IBM retreats to 20th century, drops telecommuters

According to the Wall Street Journal of 18 May 2017 [Note: the referenced article has a paywall], IBM has decided to call in all its telecommuters. The option given to the telecommuters is either to come in to an IBM facility every day or look for a job with some other employer. This was a shock to me since I helped IBM get its telecommuting program started in 1984, way back in the 20th century. So IBM has been supporting (and lauding) telework for 33 years. And now they have decided to stop it, to retreat to the pre-1980s. This does not seem to be a wise move. Why are they doing it?

The answer from IBM sounds a lot like Marissa Mayer’s excuse for calling in the telecommuters of Yahoo! Business is bad and it doesn’t seem to be getting better so it’s time call in all the troops in order to ignite a burst of innovation. Get them together every day so that the ensuing interpersonal communication (or friction), like striking a match, will produce light and the company will turn the corner and prosper. The implication, of course, is that business is bad because of telecommuting. Therefore it’s the telecommuters who are the source of the problem. It’s what my friend, Gil Gordon, calls telescapegoating!

Technically, the move by IBM can be described as a variant of what we called fragmentation in 1974, except that now it is re-fragmentation or re-centralization. The idea is this: employee residence locations in a commuting environment are greatly influenced by the distance (or commuting time) between residences and the workplace. Over time the residence patterns approximate a circular normal distribution — the number of employee residences diminishing with distance from  the workplace. In a telecommuting environment employee residence locations are more random, relatively unaffected by the location of the workplace; a condition we called diffusion. The IBM decision to stop telecommuting essentially forces a move back from diffusion to fragmentation or centralization. [You can read more about this in Chapter 2 of our 1976 book: “The Telecommunications-Transportation Tradeoff”.]

So what is the likely outcome of this move by IBM? Now many employees who are telecommuters are suddenly faced with long commutes, often over considerable distances. My forecast for previous such situations was that the good employees, the talented and imaginative ones, will quit and go to jobs where their talents are more appreciated and either local to their residences or where telecommuting is encouraged. The remaining drones will, sigh, complain and go back to commuting. The consequence is that the hoped-for increase in competitiveness of IBM will not happen.  The workers who were already commuting won’t have a sudden spurt in inventiveness and the former telecommuters will be sullen at best. In general, worker productivity will be unaffected or decline. IBM will continue its slump, as did Yahoo. And, of course, traffic congestion, energy use and air pollution will be increased in proportion to the numbers of those new commuters.

Furthermore, I suspect that in many cases there is no IBM facility for the telecommuters to return to. For example, I recall a lunch I had with the president of IBM Spain in 1994 (or so). He explained that he was converting most of IBM’s staff to be teletrabajadores, leaving a small contingent of regular commuters in the Madrid headquarters. Where do those erstwhile teletrabajadores go to work now? Madrid traffic is already bad enough.

Then there is the threat from those about-to-be former IBMers, the inventive ones, who will take this opportunity (or kick in the rear) to explore new horizons and new possibilities. Perhaps collectively or individually they will become the new crop of IBM-threatening entrepreneurs. IBM reinvented?

According to the New York Times of 24 April 2017, “Yahoo shareholders will vote June 8 on whether to sell the company’s internet businesses to Verizon Communications for $4.48 billion.” Marissa Mayer will net a tad under $200 million on the deal. Mayer’s salary and bonuses over the past five years will bring her take for her sterling management capabilities to more than $200 million. The fate of the former Yahoo telecommuters was not disclosed.

Will IBM follow the same path? I hope not because I have great respect and fondness for the IBMers I have known. Seemingly IBM’s management prowess has been sidetracked lately. Let’s hope for improvement. Yet at least some IBM senior managers, like Ginni Rometty, might come out significantly richer if there are no more IBM telecommuters, IBM’s business trend continues (like Yahoo’s) and IBM is sold to . . . .

 

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