Yahoo Exec Releases Jerry Maguire-Style Reform Memo

Over the weekend, an email from Yahoo senior vice president Brad Garlinghouse
was
released
by the Wall Street Journal
covering how Garlinghouse fears Yahoo’s resources are spread too thinly (like
peanut butter on a sandwich) and that massive reforms, along with firings, are
needed. Some excerpts:

I proudly bleed purple and, yellow everyday! And like so many people here,
I love this company

But all is not well. Last Thursday’s NY Times article was a blessing in the
disguise of a painful public flogging. While it lacked accurate details, its
conclusions rang true, and thus was a much needed wake up call. But also a
call to action. A clear statement with which I, and far too many Yahoo’s,
agreed. And thankfully a reminder. A reminder that the measure of any person
is not in how many times he or she falls down – but rather the spirit and
resolve used to get back up. The same is now true of our Company.

It’s time for us to get back up….

We lack a focused, cohesive vision for our company. We want to do
everything and be everything — to everyone. We’ve known this for years, talk
about it incessantly, but do nothing to fundamentally address it. We are
scared to be left out. We are reactive instead of charting an unwavering
course. We are separated into silos that far too frequently don’t talk to each
other. And when we do talk, it isn’t to collaborate on a clearly focused
strategy, but rather to argue and fight about ownership, strategies and
tactics.

Our inclination and proclivity to repeatedly hire leaders from outside the
company results in disparate visions of what winning looks like — rather than
a leadership team rallying around a single cohesive strategy.

I’ve heard our strategy described as spreading peanut butter across the
myriad opportunities that continue to evolve in the online world. The result:
a thin layer of investment spread across everything we do and thus we focus on
nothing in particular.

I hate peanut butter. We all should….

We lack clarity of ownership and accountability. The most painful
manifestation of this is the massive redundancy that exists throughout the
organization. We now operate in an organizational structure — admittedly
created with the best of intentions — that has become overly bureaucratic.
For far too many employees, there is another person with dramatically similar
and overlapping responsibilities. This slows us down and burdens the company
with unnecessary costs.

Equally problematic, at what point in the organization does someone really
OWN the success of their product or service or feature? Product, marketing,
engineering, corporate strategy, financial operations… there are so many
people in charge (or believe that they are in charge) that it’s not clear if
anyone is in charge. This forces decisions to be pushed up – rather than down.
It forces decisions by committee or consensus and discourages the innovators
from breaking the mold… thinking outside the box….

We lack decisiveness. Combine a lack of focus with unclear
ownership, and the result is that decisions are either not made or are made
when it is already too late. Without a clear and focused vision, and without
complete clarity of ownership, we lack a macro perspective to guide our
decisions and visibility into who should make those decisions. We are
repeatedly stymied by challenging and hairy decisions. We are held hostage by
our analysis paralysis.

We end up with competing (or redundant) initiatives and synergistic
opportunities living in the different silos of our company.

• YME vs. Musicmatch

• Flickr vs. Photos

• YMG video vs. Search video

• Deli.cio.us vs. myweb….

We have lost our passion to win. Far too many employees are "phoning" it
in, lacking the passion and commitment to be a part of the solution. We sit
idly by while — at all levels — employees are enabled to "hang around".
Where is the accountability? Moreover, our compensation systems don’t align to
our overall success. Weak performers that have been around for years are
rewarded. And many of our top performers aren’t adequately recognized for
their efforts.

As a result, the employees that we really need to stay (leaders,
risk-takers, innovators, passionate) become discouraged and leave.
Unfortunately many who opt to stay are not the ones who will lead us through
the dramatic change that is needed….

There are three pillars to my plan:

1. Focus the vision.

2. Restore accountability and clarity of ownership.

3. Execute a radical reorganization….

1. Focus the vision

a) We need to boldly and definitively declare what we are and what we are
not.

b) We need to exit (sell?) non core businesses and eliminate duplicative
projects and businesses….

2. Restore accountability and clarity of ownership

a) Existing business owners must be held accountable for where we find
ourselves today — heads must roll,

b) We must thoughtfully create senior roles that have holistic
accountability for a particular line of business (a variant of a GM structure
that will work with Yahoo!’s new focus)

c) We must redesign our performance and incentive systems….

3. Execute a radical reorganization

a) The current business unit structure must go away.

b) We must dramatically decentralize and eliminate as much of the matrix as
possible.

c) We must reduce our headcount by 15-20%.

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