To best ensure success we needed to solve three mission critical problems:
Expansion: This required larger premises, resulting in overheads increasing by a factor of 3.
Recruitment: Acquisition of the skills and headcount required was very slow, typically 6months+.
Retention: Particularly of young women. This had its challenges having lost several to larger companies.
After some careful thought, implementing flexible working practices became the obvious solution, yielding 3 significant benefits:
Cost Control: 100% hot-desking would allow us to retain the same premises, so no increase in facility overheads, while providing space for those preferring the buzz of an office environment.
Talent Reach: Our recruitment strategy would cast a wider net, attracting top tier talent from diverse backgrounds who would otherwise pass us by due to lifestyle commitments, men and women alike.
Retention & Wellbeing: Existing employees would be able to balance work and family life though location independence, saving them time and money on commuting, which is essentially a pay rise as disposable income goes up.
The operational benefits were immediate, but the deeper impact was psychological. Once the structure removed unnecessary friction, commuting, presenteeism, and reactive management, people began to work in a more deliberate rhythm. Time, attention, and energy aligned with demand rather than routine. The result was a shift from activity to effectiveness, a hallmark of teams operating in flow. This is where the financial and performance gains became measurable.
Performance
The model below is based on a matrix created by Professor Mihaly Csikszentmihalyi, the first psychologist to formally study the traits associated with high performance, collectively known as Flow. I have adapted the model for organisational analysis by correlating leadership style with its systemic impact. The framework examines the relationship between Challenge, defined as the degree of difficulty to be overcome, and Support, defined as the availability of resources. Four organisational states emerge:
Flow | Source: Massimini, Csikszentmihalyi Carli 1987 & Kenny Wallace 2019
The key to unlocking flow was rebuilding the company’s operating model, work we had previously begun. Flexible working was simply another tool in the box to support our overarching objective. We redefined everything, from company vision and mission through to measures of success: customer satisfaction, employee satisfaction, help-desk query resolution, management reporting, organisational design, learning and development, recruitment, KPIs, every system and process was re-engineered for congruence and robustness, so the organisation could support its people wherever they were.
The most significant structural shift was the introduction of Management by Objectives (MBOs). Objectives made performance visible and measurable. It no longer mattered where or when someone worked, only what they delivered. Conversations became simpler, grounded in clarity rather than assumption: either objectives were achieved, or they weren’t, and that distinction guided support rather than blame. The impact was immediate:
60 % reduction in overheads by retaining the original site.
35 % increase in revenue within a year through cost control, higher capacity and throughput.
50 % reduction in recruitment time, coupled with higher-quality candidates attracted by a stronger market proposition.
According to the Flow Model, peak performance occurs when challenge and skill are balanced, feedback is immediate, and autonomy is high. Our flexible working system contributed to precisely those conditions. Autonomy gave individuals control over how they met objectives; feedback loops through MBOs provided clarity and pace; alignment of systems removed distraction. The result was collective flow, a state where attention, energy, and capability converged around purposeful work.
As a managed IT services company, this approach also demonstrated credibility to our clients. We were not merely selling cloud-based flexibility, we were living it. The organisation became its own proof of concept, a textbook case study adopted by the Scottish Government, and ultimately successful acqusition.
Conclusion
So what?
Flexible working operates within the same structural logic as any other strategic initiative. It succeeds when each layer of the organisation, business, function, team, and individual, is aligned through a coherent system that converts intent into action. The model functions like nested Russian dolls, where every layer reflects and supports the one above and below. Once leaders locate flexible working within the Capabilities & Skills domain of their strategic architecture, the challenge moves from justification to execution: designing a model that is both commercially sound and behaviourally sustainable.
A flexible working strategy functions as a self-contained system within the wider business blueprint. In practice, this meant addressing three constraints, expansion cost, recruitment lag, and retention loss, within a technology start-up preparing for acquisition. By adopting 100 per cent hot-desking, broadening recruitment reach, and enabling location independence, the company controlled overheads, attracted stronger talent, and improved wellbeing. Daily friction such as commuting and presenteeism disappeared, replaced by focused, outcome-driven work. The change synchronised time, attention, and energy with actual demand, moving the organisation from activity to effectiveness, producing measurable financial and performance gains.
Rebuilding the company’s operating model unlocked flow by aligning every system, from vision and KPIs to recruitment and reporting, around clarity and coherence. Flexible working became one of several strategic tools supporting that goal, while the introduction of Management by Objectives made performance transparent and measurable, replacing presence with proof of delivery. The outcomes were substantial: a 60% reduction in overheads, 35% revenue growth, and 50% faster recruitment of higher-quality candidates. By balancing challenge, skill, and autonomy, the organisation created collective flow, a state where energy and capability converged on purposeful work. Living the same cloud-based flexibility it provided to clients, the company became both its own proof of concept and, later, a Scottish Government case study.
Now what?
In any performance domain, whether coordinating a military operation, running a hospital, coaching a sports team, or leading a research programme, success depends on the integrity of alignment from intent to action. When each layer of the system understands its purpose, role, and contribution to the mission above it, execution becomes fluid and adaptive. This nested architecture allows complex organisations to scale, innovate, and recover faster, because clarity of outcomes and structure replaces the need for constant supervision. It is the same mechanism that turns organisational flexibility in business into organisational readiness in every other field.
Whether in emergency services balancing resources across shifts, elite sport coordinating multidisciplinary teams, or education adapting delivery to learner demand, designing systems that converts aspiration to action effectively yield the same results: friction falls, focus rises, and output improves. When structure and capability are engineered to match real conditions rather than inherited routines, time, energy, and attention align with purpose. The result, whether measured in profit, readiness, or performance, is a system that moves from mere activity to effectiveness. This applies to any environment where efficiency, agility, and human performance intersect.
This same pattern of aligning vision, systems, and feedback applies to every field that depends on sustained high performance. In aviation, elite sport, healthcare, or complex project delivery, clarity of objective, immediacy of feedback, and autonomy of execution create the same flow state that drives commercial excellence. Flexible working is simply one window that exposes whether leaders can operate at that level or not. Competent leaders think strategically: they define intent, set measurable objectives, and build systems that enable performance to become self-correcting and self-sustaining. Incompetent leaders think transactionally: they track activity, mistake visibility for progress, and erode trust through control. The system, whatever that is, is never the real issue, it is simply the stage on which leadership capability, or lack of, is revealed.
What next?
Now that we’ve seen how leadership competence shapes outcomes through clarity, structure and flow, the next step is to look inward. The same principles that determine organisational success apply at every level of performance. The way you think, decide, and act under pressure offers constant feedback about your strengths, weaknesses, and assumptions, as well as those of the people and systems around you. With this in mind, let’s consider how you might use what you have learned:
When you lead or contribute to a team, do your actions show strategic intent or transactional habit, and what do the results reveal about your own competence under pressure?
How well do the people around you convert clarity into collaboration, can your team operate through shared purpose and trust, or does it depend on constant supervision to stay aligned?
What do the systems you use every day, your meetings, metrics, and feedback loops, really measure: progress and outcomes, or motion and compliance?
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If you are in the process of dealing with issues similar to the one in this case study, then do consider working with me to either assess your Individual Readiness to manage the situation you are in or address issues that have come to your attention as result of this case study.
