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Summary:

Yahoo says that its new edict banning remote working is necessary to build the right kind of culture. But how is making things less appealing for potential employees going to help Yahoo become more innovative?

yahoo-reflected-in-eye-o

Not long after her arrival at Yahoo, new CEO Marissa Mayer started handing out carrots to her new employees, including new smartphones, free food and other Google-style amenities. Now she has brought out the stick: namely, a directive that employees are no longer allowed to work from home, something that is expected to affect as many as 500 Yahoos. Mayer’s move has its supporters, who argue that she is trying to repair Yahoo’s culture — but in doing so, she could be sending exactly the wrong message for a company that is trying to spur innovation after a decade of spinning its wheels.

In the internal memo published by All Things Digital, Yahoo’s head of human resources said that the company wanted to improve the working environment at the company, and in order to do so, it needed people to work in the same physical location. According to the memo, “speed and quality are often sacrificed when we work from home,” and therefore working at home was no longer going to be supported — in other words, find a way to work at the office or quit:

“To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings… We need to be one Yahoo!, and that starts with physically being together.”

Yahoo says it needs to re-build its culture

Although most of the responses from tech-industry insiders have been resoundingly negative, the Yahoo plan does have its supporters: some say the company has fallen so far behind its competitors after years of inaction and bad strategy that Mayer needs to bring the scattered remnants of its corporate culture together, and one of the best ways to do that is through physical proximity. In other words, the company’s “insights from hallway discussions” argument has some truth to it.

According to some ex-Yahoo staffers, many of those who currently have work-at-home arrangements are disgruntled employees who provide little value, and so forcing them to work in an office is either a) a way of getting them to drop this attitude, or b) an easy way to get them to quit and save the company some money. Either way, the argument goes, Yahoo as a whole winds up benefiting financially. But at what cost to the company’s reputation?

Yahoo has also taken fire from critics who see the move as an attack on employees who can’t afford to work in an office, including single mothers and others who require more flexible work arrangements. This is an argument that the company should theoretically be more open to, they say, because Mayer herself is a new mother — although she also happens to be one with a built-in nursery in her office according to some reports.

Many argue that remote workers are more efficient

The debate over whether employees are more productive in the office or at home has been going on for at least a decade, if not longer, and there is still plenty of disagreement on both sides. In addition to the impromptu hallway conversations and other social benefits of working alongside other people — which are clearly very real, as I and many other remote workers will admit — some managers believe employees who work at home invariably goof off and get less done (although as our GigaOM Pro analyst Stowe Boyd argues, this often says more about those managers than their staff).

Companies like Automattic, however — the for-profit arm of the WordPress community (see disclosure below) — say they are more efficient and friendlier as a workplace without any real corporate office to speak of, and distributed teams like those behind Wikipedia and Linux have been able to accomplish incredible things without a traditional office environment. Surveys repeatedly show that companies with more flexible working arrangements are more efficient than those without.

Most technology companies (including GigaOM) support remote working because it provides a lot more freedom for employees, and because giving staff the opportunity to live virtually anywhere and work wherever they wish broadens the available talent pool enormously. And isn’t that what Yahoo theoretically wants to do, or should want to do? Maybe people are already pushing down the doors demanding to be hired at the company, but if so then it’s a well-kept secret.

What message does this send about Yahoo?

Marissa Mayer

I think David Heinemeier-Hansson of 37signals puts his finger on the problem in a recent post about Mayer’s decision, in which he says that Yahoo’s move is “an admission that Yahoo management doesn’t have a clue as to who’s actually productive and who’s not.” He goes on to argue that, for a company that is so desperately in need of talented employees who are willing to go the extra mile to rescue the former web giant, the decree abolishing remote working isn’t going to help, but will rather do the opposite:

“Are you going to be filled with go-getter spirit and leap to the opportunity to make Yahoo more than just “your day-to-day job”? Of course not. Yahoo already isn’t at the top of any “most desirable places to work” list. A decade of neglect and mounting bureaucracy has ensured that. Further limiting the talent pool Yahoo has to draw from… is the last thing the company needs.”

The danger for Yahoo here is that a decision driven by what are theoretically positive motives — to get employees to feel more like a team, to encourage innovation through serendipitous encounters, and to drive low-performing staff away — could wind up sending exactly the wrong message: namely, that it is a bureaucratic and centrally-controlled organization with no interest in being flexible when it comes to the living arrangements of its employees.

