Fuzzy Strategy, Muddy Brand Position and Board Misalignment Share Blame with CEO
With Verizon’s acquisition of Yahoo, the business media are having a field day deconstructing Marissa Mayer’s tenure as CEO, questioning her leadership, her acquisitions and the decisions that she made.
While it’s clear that Ms. Mayer was unable to reverse Yahoo’s downward trajectory, all this commentary seems to ignore the fact that Ms. Mayer followed four other CEOs – including a returned founder -- who were no better able to resuscitate the internet icon. So while Ms. Mayer gets no credit (though she does get a nice exit), I don’t believe she can fairly carry all the blame.
Which playing field?
Yahoo’s troubles began long before Ms. Mayer was even a gleam in the Board’s eye. Having literally created the consumer internet as we know it, Yahoo had lost its sense of purpose. While it still owned a collection of valuable sub-brands, notably in finance and sports, these properties did not add up to a powerful brand that meant more than the sum of their parts. The game had moved on. Facebook, Google and Instagram overtook Yahoo’s relationships and ran off with their ad revenues. Social, mobile, music, commerce, content: Yahoo didn’t seem to have the right equipment. It was easy to see all the areas where Yahoo wasn’t really able to compete. But Yahoo never decided where it was going to play or how. So the board never zeroed in on what they wanted their new CEO to do for the company or what strengths they had to bring to game.
The Board and Strategic Vision
Having served on any number of search committees in the course of my career, I can attest that successful searches start with two indispensable things: clarity and coherence. If the board itself is not united around a clear vision for the future of the company – the world it will live in and its place in that world – how can they even begin to set criteria for the kind of leader they are looking for? Now, at the time of the search that led to Marissa Mayer’s selection as CEO, Yahoo’s board was rather publicly disunited: They had no clear consensus on where they saw the company going, or agreement on the kind of individual whose experience and temperament could take the company in a winning direction.
If the board itself is not united around a clear vision for the future of the company – the world it will live in and its place in that world – how can they even begin to set criteria for the kind of leader they are looking for?
When the way forward isn’t clear, the Board needs first and foremost to select a CEO who brings the strategic clarity and leadership chops to choose the path and rally the company to follow it. But Yahoo’s Board did not do that. They chose instead an executive who had achieved success within a company known (at least at the time) for laser-like focus. Talented as Mayer is, brilliant as her achievement at Google may have been, she had not really displayed any evidence of the larger strategic vision that could carve a new, winning path for Yahoo. So with a charge to put the core business back in the game, but no clear vision on anyone’s part about which game, exactly, Yahoo should play, Ms. Mayer set about tinkering at the margins: acquiring interesting companies that would seem to shore up areas in sexy sectors where Yahoo wasn’t strong; encouraging employees to propose their exciting ideas for new services or businesses for Yahoo customers. [There was no animating idea about what the Yahoo brand should stand for](http:// http://www.foxbusiness.com/features/2016/07/26/rip-yahoo-why-marissa-mayer-failed.html) or where the company should put its resources, just a sense that lots of exciting activities and new creative thinking would bubble up some great new plays.
According to Gizmodo, she acquired more than 50 companies and spent more than $50 billion The Board, was her enabler. Unclear about where the company should be going, they authorized those initiatives, possibly hoping that a few of them would win big and in so doing, indicate an exciting new direction for the company to follow. But those acquisitions and ideas, unattached as they were to a clear and coherent competitive strategy, underpinning a distinctive and compelling brand value proposition, could never give Yahoo the clout to change the game. And so the company was left scrambling to compete on the (very un-level) playing fields of others.
The three questions every Board and CEO should ask
No strategy is fool proof. And strategies can be wrong. But unless it is very very lucky – and its competitors very very unlucky -- no company can turn itself around from the kind of decline afflicting Yahoo without a focused strategy and a crystal clear vision for its brand. When a company brings in a CEO to turn things around, the board and the CEO must ask and answer these three questions:
- What game are going to play?
- Is this game worth playing?
- How will we win?
So while Marissa Mayer didn’t restore Yahoo to greatness, she doesn’t deserve all the blame for failing to do so. No one at Yahoo was dressed to play.