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Yahoo!’s edict that all of its employees must work out of its offices, effectively ending the company’s liberal telecommuting policy, is raising hackles in cubicles around the nation this morning. In addition to being an unneeded distraction and PR nightmare, it’s likely to   pose an unintended obstacle to innovation.

Yahoo! CEO Marissa Mayer‘s edict was passed along in a memo from HR head Jackie Reses. The news was reported initial by Kara Swisher in All Things D. Swisher also managed to get hold of the company-wide memo which offered up the company’s logic:

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.

Yahoo! is not alone in thinking that togetherness is the key to innovation. This is a hallmark of Google’s corporate culture (Mayer’s former longtime employer) and Steve Jobs famously believed in face to face interactions. Apple’s corporate campus was developed with this as a key objective, even determining the placement of bathrooms – to foster the chance of serendipitous hallway conversations.

But does face time truly foster innovation and creativity? Certainly technology has made it possible to work at home effectively. With access to a phone, a computer and a fast Internet connection, may of us are good to go. Yet I contend that there is value to be gained from face to face conversation – not necessarily meetings. In fact, many meetings are detrimental to productivity and one of the true values to eliminating mandatory workplace attendance. It’s more about those ad hoc discussions and lunches.

After a number of years basing my own consulting business from home, keeping in contact with colleagues via Skype and email, I am once again in an office. I have had a number of chats just in the few weeks that I’ve been here that have led to new projects and initiatives. It is much easier than making the time to make that call. That said, my home office is perfectly suited to getting things done and a change of scenery does encourage new ideas. Maybe it’s the flexibility that truly breeds creativity and innovation.

The decision to end the work at home option has not gone over well at Yahoo! and  it does not bode well for morale. Some employees have based their lives around it. Others accepted their jobs with the understanding that they would be able to work at home. There is already a great deal of criticism coming from women’s groups that have long advocated the value of working from home. Now, according to Yahoo!, it’s either “My Way or the Highway.” There’s no option. There’s no flexibility. And that might be the problem which could breed a resentment that stifles true innovation.

Yahoo!’s move does not reflect a national trend. If anything, according to the New York Times, working from home is an  accelerating trend. And it’s accelerating not only among tech companies but among more traditionally conservative companies like banks and consulting companies. A part of the equation has nothing to do with creativity or technology. It’s pure dollars and cents. With employees working from their homes, companies don’t have to lease as much space and pay the related expenses. It also keeps down their carbon footprint and can give them a leg up in retaining high value employees. The Times reports that 47 percent of Aetna’s employees telecommute, up from 9 percent eight years ago. That has saved the company $78 million in real estate costs.

It all comes down to a judgment call. Are the savings and employee morale worth risking for possible innovations down the road? Is that a return that’s even measurable?  I just spoke with a senior executive at a major ad agency who says he values the input and creativity of his colleagues but sometimes needs to “shut himself off from the outside” at home to get some uninterrupted work done. I think that the answer is striking a balance, working part of the week from home and part of the time from an office. When the technology exists to get the work done from anywhere, completely shutting off flexibility is likely to stifle morale and, ultimately, innovation.




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