Remote Control: Is Marissa Mayer’s Big Bet on Company Culture at Yahoo! a Gamble You Would Make?

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With the decision to end the company’s work-from-home policy, Yahoo! CEO Marissa Mayer is making a calculated long-term play in the interest of developing company culture — with significant short-term risks.

Marrisa Mayer Bets Big on Developing Company Culture at Yahoo

Debate over remote working has erupted since the announcement that Yahoo! will be suspending it, with reactions ranging from Richard Branson’s assertion that it shows outdated thinking, to rebuttals arguing it is the right call for Yahoo!’s specific situation (and if employees don’t like it, they should quit).

Companies, and the employees that comprise them, often fall in love with predictability of day-to-day operating procedures, standards, norms, values, and channels for communicating that may remain stable for extended periods. But how people interact with each other and systems changes over time as employees and the leadership team are replaced. That process will invariably take the company’s culture in a different direction.

With an ongoing process of building and adjusting a company’s culture, the best organizations understand that they need to embrace change and evolve; they need to recruit people who might not be an exact fit for the company’s culture because they can bring something different, something that will hopefully change the company for the better.

Enter Marissa Mayer, who in her relatively short time since taking over at Yahoo! has created her fair share of stirs, most recently with the ending of remote work arrangements.

Mayer doesn’t want to be a fit for Yahoo!’s culture; she wants to remake it in her image. Considering how far Yahoo! had fallen from prominence at the point she took over, it’s tough to argue with her underlying assumption that big changes needed to happen in the company culture. But by ending Yahoo!’s work-from-home policy she has effectively drawn a line in the sand, indicating she believes the long-term benefits to company culture will outweigh the cost of short-term employee attrition. In other words, her message is clear: Yahoo! is bigger than any one individual or group of employees, no matter how talented.

Is Cultural Fit More Important than Employee Retention?

The math of replacing members of an organization is rarely in an organization’s favor. Successful companies put great effort into identifying the right candidates, devoting man-hours towards having multiple team members interview candidates, then reach a decision to hire and train a person, and to get them comfortable with and knowledgeable of the systems already in place.

Would you turn away a superstar who wasn’t the best fit for your team?

Stand Out from The Crowd Unique Golf Tee Game September 19, 20119

Should You Really Hire for Cultural Fit over Competence?

If a company has gone through all that effort once, then why wouldn’t it put more effort into retaining those people? It is often a smarter investment of resources to figure out if an employee is most likely to leave — and then do everything in your power to keep them — than having to start the recruitment process all over again.

Sometimes that means letting an employee become a remote worker for a host of reasons, everything from helping to take care of loved ones to moving far away so a spouse can take a job. Many would argue that if you truly liked the employee enough to hire and keep them, then you should trust them to be able to work remotely as much as possible.

On the other hand, is Yahoo! simply too big for such remote arrangements to be feasible? This is no small startup where everyone knows everyone; it’s a large scale organization that has been under-performing for years.

The move to do away with remote work arrangements assumes that those most dedicated to the mission and values will come back to the offices, and those who aren’t true believers will leave for other work. The thinking also goes that when employees do come to the office they should have ample opportunity for face-to-face communication, the richest kind there is. In theory, informal, in-person interaction increases creativity and productivity, and research data appears to back that up.

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Yet Marissa Mayer is taking a calculated risk in attempting a major reshaping of Yahoo!’s culture. She has to acknowledge that a blanket policy change such as ending all remote work arrangements will invariably lose her some good employees, and others may yet stay but have decreased morale and productivity. But she also has to be convinced that this move will get some hangers-on and system cheats off the books quicker.

The next step will then be to make the office a great place for interaction and ideas, a place where energy is amplified rather than drained. Otherwise, the risk will have been for nothing.

Only one thing is for certain: in a few months Marissa Mayer will be able to see the results of her company culture gamble from the nursery she had built at the office. For many Yahoo! employees, that’s a prime vantage spot they’ll never have the luxury of knowing.

Do you think Mayer’s bet will pay off? Or is sacrificing short-term employee retention for remote workers for the long-term gain of company culture too big of a risk to take?

