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Are Turnaround Companies Different for Flex Work?

By Melissa J. Anderson

According to the new US Census data released last week [PDF], telecommuting is a rapidly growing trend across America. Between 1997 and 2010 the number of people working from home at least one day per week grew by 34 percent. And that increase should come as no surprise since the cultural acceptance of flexible work is now greater than ever before, just as the quality of telecommuting technology is better than ever as well.

But over the past few weeks two companies have ended their generous telecommuting policies. Both Yahoo and BestBuy have slashed their work-from-home allowances for employees.

Yahoo informed its workforce by email in mid-February that all work-from-home policies – even for those people who had a special agreement in their employee contract when they were hired – were terminated. For those who found the new situation untenable, they were welcome to quit.

Similarly, last week BestBuy announced that its workforce would no longer be allowed to telecommute whenever they want without clearing it with management first.

The two announcements were big news for different reasons – first, Yahoo’s announcement bucks the telecommuting trend that is prevalent at most tech firms. And BestBuy was an early pioneer of the ROWE (Results Oriented Work Environment), touting flexible work arrangements as an engagement boosting opportunity long before many other companies were.

Since then, there has been an outcry that the new policies will cause problems for working parents. There are also reams of research showing that flex work improves productivity.

But according to executives at both companies, flex work isn’t working for their cultures anymore. What’s true to both companies is that they are in turnaround situations. Is it really possible that flex work is keeping them from getting back on track?

Culture

As Mark Furman, a Best Buy spokesman told CNET, “When you’re in a turnaround situation, it truly is all hands on deck.” He continued, “It is critical to have employees in the office to collaborate and communicate.”

Similarly, as Jackie Reses, Executive Vice President for People and Development at Yahoo wrote in her memo to staff announcing the work-from-home ban:

“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.”

At first read, it makes sense. If a company is struggling, a collaborative and bustling work environment would hopefully spur innovation and productivity. But, as the Economist suggested last week, that attitude may actually be a symptom of a greater problem rather than a solution.

“A well-managed company’s workers want to be productive, and managers trust them to decide how and where they will perform best. If that’s not happening, the boss needs to find out why. You can shackle a Yahoo to his desk, but you can’t make him feel the buzz.”

According to Kara Swisher of All Things D, the decision was based in part by detective work by Yahoo’s CEO Marissa Mayer. She found that many people working from home weren’t even logging into their VPN accounts to work.

It seems unfair, though, to cut an entire program because some people were taking advantage of it. Based on reports, about 15 percent or so of Yahoo’s workforce telecommuted at least some of the time. It’s unlikely that all – or even most – of them were misusing the privilege.

And it also seems unfair to hang an entire company’s productivity on a program utilized by only 15 percent of its workforce. Productivity at the company is low regardless of the location of its workers. As the Economist piece points out, “Google’s workers each generate $931,657 revenue, 160% more than the $353,657 produced by each of Yahoo’s employees.”

Turnaround situation or otherwise, it’s likely that both Yahoo and Best Buy’s culture problems run deeper than the physical location of their staffs. If people aren’t engaged now, being forced to change their working habits – and being alerted quite explicitly that management does not trust them – will not change that. Engagement starts with leadership – not the geography of a company’s workforce.

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