The Compromise for Yahoo? Maybe It’s Coworking

Yahoo’s decision to revoke its employees’ cloud-commuting rights has enraged some. Rather than requiring potentially hundreds of employees to commute daily to Yahoo’s offices, CEO Marissa Mayer should allow them to cowork instead.

Yahoo CEO Marissa Mayer finds your cloud commute displeasing. Credit: JD Lasica on Flickr

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Yahoo’s decision to revoke its employees’ right to work from home has enraged urbanists and feminists alike. The memo explaining the decision — issued last Friday and subsequently leaked to the tech reporting website All Things D — cited the need to be “physically together” to turn the faltering search giant around:

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.

Without meaning to, Yahoo has ignited a debate about proximity’s role in innovation and work/life balance — both fueled in part by the persona of its 37-year-old CEO, Marissa Mayer, who is seen as both a feminist role model (she took over the company while pregnant with her first child), and as the most prominent Googler-in-exile, remaking her new company in her old control-freak image. Working-from-home mothers have accused Mayer of dragging them back to the Stone Age, while the sociologist Richard Florida has spent this week fulminating about Silicon Valley’s “nerdistans” and their crimes against both cities and the creative class.

“Amazing leap,” he tweeted. “Work from home = low productivity + low interaction. Work from office = high productivity + hi[gh] interaction. MEASURE IT.”

Some have. MIT Media Lab visiting scientist Ben Waber and a team from IBM closely measured the output of 161 programmers working across 20 teams. Remote groups were 8 percent less likely than teams working in close proximity to communicate about critical bottlenecks in the code, leading to delays.

“For Yahoo, then, this means their workforce becomes about 3 percent more effective with the stroke of a pen,” Waber wrote on his blog Tuesday.

Using sensor-studded employee badges that measure the length of conversations and the number of participants, Waber has found that simply increasing the size of tables of the cafeteria will improve employee performance, because large tables lead to larger social networks and a faster flow of ideas within the company.

But what if higher productivity isn’t what Yahoo needs?

For more than a decade, Yahoo has successively tried to hire, fire and acquire its way back to its dot-com-era dominance, without success. If anything, Yahoo needs to be less efficient if it hopes to match the success of Google’s famous “20 percent time,” the program that serendipitously produced such projects as Gmail and Street View. Proximity is also essential for the formation, sharing and refinement of new ideas — hence the “hallway and cafeteria discussions, meeting new people, and impromptu team meetings” cited in the memo.

(Ironically, given the suburban campus of Yahoo — and Google, and Facebook — the person who persuasively made the case for this was Jane Jacobs, whose arguments in The Economy of Cities were borrowed by economists like Robert Lucas and Paul Romer, both of whom used cities to explain the role of innovation and information “spillovers” in economic growth.)

If new ideas are really what Mayer is after, then canceling working from home is a half-baked idea — but only half. Rather than requiring potentially hundreds of employees to commute daily to Yahoo’s offices, she should allow them to cowork instead. In fact, she should demand it.

“Coworking” describes the practice of working alongside someone who technically isn’t a colleague. A practice started as a haven for freelancers who didn’t want to work from home but refused to get a 9-to-5 job has caught on with multi-billion dollar companies. As I describe in the current issue of Fast Company, companies including AT&T, Steelcase, Zappos and Plantronics have begun stationing some of their best teams outside the mothership in the hunt for new ideas.

In Grand Rapids, Mich., Steelcase and three local suburban companies — Amway, Meijer and Wolverine Sporting Goods — have moved their product, design and business development teams into a Grid70, a corporate coworking space downtown, where they share research and advice. AT&T has opened satellite R&D centers in Tel Aviv, Palo Alto and Plano, Texas collectively known as the Foundry, where its engineers toil beside those from partners like Ericsson and aspiring start-ups. Cisco acquired one of those firms, Intucell, for $475 million last month.

Coworkers who have taken the plunge appear to love it, too. According to the third annual Global Coworking Survey by Deskmag, a German publication, 71 percent of respondents said their creativity had increased since joining, and 62 percent said their standard of work had improved. Rather than be distracted by (scheduled) meetings, 68 percent said they were able to focus better, and 64 percent said they could better complete tasks on time.

Mayer isn’t wrong to require her employees to work in close quarters with other smart people. Her only mistake is in thinking they should do within the company, rather than outside it.

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Greg Lindsay is a contributing writer for Fast Company and co-author (with John D. Kasarda) of the international bestseller Aerotropolis: The Way We’ll Live Next.
His writing has appeared in The New York Times, The Wall Street Journal, Bloomberg BusinessWeek, The Financial Times, McKinsey Quarterly, World Policy Journal, Time, Wired, New York, Travel + Leisure, Condé Nast Traveler and Departures. He was previously a contributing writer for Fortune and an editor-at-large for Advertising Age. Greg is a two-time Jeopardy! champion (and the only human to go undefeated against IBM’s Watson).

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