Adjunct Professor of Communication Studies

  • I think it’s important to consider what employees Yahoo! is potentially losing. Are they losing their best coders? Human resources? Are they not really that important to company culture anyway? Also, is Yahoo making any concessions to make work in the office appealing (Are they going to offer lunch, daycare, flexibility in other ways?) If your best and brightest employees are working from home, it’s a bad move.

    • jcrowe_openview

      Good points, Emma. I think the “gamble” here is that you don’t just make an office environment creative and innovative overnight. It takes time to develop and there’s maybe no 100% guarantee it ever will at Yahoo! At least to the level where they can tout it as a big selling point for top candidates. Being in the Bay Area they have a bit of competition in that regard.

  • Richard

    There is a difference between work and productivity. She simply looked at the data. Agree its a risk but I think she and yahoo will come out better for it.

  • DKG

    Is this really a gamble? Telling your employees that they’re going to have to come into the office because many of the remote employees haven’t been working was very generous of Marissa. She could have legitimately just fired the slackers. Maybe, though, there were so many slackers that the reduction would have left just her?

  • Every company, and every growth stage, has different needs wrt to distributed teams.

    • jcrowe_openview

      Love your post, Greg. I do think there’s a good chance the move will pay off for Yahoo! in the long run, but short-term, it’s hard not to see it as a big gamble to risk losing known talent for — as you terrifically put it — “maybe a serendipitous hallway conversation between two “Yahoos” that
      don’t normally see each other [that] might yield the great epiphany that saves the day.”

  • Greg Thomason

    “Working from home” is another term for “taking the day off”. Accountability and meaningful interaction with co-workers can only be achieved by showing up at the office.

    • This is a limited viewpoint. The ability to be productive working from home depends on the discipline, motivation, maturity, etc. of the worker and the nature of the work.

      I have experienced highly productive virtual teams with meaningful relationships. On the other hand, as someone who is highly sociable, when working in an office with a team I have at times worked from home so that I could get more done.

      However I do believe that in general working relationships are enhanced by working at least occasionally in the same
      location or by face
      to face meetings which is why I often travel to meet clients.

  • As posted elsewhere, there are always three issues:
    1) WHAT you do (management),
    2) WHY you do it (leadership),
    3) HOW you do it (execution).

    Ignore #3 and you lose, even if you get #1 and #2 right.

    “Telecommuting is not allowed because we need excellent collaboration” sounds regressive, incomplete, and heavy-handed. (Unanswered issues: For every single job and supplier for the company? Forever? Even suppliers and advisors need to be on-site forevermore? Will Yahoo will never have more than one office, with everyone co-located in one space 24/7?)

    That also ignores the huge elephant sitting on Yahoo’s table.

    A much better #3: “We are suspending telecommuting because a) it is generally out of control, and more importantly b) we need everyone face-to-face as we engineer the most amazing turnaround in history. We’ll interact intensively for the next 18 months or so; telecommuting tools just aren’t there yet. But as if/when the tools and methods evolve (or we create them) this policy will be reviewed–the world is connected an mobile, and Yahoo is going to be at the forefront of that future.”

    That message would create a positive cultural and strategic vision, break down silos by focusing people on a common rallying cry, and inspire hope of innovation and flexibility in the future. Some would stay to try to create the future. The current message misses those opportunities.

    Execution matters. After all, the CEO is the Chief *Executive* Officer.

    • jcrowe_openview

      Wow, really fantastic points, Kevin. You’re right — messaging seems absolutely critical with announcements like this and Yahoo! definitely missed an opportunity to shape the narrative more effectively around their new vision.

    • Kevin, what a thoughtful and helpful observation. Often it’s simply how news is delivered – and the tone that is set by the leader about changes that makes all the difference. As a long time telecommuter with my clients, I find it is a challenge to stay relevant, in-the-loop and on top of what is going on. Being remote along with in-person meetings and impromptu visits helps tremendously.

    • Astute assessment, Kevin.

  • Les Schmidt

    First off, I’m delighted with the mature, thoughtful tone of this post and the comments that follow. So tired of the vitriolic emotional responses. This is a breath of fresh air.

