We love this sort of story: A company is in trouble. A charismatic leader swoops in. He or she makes big changes, and while people resist at first, they come around. Losses turn to profits. Profits turn to industry leadership. A troubled company is saved.
It’s a great tale, but this “great man/woman” theory of change is pretty rare in real life, notes Nicholas Carlson in his new book, Marissa Mayer and the Fight to Save Yahoo!. “It’s doubtful whether anyone could save the company given its massive issues,” he tells me. Indeed, sometimes the narrative desire for a grand hero keeps troubled companies from seeing what options do exist.
For those who weren’t paying attention in the mid-1990s, Yahoo was one of the first internet portals. While you don’t hear about many other companies from that era anymore (Netscape, Earthlink), Yahoo was so big and served such a need that it survived through the first dot-com crash. Emerging on the other side, the leadership realized it needed to compete with new internet companies such as Google and then Facebook. It has struggled ever since.
In many executive and company profiles, narrative structure requires portraying past leaders as fatally flawed (in contrast to the current hero). Carlson doesn’t succumb to this temptation. Yahoo has had a series of talented leaders. Mayer is one of them. In her late 30s, and pregnant with her first child when she took the CEO job in 2012, she was known as a Silicon Valley golden girl.
She was so different from the mold that there were hopes she could shake things up like another grand Silicon Valley story: “Can she do what Steve Jobs did at Apple?” as Carlson puts it. “She was going to take this company by the lapels and use her energy and her brilliance and reshape it as best she could.”
She did reshape many things. The more negative moves get the press (ending telecommuting, and instituting what was basically a forced-ranking system for employees). But she made positive changes too. She came in that first day and had her computer set up to code–showing a bit of solidarity with the engineers.
She instituted town halls where management thinking could be explained and critiqued. She accelerated new product launches so they might take weeks, not 18 months. Though she took a mere two weeks off when she had her son, she extended Yahoo’s paid parental leave significantly. She even got the bathrooms redone to solve a design flaw where people could sometimes see the person sitting in the stall next to them.
In a perfect story, any of these could have been turning points. This new leader is serious. She is moving fast and breaking things. But there are two problems with this narrative.
First, Mayer, like all people, has strengths and weaknesses. Carlson notes that she’s been relatively weak at hiring executives. She throws big money at people who come to her, rather than those she’s sought out. She’s also chronically late, which is exasperating. “She’s so talented and so bright and so hard working, I’m just shocked someone of her dedication to professionalism and being a good employee doesn’t zero in on this one thing and knock it out,” says Carlson.
Second, and more fundamentally, “one person can’t just grab a company by the lapels, tap into the code base, and fix Yahoo by themselves,” Carlson says. Institutions are complicated. The market is complex, and Yahoo has fundamental problems competing in a different world than it was designed for. Leaders like to be splashy, and boards like that too. “You hire a splashy person to make splashy moves,” says Carlson, but “turn-arounds in general are just super hard.” Indeed, Steve Jobs may be one of the few people to actually succeed at this. Anyone tempted to think they can pull it off too should “Look at yourself in the mirror. Are you Steve Jobs?”
What can work is if a leader takes a more incremental approach. “Look at what is healthy, what is working, and double down on that,” says Carlson. He cites the example of AOL. In past years, to much fanfare, the company aimed to focus on local news, to “fill one of the last remaining white spaces on the internet.” That’s a splashy move, and it was pretty much a failure.
More recently, AOL has focused on such pedestrian things as the size of banner ads. People aren’t going to write glowing stories about that, but such tweaks can bring in cash and help a company maintain itself as a second or third player in a market. Leaders don’t like to settle for second or third. But sometimes that’s what saving a company really requires.