The Yahoo Firestorm: Intention vs. Effect

CEO Marissa Mayer has certainly created a firestorm of reaction with her decision to require all Yahoo employees to work from the office. Mayer knows infinitely more about IT than I will ever know, but I know a lot more about the laws of behavior than she will probably ever know. While I don’t want to be overly critical of her attempt to solve some of the complicated problems facing Yahoo, I believe this decision will create more problems than it solves.

It reminds me of a similar across-the-board decision of the now-defunct Circuit City where executives decided to terminate 3,400 of their best salespeople in a cost-saving move because they were the highest paid. My reaction to that decision was to ask, “What could they have been thinking?” It also revived memories of a decision a number of years ago of both an auto manufacturer and a bank that offered bonuses to poor-performing employees if they would quit. As an aside, an employee of the bank sued because he was not offered the bonus. His claim was that he was a poorer performer than some who were terminated and he could prove it!

There has been an outrage in the blogosphere about how Mayer’s decision will have negative effects on everything from innovation and productivity to global warming, and they are probably right. However, their outrage is misguided. The issue comes from the performance of the company. This performance is not caused by people working from home and will not be solved by people working in the office. It is a management problem, pure and simple, and it is not limited to Yahoo.

The decision of whether or not someone works from home is typically based on the job, not the performer. This is a fundamental management error. Regardless of the job, some people perform better in the office than they do at home. And, believe it or not, some people would rather work in the office than at home. Here is the solution to Mayer’s problem: Set up criteria for people who want to work from home and give them the chance to EARN it. How do you earn it? By delivering high performance over an extended period of time. I promise you that a poor performer in the office will be a poorer performer at home. Someone who performs at a high and steady rate in the office will do the same at home if this is what the person wants. If people want to work at home, don’t say they can’t; tell them what they need to do to earn that perk and what they need to continue to do to retain it. While it may be difficult for some jobs to be done at home, Skype and other inventions make it possible for an increasing number to jobs to be done remotely as technologies allow personal interactions (including collaboration!), which is necessary in certain jobs.

I am always bothered when executives issue orders that apply across the board because they are almost always counterproductive. Think of the Yahoo employees working at home who often work more than the compulsory eight hours and are so engrossed in problem-solving that they wake up in the middle of the night to work on a problem. But at Yahoo that was yesterday. Today is another story.

Discretionary effort is an outcome many talk about, but few truly understand. No doubt Yahoo has much less of it today than it did before the decree went out. (Learn about discretionary effort.) Yahoo would do well to look first at management behavior and executive decision-making as what needs to change before deciding that employee behavior is the problem.