Thursday, September 8, 2011

Another Botched Corporate Transition

When Will They Ever Learn?
The news this week that Yahoo! CEO Carol Bartz was fired took me back to Mark Hurd's departure from HP last year. I used Mr. Hurd and the HP Board as an example in chapter 13,
Passing the Candle: Succession Planning, in my book, Camelot, Inc.: Leadership and Management Insights from King Arthur and the Round Table. While Yahoo! stock rose and HP stock dropped in the immediate aftermath, both actions left a leadership vacuum -- the Boards acted without naming a successor. Indeed, both companies didn't appear to have a succession mechanism nor was a search firm in place. I wrote, "Succession for executives and managers must not be left to chance; evaluation of internal and external talent, along with a predetermined, orderly process for transition, is required to help guarantee the organization's ongoing success."

In the case of Ms. Bartz, though, a number of other book chapters were violated such as chapter 8, Picking Your Battles: Navigating through Your Audience and Environment. It was a less than graceful exit when she sent an e-mail to 14,000 staffers saying, "I am very sad to tell you that I've just been fired over the phone by Yahoo's Chairman of the Board." In an interview with Fortune, she expanded her remarks by saying, "
These people f****ed me over."1 Will that help her to create trust in future relationships? Does that embody professionalism? And, in a blow to chapter 14, Destiny and Legacy: Making Your Personal and Professional Mark, is that how she wants to be remembered?

Of course, the Chairman, Roy Bostock, also trampled on chapter 8 as well as chapter 10, Realism and Idealism: Balancing Vision and Execution. The key take-aways are that one can't allow things to boil over and that important issues - no matter how awkward or uncomfortable - must be handled face-to-face. Ms. Bartz said she called him out on the cowardly handling of the termination by asking, "Why don't you have the balls to tell me yourself?"1

All of this begs the question of whether or not Ms. Bartz was the best choice when she was hired in 2009. In chapter 5, Creating a Round Table: Assembling the Right Team, the importance of vetting and fit - skills, personality, philosophy - are discussed. In an open letter, Yahoo! investor Daniel Loeb noted that Yahoo has cycled through four CEOs in four years. He said, "This board's failures have destroyed value for all Yahoo stakeholders." Ms. Bartz was brought in to turn around a struggling Yahoo! but mostly divested or shut down struggling units and shed employees. She "failed in that she could not build new growth engines for the company."2 And was her "take no prisoners" approach appropriate for Yahoo? As an outsider, I don't know but reports of poor relationships with Asian partners and a "proclivity for verbal gaffes" indicate that trouble probably started early on.3

So, Yahoo looks amateurish and ill-prepared, calls for ousting some Board members have begun, Ms. Bartz will probably continue to embarrass Yahoo! and herself for a while, and no one learned any management or communication lessons. Hint: I'm available for some consulting and I'll bring copies of my book.

1. Patricia Sellers, Fortune, Sep. 8, 2011
2. Maxwell Wessel, HBR Blog Network, Sep. 7, 2011
3. Kara Swisher, All Things Digital, Sep. 6, 2011

Between blog posts, you can follow me @pauloestreicher.

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