Disclosure: Automattic, the maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Post and thumbnail images courtesy of Getty Images / Chris Jackson Shutterstock / ER 09 and Flickr user Pew Center

  1. This article is ridiculous over-exagerrated nonsense. 500 employees is a drop in the bucket at a company like “Yahoo!” and while working at home *can* be more efficient, it’s not something that any rational person who was a valued worker would quit over.

    There is also probably all kinds of leeway for individual managers to use if there actually *is* a good worker who is threatening to quit if they have to get out of their PJ’s.

    Every company I’ve ever worked at with work at home policies has some of it’s worst and laziest workers take advantage of it as well. I think it’s likely that you could clear the company of all the real deadwood in this way. Perhaps that is her intention.

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    1. Tom The Nerf Herder Monday, February 25, 2013

      To put it bluntly, Mr. Bee, I would HAVE to quit if my company enacted a “no remote workers” policy, since I live and work 600 miles away from my office.

      If the people live in the same town as a Yahoo! office, I also think there’s nothing wrong with asking them come back in to the office… but if people have taken the opportunity to work remotely, and that remote location is hundreds of miles away, that’s a problem.

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      1. Khan is not the easy route Monday, February 25, 2013

        Tom, it’s called relocation.

        Lots of people have had to relocate because of the location of their job.

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      2. Khan,

        And lots of people quit rather than relocate. It’s not absurd to suggest that a rational personal would rather leave a job than move across the country, which is what Mr. Bee was saying.

        For many people, relocation means pulling kids out of school, moving away from elderly parents, accepting a lower quality of life and forcing a spouse to quit their job. Those are all considerations that could easily — and rationally — sway a rational person to decide to leave the job rather than move.

        As Mr. Bee points out, 500 employees is a drop in the bucket for a company of Yahoo’s size. So the flip side to his argument is: can 500 employees really make a difference to the office culture? What if those 500 employees are now more likely to be disgruntled after having been forced to relocate and work in an office?

        We’re talking about a supposedly cutting-edge digital company in 2013 that makes a 100% online product. They should be able to effectively work remotely. Are there instances in which in-person interaction is beneficial or necessary? Of course. So bring those employees for whom that’s the case into the office once in awhile. Mandate for those who could benefit from being around more often that they come in at least a few days each week (i.e., for managers working with junior hires who could use hands-on guidance).

        And create a great office environment and in-person culture that people want to be part of. But don’t mandate it. Forcing the issue isn’t good and won’t help anyone in the long run.

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      3. Well I was implying rather strongly that many of those that would quit, in fact probably the majority of them would wither be “deadwood” that would be better off quit and that “a way” would be found to keep those that were actually key employees working remotely. Rules, especially in corporations are rarely iron-clad and rarely what they appear to be.

        I re-iterate that in my experience the “work at home” policy of every place I’ve ever worked leads to a great deal of lazy people (not all by any means but quite a few) taking advantage. “Banning” working at home, while simultaneously allowing it for a few key people seems like it might be the best way to clear house in that regard.

        Marissa Meyer is a very capable person with long experience exactly in areas such as this. Google was one of the first places to institute work at home rules for instance. Why do we now assume that she has lost her mind?

        She obviously knows that in *some* cases working at home is the most productive way to work. She obviously has access to productivity statistics. Why does everyone assume she is looking at this data and then making the wrong decision?

        In any case, people in the comments (as well as some articles I have read about this) are mixing in all sorts of extraneous things that may not even apply. A ban on working at home for instance, is not necessarily a ban on working remotely or working form one coast or the other. A ban on working at home does also not necessarily mean parents have to make a choice between work or kids as some have suggested.

        My original feeling that people are going off the deep end in criticising this move hasn’t changed at all. It gets page views, but it’s not very rational IMO.

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    2. If people are so poorly managed that they can be lazy then fire them, don’t take the coward’s approach and say no one can work from home. These blanket policies are foolish and non-competitive.

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    3. If you have bad and lazy employees, then the operative move is to get rid of them. It doesn’t matter where they are working (home or central office.) If you don’t know who’s on your payroll and what level of work they are contributing, then you are worthless as a manager it’s YOU who should be fired.
      I’ve been a work-at-home director, managing several groups in multiple countries, and I knew who was doing what. True, I had to make a few trips a year to foreign countries and multiple states, but I would have had to do that even if I worked most of my time in a central office.
      What the company got was increased availability across nearly every timezone, that often required I get up at midnight to conduct a meeting in one of the foreign country offices.
      BTW…lazy and worst happens regardless of where the employee spends their working time. Do something about THOSE employees instead of trying to punish everyone because you can’t tell the difference.

