Yahoo: Head Winds, Bold Moves…and Jettisoning Fuel

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Tough times at Yahoo.  Yesterday’s revenue outlook cites "head winds" as Yahoo continues to try to reinvent itself and compete with the Google juggernaut.

Today’s Wall Street Journal cites "investor impatience" and the Street’s hackneyed call "for Yahoo’s management to take bold steps, like staff reductions."  (Emphasis mine.) 

Bold steps are, indeed, called for.  But staff reductions are not a bold step: on the contrary, they are a tacit admission that management has been too timid, historically, or that attempts to be bold have failed.  Yahoo’s announced reductions may be necessary, yes — better to jettison fuel than crash. But bold?  Not to my thinking.

For comparison, I joined Hewlett-Packard within a few weeks of Mark Hurd joining as C.E.O., and I ran employee communications for one of HP’s three business units (which happened to employ 2/3rds of HP’s employees) for two years prior to leaving HP.  Mark rolled out a comprehensive turnaround plan within a few months of his arrival.  And yes, a substantial staff reduction was part of that plan.  But Mark underscored that the cuts were an unfortunate consequence of past under performance, and a necessity that had to be undertaken in order to fund a number of bold moves that would turn the company around. 

Almost three years since Hurd took over, HP’s performance speaks for itself.  And it’s worth noting that he brought employees along on the journey, driving up employee engagement and satisfaction during a time of massive change and upheaval.  Hurd kept "communicating with employees" near the top of a long list of priorities.

Hopefully Yahoo understands all of this.  Is management communicating with speed, transparency and brutal honesty?  Are they breaking down barriers and silos and rewarding contribution?  Are they encouraging risks, and discouraging ego-centric behavior?  Is management itself truly aligned around a clear vision and set of goals?

Jettisoning fuel may very well be necessary for Yahoo today.  But moving forward, a truly bold plan will aspire to prevent such dire measures from ever being needed again.  There’s nothing like an engaged and passionate workforce to raise a company to new heights.

David Bailey