THE YAHOO LESSON: LINE UP YOUR DUCKS AND CONTROL THE DIALOGUE

Posted in Anticipation, Business Crises of our own making, poor succession planning creates concern, succession planning avoids a crisis, YAHOO fires its top exec on September 8th, 2011 by mnayor

On September 6TH Yahoo fired its CEO Carol Bartz after 2 ½ years of lackluster performance.

The firing was done abruptly over the phone and Bartz immediately controlled the dialogue by emailing the story to all Yahoo employees. Yahoo announced that its current CFO, Tim Morse, would be interim CEO.

What’s wrong with this picture? Plenty!

First, as a very visible public company, you try to do things with class.

Second, before you take significant action, you have a plan. In this case, either a solid succession plan with a new CEO waiting in the wings; or a takeover or a restructuring or other dramatic announcement. This current action feels like it is adrift in the middle of nowhere, adding to the perception that Yahoo is essentially rudderless and is floundering.

Third, if all else fails, at least control the dialogue. Make the announcement, explain the need for the company to get back in the ball game, relate what it is it wants to accomplish, thank the fired CEO for her efforts on behalf of the Company, express a long-term vision and state you are looking forward to the future.

Although Yahoo’s Board is probably congratulating itself on the stock surge that resulted from the firing, that little boost may be short-lived. The fact is that Yahoo is behind the times and needs to play catch-up. It has failed to cater to the new digital world of social networks, video creation, mobile apps and smart phone screens. Once investors realize that Yahoo has to do more than fire someone, its stock price will settle back down. To take over, or be taken over, or mount a monumental internal surge – that is the question. An executive looking for an extraordinarily interesting challenge should not be impossible to find.

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