AOL (TWX): How To Fix AOL, Part 1: Boost Morale


The smart money says it doesn’t matter what Time Warner’s AOL does next–because it’s toast.  We have sympathy for that view: Messrs Falco and Grant and the remaining 8,000 other AOLers have their work cut out for them. On the other hand, you have to try.  And given that we saw such an amazing outpouring of sentiment, info, and analysis from worldwide AOLers and ex-AOLers about the layoffs, it’s time to solicit their help in fixing the company.

We have some thoughts, which we’ll post in a series of notes.  We’ll also post other suggestions as we get them (please post in comments or send to [email protected]).  And at the end of the exercise, we’ll package the whole thing up and zip it over to Rockefeller centre–free, user-generated consulting content that AOL would otherwise have to pay McKinsey millions for.

Our first suggestion is below: Begin to rebuild trust and morale…   (And here’s our second:  Pick one content head)

From what we’ve heard, senior management’s first priority should to persuade AOLers that:

  1. senior management will be completely straight about AOL’s predicament,
  2. senior management understands that AOLers have been through hell, 
  3. senior management is going to eat, sleep, and breathe AOL until the company is on track again–including outworking everyone else in the building (preferably the Dulles building, at least until the NY move)
  4. senior management is going to reward employees on current merit and contribution
  5. senior management is open-minded and eager to listen.

The good news: We believe senior management understands this, and has embarked on a series of small group meetings to begin the process.  One of these meetings took place in New York on Monday, with AOL’s senior programming and advertising VPs and SVPs.  In the meeting, President Randy Falco and COO Ron Grant explained how they had gotten to where they were, why the layoffs were necessary, and what the strategy was, and then took questions.  The feedback about this meeting has not been uniformly positive, especially with respect to Grant, but it was certainly a step in the right direction.  We believe Randy Falco is conducting a series of similar meetings this week. 

We believe Falco, especially, understands how important this effort is, and we will leave it to him (and our readers) to figure out how to win back the trust of AOLers.  Based on what we’ve heard, however, we do have one specific suggestion: We think Falco should move COO Grant into a less public strategy role and appoint a new Chief Operating Officer.

Grant is clearly sharp and clearly “gets” the Internet, so it’s obvious why Falco values having him around.  Unfortunately, the impression we get is that AOLers have little respect for him: Some feel he hasn’t been straight; some feel he has little interest in and/or facility for dealing with people; some feel he has rinsed his hands of every bad decision made in his former AOL life; Some feel he is arrogant to a fault; and so on. 

There’s often a place for hard-arse, my-way-or-highway management–for example, in an arrogant company resting on laurels.  Although some AOLers may be just punching the clock, however, we don’t get the impression they’re arrogant.  Rather, we get the impression that they’re shell-shocked.  And we therefore feel that the company would benefit from a more paternal leader–a”relationship guy” (or gal) who listens patiently, explains patiently, expects and rewards excellence, and can gradually rebuild the company into a motivated, cohesive team. 

It’s possible that Falco himself could play that role, but it won’t work if there’s someone in the middle.  A decade or more of true Internet expertise would also help.  We therefore think an internal promotion or external hire would fit the bill. (Tacoda’s Dave Morgan, perhaps?) 

Moving Grant to a strategy role would also accomplish a few other things: It would break apart the “Smithers & Burns” dynamic; it would create a fall guy for the near-universal outrage about the way the layoffs were handled; it would establish Falco’s leadership; and it would demonstrate that senior management is listening.

See Also: How To Fix AOL, 2: Pick One Head of Content Instead of Three