Why Yahoo’s Telecommuting Ban Is a Model for Struggling Companies



Despite the initial hysteria over Yahoo CEO Marissa Mayer’s telecommuting ban, her decision is a positive example for other companies needing a turnaround.

Lest we forget, Yahoo has a storied reputation. But it slipped – badly. Ms. Mayer was hired to facilitate a turnaround.

In the U.S., Yahoo ranks third in search behind No. 2 Bing and No.1 Google, which owns about a 66 percent market share.

You might recall Yahoo was forced to align with Bing in search and advertising – to no avail.

The latter two combined only have about a 30 percent share and advertising revenue hasn’t noticeably improved. Plus, Google powers many of the remaining search engines.

Worse for Yahoo, worldwide, Google has a 90 percent share. Google is particularly strong among business users.

Yahoo’s share price had been languishing for years.

Since Ms. Mayer took over and made some positive changes, such as in e-mail and photo-sharing, Yahoo’s market capitalization has been $34.5 billion and the stock price increased considerably to the mid $30 range.

Compare that to Google – it’s broken the price barrier of $800.

However, employees and pundits outside of Yahoo have condemned the decision affecting many of the tech giant’s 11,500 employees who are left from the formerly 18,000-person workforce.

Some point out that there’ve been countless studies on telecommuting. That’s true.

Not to oversimplify, for many businesses there are indeed benefits.

Telecommuting Pros

  1. Cost savings from not having to provide furnishings and workspaces. A telecommuting policy also aids in employing persons with disabilities. All of this ultimately might reduce office rent and utility expenses.
  2. Telecommuting employees say they’re more productive with fewer interruptions.
  3. Taking into account their internal clocks, such workers can work at their own schedule – some prefer to work early in the morning – some are night owls. They also like to balance their work duties with their families and running errands.
  4. Telecommuting workers say they save money and time by not having to commute to the office, and don’t have to unwind from driving in traffic. They don’t take sick leave when they need to run errands or take care of family matters.
  5. Telecommuting is a tool for employee recruitment and retention. Such employees prefer what they feel is a benefit for them. Sometimes, employees have spouses who are forced to relocate, but telecommuting means the company can retain its employee via telecommuting.
  6. During inclement weather, telecommuting workers continue to function.
  7. It aids in the slowing down of global warming, and lessens the use of petroleum.

However, especially in communication, there are disadvantages.

Telecommuting Cons

  1. A telecommuter must heavily rely on technology, but if problems or security issues arise, work goes undone until repairs are made. If a company has large telecommuting staff, repairs are a more costly ordeal.
  2. Many telecommuters need social interaction and their individual work suffers because of their alienation from being solitary and not having contact with the outside world.
  3. Teamwork and collaboration is practically non-existent.
  4. Misinterpretation, especially in sensitive matters, becomes more problematic with a lack of personal interfacing. In-person communication allays the potential for communication problems. Telephoning in such occurrences is an insufficient option.
  5. Distractions become a problem for workers with families. There is little or no separation from work and life.
  6. Telecommuting easily leads to longer hours and possible burnout. Family interruptions and worry over missing office developments leads to checking e-mails more frequently.
  7. Visibility is a problem for both the employer and employee. Face time suffers when a company has employees who are out of sight and out of mind. Employers can’t properly evaluate workers. Conversely, workers lose the advantage of meeting face-to-face with managers and coworkers.

Yahoo’s reasoning

“To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side,” explained Yahoo Human Resources Manager Jackie Reses in a memo to employees. “That is why it is critical that we are all present in our offices.”

What’s the company’s justification?

“Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings,” she explained. “Speed and quality are often sacrificed when we work from home. We need to be one Yahoo, and that starts with physically being together.”

Conclusion

Critics fail to see the big picture, which is typical in turnaround situations.

Google is known for its continued innovation. Yahoo isn’t. It needs a new tone to become a Ninja innovator by practicing what I call “The Principle of Contrary Action” – doing things differently – even the little things – in order to keep an open mind for innovation.

That can be accelerated where the tire meets the road – the employees communicating among themselves. More ideas are generated when people interact with each other.

In my experience, it leads to partnering with employees to create profits. Collegial communication generates powerful synergy – something Yahoo has been lacking.

Hence, Yahoo’s CEO implemented the ban on telecommuting. If employees continue to bicker, it will become more obvious that they’re too complacent about Yahoo as an employer. Otherwise, Ms. Mayer will have to take six steps to implement a cultural change for profits.

Meantime, my assumption is that Ms. Mayer is employing the proper step-by-step solutions for a company turnaround.

From the Coach’s Corner, related articles on Yahoo:

Memo to Yahoo employees: Unemployment is not working.

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Seattle business consultant Terry Corbell provides high-performance management services and strategies.