In the last decade, a few high profile companies experienced with remote work called their workers back to the office. Skeptics interpreted these cases as evidence that remote work simply doesn’t work. But was that the right takeaway?
Revoking Remote Work
To great controversy, several large companies that had pioneered flexible work programs revoked or curtailed them in the last few years.
In 2013, the newly appointed CEO of Yahoo, Marissa Mayer, withdrew the company’s work from home option. Meyer had arrived at a floundering Yahoo from Google, a company with a campus known for slides, nap pods, and chefs whipping up delicious meals. It was the ultra-office-culture company, and Meyer brought with her the idea that collaboration requires employees being in the office together.
Yahoo’s public justification for ending employees’ ability to work remotely was that “the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings.”
In the same year, a second financially failing enterprise with a new CEO decided to revoke its remote work policy. Best Buy had been the developer of the Results Only Work Environment (ROWE), which empowered its corporate employees to work wherever and however they liked.
But in the face of declining company value and fierce online competition, the company decided to bring employees back to the office. Its spokesman argued, “Bottom line, it’s ‘all hands on deck’ at Best Buy and that means having employees in the office as much as possible to collaborate and connect on ways to improve our business.”
In 2017, another enterprise with declining stock value decided to order a number of their remote employees back to the office. A pioneer in remote work, IBM had 20 percent of their US workforce working from home at the time, saving 100 million dollars over the previous decade in foregone office space.
In calling thousands of employees back to the office, IBM argued that the move would foster greater collaboration. The CMO of IBM explained, “There is something about a team being more powerful, more impactful, more creative, and frankly hopefully having more fun when they are shoulder to shoulder.”
Motivated by Failure
Did these corporate leaders really believe they would benefit from bringing their employees back to the office? And did revoking flexible work policies actually help these companies collaborate?
Yahoo, Best Buy, and IBM were all facing declining company values when they decided to revoke work from home options. Many commentators argued that the decisions weren’t about the failure of remote working, but a way for the companies to slash their workforces without having to officially lay employees off.
In addition, the policy shifts seemed to result from a reliance on conventional wisdom and mismanagement more than from a solid understanding that remote work had failed. In both Yahoo and Best Buy’s cases, the decision was made by newly appointed CEOs who had barely gotten a lay of the land.
As one commentator said about Yahoo, the revocation of working from home was a clear sign that the company had “no decent way to measure the productivity and output of a worker.”
An insider at Yahoo reported that there was also mismanagement of the remote workforce, with little effort to stay in touch regularly. Poor connection and communication meant that “there were all these employees [working remotely] and nobody knew they were still at Yahoo.”
At Best Buy, the creators of the ROWE management style the company had pioneered opined that “as new management came on board over the past few years,” Best Buy had adopted a preference for “managing schedules over managing performance” and this had “choked the evolution of” the company.
In fact, an academic study of Best Buy in the years prior had shown that their flexible workforce had 45 percent less turnover than those who had come into the office, which backs up research that says remote workers are generally happier with their jobs. It also suggests that Best Buy failed to appreciate the value remote workers had delivered to the company.
Yahoo, Best Buy, and IBM were all in “crisis mode” when they decided they needed employees at the office to help figure out how to turn their companies around. In the face of financial failure and uncertainty, it is easy to revert to conventional wisdom for guidance, and conventional wisdom dictates that collaboration occurs best in the office. Yet this notion has quickly become outdated.
Studies have repeatedly shown that remote workers are more engaged and more productive at their jobs. They also stay longer at a company. But in order to be successful, remote work requires trust, clear standards of performance, and good communication. Collaboration can be successful from distributed locations, but only if practices are in place that unite workers and keep them on the same page.
Chief Operating Officer of the Goodway Group explained to NPR that having a remote workforce forced the company to improve communication and collaboration. In order to make remote work work, they implemented better metrics and documentation that aligned all workers and increased transparency, which “actually reduced the amount of time and back-and-forth” company wide.
Calling workers back to the office did not change Yahoo’s or IBM’s fortunes. The former ceased to be an independent company, and IBM stock prices have continued to fall. Best Buy has flourished by expanding its online sales, but it’s unclear whether this has anything to do with deciding to chain its corporate workers to their headquarters.
Most likely, the mismanagement and conventional thinking that led Yahoo and IBM to withdraw remote work options continued to prevent the companies from moving forward. IBM still has many remote workers, indicating it is not an either/or proposition, and some parts of the company might remain more forward-thinking than others.
With technological advances in workplace technology, such as digital messaging, digital project management, and video conferencing, it is easier than ever for companies to effectively foster collaboration across time and space. As tech savvy and purpose-driven millennial and Gen Z workers have become a larger percentage of the workforce, the demand for remote work is greater than ever.
The NY Mellon Corp’s recent decision to end telecommuting, for example, provoked such a massive backlash from its employees that it was forced to change its mind. One third of employees globally already work remotely at least some of the time and many aren’t interested in returning to positions where this isn’t an option.
Flexible work has been shown to make employees happier, more engaged, and loyal. Moving forward, companies who fail to offer remote work will lose access to much of the talent pool. Instead of instinctively abandoning the practice as insufficiently collaborative like Yahoo and Best Buy, most companies are better off improving their communication and management practices so they can successfully run distributed teams as an integral part of their workforce.