How Well Does Working From Home Work?

March 13, 2013 Current Commentary Comments Off
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Almost everyone seems to have an opinion about whether Yahoo CEO Marissa Mayer was wise or otherwise when she decided to end permanent telecommuting arrangements at her company.

I don’t. This may be a little surprising, since I write an opinion column five days a week. Regular readers have probably concluded that I have opinions, worthwhile or not, about everything.

Editorialists, journalists and bloggers all rushed to comment on the policy change. Some argued that working from home is productive, and accused Mayer of missing or ignoring the drawbacks of working in an office. Others defended Mayer, pointing out that her decision was simply about what was best for Yahoo, not a broader statement about the utility of working from home. Still others tied the news into the ongoing discussion about women trying to climb the corporate ladder and raise young children simultaneously, while others polled the public to see whether they thought working from home made employees more or less effective.

Readers keeping up with the coverage would be forgiven for suspecting reactions to Yahoo’s policy say more about their respective authors than about Yahoo.

People tend to assume, falsely, that their experiences and priorities are always relevant to somebody else’s situation. Running my own business gives me quite enough to do without worrying about how Mayer runs her company. Lacking an insider’s perspective, I cannot form a knowledgeable opinion about whether I would have reached the same decision in Mayer’s position. All I can do is reflect on my own experiences, apply my own values and priorities, and wonder whether lack of productivity is really at the core of Yahoo’s problems.

Employees at Palisades Hudson, starting with me as its founder, have always worked from home on occasion. In some cases, employees have split their workweek between home and office for extended periods of time; in a few situations, they have worked almost exclusively from home for temporary periods of up to a year.

Telecommuting plays an important, though limited, role at our company. Our organization would not be nearly as strong without it. Yet what works for us would not necessarily work for other businesses in our own industry, let alone in fields that are very different from the tax and financial planning services we provide. Some firms probably need to allow more telecommuting than we do, while others should do it less.

The debate over the “productivity” of work-from-home employees largely misses the point, for two reasons. The first is that working from home probably increases productivity sometimes and reduces it at other times, in different amounts for different employees. The second is that productivity – the number of units of “work,” however we define it, that an employee churns out in a given period of time or for a given amount of compensation – may not be the most important consideration in evaluating an employee’s performance or overall value to the company. It might not even be close.

There is almost no circumstance in which I would hire a new employee and have that person start by working from home most or all of the time. The need to evaluate a new employee’s work habits and ability to self-supervise is part of the reason, but only a minor part. Even if I had the utmost faith in the employee’s diligence and focus, we want to provide as much guidance and mentoring as possible during the first few years an employee is with us. At the same time, we want to integrate that person into our tightly knit, team-oriented, client-centric culture.

New staff members often need to learn when to try to work out a problem on their own and when to ask for help. Sometimes the only way we can tell they’ve gotten into the latter situation is to walk past their desks and see the worry or confusion in a staffer’s eyes. It is then an act of compassion, as well as good business, for a more experienced employee to pull up a chair and help the newbie out of a jam.

A new staffer will also often try to follow the mechanical steps of a task, such as preparing a tax return or writing a financial report or rebalancing a portfolio, without knowing the human context in which the work is happening. It is easier to do a trust’s tax return, for example, if someone has taken the time to explain to you what a trust is, how trusts generally operate, and the objectives of the particular trust in question – perhaps that it was established to provide income to a parent while growing its capital for younger generations of the family, for example. These human details, which underpin all our work, are best conveyed in person. A new staff member may not always know when to ask for them.

Our younger staffers pick up many of their work habits from our managers. They learn how to deal with clients and other outside parties by being in the room while people with more experience do so. They learn our organization’s thinking about business and finance in casual conversations, often over lunch. They pick up our culture of welcoming different viewpoints on matters such as politics and social issues, even as we provide essentially the same guidance to our clients regardless of our personal priorities, the same way.

I don’t think we could effectively educate new employees this way if they did not work at the office. We won’t try.

On the other hand, once someone is integrated into the Palisades Hudson team, it does not much matter where they work (as long as there is someone back at the office to help the new arrivals). Interestingly, our most important tool for working across distances, whether the other side of a city or the other side of the country, for more than a decade has been Yahoo’s own instant messaging service. Everyone in the firm is on IM constantly while we work. We are all on one another’s buddy lists. We know from an IM status exactly who is working, and where, at any time. IM is the virtual doorway to someone’s office or cubicle. Need to talk to a co-worker? Just IM and ask him or her to come down the hall or pick up the phone. Need to share a screen? Use IM to set up a session. And if you absolutely need a face-to-face discussion with someone working elsewhere, you can jump on a video chat, though this is something we have only done experimentally, because it just is not that important to us right now.

Last week, a human resources staffer who had the flu set up a candidate’s interview session while working from home. (She should probably have been in bed getting better, but since she was at home, nobody could stop her from working when she got restless.) I asked my colleague Amy Laburda to write a first draft of this column last week on a day that a nor’easter threatened the New York area. Amy made it to the office that day, but if she had stayed home, it would not have mattered to me.

Three time zones away, our manager David Walters worked from his home near Portland, Ore., which is his main workplace right now. David moved to Oregon last summer. He has been with us for more than 10 years and is a highly valued, productive manager. Many clients rely on him, and I certainly was not about to lose him just because he moved across the country. I had planned to open an office in the Pacific Northwest anyway. So David became our first West Coast staffer, and has worked from home pending the startup of our new Portland office, which should happen in the next couple of months. He will then split his time between home and office, at least until we have more staff in Portland, requiring him to be at the office every day.

Years ago, a young manager named Shomari Hearn needed a similar arrangement when family issues required him to relocate to Florida. Shomari started our Florida office in 2005 and became a vice president of our company last year. He is still based in Fort Lauderdale, where we now have a half dozen employees.

We have had other managers who needed to adjust their work schedule because of young children. I always let them tell me how much time they wanted to work. If allowing them to work from home makes them available for the benefit of the firm and its clients, while reducing their stress in meeting family needs, I am all for it. Can I quantify exactly how productive they are? No. But I do know that they get their important tasks done, which is what matters.

For me, the overwhelming priority is to retain valuable, longstanding members of our team, who took years to develop. Anything I can do that makes it easier and more compelling for them to stay with us is worthwhile. The mathematical calculation of their productivity is secondary, and is mainly useful in determining how to compensate them in ways that are fair to them and to others in the organization.

I don’t know whether Yahoo has a productivity problem. Given the company’s struggles to adapt to new competition from Google, Facebook and other modern Internet powerhouses, I suspect it does have a problem with retaining top talent. Will the new CEO’s policy change make it harder to attract and retain the people Yahoo will need to succeed? I think it’s a fair question, and one I would be asking if I were on Yahoo’s board of directors. But it is not one that an outsider can knowledgeably answer.

Management is often more of an art and less of a science than we make it out to be. Productivity is something that can be scientifically measured, but it is just one ingredient among many that make an enterprise successful.

However, management is not a religion, either. There is no holy book showing managers the one true path to success. There are many routes, some more direct than others, but all of which can lead to the desired destination as long you don’t get too lost in the weeds along the way.


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