    I 100% agree with Kevin’s post – “how” matters. If only Marissa had taken the approach suggested by Kevin, a lot of the “churn” on this matter could have been eliminated. Having been a CEO, I know how attractive it can be to make “mandates” and “tell” folks what to do. It seems like the easier, shorter, more direct path in the moment. Time and time again, however, there is plenty of evidence that the seemingly expedient mandate, turns into a loss of trust, confidence and respect for the CEO. Those values take years to recover…if the CEO is allowed to stick around that long and is capable of coming to grips with the mistake.

    Re: the loss of talent… I haven’t seen it mentioned yet that the talent exodus resulting from the change in policy, might be an exodus of those who were hired under a different set of cultural assumptions. The imagined loss from their departure may be a “necessary” cost of the cultural shift that Marissa has initiated. Said another way, these departing employees would likely not be hired if the cultural shift were already in place.

    The culture of a team is sooo important to creativity, innovation and IMHO, long-term success. I applaud Marissa for tackling the issue. A little work on the tackling technique would have significantly improved the outcome.

  • Yes. One thing this article did not note is statistically remote workers were checking in via VPN at a highly unsatisfactory rate… and in effect, were not working nearly as much as they should have been.

    Apparently, other employees that did bust their ass “in-house” knew this, so it did create some divisiveness.

    Any employee that does not realize the precarious postion Yahoo is in… and that bold sacrifices need to be made to to avert a slow death.. is probably not the committed employees Yahoo currently must have anyways.

    If they have a problem, I’m sure Marisa is happy to let them go.

  • As a sole practitioner, I’m a work-from-home guy. But I still think Mayer is on to something. To accomplish what Yahoo! really needs — a significant turnaround — will take much more than the sum of many individual efforts, as accomplished as those efforts may be; it’s going to take a massive collaborative effort, a whole greater than the sum of the parts, for Yahoo! to reach its goals.

  • Time will tell. If this action represents an ongoing management style then my hopes for Yahoo’s future are dimmed. I’d like to believe that what we have witnessed is a leader making a bold and courageous decision as part of the attempt to rescue a severely faltering organization, and making a decision of this magnitude and with the possible repercussions based on clear evidence that this action was needed.

    Leadership in times of war or crisis is different than leadership in times of peace.

    Right now, I believe that Marissa is figuring out whether she has an army and is taking measures to build one. This decision is a step in that direction.

    Yahoo is in crisis and this is crisis leadership. Insanity is continuing on the same path and expecting radically different results. Yahoo needs radically different results.

    • Totally agree with you. I believe that once she rebuilds Yahoo’s workforce into the army she needs, she won’t really care a whit about where they work from. She’ll know that every single person is 110% committed.

      • In a time when evidence of outstanding leadership is scarce, I’m bullish on Marissa Mayer, hoping that my hunches about her are right.

  • Great post BTW.

  • Totally agree — a tough leadership play to address a bankrupt culture. More on this here:

  • The poll is worded wrong. It should be a simple yes or no. I would say it is a bad move but not because of the loss of employees but because of how it affects morale. I think the tone is more of an issue than the actual decision. It is in your face, hypocritical and has no allowance for exceptions. I predict this will backfire like it did at HP with Fiorina. You can’t do all the work yourself and a big organization relies on lots of people to make everything work right and you need extra effort to turn things around. I have noticed that when you get this type of top down punishment based motivation you get just enough from people to keep their jobs but not much else.

    I realize the goal is to replace the unmotivated people with highly motivated ones. The problem is that this is the type of leadership that does not really motivate people or attract the best and brightest. Even it did, you cannot replace a big chunk of your workforce overnight. So they will be stuck in low gear while they figure this out.

  • Most large organizations can never change their culture unless they have a near death experience, which to be fair, yahoo has had.

    Maybe this will change the culture and like IBM they will manage to come out the other side leaner and meaner than before…that’s a very big maybe.
    But I am not even sure what the future of yahoo looks like, how will they face competition from google, facebook and twitter? What do they plan to offer to the consumer that someone else doesn’t offer (in a better way) already?