On July 16, Yahoo announced that they hired 37-year-old Marissa Mayer, a former Google Vice President (VP), as the new Chief Executive Officer (CEO) to turnaround the company. A little over a month later Mayer hired a new Chief Marketing Officer (CMO), which should not be surprising. How she did it tells us a lot about her management capabilities and about Yahoo’s Board of Directors.
Often a change in direction for a company will require new leadership in key management positions. Anyone who doesn’t know their job is in jeopardy when a new CEO walks in the door is kidding themselves. Sometimes a new CEO will ask for the top management to resign. Sometimes a new CEO will just give the old management team a severance package. Sometimes a CEO will take six months to get to know the company and then make changes. All these options a part of nominal business operations.
However, Mayer reportedly fired Mollie Spillman, her old CMO 1) by phone, 2) while she was on vacation, and 3) ten minutes before Yahoo’s official announcement that the new CMO would be Kathy Savitt.
Wow. Apparently, Mayer like burning all her bridges before she blows them up.
It’s important to note that Mayer’s age and/or gender are not at issue. Man or woman, old or young, what Mayer did was ethically questionable and has far reaching implications for Yahoo. Her slam-bam-you’re-fired-ma’am stunt is worthy of analysis for what it says about Mayer, Yahoo, and management-by-intimidation.
Lesson 1: Mayer’s Questionable Ethics and Leadership
It doesn’t take guts to fire somebody. Firing someone is easy. Firing someone is a power trip. If you walk up to person on the street and say, “You’re Fired!,” it will probably only get you a confused stare followed by a laugh, but if you say, “You’re Fired!” at an underling employee, you have shown you are dominant and all powerful. To fire someone is a rush to the sadist.
Separating an employee from an organization with dignity and respect takes sensitivity, experience, and humility. It requires that the manager talks with (not at) the employee, and it requires the manager check their need for power at the door. Firing someone over the phone while they’re on vacation demonstrates a lack of experience and a lack of humanity.
In her defense, Mayer may have been reacting to another executive who left Yahoo one week before. It is possible that Mayer thought that Spillman might also leave and decided she would exercise a preemptive strike by replacing her before she could find another job. Still, that’s a weak reason to behave like a tree house club President.
Lesson 2: How to Destroy Morale
When the CEO trash-n-bashes an employee it sends a message to everyone else in the company: Time to look for another job. How can any employee at Yahoo avoid wondering if they will be fired the next time they’re on vacation? How can any manager at Yahoo not believe that Mayer’s questionable ethics is now the model they should be following?
Mayer did make a peace offering to her employees soon after she took over by offering free food to full-time employees and a free iPhone. But her offerings weren’t free. In return for free perks she put extreme pressure to perform. She pushed a new product up by months and gave the development team one week to prove it could be done. When the team came back a week later and said it couldn’t be done on the schedule she demanded she said she would find another team that could do it.
This shows the classic fatal error in management-by-intimidation (MBI): Failing to trust and listen to the people you have working for you. It may be great to tell the investor a tale of tough-love while scratching your balls and dining on the company’s dime, but it really means that the customer is going to get a rushed, half-baked product that shows how mediocre your organization can be when it comes to innovation. Don’t get me wrong, some people…okay most people, need to be pushed, but most people don’t like to work in a threatening environment.
This shows the classic fatal error in management-by-intimidation: Failing to trust and listen to the people you have working for you.
The result of MBI is that all your employees start looking for other employment options. The people with great ideas and skills are grabbed up by the competition and Yahoo will be left with the people who nobody else wants. Now you have an organization consisting of the worst performers.
Lesson 3: Yahoo’s Future is in Doubt
In the past five years it has averaged a new CEO each year. That says more about the Board of Directors than it does about the CEO’s. The problem is that there is no quick fix and it is likely that Mayer management style is being encouraged by dysfunctional leadership in the Board room. Yahoo needs positive, creative, loyal, and happy employees if the company is to dig its way out of the hole its in. Creating an environment of fearful, anxious, angry employees is guaranteed to keep them noncompetitive now and in the future.
Throwing money, free food, or free iPhones may appease employees temporarily, but people want and need to be valued and treated with respect. The moment an employee feels that their neck is on the line is the moment they are no longer have ownership in the company, and when employees don’t have ownership, they stop caring. Uncaring employees are saboteurs in an organization. Yahoo likely has almost 15,000 saboteurs with intimate knowledge of the company’s secrets, weaknesses, and plans. That doesn’t bode well for customer satisfaction, nor company stock price.
Lesson 4: Inexperience Does Not a Good Manager Make
Of the Fortune 500 club, Mayer is the youngest CEO. Publicly, she has been a celebrated rising star at Google since she joined as employee #20 in 1999, and was Google’s first female engineer. Privately, some accused her of being a glory-hound seeking attention and fame. Despite having no business degrees (her bachelor’s and master’s degrees from Stanford are in computer engineering specializing in artificial intelligence,) she rose through the company to be a Vice President.
It was appropriate for Yahoo to hire a young executive. There are many people under 40 who are wise beyond their age, or have solid experience in people and resource management; however, Mayer’s lack extensive executive management experience seems to be demonstrated in her immature behavior.
Bonus Lesson: Micromanagement – Slapping Your Team in the Face
It was reported last week that Mayer is now reviewing the candidates for every open position at Yahoo. That’s correct, Mayer is overseeing every potential new hire for every opening in a company of 15,000 employees. Nothing says you’re a ‘stupid ass’ to your management team quite like taking away their ability to choose who will work for them. If anyone at Yahoo didn’t know that they are valueless, Mayer and the Board of Directors have certainly removed all doubt.
Every business school should be studying Yahoo. Studying successful management is important, but studying an organization that is in a meltdown can teach future would be leaders why you can’t build up your organization by tearing apart your employees.