There are a few qualities that typify organizations that experience constant changes in their leadership:
- Insecurity
- Lack of Discipline
- Lack of Resilience
- Lack of Continuity
- Short-term Focus
- And, above all: a track record of losing
Consider two once proud organizations in completely different worlds who have become the butt of jokes and the symbols of lost glory for their respective industries:
The Cleveland Browns
- 8 Head Coaches since 2004 (including interim HC's)
- During that time, the longest tenure of any Head Coach was 4 seasons (Romeo Crennel: 2005 - 2008)
- Poor performance
- Bad bets on high-profile talent
Yahoo!
- 6 CEO's since 2007 (including interim CEO's)
- During that time, the longest tenure of any CEO is less than 4 years (Marissa Mayer: July 2012 - present)
- Poor performance
- Bad bets on high-profile talent
For both organizations, the big new idea is to try the same old idea: more change. While the Browns have yet another new Head Coach and new Quarterback, the push for changes buffeting Yahoo! are far more ominous.
After months of agitation, an activist investment group has announced to the world its intention to trigger a proxy fight, replace Yahoo!'s board of directors with nine of its own handpicked candidates, and subsequently remove Yahoo!'s leadership team. The goal of this takeover bid? From the letter to Yahoo!'s shareholders:
We believe that Yahoo is deeply undervalued and opportunities exist within the control of management and the Board of Directors (the "Board") to unlock significant value for the benefit of all shareholders.
This isn't an analysis coming from executives experienced at running either tech companies or media companies ... or leading the people at any company for that matter. No, this attempt to takeover Yahoo! and force a new strategic direction upon Yahoo!'s employees and users is coming from a small group of New York investment wizards at Starboard Value LP. Here's how they describe themselves:
Starboard Value LP is a New York-based investment adviser with a focused and fundamental approach to investing in publicly traded U.S. companies. Starboard invests in deeply undervalued companies and actively engages with management teams and boards of directors to identify and execute on opportunities to unlock value for the benefit of all shareholders.
Starboard's principals have managed investments in this manner since 2002.
To the Billionaire Boys Club attempting this maneuver, Yahoo! isn't a group of people working on a mission to provide another group of people products and services they find valuable. To Starboard, Yahoo! is just another label for a set of numbers which their formulas say can be increased by changing other numbers in other cells on their Spreadsheet of Answers. If you think that is too judgmental, no problem: read Starboard's first letter to Mayer from 2014 and judge for yourself.
Now, I'm not saying current CEO Marissa Mayer is doing a great job and actually can lead Yahoo! back to being a successful organization. Stories like this about Mayer's tenure at Yahoo! exhibit the tired, hollow, cynical approach to leading that is all too common among corporate boardrooms:
Ms. Mayer has steadfastly refused to use the word "layoff" to describe the thousands of jobs eliminated since she joined the company. She even forbade her managers from uttering what she called "the L-word," instructing them to use the term "remix" instead.
The lawsuit comes as Yahoo morale hits new lows. More than one-third of the company's work force has left voluntarily or involuntarily over the last year.
...
At Yahoo, the program, known internally as Q.P.R., has been a sore spot among managers and employees since it began. The court filing said that managers were forced to give poor rankings to a certain percentage of their team, regardless of actual performance. Ratings given by front-line managers were arbitrarily changed by higher-level executives who often had no direct knowledge of the employee's work.
That said, color me extremely skeptical that the coup being instituted by the spreadsheet jockeys at a New York investment firm will cure what ails Yahoo!. One can't help but wonder if actually fixing Yahoo! is even the goal. Remember this: a proxy takeover of the board of directors by an activist investor is how Mayer became CEO in the first place. A year later, the activist investor and the directors he put in place withdrew from the company's leadership structure. Upon doing so, Dan Loeb and his hedge fund, Third Point, sold 2/3 of their stock back to Yahoo! to the tune of about $1 Billion in net gain. And yet, here Yahoo! is, with the same problems and staring at the same solution once again.
Funny that.
Go Browns!
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