Why Marissa Mayer’s ban on remote working at Yahoo could backfire badly

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.

People, I know it sucks for 500 who can’t WFH but @marissamayer trying to ensure other 12k Yahoo employees still have an office to come to

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Hunter Walk (@hunterwalk) February 23, 2013

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).

The new Yahoo policy for remote workers is incredibly myopic. And unfair.

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(@danprimack) February 22, 2013

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?

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