Don't Underestimate Mayer's Huge Gamble at Yahoo!

Marissa Mayer's appointment as Yahoo!'s new CEO looked promising given her past stint at rival powerhouse Google. However, the recent controversy concerning Mayer's decision to metaphorically chain Yahooligans to their office desks sounds as un-Googley as it gets. Investors should be aware it could have an adverse effect on the inner workings of the company.

Banning working from home sounds as non-progressive as ideas come, and I don't believe it will increase productivity at all. Great companies have happy employees, and this "one-size-fits-all" approach should worry Yahoo! shareholders.

Different strokes for different folks
Underlining the reality disconnect of this move is the fact that there's no real evidence that working from home causes lost productivity at all . Some individuals really do get more work done in solo settings. Endless in-person meetings that are supposed to encourage "communication and collaboration" as Mayer claims also simply end up wasting time in many cases.

Compelling amounts of research show in-person brainstorming sessions actually don't work. Many people don't feel creative in a group setting, and most prefer to feel "right" and go along with the gang more than they like "standing out" with a truly interesting idea. A morning shower is either just as good or a better place to come up with innovative ideas than a conference room and white board.

Jonah Lehrer pointed to psychologist Keith Sawyer's summation in a New Yorker article last year: "Decades of research has consistently shown that brainstorming groups think of far fewer ideas than the same number of people who work alone and later pool their ideas."

Leaders need to realize that people function differently -- to say that there are differences between how extroverts and introverts function is an understatement, for example. There simply won't be a uniform heightened "productivity" defined by warm bodies in office chairs, and better productivity and ideas garnered this way is a pleasant myth that assumes everyone is the same, not different.

Old-school toxic
Yahoo! certainly could be a fertile ground for workplace negativity, too. For example, survivor guilt can cast one heck of a pall over a company. About this time last year, Yahoo! announced plans to cut 2,000 jobs from its payroll under Mayer's predecessor Scott Thompson. That was Yahoo!'s sixth swing at mass layoffs in just four years' time. Keeping the best workers under such circumstances already looked pretty dicey.

My Foolish colleague Sam Cicotello is right to point out that if a company's culture is a positive one, employees won't dread the idea of coming into work in the first place. If managements have to mandate such policies, something's wrong.

So yes, maybe Yahoo!'s culture is so broken that many workers have been avoiding a daily dose of toxic environment. In fact, part of the emerging pro-Mayer argument is that many Yahoo! employees were taking advantage of the perk to do as little work as possible.

Can Mayer's blanket mandate to coax more face time and productivity out of workers in this manner possibly help morale? I highly doubt it.

In interesting and related news, Best Buy (NYSE: BBY  ) has just decided to end its once-innovative Results Oriented Work Environment program, or ROWE, on the heels of the Yahoo! announcement. At one time, ROWE was one of the reasons I believed in Best Buy -- the retailer's management could think differently and completely out of the "big box." I now think Best Buy is a disastrous stock, and one to avoid, and the ROWE decision is just one more reason.

Maybe Mayer's decision has galvanized other companies like Best Buy to take control of their workforces in a similar way, but really, I'm more inclined to believe these are companies whose workers lost their passion a long time ago. That's never a good sign..

More positive ways to shake up the status quo
On the face of it, Mayer's high-profile controversial decision looks terrible. When Mayer talked about heightening "communication," she was on the right track, but to force it by taking away flexibility is where she lost the plot.

A better way to address real issues is to come up with real performance goals for work-from-home employees and hold them to it. Get rid of workers who truly are taking advantage of a good thing instead of helping the company move forward. Cracking the whip with across-the-board mandates is hardly productive.

Thinking differently and thinking forward builds the best companies. Mayer may have been left with a mess on her hands, but shareholders should be mighty concerned that this blanket statement on the efficiency and productivity of remote workers will actually make the company less competitive.

Meanwhile, Mayer had better have a positive and dedicated workforce to take on her former employer Google and other companies in key areas like Yahoo! search, an area she indicated is first priority in January. That's an aggressive plan and a formidable opponent; a demoralized workforce isn't a motivated one, so hopefully she's got major tricks up her sleeve to make all this new office face time a value-creating initiative.

We'll see how Mayer's leadership works out for Yahoo!'s long-term health, but I doubt this decision will help matters in the least. Workers are the lifeblood of a company, and when they're not motivated for the fight to return to health, it's hard to recover.

The brick-and-mortar versus e-commerce battle wages on, with Best Buy caught in the middle. After what might have been its most tumultuous year in history, there are now even more unanswered questions about the future for the big-box electronics retailer. How will new leadership perform? Will old leadership take the company private? Will a smaller store format work out for both the company and its brave investors? Should you be one such brave investor? To help answer all these questions, The Motley Fool has released a new premium research report detailing the opportunities -- and the risks -- in store for Best Buy. Simply click here now to claim your comprehensive report today.

