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Turning around a ship as big as Yahoo is going to take a long time, but new CEO Marissa Mayer is already off to a good start. (See my commentary on CNBC from yesterday.)
Although her moves so far are largely symbolic — removing the company’s stock price from the home page of the company’s intranet, making meals free, and introducing weekly meetings with leadership — symbolism is important. Tiny details add up to a company’s culture and provide indicators to both insiders and outsiders about what’s important to a company.
Mayer’s moves indicate a desire to be a company that wants to be collaborative and innovative, that values the time of its employees.
The first moves an executive makes provide important insight. When NBC’s Randy Falco became CEO of Aol, one of the first things he did was install physical barriers with restricted access keycards to keep rank-and-file employees away from the executive suite. He also redirected the company’s corporate shuttle that flew between New York and Washington D.C. to fly to and from an airport closer to his house. The message was clear: I’m more important than you.
No one is going to join Yahoo because it offers free lunch. But some might choose not to go if it didn’t. It’s not because of the economic value of lunch, it’s because of what charging for lunch represents. It means that the bean counters are in charge. For a rapidly growing tech company, the cost of offering meals to employees should be so insignificant relative to the value that they create that it never even merits discussion at the management level. (Square gets a free pass here because the point of charging for lunch is not the money, it’s about ensuring that employees experience what they create.) It should also ease the transition for Googlers who decide to defect.
I worked at Tellme shortly after it was acquired by Microsoft. Tellme had a history of offering the most delicious cookies I’ve ever eaten. One day an email came down from Microsoft’s food services that the Tellme cookies were more expensive than the cookies that Microsoft could get from the suppliers they used for the Silicon Valley campus. We could either choose to get the free Microsoft cookies or pay a small amount to cover the cookie gap. This started many days of discussions on internal listservs, including a poem that talked about how Microsoft was taking away our buttery goodness because of its generous health plan. In the end, an anonymous Tellme exec covered the difference. But it was a clear sign the culture was changing.
When I visit companies, I notice little details. I notice whether they charge for coffee. I notice whether the CEO sits on the floor with employees or is secluded in a far-removed office. I notice that PayPal doesn’t seem to use PayPal software at its cafe.
I rarely call out such details. But they do help form my overall impression of a company.
Removing the stock price from the internal home page is even more significant. I’ve long said that you can’t innovate when you’re focused on quarterly returns. The best innovation — think iPad and iPhone — take many quarters of expenses before they show any return. Yahoo employees need to be focused on building great products, not each tick. If Mayer’s going to replace it with anything, I recommend load time of Yahoo pages. They just feel much slower than Google.
Yahoo still has a lot of assets. About three-quarters of the U.S. Internet audience visits Yahoo sites at least once a month, according to comScore. Only Google and Microsoft do better on this metric. (Facebook has slightly fewer users, but they spend much more time on the site.)
Yahoo has some great properties. Yahoo Finance is still one of the best finance sites. (Nearly 3 months after Facebook’s IPO, Google Finance still has its market cap wrong.) Fantasy football remains a major draw. I’m a big fan of IntoNow, which Yahoo acquired earlier this year. Although few people use that product, it’s an innovative entry into a nascent space. And it might not be too late to resuscitate Flickr.
Mayer does have one challenge that Page at Google and Zuckerberg at Facebook don’t have: She doesn’t have supervoting control of Yahoo. Page and Zuck can, if they choose, ignore Wall Street. Yahoo still has to deal with activist shareholders.
But maybe, after the previous administrations, those shareholders will realize that Yahoo can’t cut its way (Bartz) or troll its way (Thompson) to success. Yahoo’s success will come from product and innovation. And I can’t think of a better person to get the company on that track than Mayer.