Friday, November 24, 2006

A Mid-life Crisis for Yahoo! - and a wake-up call for the world of Business!

Serious lessons for everyone with an interest in how businesses are run.

One of the more sensational developments in the world of technology and business last week has been the leaking of the internal memo in which Yahoo Senior VP Brad Garlinghouse accuses the company, among other things, of spreading its talent too thin and trying to follow every innovation on the Web, rather than focusing on its strengths.

Yahoo, on it's part, must be commended for promptly acknowledging and responding very appropriately: CEO Terry Semel said that the company is narrowing its focus on boosting search and graphical ad sales and on prioritizing social media, video and mobile.

My first reaction to reading about this memo was, Gosh, How on earth did such an explosive memo leak to the outside world? I think that's a question Yahoo should ask as part of the soul-searching that has clearly been initiated by this event.

My second thought was, Welcome to the real world! To understand what I mean, just read the excerpts I've taken from the memo below and ask, how many of these could apply to companies anywhere - in any industry, in any country,..?

"We want to do everything and be everything -- to everyone. about it incessantly, but do nothing to fundamentally address it. We are scared to be left out. We are reactive. We are separated into silos that don't talk to each other. And when we do talk, it isn't to collaborate on a clearly focused strategy, but rather to argue and fight about ownership, strategies and tactics".

"Massive redundancy that exists throughout the organization. We now operate in an organizational structure -- admittedly created with the best of intentions -- that has become overly bureaucratic".

"Product, marketing, engineering, corporate strategy, financial operations... there are so many people in charge (or believe that they are in charge) that it's not clear if anyone is in charge".

"We are held hostage by our analysis paralysis".

"Our compensation systems don't align to our overall success. Weak performers that have been around for years are rewarded. And many of our top performers aren't adequately recognized for their efforts".

In all the rash of comment this memo has generated, I didn't see anyone picking up on this thread - that we must resist the temptation to lambast Yahoo for suffering these problems, and instead ask, why does such apparently dysfunctional behavior exist in most companies?

I am not for a moment saying that Yahoo mustn't take this situation seriously. They must do their soul-searching. What I am saying is that, the rest of us should see the wider issues this memo has brought out: namely, do businesses have to be this way, and what can the rest of the world of business learn from these revelations about how to run companies better?