Feb 28, 2013

Why can’t Yahoos telecommute anymore?

The CEO of Yahoo has directed staff who currently telecommute to start working out of Yahoo offices. The rationale is innovation and collaboration place a high value on face-to-face contact

Alan Davies — Editor of The Urbanist

Alan Davies

Editor of The Urbanist

Proposed headquarters building for Apple Inc in Cupertino. Design by Foster + Partners

I don’t know why, but I’ve independently met a number of people over the last year or so who hold middling to senior positions at National Australia Bank (NAB).

What surprised and impressed me is that all of them work flexible hours, including working from home on some days and not working at all on others.

All of them hot-desk i.e. they don’t “own” an office or even a desk but rather share space, services and facilities with other workers at NAB’s Melbourne headquarters.

NAB seems to be an exemplar of flexible working practices. These policies doubtless improve productivity, help attract and retain good staff, and save on office infrastructure into the bargain.

For their part, employees get a big benefit because they save on commuting time and have greater flexibility to deal with the demands of managing a household.

And there’s potentially a big social pay-off for the rest of us too.

If it’s implemented on a large enough scale, flexible working practices can have a significant impact on the demand for peak transport capacity.

For example, it can reduce the number of trains that have to be provided to meet the relatively brief peak hour demand. Those extra trains sit idle for the rest of the day and on weekends.

Flexible working arrangements like those apparently in place at NAB are becoming more common. The New York Times reports that a massive 47% of Aetna’s employees telecommute, up from 9% in 2005.

I contacted NAB’s public relations people a few months ago to follow up on the theme of how NAB’s initiatives impact infrastructure planning. I was keen to find out how many staff were availing themselves of flexible working conditions and what are the trends.

This sounds like a good news story for NAB so I wasn’t surprised the initial reception was positive. But then the relationship went cold – no one from the bank bothered to follow-up on their initial offer of cooperation. No one answered my subsequent queries.

I thought it was just poor public relations but after seeing this report in USA Today I’m now wondering if maybe NAB’s contemplating a change in its flexible workplace policy.

USA Today reports that the new CEO of Yahoo, Marissa Mayer, has “issued an edict banning company employees from working at home.”

You can read the memo sent to staff by Yahoo’s HR manager by going here. Beginning in June, it says,

we’re asking all employees with work-from-home arrangements to work in Yahoo! offices.

Ms Mayer’s decision hasn’t been received well in all quarters. The memo to staff was leaked and Slate’s technology columnist, Farhad Manjoo, doesn’t pull any punches:

Mayer is going to regret this decision. It’s myopic, unfriendly, and so boneheaded that I worry it’s the product of spending too much time at the office.

However the New York Times reports that Yahoo isn’t alone. Other companies, including Bank of America and Zappos, have reined in their working from home policies and now treat telecommuting on a case-by-case basis.

Ms Mayer was formerly with Google where there’s a greater emphasis on workplace collaboration. Shortly after taking up her new position she introduced some Google-like practices at Yahoo, including free food and smartphones.

Yahoo’s memo to staff justifies the new rules by pointing to the value of impromptu team meetings and casual coffee machine conversations.

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…..We need to be one Yahoo!, and that starts with physically being together.

The memo goes on to say (I love this bit) that “being a Yahoo isn’t just about your day-to-day job, it is about the interactions and experiences that are only possible in our offices.”

Yahoo’s changes reflect on the one hand the tension between the greater productivity provided by flexible workplaces (e.g. see here and here); and on the other the importance of face-to-face contact within the workplace in fostering innovation and collaboration.

Firms like Google, Facebook, Apple and Microsoft don’t actively discourage telecommuting, but they nevertheless emphasise the “campus” culture.

Standard Silicon Valley perks like cafeterias with free food, shuttle buses, gyms, ice cream parlors and dry cleaners not only make employees’ lives easier, but keep them on campus during the day and promote contact with other employees.

In innovation-intensive firms, keeping staff cosseted in one place – in a special, even unearthly, world (see exhibit) – aims to promote serendipitous contacts among thousands of employees as well as build esprit de corps.

Being insulated probably also helps protect valuable intellectual property and aids retaining key individuals in an industry where product cycles are measured in months.

That might be a key reason why these sorts of firms generally eschew dense locations like the CBD. It might also indicate those who argue tech firms like Apple should be providing a “walkable urban core” in their localities don’t understand “the brief”.

Perhaps she justifies it on the basis Yahoo needs a forceful “new broom” message, but Ms Mayer’s broadbrush wiping of telecommuting looks heavy-handed. There’s more to building a team culture than just proximity.

