Marissa Ann Mayer, CEO of Yahoo, is recalling key employees back to the Yahoo offices. It’s the right thing to do to save Yahoo.
If Yahoo! staff offsite were mostly part of a distributed typing pool, the criticism we see might be valid. But there’s a lot more to it!
Yahoo! Castigated in Public
If you were just considering the Yahoo situation from a modern business point of view, you might find Marissa’s plan to be Draconian. All the remote employees who’ve setup home offices and Skype and chat all day back to the home office will be uprooted. Childcare arrangements to be replanned. The daily commute won’t be avoided, so the 08:30 jaunt to Starbucks or Panera becomes the 7:45 run to the office, a longer commute.
Some critics of Mayer’s plan view the situation as a step back to the days of typing pools. A blog post at AVOXI points out business benefits of working remotely. It’s a well-crafted blog post, and would be the definitive answer if, and only if, the Yahoo employees were essentially a distributed typing pool.
We’re going to explain in sections below why there’s a different situation at Yahoo!
The Real Situation at Yahoo
Yahoo! is far more than a web portal. It’s a software and web application company, a digital advertising company, a marketing company, an ad sales company, and a media channel, and many more things.
The company grew strong and made money through innovation, good programming of web services and interfaces, and development of complimentary online services and feeds.
But as Yahoo! grew, it lost focus as it expanded and it failed to continue to innovate. Development and marketing teams were apparently increasingly allowed to work from home. The company’s signature web services and revenue-generating search engine were overtaken by competitors.
Today, Yahoo! has loyal users, but it’s really not been making great technical leaps as it once did.
With so many team members working remotely, Yahoo is bleeding money from lost opportunity – the lost opportunity of rapid development and innovation. Brainstorming and rapid development depend on teams working within shouting distance. Skype and video conferences just aren’t a substitute.
An Earlier Yahoo!
Lotus Development Corp. was the marketing and development company behind the legendary Lotus 1-2-3. This, and Wordstar, were the two applications that could truly sell computers. That’s right, starting around 1983, people starting buying computers so they could run applications. (IBM never understood this, clearly Apple and Microsoft learned quickly.)
Back to Lotus (the part of the company in Boston). Development teams worked closely together and pumped out updates and versions of Lotus 1-2-3 and related products. However, as Lotus gained cash, it stupidly lost discipline it had with its development teams. First, Lotus started breaking up teams after each release, and putting developers back into “the pool”. That mean that nobody owned the code base, and that three releases of code would have three different developers adding changes onto the same set of modules. Gruesome consequences (spaghetti code with strange comments like “what’s this do?”
Second, and this is critical, Lotus gave promotions to development team leads that, by company policy, made the team leads eligible for corner offices, in any building where a corner office was available. Development team leads moved to corner offices in different buildings than the one that housed the team they led. Team communications and morale broke down. Eventually Lotus fell behind and fell apart.
Lotus was reduced to stopping development on its desktop suite to shift all funding into Lotus Notes. The lack of support for its desktop products stopped them from being the door openers they once were, and Lotus started to run out of cash. IBM bought Lotus to get Lotus Notes, and eventually stripped away the unneeded remaining employees.
Lesson learned? If software or web development is at the core of your business, your core development team should work together.
Modern Office Space
Clerical workers, travel agents, bloggers, and insurance adjusters can work from home and do well. Their work is measured by forms filled, reports filed, stories written, cold calls made, and hours worked. The important work they do is like a train that runs on a regular schedule on tracks laid down by others.
But core web and app developers, marketing teams, and inside sales teams, as examples, need to work together, within shouting distance, literally. For speed, for idea sharing, for decision-making with a purpose, nothing is faster than having teams together. These people are literally doing the exploration, surveying, blasting, and construction that is needed to lay down the tracks on which the company train runs. No two days are exactly the same, and in these jobs, one great idea change the whole direction and future of the company.
Go Yahoo Go
For Yahoo, stopping the lost opportunity and lost revenue begins with reassembling teams and getting them moving on new marketing plans, new products and services, and raw innovation. Getting the team back to the Yahoo! campus is going to make it possible to change the company back to an innovative culture. This just can’t be done when so many key team members are working from home.
Marissa – good luck!