Lessons learned from the Yahoo! employee memo

On February 22, disgruntled Yahoo! employees leaked a staff memo that ironically began with “YAHOO! PROPRIETARY AND CONFIDENTIAL INFORMATION — DO NOT FORWARD” to Kara Swisher, Co-Executive Editor of AllThingsD.com (owned by Dow Jones).  The memo explained that executive management was bringing an end to Yahoo’s work-from-home policies because they “want everyone to participate in our culture and contribute to the positive momentum…and that starts with physically being together.”

The memo quickly went viral and caused an uproar on social and news media sites. There are a few reasons why it caused such a stir. The first is its dictatorial, condescending tone, which is at odds with the values and philosophy Yahoo! is trying to promote, resulting in a “do what I say, not what I do” approach to employee communications. Another is its lack of empathy for the employees effected by this change in policy.

The result is a revealing gap in trust between management and employees. A comment on AllThingsD by Angus Swan explains the memo speaks to “a tension and distrust between management and rank-and-file”:

Angus Swan Comment AllThingsD.com re Yahoo

Further compounding the problem is that Yahoo! has remained strangely quiet about the issue, leading to further speculation and opinion from mommy bloggers accusing Yahoo! CEO Marissa Mayers of setting women back 20 years, to business writers speculating that employees are being called in to be examined pre-layoffs, to Richard Branson’s comment on the Virgin company blog that stated: “To successfully work with other people, you have to trust each other. A big part of this is trusting people to get their work done wherever they are, without supervision. “

D’Aprix and Fagan-Smith write in Open Communication Cultures: Best Practices In A Changing World, “Internal communication is the top factor in determining a CEO’s reputation, which in turn is critical to shareholder value (Burson-Marstellar). The reaction to this memo poses a significant reputational threat with potential consequences for Yahoo!’s bottom line. Rather than remaining silent, Yahoo! should have immediately gained control of the discourse by employing the following approaches:

1. Empathise and reassure those affected: recognise that employees who are affected by this change in policy may need additional supports. Ensure them that their jobs are safe and that executive management see them as key to Yahoo!’s success.

2. Acknowledge responsibility: the dictatorial tone of the memo is not congruent with Yahoo!’s values of collaboration and innovation. Admit the disconnect here and assure employees that Yahoo! will learn from its mistakes and do better next time.

3. Open the communication channels: As Sarah Perry writes in her article Internal Crisis Communications, a company’s employees are “perhaps your most important ‘stakeholders’ during a crisis. Poor internal crisis communications can undermine all your efforts to manage a crisis externally, and the lack of trust, low morale, employee turnover and poor customer relations that result can compound the issues you face.” Creating a more open communication culture and encouraging feedback from staff about the work-from-home policy and other HR issues could help create a foundation of trust that Yahoo! can lean on when a true crisis hits.

After all, employee trust is not something that can be bought with an iPhone5 or free food; trust is earned.

What do you think of the memo and the resulting fallout? How do you think Yahoo! should have responded?

workban comic xlrg

Zappos: an open communication culture that inspires employee engagement

Tony Hsieh, CEO Zappos

Tony Hsieh, CEO Zappos
Source: http://www.businessinnovationfactory

I recently read an article by internal communication gurus Roger D’Aprix and Barbara Fagan-Smith called Open Communication Cultures In A Changing World. In a nutshell, the authors look at the positive effect of open communication on bottom line business results. They define an open communication culture as one “in which non-confidential and non-proprietary information is actively and freely shared with both employees and interested stakeholders with the leadership’s blessing and proactive participation.”

This made me think about what companies like Zappos are doing right with regards to internal communication. Established in 1999 and bought by Amazon in 2009 for $1.2 billion, Zappos is a $1 billion online retail business with 1,400 employees. Despite its impressive growth, Zappos maintains an open communication culture that inspires employee engagement. For example, Zappos publishes an annual “Culture Book” that’s “a collage of unedited submissions from employees within the Zappos Family of companies sharing what the Zappos culture means to them…it reflects the true feelings, thoughts and opinions of the employees.” Zappos also encourages employees to get involved on the company’s social networks, and hosts a micro-twitter site for staff. Zappos CEO Tony Hsieh actually posts some of his correspondence to employees on Twitter. It can’t get more transparent than that.

Do you think that open communication cultures have a positive influence on bottom line results? Are open communication cultures more effective at handling the various crises and challenges that come their way? How can closed communication cultures become more open?