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Posted at 12:27 PM ET, 02/28/2013

The Yahoo memo and Marissa Mayer’s big innovation gamble


In this Friday, Jan. 25, 2013, file photo, Marissa Mayer, CEO of Yahoo!, listens during the 43rd Annual Meeting of the World Economic Forum, in Davos, Switzerland. (Laurent Gillieron - AP)
The backlash against the leaked Yahoo memo banning telecommuting work was as swift as it was comprehensive. Innovative CEOs such as Richard Branson were "perplexed" by the move. Telecommuting advocates fretted that Marissa Mayer, the company’s CEO, was attempting to turn back the clock on flexible workplace advances. Working moms worried that Mayer — herself a new mother — had turned into an evil caricature of a woman who wanted to have it all. And management gurus were quick to point out that telecommuting workers were actually more productive than office workers.

But take a deep breath and consider a few things. Mayer is a young celebrity CEO who hangs with people like Wyclef Jean and Matt Lauer. She’s not an out-of-touch Old School CEO without any idea of how this Internet thing works. She knows how the Googleplex works, inside and out, since she was the 20th person ever hired at Google. Finally, Mayer must be aware that people look to her not just for tactical decisions, but also for the types of big, global ideas that sell magazines. She’s not about to blow it all on a move that makes her look like a newbie CEO panicking in an attempt to turn around a company in crisis mode.

So, if the Yahoo memo is not a bone-headed move that shows how out-of-touch the company’s CEO is with the way Silicon Valley works, then what is it?

It might just be one of the biggest “bet-the-company” moves to create a culture of innovation that we’ve ever seen in Silicon Valley. Marissa Mayer is essentially saying to her employees, “If you’re not 100 percent vested in making Yahoo one of the greatest companies in Silicon Valley once again, then you’re not the right fit for us anymore.” The telecommuting ban functions much like a tempting buyout offer from a company trying to slim down via attrition. It’s a test of how dedicated employees are to her vision for the New Yahoo, similar to what Zappos (itself lauded as one of the most innovative workplaces around) does with its new employees with "The Offer." After one month, Zappos offers each new employee a one-time $1,000 buyout offer to quit the company. The employees who are just in it for the money take the $1,000 and jump ship. The employees who love the Zappos corporate culture stay and do amazing things.

The same thing could happen at Yahoo. At least that appears to be the plan. (Yahoo responded to its critics this week, with a terse comment that this was an internal matter, and not an industry-wide experiment for spectators).

Building the right corporate culture is what leads to more innovation, and the way you build that culture of innovation is by having the right people. Something was apparently very rotten with the way things worked at Yahoo. Maybe the company’s telecommuters weren’t exactly hanging around at the pool all day, but they weren’t maxing out on new product launches. Yahoo claims to be in the middle of a "brand renaissance," and so nothing less than full dedication to that brand will work anymore if Yahoo hopes to catch up to Google, Apple or Facebook. Or, as Mayer famously said earlier this year, “God, family and Yahoo -- in that order.”

In the backlash-to-the-backlash, a few voices have started to speak out in favor of Mayer - including some experts who say Yahoo’s radical move is the only possible way the company can ever catch up with Silicon Valley’s elite. Anonymous Yahoo employees have started to use social media to speak out in their support for the company’s CEO. The stock market, usually a good indicator of which way the wind is blowing, didn’t flinch. The danger in Marissa Mayer’s radical bet-the-company move is that it will alienate more people than it will attract, and that Yahoo’s competitors will use this opportunity to poach the company’s star talent working in cafes and home offices across the nation. In the meantime, hold your breath — this is going to be one of those almost-all-in bets that will either become a minor footnote in Yahoo’s final demise or a classic business case study on how to create a culture of innovation for years to come.

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By  |  12:27 PM ET, 02/28/2013

 
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