Many in the tech world (myself included) were shocked by the announcement, as working with distributed teams has simply become the way software is made. Collaborating with a team of people building tools for virtual experiences seems to naturally lend itself to collaborating virtually. A tech company saying that they cannot figure out how to collaborate virtually to build great products promotes the image that they just "don't get it", and won't be able to build great products for the internet.
However, if Yahoo's remote employees are truly slacking off at home and failing to contribute meaningfully to Yahoo's culture, it's probably the fault of Yahoo's management. Fire the poor managers who don't even know if their teams are producing productive output. The solution here is to set up remote employees for success, not to revert to a model of work tailored to an industrial economy rather than an information economy.
With poor management and a lack of motivation and inspiration, an employee can be just as unproductive at work as they can be at home. When the unproductive Yahoo employees come in for their first day back at the office, the poor management structure will still be unaware of their contributions or lack thereof, and that's the root of the problem.
While I certainly don't claim to have all the answers, I thought I'd describe how we do remote work at Vertigo:
I typically manage a project team of ~5-10 people, and there are also 4 people that report to me from an H.R. perspective. Of those groups, at least half are remote employees. This means that our project teams have to find common ground to allow everyone to work effectively whether at the office or remote. This typically means that we'll need to use online project management tools rather than whiteboards, screen sharing rather than side by side paired programming, and Skype rather than conference rooms for stand up meetings.
It's weird when a project team consists of a few people who are all at the office and we realize that we're holding a stand up meeting over Skype with each other, but we've built this kind of consistency into the way we work and we barely notice it any more.
Creating this kind of level playing field for remote and local employees goes a long way to making remote employees feel valued, and making local employees understand that remoteness is no excuse for a lack of collaboration.
Openness and transparencyA hidden benefit that emerges from this methodology is that our processes become immediately extensible and scale-able to our clients, 3rd party stakeholders, and the world. If a client wants to see the estimates and flowcharts from yesterday's sprint planning meeting, they're immediately visible and available on the online tool in which they were originally created, rather than sitting on a whiteboard. If we need technical assistance from a technology partner, our 15 minute meeting discussing the problem with screen sharing showing code can be recorded and played back to get people up to speed.
This openness has a positive feedback loop effect as well. When everyone can see everything, it's very clear exactly what work is getting done. Remote employees at Vertigo would never go unnoticed, because their work is visible in the same way that everyone else's work is. The openness encourages collaboration and productivity, as everyone knows that their work will be discussed and used by the team on a daily basis.
CulturePerhaps the biggest drawback to remote workers is that their day to day "water cooler" interaction is limited with the rest of the staff. I can't take my half-remote team out for a beer after a big deliverable, and that sucks.
Building a highly motivated team that coalesces around the work depends on healthy culture, so this is a real problem. My take on the solution is to try to create opportunities for culture to breathe whenever possible.
Schedule group meetings with enough time for chatting about the weekend for the first 10 minutes. Take a minute to show that funny YouTube video halfway through a technical meeting when someone mentions a meme.
Most of all though, make sure the team knows that they are adults, and as such are implicitly trusted to deliver high quality products. You can't command and control a team into that mindset. A culture where I deliver that feature because I know my teammates are counting on me is so much more powerful than one where I try to deliver it because my boss is breathing down my neck.
I'm looking forward to the new 37Signals book on this topic, "Remote".