I expect firms everywhere are learning which jobs and functions lend themselves to telecommuting and which rely on frequent and intense face-to-face communication. Big firms like Yahoo – and NAB for that matter – will likely eventually arrive at a mix of solutions that reflect the diversity of big organisations.

While advances in communications and technology appear to increase the demand for face-to-face contact, they also permit more flexibility in the timing of travel. That should reduce the demands on peak infrastructure capacity.

Like Yahoo’s new leadership, perhaps NAB is re-thinking its flexible working hours policy too. That’s not entirely fanciful – the NYT reports some non-technology companies in the US are reviewing their telecommuting policies.

Still, I think it’s an unlikely explanation for NAB giving me the brush-off. It seems more plausible the officers concerned simply couldn’t be bothered devoting energy to a topic outside the bank’s core business. If so, that doesn’t say much for either the organisation’s civic-mindedness or its manners.

Note: There doesn’t seem to be anything in the Yahoo memo to indicate staff can’t work part-time or job-share (as some assume). There’s also a recognition that sometimes staff need to “stay at home for the cable guy”.

Google's proposed new campus, Mountain View, California
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9 thoughts on “Why can’t Yahoos telecommute anymore?

  1. drsmithy

    I dare say this had a bit to do with it:

    “After spending months frustrated at how empty Yahoo parking lots were, Mayer consulted Yahoo’s VPN logs to see if remote employees were checking in enough.
    Mayer discovered they were not — and her decision was made.”


  2. Alan Davies

    This Fairfax story is titled Yahoo telecommute ban much ado about nothing, but doesn’t offer much to support that contention.

  3. Smith John

    Surely it’s a matter of horses for courses depending on the nature of the job. Probably some jobs benefit from gossip around the water cooler more than others.

  4. Samuel

    I find the contradiction exhibited by those who advocate the benefits of agglomeration for a city, but then criticise the Yahoo decision, quite interesting. This is just agglomeration on the firm level.

  5. Dylan Nicholson

    If Yahoo haven’t back-flipped (or at least backed down somewhat) on this within 12 months I’ll eat my hat. It makes no sense for that sort of company to insist every employee spends every working hour in the same building.

  6. Hill Peter

    The contemporary work practices culture at NAB is nothing new. In 1978 I was hired by Mobil Oil Australia Ltd (part of world-wide Mobil Oil Co.) as a commercial sales engineer (representative). Mobil’s practice was NOT to require its field sales people to come to Mobil’s office every day, if at all. We “hot-desked” (i.e. shared a desk) and had our Mobil office records and equipment in a spare room in our homes. We only had the land-line phone as the means of communication with customers and our marketing office. The other major oil companies used similar salespeople management approaches.

    Our work performances were measured by results achieved relative to pre-set objectives (KPIs). This worked well, as the persons hired by Mobil into these sales jobs were psych-tested for certain behavioural attributes, e.g. independence (detachment). Social relationships between sales team members and management were positive and strong, as part of the working group culture in practice was to have monthly all-day meeting to either formally present or informally talk about our individual endeavours, market trends, effectiveness of marketing practices, and a good solid lunch or dinner. More frequent group or individual socialising was commonplace.

    I think Yahoo and these other companies are on the wrong track, and this drive to pull their employees into a kind of citadel environment is to force-feed acculturation into employees quickly and in the situation where the corporation lacks an enduring “culture” (“ten commandments”, etc.). I have always regarded the IT industry as relatively immature in its management style and commercial practices. These IT companies should perhaps brush up on corporate organisational strategy, e.g. Hamel’s and Prahalad’s work.

    A key tactic would be to get people away from their computer screens and thence together in planned work and social sessions – the IT device is often the real enemy of communication.

    The thrust of innovation-driven IT companies’ HR practices will be to force people to commute more, thus increasing externalities upon the rest of society and the ecosphere. This has implications for planning strategists striving for less unsustainable urban living, e.g. the Victorian government’s desire for “20-minute cities”.

  7. hk

    There is an axiom “what can be controlled, can be managed”. Much more management skill is required to control and therefore manage flexible and “free” large office environments such as at Yahoo HQ. 12,000 employees at a place such as the proposed Apple HQ doughnut would be quiet a challenge for a control freak focused CEO.

  8. Strewth

    Yep, Silicon Valley firms are something of a special case – they’re self-contained innovation silos, and could really locate themselves anywhere were it not that the ‘talent’ tends to concentrate in the SF Bay Area.

    Meanwhile, as a medical researcher in Melbourne (say), there’s a lot of benefit to being able to walk from the Melb Uni campus across the road to RMH or WEHI. Even if you’re only on campus for a couple of days a week and work from home the rest of the time.

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