There has been a lot written about the recent decision by Marissa Mayer, CEO of Yahoo!, to stop letting people telecommute and require them to work in Yahoo! offices. Suddenly she is the anti-feminist, anti-freedom, anti-Silicon Valley Satan. I would guess that her shareholders would disagree. On July 17th, 2012, the day she was named CEO, the stock was at $15.60. It closed on March 5, 2013 at $22.95. That’s a 47% increase in less than 8 months, and the stock price continues to rise. I am betting that she knows more about what is good for Yahoo! then the rest of us do, and that this is a well thought out action by one smart CEO. My hypothesis is that the decision had little to do with the commute, and everything to do with culture. The actual memo is at the bottom of this blog post if you haven’t read it.
At Osage Venture Partners, we have portfolio companies with very different work / office / lifestyle cultures. Some examples include:
Bottom line – there is no secret formula for what an office environment should be like. The secret formula is to hire great people, have them fully understand the mission, engage their passion, and know that wherever they are, they are fully committed to the success of the business because they can directly connect the success of the business with their own success. If you do that, the options for work environments are endless. For most of our portfolio companies, they are on the first cycle of business building. This means that most employees are aligned around the vision, every hire is critical, and the mission is understood and embraced. Not all of these visions will become reality, but for this phase of the business life-cycle, alignment is relatively easy as long as the hiring process is effective.
A turnaround is a different story, and Marissa Mayer is very publicly in the middle of what is a massive turnaround. I may be the only person I know whose web browser opens up to my “My Yahoo!” page. My kids and younger co-workers laugh at me, as I used to laugh at my father for using AOL until three years ago. This perception demonstrates the turnaround challenge facing Yahoo!. In the markets where Yahoo! has offices, including Sunnyvale, New York, Bangalore, and Beijing, the battle for talent is fierce, as the best people want to work at the “hot” company. Given that Yahoo has not been “hot” for a decade, who is left working there? Well, there is clearly some percentage of loyal, hardworking people, who have had their heads down and have done well and have remained loyal. Thank God for them – they may be the only reason Yahoo! is still operating. Then there are the people who opt to stay because it is an easy paycheck. No need to be in the office, little accountability, constant management rotations, few metrics or expectations, and possibly a 40 hour a week job that can be done in much less time. The hard part of a turnaround is trying to figure out who is in the first category and who is in the second. For Marissa Mayer, getting people in the office is about change management and a culture shift. She did not hire these people, or their managers, or even their managers’ managers. She needs to see who deserves, in Jim Collins’ words, “a seat on the bus.” Ms. Mayer is raising the bar for what being a Yahoo will be, and she is seeing who will meet the challenge.
I bet the move to eliminate telecommuting was a tough one, but I also think it will prove to be a smart one. I would also bet that this will be followed by a lot of departures – both by choice and by termination –and by a lot of new hires who map to the persona of the new Yahoo!. There will be more written on the new Yahoo! culture in the future, and my guess is that it will generally be very positive. I would also guess that telecommuting will return to Yahoo! in the future once the right people are in the right seats on the bus.
Funny though, this company that everyone thinks of as a has-been is still worth $26 billion in market cap. By the way – that’s neck and neck with Salesforce.com, and Yahoo! recently has been rising faster.
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.