The Real Challenge at Yahoo
Yahoo recently announced the hiring of Marissa Mayer – employee number 20 at Google – as its new CEO. Her appointment is noteworthy for a few reasons; she has been appointed CEO in a notoriously male‑dominated industry, she is the youngest CEO of a Fortune 500 company, and as has been widely reported, Ms. Mayer is pregnant and expecting her first child in October. The vast majority of press concerning her appointment to date has centered on this last bit of news, inciting discussion and debates about balancing careers and personal lives, and how she will manage through late-term pregnancy and her maternity leave. While this will certainly be an adjustment, Ms. Mayer will enjoy an army of help and plethora of resources that most new parents have never dreamed of. She will be able to manage this transition just fine.
In all the excitement concerning her pregnancy, few are writing about the real challenges that await Ms. Mayer as the new chief of Yahoo. For 13 years she has been with Google, leading the charge as the company grew from the tech nerd’s search engine of choice with a funny name, to the dominant search, cloud, mobile, and advertising giant we know today. Fortune has named Google the top company to work for in 3 of the past 6 years, allowing them to attract top talent in the industry. Google has developed a culture of success.
On the other hand, Yahoo has been a steady state of decline during the same period. An early internet darling in the late 20th century, Yahoo has gradually ceded ground to others in areas such as search, content, mail, and advertising, all areas where they were formally leaders. Ms. Mayer is Yahoo’s 4th CEO in as many years (not including interim CEOs), and former leadership has been criticized for failing to provide any direction or strategic leadership. Yahoo’s sales peaked at over $7 billion in 2008, and have steadily fallen to less than $5 billion in 2011.
All of this points to the biggest challenge; changing the culture at Yahoo. Where Google was a confident culture that expected to succeed, Yahoo’s culture is one that has been continually losing ground and lacks confidence in leadership. Yahoo has been losing out in the talent war to organizations like Google, Facebook, or promising start-ups in Silicon Valley. Ms. Mayer will need to convince Yahooers that they can be successful, and that they can trust her vision. She will need to put in place a strategy to recruit, develop, and retain the highly-prized talent that helped Google be so successful.
We know that leadership is not about the individual, and Ms. Mayer cannot expect to single-handedly rescue Yahoo from its recent woes simply by decreeing a new strategy or direction. Leadership is about facilitating the performance of others, about building and maintaining high-performing teams, and about winning and beating the competition. The biggest challenge that Ms. Mayer will face is building a company culture that, after years of losing ground and churning through leadership, believes it can compete and win against the Googles of the world.