Tech turnarounds are even harder.
Even in a garden-variety industrial turnaround, the company's credibility with customers, investors, suppliers and employees is damaged. They are all wondering if the institution can be saved and whether they should hang around long enough to find out.
When there is a history of poor governance and leadership the job is that much tougher. Yahoo is a poster child for bad management. Four CEOs in almost as many years, a dysfunctional board, a refusal to sell to Microsoft four years ago due to some pathetic, emotional reaction to the end of the company's independence and the embarrassment, unique to Bay Area tech firms, of being acquired by a firm from some other geographical locale. As if their location confers some kind of genetic preeminence not available outside northern California. Much of this travesty was engineered by Yahoo founder Jerry Yang who walked off with his bundle but had not shown much subsequent concern for other's investments.
The additional problem with tech turnarounds is that the industry and its investors are enamored with innovation/power continuum. Apple has it. Microsoft lost it. Amazon is gaining it. Google may be losing it. Facebook hasnt yet established it. There may be a perception that no one really good would want to work for a damaged brand like Yahoo. Mayer's hiring could change that. But it may be too little too late.
But dont wring your hands on Mayer's behalf. She is tough, smart, experienced, technologically gifted and media savvy. She undoubtedly understands the odds. And realizes that many believe Yahoo cant be saved. But there are not all that many public company CEO positions in the world. Especially in tech. So by taking this one, even if the enterprise is doomed, she has served notice that she is a CEO with the managerial and strategic chops to lead anywhere in the industry. If this one doesnt work out, the thinking may go, it wasnt really her fault and there will soon be another CEO position waiting for her. JL
Brad Stone reports in Bloomberg BusinessWeek:
Marissa Mayer now faces an almost impossible task. She must restore Yahoo’s ability to innovate, repair its image with advertisers and customers, and inject some energy into the depleted work force, which has been bruised and battered by layoffs and a cratering stock price. And while she’s doing all that, she’ll have to manage restless shareholders
such as Daniel Loeb, who recently joined the board and controls two other seats as well, and fend off Yahoo-obsessed bloggers (particularly this one) who seem to have a direct pipeline into the Yahoo boardroom.
Yahoo! (YHOO) shocked its observers and Wall Street by naming Mayer, longtime Google (GOOG) executive, as chief executive of the teetering Silicon Valley Web portal. The beleaguered company has had four official CEOs over the past five years, and their names—Terry Semel, Jerry Yang, Carol Bartz, and Scott Thompson—have come to define hapless management. Thompson, the most recent chief exec, left the company in May after activist shareholders revealed that he had exaggerated his academic credentials.
Mayer, 37, was one of the first employees of Google, the company that first rode to prominence on Yahoo’s coattails as its search provider—and then quickly surpassed it. She ran Google’s search group for years and most recently has led the location and local division; she’s also always been one of the company’s best spokespeople. But over the past year she never seemed to find a place on CEO Larry Page’s senior leadership team.
such as Daniel Loeb, who recently joined the board and controls two other seats as well, and fend off Yahoo-obsessed bloggers (particularly this one) who seem to have a direct pipeline into the Yahoo boardroom.
The biggest problem at Yahoo remains existential—what is Yahoo’s mission, anyway? Often nothing seems as trivial and artificial as a corporate mission statement, but such exercises do help clarify the minds of the troops and unify them behind a common goal. Google’s mission is “organize the world’s information and make it universally accessible and useful.” Amazon (AMZN)’s is to “build a place where people can come to find and discovery anything they might want to buy online.” Apple (AAPL)’s is to create the best-designed, best-in-class PCs and digital media devices in the world.
Yahoo’s mission statement, according to its website, is to “create deeply personal digital experiences” and to connect users to what matters most to them. The Internet does that very well all by itself, thank you, and social media such as Facebook and Twitter have also encroached on that vague territory.
But Mayer has something most of her predecessors have lacked—she’s a trained engineer, with a masters degree in computer science from Stanford. Ross Levinsohn, the interim CEO and apparent frontrunner for the job, was a media guy who hailed from News Corp (NWS). As Yahoo’s rivals have amply demonstrated, having technical knowledge and an innovative vision are the qualities that make for successful leadership in the rapidly changing world of the Internet. To the extent that it’s even possible to right the good ship Yahoo anymore, the Yahoo board may have finally gotten it right.
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