Raising Morale is Goal of Yahoo's New Policy

Story first appeared on The New York Times -

When Marissa Mayer took over as chief executive at Yahoo last summer, she confronted a Silicon Valley campus that was very different from the one she had left at Google.

Parking lots and entire floors of cubicles were nearly empty because some employees were working as little as possible and leaving early.

Then there were the 200 or so people who had work-at-home arrangements. Although they collected Yahoo paychecks, some did little work for the company and a few had even begun their own start-ups on the side.

These were among the factors that led Ms. Mayer to announce last week that she was abolishing Yahoo’s work-from-home policy, saying that to create a new culture of innovation and collaboration at the company, employees had to report to work.

The announcement ignited a national debate over workplace flexibility — and within Yahoo has inspired much water cooler conversation and some concern.

But former and current Yahoo employees said that Ms. Mayer made the decision not as a referendum on working remotely, but to address problems particular to Yahoo. They painted a picture of a company where employees were aimless and morale was low, and a bloated bureaucracy had taken Yahoo out of competition with its more nimble rivals.

“In the tech world it was such a bummer to say you worked for Yahoo,” said a former senior employee who, like many Yahoo insiders, would speak only anonymously to preserve professional relationships. The employee added, “I’ve heard she wants to make Yahoo young and cool.”

Restoring Yahoo’s cool — from revitalizing behind-the-times products to reversing deteriorating morale and culture — is hard to do if people are not there, Ms. Mayer concluded. That view was reflected in Yahoo’s only statement on the work-at-home policy change: “This isn’t a broad industry view on working from home. This is about what is right for Yahoo, right now.”

Yahoo declined to comment further.

On Monday, another ailing company, Best Buy, announced that it, too, would no longer permit employees to work remotely, reversing one of the most permissive flexible workplace policies in the business world.

Inside Yahoo, there has been mixed reaction to the policy change. Some employees said that they were able to be highly productive by working remotely, and that it helped them concentrate on work instead of the chaos inside Yahoo.

Brandon Holley, former editor of Shine, Yahoo’s women’s site, said she built the site and signed on big-name advertisers while she and most of her team worked from homes across the country.

“It grew very rapidly,” said Ms. Holley, who is now editor of Lucky, Condé Nast’s shopping magazine. “A lot of that had to do with the lack of distraction in a very distracted company.”

The change to the work-at-home policy initially angered some employees who had such arrangements, and worried others who occasionally stayed home to care for a sick child or receive a delivery. Reports that Ms. Mayer built a nursery for her young son next to her office made parents working at Yahoo even angrier.

This week, the policy continued to be the topic of much discussion at the company, as people wondered aloud whether they would lose that flexibility, said employees who spoke anonymously because they were not authorized to speak to the media.

But for the most part, those employees said, those concerns have been eased by managers who assured them that the real targets of Yahoo’s memo were the approximately 200 employees who work from home full time.

One manager said he told his employees, “Be here when you can. Use your best judgment. But if you have to stay home for the cable guy or because your kid is sick, do it.”

Many of Yahoo’s problems are visible to people outside the company. It missed the two biggest trends on the Internet — social networking and mobile. Its home page and e-mail services had become relics used by people who had never bothered to change their habits. It ceded its crown as the biggest seller of display ads to Facebook and Google. Its stock price was plummeting.

Inside the company, though, there were deeper cultural issues invisible from the outside. For Ms. Mayer’s ambitious plans to turn around the company to work, employees briefed on her strategy said, she believed Yahoo needed “all hands on deck.”

Jackie Reses, Yahoo’s director of human resources and the author of the new policy, is an extreme example of this philosophy. She commutes to Yahoo’s campus in Sunnyvale, Calif., from her home in New York, where she lives with her children.

“Morale was terrible because the company was thought to be dying,” said a former manager at Yahoo, who would speak only anonymously to preserve business relationships. “When you have those root issues, an employee work force that is not terribly motivated, it built bad habits over years.”

Yahoo has withstood many changes over the years, starting with a turnover of six chief executives in five years, each with his or her own deputies and missions for the company. This led to confusion among the work force about the company’s goals and frustration that projects would be pulled midstream by a new chief executive.

The company had hired many managers to oversee new tech products, but the extra levels of management slowed product development, former employees said.

“Where Yahoo competes, with companies like Facebook churning out a new release every single day, there was a lot of bloat slowing down product decisions,” the former manager said.

The new policy is the first unpopular big move Ms. Mayer has made. Yahoo insiders said they did not expect the employee and media outcry that followed.

Employees said that unlike previous chief executives, who focused outside Yahoo, she has prioritized fixing the company internally and motivating employees.

She introduced free food in the cafeterias, swapped employees’ BlackBerrys for iPhones and Android phones and started a Friday all-employee meeting where executives take questions and speak candidly.

A recent internal employee survey found that 95 percent of employees were optimistic about the company’s future, a 32 percent bump from the previous survey, Ms. Mayer said in a call with analysts in January.

Résumés have begun arriving from employees at competitors like Facebook and Google, which rarely happened in the past, according to one person briefed on Yahoo hiring.

Since Ms. Mayer made food free, there are now crowds in the cafeterias, lingering to talk about new ideas, employees say — exactly what she wants to encourage by requiring people to work in the office.

“I understand why Marissa Mayer would want to call everybody back into work,” Ms. Holley said. “It’s kind of a necessary step.”