Brad Garlinghouse, a Yahoo! SVP, is up-in-arms about the state of Yahoo!'s business, sending out a "Peanut Butter Manifesto" as reported in today's WSJ and as covered by ZDNet. The four-page memo has been circulated within Yahoo! over the past few weeks and is getting executive interest. Among its other points:
- Yahoo! lacks cohesion and focus.
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 know and have worked for several companies like this, and it's my number one concern wherever I work. Companies must do at least one thing well, and do it incessantly. This is why Google, despite its overall abysmal record on innovation, is a money machine: it does search (and associated advertising) incredibly well. It's why Microsoft continues to be an important company, despite its lame track record online and with most everything that isn't Office or Windows (and, frankly, it's why its FUD machine revs into full gear whenever a threat to these two businesses is perceived on the horizon).This need for focus is even more acute for startups. Startups lack the cash cushion to be able to make lots of bets. They need to make a few, highly correlated bets, and stick with them.
- Yahoo!, as an organization, lacks accountability and single-point-of-failure ownership.
- Yahoo! lacks deciveness.
We are repeatedly stymied by challenging and hairy decisions. We are held hostage by our analysis paralysis.
To fix these problems, Garlinghouse suggests a 15-20% headcount reduction, the sale of non-core businesses, and a reorganized reporting structure that streamlines accountability. Funny enough, these are some of the things that I wanted at Novell before I left (though a 50% headcount reduction might have been nearer the mark to help force a focus on the company's future - Linux - and reduce its dependency on legacy businesses). But they are important for any business. Focus, focus, focus....
Posted by Matt Asay on November 18, 2006 10:25 AM
