Channeling Decision-makers

For reasons I won't get into here, before the Microsoft bid to buy Yahoo, I had been spending a lot of time learning about Yahoo and considering its prospects.  In parallel, during the days preceding their latest earnings release, a number of journalists had been interviewing me for perspectives on Yahoo and, specifically, Jerry Yang and his management style as perceived by competitors. Most of the pending stories were likely shelved to make room for extended takeover coverage. Yet, there was one insight that the occurred to me that I thought was worth sharing nevertheless:

At Google, Eric, Larry, and Sergey are ultimately responsible for the decision-making. There is no doubt about that. Nothing significant can get done without their buy-in, and they come to unanimity with remarkable frequency. Yet, in a company of 16,000+ people, it just isn't possible to have ELS (their much more efficient moniker within Google) weigh in at every stage of the product conception, creation, distribution, and refinement process.

Instead, those guys have done a remarkable job (with the help of many around them) of building a core set of principles and ideas that embody what Google believes and how individual products can serve Google's mission. This codification and notes from discussions as to how it was applied in each case are then shared liberally throughout the company. In most cases while big decisions are being made, in addition to 6-12 senior executives at the table engaging the presenting team, there are usually 10 or so junior people in the periphery of the room watching and learning from the exchange as well. If that isn't enough, the triumvirate is available on stage at the weekly TGIF all-hands meeting to close any gaps in understanding.

The result is that product managers and engineers working on new efforts can almost channel Eric, Larry, or Sergey and role play how the discussion might unfold with them in the room. (One Googler executive I spoke to about this observation wanted to know how soon before there was a Larry Page Ouija board to actually channel him. Hmm, good idea.) By the time product and related decisions bubble up to the big guys there tend to be fewer surprises and the level of debate and discussion is more informed. Sure, there are anomalous outcomes, but generally Googlers walking into executive meetings understand what Google is aiming to accomplish and if ELS are likely to support the proposed path to that end.

From what I hear from friends at Yahoo, there is no consistent and universal sense of Yahoo's mission, let alone a consistent sense of how the brass will think about things. From a variety of folks, I heard that the company used to be logjammed at the top and the decision-making process was opaque, with only conclusions being communicated. It was thus extremely difficult to build an institutional sense for how outcomes were reached and how to presage such events in the future.

In an attempt to create a more nimble organization, decision-making was distributed deeper into the ranks among what Kara Swisher has reported to be in excess of 300 vice presidents at Yahoo. Yet, without any common feel for what the company's goals and values were, and as a result of alarming inconsistencies in how each of the newly minted decision-makers perceived Yahoo's future, Yahoos have had no reliable compass by which to guide their efforts. The impact on Yahoo morale has been palpable.

I won't begin to speculate as to how the new bosses at Microhoo might deal with this issue, but I am curious to hear your thoughts.

 

Comments

[b]

It used to be that decisions at Y! were made lower in the organization. The decisions that were made at the top generally were made with serious input from the folks who were impacted. That all changed with the arrival of Semel. Instead, like you said, decisions were made in a vacuum at the top without any true input from the foot soldiers and no transparency into the decision-making process. From what I hear, Jerry and Sue are reversing the decision-making process back to its earlier incarnation. The major initiatives Y! embarked on came from lower in the organization and have gotten input from across a broad spectrum of yahoos rather than the vacuum of semel days of yore. Not only that, but I've been told that Jerry has sent much more frequent updates to the staff in both email and video form. And I've been told that yahoos are much more aware of and understand the mission than just a few months ago.

My take is that Microsoft will be well served by keeping yang and filo if it does complete its purchase, even for a year or two. Retaining them will help stave off some of the inevitable outflow of talent.

[mlvlvr]

Compare some of this to Intel, where I worked from '84 to '01.

Intel, with more than 80k people, has maybe 150 VPs. Yahoo's been promoting for titles but not authority. There isn't that much authority to go around.

Also, at Intel, everyone was channeling ASG around the clock. Didn't Doug Coupland compare Intel to a hive of ants in Microserfs? Everyone thought one thing, to the detriment of diversification it was said, but as long as they did, Intel did kick the daylights out of the competition. Channeling CRB didn't turn out to be as successful.

[kevind]

@b "My take is that Microsoft will be well served by keeping yang and filo if it does complete its purchase, even for a year or two. Retaining them will help stave off some of the inevitable outflow of talent."

I seriously doubt there is even a chance that Yang and Filo will be kept on after the takeover. Yang especially has already made his views clear. The target of a hostile takeover is rarely allowed to retain their top management. The tragedy is that Semel's style is much closer to Balmer's and likely paved the way for the takeover.

[Survived the Layoff]

Did you ever work here? You seem to understand the place pretty well. :)

[Chris Sacca]

Survived the Layoff - Thanks for the kind words!

b - Interesting perspective and thanks for the insight. That said, I have to agree with Kevin D. I think it is unlikely MSFT would keep those guys around after the deal.