“What Happened When Marissa Mayers Tried To Be Steve Jobs”Posted: December 18, 2014
This article, by Nicholas Carlson in the upcoming NY Times magazine, is one of the best business articles I’ve ever read (note: I don’t read that many business articles).
Here’s where the story really begins:
But as Alibaba’s stock soared, Yahoo’s dropped, an indication that the market seemed to concur with Jackson’s analysis: Yahoo’s core business was worth less than zero dollars.
That’s bad. Next sentences:
A week later, Smith published an open letter calling for Yahoo to divest itself of its Alibaba assets, return the money to its shareholders and then merge with AOL. Redundancies could be eliminated, thousands of people could be fired and two former Internet superpowers would be downsized into a single and steady (if uninspiring) entity that sold ads against its collective online properties — news, blogs and Web products like email, maps and weather. “We trust the board and management will do the right thing for shareholders, even if this may mean accepting AOL as the surviving entity,” Smith wrote.
(Note that “could be fired” — non-business readers like me often gotta remind themselves that in business articles it’s often assumed that firing people is positive.)
The article goes on with punchy, succinct, clear explanations the challenges of tech companies, and specifically the challenge Mayers faced, and I don’t envy her:
Previous Yahoo C.E.O.s had underinvested in mobile-app development, plowing money into advertising technology and web tools instead. A couple of days into the job, Mayer was having lunch at URL’s when an employee walked up to her and introduced himself as Tony. “I’m a mobile engineer,” Tony said. “I’m on the mobile team.”
Mayer responded to Tony, “Great, how big is our mobile team?” After some back and forth, Tony replied that there were “maybe 60” engineers. Mayer was dumbfounded. Facebook, for instance, had a couple of thousand people working on mobile. When she queried the engineering management department, it responded that Yahoo had roughly 100. “Like an actual hundred,” Mayer responded, “or like 60 rounded up to 100 to make me feel better?” The department responded that it was more like 60.
But then it starts to unravel:
Mayer subsequently immersed herself in the redesign. Months into her tenure, she was meeting with Sharma’s team regularly in a conference room that started to look more like a design studio: projectors hung from the ceiling, rendering screens displayed on the wall. All around, dozens of foam core boards were pinned with ideas. Mayer would regularly interrogate designers about the minutest details of display and user experience. By early December, one day before Yahoo Mail was set to release, she convened a meeting at Phish Food, a conference room in the executive building of Yahoo’s campus, to talk about the product’s color. For months, the team had settled on blue and gray. If users were going to read emails on their phones all day long, the thinking went, it was best to choose the most subtly contrasting hues. But now, Mayer explained, she wanted to change the colors to various shades of purple, which she believed better suited Yahoo’s brand.
Well, see, purple sucks? More great detail:
During a breakfast with Anna Wintour, the editor in chief of Vogue, Mayer asked if there might be any partnership opportunities between the magazine and Shine, Yahoo’s site for women. According to Mayer’s own telling of the story to top Yahoo executives, Wintour lookedappalled.
I bet she did!
Bad to worse:
Yahoo Tech would sometimes go weeks without running a single ad.
Don’t know much about this, but that sounds terrible.
This delinquency eventually became a problem outside Yahoo. At a major advertising event in the South of France, Mayer sat for an interview with Martin Sorrell, the C.E.O. of WPP, one of the world’s largest agencies. In front of a filled auditorium, Sorrell asked Mayer why she did not return his emails. Sheryl Sandberg, he said, always got back to him. Later, Mayer was scheduled for dinner with executives from the ad agency IPG. The 8:30 p.m. meal was inconvenient for the firm’s C.E.O., Michael Roth, but he shuffled his calendar so he could accommodate it. Mayer didn’t show up until 10.
Fuck that. Worse:
Mayer’s largest management problem, however, related to the start-up culture she had tried to instill. Early on, she banned working from home. This policy affected only 164 employees, but it was initiated months after she constructed an elaborate nursery in her office suite so that her son, Macallister, and his nanny could accompany her to work each day. Mayer also favored a system of quarterly performance reviews, or Q.P.R.s, that required every Yahoo employee, on every team, be ranked from 1 to 5. The system was meant to encourage hard work and weed out underperformers, but it soon produced the exact opposite. Because only so many 4s and 5s could be allotted, talented people no longer wanted to work together; strategic goals were sacrificed, as employees did not want to change projects and leave themselves open to a lower score.
This got ugly:
During the revamping of Yahoo Mail, for instance, Kathy Savitt, the C.M.O., noted that Vivek Sharma was bothering her. “He just annoys me,” she said during the meeting. “I don’t want to be around him.” Sharma’s rating was reduced. Shortly after Yahoo Mail went live, he departed for Disney. (Savitt disputes this account.)
Then this part is deeply weird:
As concerns with Q.P.R.s escalated, employees asked if an entire F.Y.I. could be devoted to anonymous questions on the topic. One November afternoon, Mayer took the stage at URL’s as hundreds of Yahoo employees packed the cafeteria. Mayer explained that she had sifted through the various questions on the internal network, but she wanted to begin instead with something else. Mayer composed herself and began reading from a book, “Bobbie Had a Nickel,” about a little boy who gets a nickel and considers all the ways he can spend it.
“Bobbie had a nickel all his very own,” Mayer read. “Should he buy some candy or an ice cream cone?”
Mayer paused to show everyone the illustrations of a little boy in red hair and blue shorts choosing between ice cream and candy. “Should he buy a bubble pipe?” she continued. “Or a boat of wood?” At the end of the book, Bobby decides to spend his nickel on a carousel ride. Mayer would later explain that the book symbolized how much she valued her roving experiences thus far at Yahoo. But few in the room seemed to understand the connection.
Strange. But man, what great writing in this article.
Let’s give the last word to Aswath Damodaran:
Aswath Damodaran, a professor at N.Y.U.’s Stern School of Business, has long argued about the danger of companies that try to return to the growth stage of their life cycle. These technology companies, he said, are run by people afflicted with something he calls the Steve Jobs syndrome. “We have created an incentive structure where C.E.O.s want to be stars,” Damodaran explained. “To be a star, you’ve got to be the next Steve Jobs — somebody who has actually grown a company to be a massive, large-market cap company.” But, he went on, “it’s extremely dangerous at companies when you focus on the exception rather than the rule.” He pointed out that “for every Apple, there are a hundred companies that tried to do what Apple did and fell flat on their faces.”