Yahoo: Back to the future office

Yahoo's command and control move of all employees back onsite may be a pyrrhic victory: Bricks and mortar economics don't add up now that the epicenter of modern firms is the screen you're reading this on.
Written by Oliver Marks, Contributor

As you undoubtedly will have read by now, Yahoo formally told its employees that everyone must travel to Yahoo buildings to work together, and that there would be no more "remote work" from June onwards.

Image: Universal Pictures

HR head Jackie Reses leaked email:


Over the past few months, we have introduced a number of great benefits and tools to make us more productive, efficient and fun. With the introduction of initiatives like FYI, Goals, and PB&J, we want everyone to participate in our culture and contribute to the positive momentum. From Sunnyvale to Santa Monica, Bangalore to Beijing — I think we can all feel the energy and buzz in our offices.

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. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo, and that starts with physically being together.

Beginning in June, we're asking all employees with work-from-home arrangements to work in Yahoo offices. If this impacts you, your management has already been in touch with next steps. And, for the rest of us who occasionally have to stay home for the cable guy, please use your best judgment in the spirit of collaboration. 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.

Thanks to all of you, we've already made remarkable progress as a company — and the best is yet to come.

Predictably, there has been much commentary and reaction unfolding around this internal decision, and it shows the wide gulf between the "future of work" crystal ball gazers and futurists, and the realities on the ground in some large global corporations.

We're not privy to the rationale or specific business problems that Yahoo is attempting to solve with these actions, although "unspecified sources" claim that a lot of employees are "hiding at home" across the organization. There are rumors that this is a clever way to cut costs with a cunningly disguised "layoff that's not a layoff" in a "fat and bloated organization", according to Nicholas Carlso at Business Insider (and also read the comments from Bay Area Yahoo employees) ... and there is definitely also some mistrust amongst some of the people I know who are at Yahoo.

At the heart of all this may be the current perceptions and understanding of the value of a "collaborative business". There's a current vogue for open-plan offices in large companies, with giant floor spaces where everyone is visible to everyone else, often with mid management sitting at the center.

This, along with the wi-fi-enabled coaches that companies like Yahoo provide to transport their employees from their homes to their hubs is clearly expensive in real estate and perks (Yahoo is also now providing free food), which would arguably not ultimately be a significant cost saving, so what' s the appeal?

Proponents of "remote working" (a term that sounds like some kind of séance/trance channeling exercise) argue Yahoo's move is a big step backwards. The whole point of the Enterprise 2.0 movement was to pump some blood back into the veins of command and control enterprise infrastructure and allow underlings to participate collaboratively in real time with their agile, swapout-able different tasks modern tools, regardless of where they were.

David Heinemeier Hansson at early cloud project management and collaboration software vendor 37Signals wrote:

What this reveals more than anything is that Yahoo management doesn't have a clue as to who's actually productive and who's not. In their blindness, they're reaching for the lowest form of control a manager can assert: Ensuring butts in seats for eight hours between 9-5+. Though while they can make people come to the office under the threat of termination, they most certainly cannot make those same people motivated to do great work.

IBM has cut huge costs by eliminating corporate buildings as part of its transformation from hardware to services vendor over the last 10 years or so. Many IBM employees work from home, using IBM's products to interact. The caveat is that many IBM jobs depend on the collaboration tools they sell being successful, whereas Yahoo is attempting to regain relevance in the Google era and is driving to sell more digital advertising space and tracking data.

My take and experience in some business cases is that many people have mistakenly installed work hub furniture and internal social networks in the belief that they will automatically engender cultural shifts to a more interactive and collaborative knowledge-sharing environment. The call center like open offices can have the intimacy of a kindergarten in terms of shared germs and noise levels, and their digital equivalents tend to be dominated by noisy, pushy people — including, in some cases, their community managers — without significant forethought and ongoing management.

Decisions and insights from hallway and cafeteria (and, from what I hear, corporate transportation) discussions and impromptu team meetings are deemed best for Yahoo's speed and quality, to paraphrase HR head Jackie Reses.

According to the GSMA, mobile data revenue will surpass voice revenue next year: Yahoo may have been a darling of the web 1.0 dot com era of PCs, modems, and early search categorization, but the world has changed beyond all recognition since then. Making the email login/news portal page more purple doesn't change anything, and neither does reverting to a web 1.0 workplace model in an era of persistent broadband and mobile access.

As I've been reminding my clients for years, the epicenter of their company is increasingly the screen you are reading these words on, not some meeting room, and it shouldn't matter whether it is in an airport, on a beach, at home, or in an office. Audio and video are increasingly important in this scenario as we leave the QWERTY keyboard era. This is of course easy to proselytize about, but hard to execute across a large organization. The future's unevenly distributed, with many in the workforce still tied to document and filing cabinet workflows and mentality ... and political agendas and ossified departmental silos that are set in their ways are very hard to shift and very volatile when disrupted.

There is no question that we instantly learn more about each other by interacting face to face, reading body language and gesture and learning over time from human interactions. Digital interactions are a few years old, telephone audio a hundred years old and human interaction thousands of years old ... but the problems to be solved in a large organization tend to be stasis/inertia, group think, exclusivity/cliques, and knowledge hoarding, and proximity of participating human bodies has little to do with solving these issues — it may even exacerbate them.

In our information overload society, digital devaluing of information is rife, and this "information deflation", as I've been calling it, often requires significant input to employees to stress what is important, and to define current goals and threats. Perhaps Yahoo feels the need to get everyone aligned in person, onsite, which would be ironic for a company widely considered to still be in the digital elite.

There can be an important place for regular face-to-face gatherings in one location to define direction and focus, put faces to names and so on, but I would argue that a well-organized global company shouldn't need to have everyone with their knees under desks in front of screens in a few formal locations every day. I question how much longer Yahoo can be cost effective with this level of command and control location overhead in the face of competition that is more economically distributed — not to mention that talented people often choose to live in remote locations to suit their lifestyle of rock climbing, family proximity, or whatever.

There are more great reader comments on this piece by Quentin Fottrell on Marketwatch, which cites Stanford research paper "Does Working From Home Work? Evidence From A Chinese Experiment" studying CTrip travel agents by Nicholas Bloom, James Liang, John Roberts, and Zhichun Jenny Ying:

This experiment highlights how complex the process of learning about new management practices is. For CTrip, having no precedent in terms of similar Chinese firms that had adopted working from home for their employees led them to run this extensive field experiment. Given their success, other firms are now likely to copy this practice.

Large enterprises strive to find innovation in their ranks, yet tend to insist on conformist employees within brittle and sometimes bullying command and control structures. Yahoo's actions are well worth watching over time to see if its decision will yield improved results for their shareholders, or whether this is a pyrrhic victory for the past. New CEO Marissa Mayer has made it clear that no job is safe, from her CFO down, if Yahoo can find better talent for positions. It's certainly not a kinder, gentler organization, but perhaps there is a place for shock therapy to jolt new life into a company struggling for relevance going forward. This is assuming of course the leadership isn't deposed or changes again in a year's time, given Yahoo's checkered past...

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