Working from Home and Outsourcing
I don't know whether the emphasis on culture is new or whether I'm just seeing it more because I'm aware of it. Either way, there's been a ton of discussion about Corporate Culture (for my definition of Culture click here). One of the things that was underemphasized when Yahoo! had their work from home blowup a few weeks ago was Marissa Meyers assertion that it was a choice for Yahoo! not a referendum on working from home. In other words, Yahoo!'s culture at this point, requires the random exchange of ideas that comes from people being physically together.
Common sense and scientific research back up the idea that working from home was the right call for Yahoo!. Like this quote from a Scientific American article:
Why do cities bring out the best in us? Technology lets us hold virtual meetings, and the Internet keeps us in touch 24/7, but neither can be a substitute for the types of social cues (a facial expression that signals comprehension or confusion) when people meet in an office, bar or gym. Cities deliver the random exchanges of insight that generate new ideas for solving the most intransigent problems …Young workers, whether they are on Wall Street or in Google’s New York City offices, succeed by picking up unexpected bits of knowledge from the successes and failures of those around them. It has always been so.
- "Cities: Engines of Innovation" Scientific American, August 17, 2011
Ok, I get it, Y! needs to have the people together to have the informal conversations, the spark that happens when random ideas collide in the hallways or in the lunchroom. The accountability that goes along with looking someone in the eye. But the question that’s been bothering me has been: if Yahoo! needs that collaboration, how can they outsource work and how can they operate globally?
Certainly, Y! isn’t going to shut down all offices except for Sunnyvale. But maybe it’s strictly a question of people working in isolation. Perhaps Y! is big enough to have people working on completely independent products with little need to interact. But treating it that way could lead to disjointed customer experiences, so they need to be clear on who the customer is and ensure that the overall customer experience is maintained and communicated. Perhaps it leads to a “center of excellence” model, where the problems are attacked by people who are all co-located and the job of bringing it all together falls to a smaller set of people who are able to operate between offices.
I'm also thinking of Google. Larry Page's stated goal of having a million employees will make innovation difficult, unless of course they're working on a thousand projects that don't relate to each other. (Of course, that may be the plan.)
But what about outsourcing? Can you hire in teams to work on your core product or to do custom work? I think it's better to integrate fully developed products (since there's a niche solution for almost everything.) I also think that the changing economics of Indian outsourcing, the challenges of outsourcing to non-English countries (and the challenges of doing business in China and Russia) and the growing understanding of the value of chance interactions, have already started to change outsourcing.