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    4. Yes 500 is a “drop in the bucket” (those affected probably don’t feel that way) but what of hiring people tomorrow? Why would a smart person go to a place that has as a policy a ban on WFH?

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    5. Edward Yang Monday, March 4, 2013

      Mr. Bee, that’s like cutting your nose to spite your face. Bad and lazy workers will be apparent in the office as well; it doesn’t take telecommuting to call them out.

      There are PLENTY of tools now to make remote collaboration a breeze, much more so than even five years ago. Dropbox, Google Docs, Google Hangouts, Skype, screen sharing like Join.me, the good ol’ fashioned Terminal Server or GotomyPC. Not to mention with smartphones and Blackberries, people are almost always at the employers’ beck and call anyway. We attended the HR Technology show in Chicago late last year and there were plenty of tech solutions to manage remote employees including ones to measure productivity http://www.mysammy.com and a variety of iPhone timecard apps.

      Side note, considering studies show that most telecommuters put in more hours of work than office staff, maybe one day employees will all be longing for the days when they could actually leave work at work.

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  2. Thanks for posting a thorough round-up of the many facets of this story, Matthew. I firmly disagree with how Yahoo has handled this, and have already posted as much. But at the same time, I appreciate a well-rounded analysis.

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    1. Thanks, Taylor — much appreciated. I think it is a mistake as well.

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  3. The bit I don’t get about this is the black and white nature of the issue: Working from home is bad, in the office is good.

    Truth is working from home four or five days a week IS bad, having the flexibility to work from home a few days each month is sensible. Apart from letting parents or spouses look after sick family members, let the electrician into the house and so on, there’s also the change of scenery being good for creative thinking.

    Like I said, the issue isn’t simple black and white.

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    1. Karl Zimmerman Monday, February 25, 2013

      What Yahoo! is not allowing isn’t ANY work from home, the memo still specifically allowed for those sorts of “couple times a month” cases. it is denying those who have a permanent “work from home” arrangement. I don’t think anyone is arguing that some flexibility is a bad thing.

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    2. “Truth is working from home four or five days a week IS bad”

      Why do you think so? I work for a telecomm company in a dept. that operates entirely through chat–we provide technical support to customer care–and we WFH the majority of the time. We have strong metrics and intensive QA monitoring, and believe me, no one can slack off. Three or four days a week not having to drive to work is like giving a major raise without increasing the bottom line one cent, and company morale is fantastic. Where’s the bad?

      CK

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  4. Yahoo needs to get their act together and employees crying about not being able to work from home shows where their heads are at. Focus on putting out the best product rather than being able to do your work and tend to your virtual farm at the same time.

    Every product that Yahoo buys fades into oblivion like there is a ball and chain that they put on the end of the product with the Yahoo logo that destroys all momentum it may have.

    Good job Marissa for actually doing what should have been done years ago when the company and employees went off track.

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  5. To be fair, I only read the summary. But that’s why you have it there.

    I don’t buy it. I don’t buy that “not being able to work from home” is going to deter employees who would bring about innovation. Firstly, I have a hard time buying that innovation can happen with people distanced in silos. Secondly, people who innovate don’t care about being able to work from home. They may think they do, they may care to some small degree, but what drives them to work at a place or not work at a place has more to do with what is being worked on.

    Yahoo wants innovative people? They have to have something innovative or interesting to work on. Not necessarily sexy, just interesting. This policy doesn’t deter (nor promote) that. But it does solve a problem: cutting the fat.

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    1. I agree with your sentiment here, Troy. This is why Facebook and Google don’t need policies for their employees to work remotely.

      Also, Mathew – I think Yahoo! has a short window of opportunity to signal to their staff that this decision is *not* that of a “a bureaucratic and centrally-controlled organization,” and that we outsiders have too quickly made that determination on the basis of a single, fairly short memo. There are many companies that are great places to work where everyone is generally expected to work from the office. I certainly don’t know enough to state that Yahoo! can’t be among them (and if I’m being perfectly honest, I don’t believe many pundits are very familiar with the corporate culture at Yahoo! these days, either).

