One year ago, newly-appointed Yahoo CEO, Marissa Mayer, shook up her company, if not the business world, by banning telecommuting. It’s now a year later, and life at Yahoo has not only continued, but the YHOO stock has risen from 21.22 to 37.79, up 78 percent. In that same time period, the Dow Jones Industrial Average rose only 15 percent. While the policy change has worked out well for Yahoo, those who predicted it would not start a trend have been proven largely correct.

Is it possible that while telecommuting is bad for Yahoo, it is good for the rest of the industry?

The important questions for companies grappling with telecommuting are these:

  • How can you best motivate your employees to want to contribute to the company’s success?
  • How do you create a work environment that helps employees achieve their full potential?
  • How do you define and communicate a purpose that will inspire your employees to delight your customers? Work without purpose is just a job.

The answers to these questions are different when a company is struggling versus when it is booming. Underperforming companies have a mix of hygiene (brand awareness) and health (cultural) issues that must be addressed. If a broken culture is the symptom, short-term morale damage is not your top concern. Remember, two companies thought of as the top innovators in the world-Facebook and Google-strongly promote an in-office work environment. Several years ago the company I work for was in a tough spot, and we went through a turn-around period of our own. Work-from-home policies were less flexible during those times, and today we are better for it.

Enabling a collaborative culture

Demanding that all employees come to the office is never the complete solution. Inspiring employees with a vision is a start. Enabling employees to support that vision and embedding it into the culture is where the fun begins. I believe that establishing a social business is key to building a healthy culture. Without the environment and tools that encourage open sharing and collaboration, it’s too easy for the team to disengage. Studies have shown that collaboration tools can improve employee productivity gains by 20 to 25 percent, including telecommuters. These are the important factors for a healthy business:

1. Enable collaboration. An IBM survey of more than 1,700 CEOs from 64 countries asked what trait was most wanted in employees and found the top answer was “collaboration.”

2. Promote creativity. Fire-in-the-belly inspiration is critical to creativity, as is face-to-face collaboration. Especially in a turn-around period, coming together as a team to bounce ideas off each other is paramount to re-energizing and fostering innovation. This may also be accomplished by reproducing water cooler conversations in a virtual way. A social work environment helps humanize senior management and the business as a whole.

3. Encourage shared accountability. Whether it’s face to face or via social networking, the more interaction there is within a team, the more they feel implicitly accountable. Communication improves culture.

It’s true that most people find value in allowing employees to work remotely. But there are also important benefits for teams that work side-by-side. Once the foundation of a strong environment is built, a healthy, growing business will find the right balance and integrate flexible options that make sense.

Working from home is a privilege, not an entitlement. As business leaders, we must hire people we can trust and then trust them to do their work-as long as we are driving results. To reach full potential, we must have the courage to make tough decisions and put the company’s, and most importantly the customer’s needs, ahead of our own. Work is not a place; but the quality and quantity of work is influenced by location. By the way, there was another company that notably banned telecommuting last February: Best Buy. Although they too have been struggling, their stock has gone up 43 percent since then.

The opinions expressed here by columnists are their own, not those of