Telecommuting and innovation

The press, both national and international, has been full lately of stories related to Yahoo’s impending termination of telecommuting for all of its employees. The reason for this termination, according to Yahoo’s spokespeople, is the need for more innovation within Yahoo so that it can gain market share. Furthermore, Yahoo’s position seems to be that innovation can only occur if the employees are always co-located and frequently interact with other employees not in their usual workgroup. It ignores the fact that most contemporary telecommuters do their telecommuting part-time and do spend time with their coworkers in face-to-face situations.

As you may have noticed in my previous two blogs on this topic I am skeptical of Yahoo’s approach. There are two aspects to my skepticism. First, there is the question of how much innovation is really needed in an organization. Second, is the premise valid that employees need to be co-located in order to be innovative?

In the first quantitative tests of telecommuting by my research team – 40 years ago – our testbed was a major national insurance company. One of our concerns was whether the physically distant telecommuters would be less creative or innovative than their coworkers who were located in the corporate headquarters. As it turned out, that concern was quickly put to rest; the distant telecommuters turned out to be more creative than the workers in the central office. [Subsequent tests in a variety of organizations produced similar results.] Even more interesting was a conversation I had with one of the senior executives of the company. He told me that the company goes to great lengths to weed out innovative employees since they allegedly kept trying to disturb the finely honed process of insurance delivery. So our first telecommuting test turned out to address both the question of telecommuter creativity and the perceived need for it among insurance companies.

Clearly, Yahoo is not an insurance company. It is, or was, a leader in an innovative industry. So innovation is much more highly prized there then it would be in an insurance company. But let’s look at what “innovation” really means. There are two main components of innovation: the Aha! moment and the long, often arduous process of converting the idea to a real product or service. The latter component is the far more important and expensive one. As the old saying goes ideas are a dime a dozen. Making them work is what’s important. Although the idea–to–product conversion process can also require some creativity, much of it is relatively routine, possibly location-independent work. So innovation involves at least initial creativity but is not necessarily creativity dominant. Furthermore, too much innovation can be disruptive. There is a constant battle in many organizations between coming up with new ideas and focusing on the routine business that brings in the cash.

The next question is the togetherness equals creativity issue. As I mentioned in an earlier blog my own experience has been that my Aha! moments usually came when I was in a non-work situation, not when I was mingling with my coworkers. The point being that creativity necessarily involves a departure from business as usual; immersion in a different environment than the daily routine. The implementation part of innovation may well benefit from the daily routine but that is not what gets innovation started. Unfortunately, statistics concerning the locales of the various steps of innovation are very hard to find. Let’s hope Yahoo can develop some. Until then, my vote is for the telecommuters.

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