When Yahoo CEO Marissa Mayer banned her 12,000 employees from working from home in February, her all-hands-on-deck ultimatum ignited a national debate on the merits of cloudworking that still rages. Silicon Valley’s fair-haired wunderkind was alternately mocked and condemned by the likes of Maureen Dowd and Richard Branson, while pundits declared she’d made "a terrible mistake." Some even wondered whether Mayer was trying to make them quit.
Mayer was finally hounded into addressing the issue in April, acknowledging her critics' contention that "people are more productive when they're alone," and then stressing "but they're more collaborative and innovative when they're together." Eight months later, Yahoo insists Mayer was right. (And earlier this month, HP’s Meg Whitman followed suit.)
Despite predictions of "epic policy failure," in the words of Julie Ford-Tempesta, Yahoo’s senior director of real estate and workplace, "employee engagement is up, product launches have increased significantly, and agile teams are thriving," adding, "The workplace has become a catalyst for energy and buzz." Ford-Tempesta’s comments were included in a paper called The Power of Presence: Being Present In a Virtual World, published last week at the CoreNet Global Summit in Las Vegas, where several thousand real estate execs gathered to debate the future of the office. (Full disclosure: I was an unpaid speaker at the event.)
The author of the report, Steve Hargis has spent the last six months advising Yahoo on an overhaul of its Sunnyvale headquarters in his role as an executive vice president at Jones Lang LaSalle, which handles the company’s outsourced real estate. "Most of the campus is still the old-style cubicles," he says, but several floors have been remade in the image of the 300 to 400 agile programming teams charged with overhauling Yahoo’s aging Web services and dragging them into the mobile era. These are the spaces packed with stand-up desks and scrum boards—not to mention employees. "The difference between the two is so visible it’s become a marketing tool," says Hargis. "People are saying, ‘Wait a minute, I want to be over there."
But does this anecdotal evidence constitute success? In the report, Yahoo’s Ford-Tempesta points to the near-doubling of the stock price since the beginning of the year, an assertion which is dubious at best considering how much of that value is tied up in the company’s 24% stake in the soon-to-IPO Alibaba, while its third quarter revenues and profits are both down compared to a year ago.
There is definitely merit to the idea, however, that bringing its agile programming teams together in the same place at the same time can have a small but crucial impact on performance. In his book People Analytics, MIT visiting scientist Ben Waber discusses the role of dependencies for programmers, that teams must coordinate closely to ensure their code meshes well. Citing others’ research as well as his own, Waber argues remote programmers are 8% less likely than co-located groups to communicate about dependencies, which translates to 32% longer code completion times—or death when you’re already as lumbering as Yahoo. "For Yahoo, then, this means their workforce becomes about 3% more effective with the stroke of a pen," Waber wrote, the value of which he pegs at $150 million.
That may not be quite as much as the $17 billion in market cap that the report lays at the feet of killing working from home, but Mayer certainly doesn’t have to say she’s sorry, either.