      Finally, you’re making apples-and-oranges comparisons with GigaOM, Automattic, Wikipedia, and Linux. How many levels of management do these organizations have? How many total employees? How many projects that require collaboration between more than ten people, or people with extremely specialized skills, or that outlast the tenure of the people managing them?

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    2. “Firstly, I have a hard time buying that innovation can happen with people distanced in silos.” You seem to be generalizing about remote employees..I work for a software company and we have the leading edge with some of our products…many of those ideas have been brought in by our remote employees and many of them are not only hundreds of miles away from the office but even outside the U.S. Sometimes it is hard to find local employees with the right qualifications and when you find them somewhere else, they are not willing to relocate.

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  6. Karl Zimmerman Monday, February 25, 2013

    I agree with Marissa, people should not work from home as a primary workplace unless it is absolutely necessary, and in the vast majority of cases, it just isn’t necessary. No one is saying you can’t work remote or companies can’t be successful that have people working remote, but it is simply not as collaborative, in my opinion, it is much less of a community. In addition, the study reference demonstrates nothing, you can still let people work from home on a rare occasion (as this allows) and that is still a “flexible work environment.” I don’t think anyone would agree that there are limits to how flexible a work environment can be, thus “more flexible = better” can’t be true either.

    If the issue is with single mothers, the issue isn’t that they have to go into the office, it is that they’d have to pay for childcare. Provide childcare or a credit to have that done, and that issue is resolved. if you’re looking for people who “work from home” is the top of their list, they aren’t the type of collaborative people you want in your talent pool anyway, so where is the loss?

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    1. Karl, couldn’t disagree more. We live in LA by choice and we both work from home for Northern California companies. If they could simply replace us with locals, they would have already, but we bring unique skills and insist on having the lifestyle we choose. We’re more productive than office-bound people.

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  7. i believe marissa knows what’s going on with the company way better than the outside critics. the old way wasn’t working, so she’s changing it. it does not mean she is against working from home as a philosophy; it just means she thinks yahoo, in its current concrete situation, might benefit from it. it might be a gamble, and it might not pay off. but just sitting there changing nothing is completely sure to fail.

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  8. I really don’t understand how CEOs can think that people rub elbows with their co-workers in the office when the ‘office’ is multiple buildings or even global. Right now, my primary team is in 7 time zones and only 3 members are in the same time zone as myself, so explain to me how taking a WebEx in the office is any better than taking it at home.

    Don’t get me wrong, I prefer being able to work in the office, face to face, with a whiteboard, but considering travel budgets these days, I just don’t think that is going to happen.

    Marissa is being myopic.

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  9. I work for a Fortune 500 company writing code three days a week from my home office. The other two days a week I make the 130 mile round trip to work from the office. My productivity level is through the roof when I work from home. I’m not distracted by singing cubicle neighbors, water cooler chatter and office politics. Working from home I am more engaged in teleconference meetings and I write code at all hours of the day and night. In my home office I am focused on my productivity level. In my cube, I’m focused on eight hours of the day and that’s it.

    Taking that option away from Yahoo employees will stifle creativity. They are punishing their employees, regardless of their performance level, because of company mismanagement.

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  10. Since my tweet supporting marissa is embedded in the post…

    She’s making a set of tough decisions to try and save the company. Look at the “brain drain” from the last five years. Far exceeds any collateral damage from this decision – esp since they’re likely helping behind the scenes with relocation packages, etc for anyone they want to retain who has been impacted.

    Companies which want to support effective remote working need to design systems and cultures around that reality, a complexity she doesn’t want to deal with right now.

    This isn’t an absolute referendum on WFH’ing as needed and if she can solidify the company, I wouldn’t be shocked to see increased flexibility here a few years down the road.

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    1. Thanks, Hunter — I hope you are right. And perhaps she didn’t see any other way of dealing with Yahoo’s culture problems. I’m not denying it’s a hard problem, I am just questioning whether this was the best way to deal with it. Thanks for the comment.

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      1. M. Edward Borasky Tuesday, February 26, 2013

        Hunter, Mathew: I’m with Marissa on this one as well. The people who are whining about it are for the most part people who don’t understand how large businesses function. They are run by lawyers, accountants, engineers, sales reps and marketers. To be blunt, David Heinemeier-Hansson doesn’t have to make Marissa Mayer’s numbers.

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