Yahoo chairman Roy Bostock’s plan was to name a new CEO before 2009. Hasn’t happened yet and there’s only a week to go, so we’re prepared to be shocked — shocked! — that Yahoo might take more time to make its decision than originally anticipated.
But in case you are the leading candidate for the job — despite, perhaps, only joining Yahoo’s board this fall — you’ll want to be prepared if the chairman and his pal on the board Gary Wilson do call you up for an interview between now and the New Year.
Lucky for you (and we do mean you, former Nextel Partners CEO John Chapple), Ironfire capital manager Eric Jackson — who finally sold his hedge fund’s stake in Yahoo (YHOO) last fall but still has plenty of sources at the company — just wrote an article titled “Reasons Behind Yahoo!’s Four-Year Slump” for TheStreet.com.
We’ve edited down to four reasons for Yahoo’s four-year slump, in bulletpoints below:
- Lack of Product Leadership: “From Yahoo!’s founding, the company has had its fingers in a lot of pies. Through Bubble 1.0 and Bubble 2.0, the Yahoo! M&A machine was always humming to suck up venture-backed firms at healthy valuations. Integrating them cohesively was a different story and left a string of disparate businesses under the Yahoo! roof.”
- Self-Isolated Leadership: “Executives often didn’t engage in detailed discussions with lower-level managers responsible for areas that were under-performing. “I would have liked to talk to them more,” said one ex-Yahoo!. “I had one good conversation with [one Yahoo! executive] and one good one with [another executive] in [the last few years]. That’s it. I know others tried to educate them on the issues. Nothing came of it. One group that Yahoo! executives were not shy about consulting in the last four years: the consultants. “There were way too many consultants and too many planning sessions. We needed more execution,” said a former employee.”
- Tolerating a Non-Performance Culture: Over time, it appears most employees stopped pushing for the changes they wanted to see. When they tried and it fell on deaf ears, they backed down. “I think a lot of people also knew they wouldn’t get similar jobs elsewhere and decided to keep quiet.” The tone got set from the top, and it trickled down to permeate the organisation.
- Matrix Organizational Structure: One of the recommendations that Yahoo!’s consultants made a few years ago was to institute a so-called matrix organizational structure across the company. A matrix structure seeks to overcome the complexity of a large global organisation by assigning multiple bosses to employees in different geographies working on similar product or functional tasks. In other words, you report up to two or more bosses — a product or functional boss and a geographical boss. They create confusion about who is responsible for certain actions. The “shared” ownership of tasks and projects across multiple groups and bosses means that it’s difficult to go back and assign blame for and learn from failures.