Check back at Fool.com for more of Alyce Lomax's columns on environmental, social, and governance issues.


Read/Post Comments (11) | Recommend This Article (9)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 07, 2013, at 3:52 PM, Aku603 wrote:

    Work-at-home is a privilege, not a right. That is something Yahoo forgot about years ago. Case in point, the stock price over the past five years.

  • Report this Comment On March 07, 2013, at 4:53 PM, chay2327 wrote:

    It seems to me, she took the easy way out when it came to reducing the work force. Instead of relying on the numbers, as she is reported to do, she made a blanket decision, well knowing that most would quit. I agree with the article, wasted time is equally bad both at the office and working from home. It seems more like some managers are just not doing what they are supposed to be doing, paying attention to the work being done by the workers.

  • Report this Comment On March 07, 2013, at 4:57 PM, wap21 wrote:

    I am not sure how accurate this is but I read an article that Mayer compared the list of people working from home to a list of people that accessed VPN and the numbers were way off. People were saying they were working from home but not really logging in to do so or at least not at the level of productivity they were expected to.

    I agree with Aku603 working from home is a privilege and if it is being abused then it needs to be taken away.

  • Report this Comment On March 08, 2013, at 7:09 AM, RealityCheck1930 wrote:

    Marissa Mayer does not know what she is doing at Yahoo. Yahoo's new page is a good enough evidence to proof it. Secondly, Yahoo is pumping out more trash articles than before. Most of the articles do not even have photos when they are required or stated.

  • Report this Comment On March 08, 2013, at 8:55 AM, username43 wrote:

    I think at this point you have to have all the people in the office to get this ship turned around. It's like turning around the Titanic. And you don't know what people are doing at home or what the "toxic emotions or survivor guilt" is like. But people need to get over it if they want their job. So get on with it and move forward. It's a new day and yesterdays rules don't apply. You are trying to reinvent the wheel over there and you need everyone together to get it done. Not everyone scattered throughout the city in their home offices, taking breaks to pick up their kids, walk the dog, throw in some laundry etc... You need them present, contributing, getting it done. I agree with Ms. Mayer. Quit whining and get to work or go find another way to make your paycheck.

  • Report this Comment On March 08, 2013, at 5:03 PM, damilkman wrote:

    Work is a privilege. Whether you telecommute or go in the office, if you do not perform your employer has the right to can you. If the compay could tell that people were not working because of lack of activity. Shame on them for not holding their employees responsible to perform.

    As a company in the technology segment it should be easy to keep people on multiple continents together with IM, remote office, and other gadgets. If anything this is proof YAHOO is doomed since a tech company can't seem to figure out how to use tech to connect their remote workers.

  • Report this Comment On March 08, 2013, at 5:52 PM, Chuck2010 wrote:

    The management system at Yahoo is broken and the poor management of the offsite workers (likely including many of the managers who oversaw the broken system) was definitely attributable to that management system.

    Mayer put up a stop sign. Lots of pessimists think they have already gone over the cliff. If they haven't, she is responsible to make the positive changes to the management system needed to run the company successfully in the right direction.

    Enough about the poor mistreated workers being forced to come to an office with free lunches. Many of us would like to be mistreated that way too. Whether the employees are more or less productive, that is their responsibility and should be held to accountable as much as Mayer is held responsible for fixing the broken management system.

  • Report this Comment On March 08, 2013, at 6:39 PM, SuntanIronMan wrote:

    "Great companies have happy employees..."

    The problem is that Yahoo is not a great company. Far from it.

  • Report this Comment On March 08, 2013, at 7:53 PM, jtmccjr wrote:

    Lomax is way off base here. Yes, Mayer has a big task ahead but the hyper attention to this one issue regarding work-at-home privileges is misplaced. The big task is to turn around Yahoo and she is doing what she believes will achieve results. I like the comment with the Titanic analogy. Mayer is saying she needs "all hands on deck". What is so bad about that? It's not like the work policy cannot be changed once Yahoo is back on track.

  • Report this Comment On March 11, 2013, at 12:53 PM, griderX wrote:

    From an article I recently read:

    Marissa Mayer, who just made all kinds of news for ending work-from-home privileges for all Yahoo employees, is currently under fire for the nursery she had built (at her own expense) next to her office after the birth of her son last fall. "I wonder what would happen if my wife brought our kids and nanny to work and set 'em up in the cube next door?" joked the husband of one remote-working employee. While the debate over working from home is endless, something seems off about Mayer saying, in effect, "You can't work from home, but I can pay to have my home brought to work."

  • Report this Comment On March 13, 2013, at 12:58 AM, Chontichajim wrote:

    I am not sure what kind of work people who say "working from home is a privilege", but this is far from true and often done at the companies "request".

    Working from home saves money since the employer does not need to provide work stations except for a few "hotel' spaces.

    When your employees (usually even a single team) are spread all over the country anyway, what difference does it make if a few are in the same office or not?

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