Yahoo's Board is to Blame for Marissa Mayer's Failure

By Rob Enderle December 08, 2015

This week folks are again focused on a failing CEO and one that has a severance package which falls between $160M and $60M, regardless of how you do the math.  First, this reminds me that clearly I haven’t done a great job of negotiating my own severance package.   Second, this is a reminder that the reason Mayer failed was the Yahoo board. It really wasn’t her fault.

You see, if you take someone from another industry who has no experience in a job and basically throw them to the wolves, they will fail. This holds just as true for an entry level employee as it does for a CEO.  There is really no excuse for that, particularly when there is a multi-million dollar penalty the company has to pay if the employee fails. 

Let’s talk about why Marissa Mayer failed.

The Google Fallacy

It doesn’t matter what company name I put in here; there is an ongoing fallacy that folks that come out of successful companies are themselves inherently more valuable.  They may be, but only if they had a major hand in the success, operated largely alone, and their new job is very similar to what they had successfully done in the old one. 

Not every aspect of a successful company is, in and of itself, successful.  Let’s take Apple.  The company is strong on design, quality is good, supply chain is good, it has decent product marketing, and pays its employees pretty well.  They suck at partnering, selling to companies, web services, corporate marketing, and government relations.  And not everyone on their design team is a champ, either. Look at the butt ugly new battery pack for the iPhone.   Finally, even if a company is good at something, there is a good chance the person you are interviewing is leaving there because they suck at it and either aren’t being advanced or are in the process of being managed out of the firm.  

So if you look at Marissa Mayer, she had been passed over for promotion at Google, was largely in marketing (something that Google does very poorly) and she had no notable experience as either a CEO or in a media company.  Her biggest major asset was her experience on the Google startup team, but Yahoo wasn’t a startup anymore.  So nearly nothing in her background should have given anyone confidence she could be a CEO, even at Google.

Image Over Substance

The one thing the Google pedigree did provide was a connection to the Google brand.  This made it at least look like the Yahoo board had made a home run and brought in someone with the requisite skills.  Like a lot of boards, it appears they just tossed Mayer into the deep end and wished her an insincere “good luck” with no visible back-up or help.  Worse, the most experienced person on her executive team was Ross Levinsohn, who had been interim CEO and was more qualified.  But rather than assuring that he stayed and worked with Mayer as a team, he was disenfranchised and effectively pushed out of the company.  So they traded someone with experience and knowledge of Yahoo (and who was far cheaper) for someone that had a Google background but not the experience needed to do the job.   The trade was unnecessary. Yahoo needed Levinsohn, or someone like him, more than they needed Mayer. 

So, in effect, Mayer was set up to lose and given a $100M bonus if she, in fact, did fail.  

Wrapping Up:

Yahoo’s last three CEOs have been poor choices.  Carol Bartz was an experienced CEO, but from a package-focused software company and didn’t understand Yahoo’s industry. Scott Thompson wasn’t properly vetted and was found to have lied about his education (and realistically, an experienced CEO’s education has little absolute value, it is their job history that is important-so he got fired for lying about something that didn’t really matter). And now Merissa Mayer had neither the job experience nor the  background to be successful. You have to stop and look at Yahoo’s board and ask yourself whether they are the real problem.  At any other level, if a manager has a long string of failed employees, at some point you realize it isn’t the employees that are the problem. It’s the manager. In this case, Marissa Mayer’s failure is Yahoo board’s fault. If Yahoo is to be fixed, that effort now has to start with the board.   




Edited by Kyle Piscioniere

President and Principal Analyst, Enderle Group

SHARE THIS ARTICLE
Related Articles

Pai Makes His Case for Title II Repeal

By: Paula Bernier    11/21/2017

FCC Chairman Ajit Pai today made clear his plans to repeal Title II net neutrality rules. The commission is expected to pass his proposal at its Dec. …

Read More

Mist Applies AI to Improve Wi-Fi

By: Paula Bernier    11/9/2017

Mist has created an AI-driven wireless platform that puts the user and his or mobile device at the heart of the wireless network. Combining machine le…

Read More

International Tech Innovation Growing, Says Consumer Technology Association

By: Doug Mohney    11/8/2017

The Consumer Technology Association (CTA) is best known for the world's largest trade event, but the organization's reach is growing far beyond the CE…

Read More

Broadcom Makes Unsolicited $130B Bid for Qualcomm

By: Paula Bernier    11/6/2017

In what could result in the biggest tech deal in history, semiconductor company Broadcom has made an offer to buy Qualcomm for a whopping $130 billion…

Read More

How Google's 'Moonshot' Could Benefit Industrial Markets

By: Kayla Matthews    10/30/2017

The term "moonshot" encapsulates the spirit of technological achievement: an accomplishment so ambitious, so improbable, that it's equivalent to sendi…

Read More