yahoo leadership challenge

University of Applied Sciences Dresden Master International Business

Summer Term

Change Management

Lilo Pabst

Kiana Frank

1

CHANGE MANAGEMENT

Yahoo seems to have lost the internet. (Honan, 2012)

3

1. Yahoo! History

2. Leadership Change Matrix (Dunphy & Stace) A. Collaborative & Consultative Leadership

B. Directive & Coercive Leadership

C. Evaluation of Leadership Change Matrix

3. Classification into Organizational Theory A. Machiavelli

B. Argyris

C. Kruse

Table of contents

4

David & Jerry‘s Guide to the World Wide Web at Stanford University

1994

1996 Yahoo! goes public

(Oreskovic, 2015)

. 1. Yahoo! History

4


1994


(Oreskovic, 2015)

. 1. Yahoo! History

Survival Yahoo! share at 5$

early 2000s

Yahoo! in constant rivalry with Google

Crisis Dot.Com bubble Yahoo! share at 118$

2000

2001

(Carlson, 2013a; Oreskovic, 2015)

4


1994


(Oreskovic, 2015)

. 1. Yahoo! History


early 2000s



2000

2001


2012

- CEO: Jerry Yang Jun 07 - Dec 08

- Failed takeover bid by Microsoft

2007 2008

2009 2010 2011

- CEO: Carol Bartz Jan 09 - Sep 11

- Dismissal of 2000 ppl

- CEO: Tim Morse Sep 11 - Dec 11

- CEO: Scott Thompson Jan 12 - May 12

- Dismissal of another 14% of the workforce

- CEO: Ross Levinsohn May 12 - Jul 12

(Carlson, 2013a; Carlson, 2015, p.105/129-131/208-213; Oreskovic, 2015)

4


1994


(Oreskovic, 2015)

. 1. Yahoo! History


early 2000s



2000

2001


2012

- CEO: Jerry Yang Jun 07 - Dec 08

- Failed takeover bid by Microsoft

2007 2008

2009 2010 2011

- CEO: Carol Bartz Jan 09 - Sep 11

- Dismissal of 2000 ppl

- CEO: Tim Morse Sep 11 - Dec 11

- CEO: Scott Thompson Jan 12 - May 12

- Dismissal of another 14% of the workforce

- CEO: Ross Levinsohn May 12 - Jul 12

(Carlson, 2013a; Carlson, 2015, p.105/129-131/208-213; Oreskovic, 2015)

2012 CEO: Marissa Mayer Jul 12 - Present

2002 -2012 Executive at Google

2012 CEO at Yahoo!

1998 Stanford University M.Sc. Computer Science

1999 Employee #20 at Google

(Postinett, 2016; McLean, 2014; Carlson, 2013a; Carlson, 2015, p. 136/144;Fairchild, Kowitt, Leahey, & VanderMey, 2014)

Revenue in m$

... despite Mayer’s change initiatives, there was no significant

improvement regarding the financial performance of Yahoo!

increased their revenues in the same

time span from 37 bn$ to 75 bn$ (+100%)

(Fin

an

zen

.Ne

t, 2

016;

Sta

tista

, 201

6; R

uss

ell,

201

4)

5

. 1. Yahoo! History

Leadership Change Matrix by Dunphy & Stace

Leadership Style Scale of Change

Australian service industryEnterprises subjected to environmental change

(460 respondents from 13 companies)

Dim

en

sion

sSa

mp

le

(Du

np

hy,

Sta

ce

, 199

3, p

. 905

-920

)

“[...] leaders make the biggest difference between success and failure in implementing high magnitude change [...] accounting for (at least)

50% [...]“ (Rowland, Higgs, 2008, p. 62)

. 2. Leadership Change Matrix

6

1.2 Yahoo! - Steps for Change

Fine

tuni

ng

Inc

rem

ent

al

Leve

l

Mo

dul

ar

Leve

l

Co

rpo

rate

Leve

l

Collaborative

Consultative

Directive

Coercive

Man

agem

ent S

tyle

Types of ChangeThe Dunphy & Stace

Style of ChangeManagement

Matrix

STYLE - 1 Participative

Evolution

STYLE - 2Charismatic

Transformation

STYLE - 3Forced

Evolution

STYLE - 4Dictatorial

Transformation

Samstag, 2. April 16

(Dunphy, Stace, 1993, p. 908; Senior, Fleming, 2006, p.285)

7

. 2.A Leadership Change Matrix - Collaborative & Consultative Leadership


Fine

tuni

ng

Inc

rem

ent

al

Leve

l

Mo

dul

ar

Leve

l

Co

rpo

rate

Leve

l

Collaborative

Consultative

Directive

Coercive

Man

agem

ent S

tyle

Types of ChangeThe

Dunphy & Stace

Style of Change

Management

Matrix


Evolution


Transformation

STYLE - 3Forced

Evolution


Transformation


•FYI-meetings once per week > Wins of the month & work anniversaries > More transparency (Carlson, 2015, p.258)

• PB&J (Process, Bureaucracy & Jams)

> Online suggestion box for improvement > PB&J list is public (Sellers, 2013a; Sellers 2013b; Carlson, 2012a; Carlson 2015, p. 262)

• Smartphones & fitness tracker > Usage of devices similar to those of Yahoo target users (Carlson, 2012b; Carlson, 2015, p.261)

Participative Evolution & Charismatic Transformation


7

. 2.A Leadership Change Matrix - Collaborative & Consultative Leadership


Fine

tuni

ng

Inc

rem

ent

al

Leve

l

Mo

dul

ar

Leve

l

Co

rpo

rate

Leve

l

Collaborative

Consultative

Directive

Coercive

Man

agem

ent S

tyle

Types of ChangeThe Dunphy & Stace

Style of ChangeManagement

Matrix


Evolution


Transformation

STYLE - 3Forced

Evolution


Transformation


8


. 2.B Leadership Change Matrix - Directive & Coercive Leadership


Fine

tuni

ng

Inc

rem

ent

al

Leve

l

Mo

dul

ar

Leve

l

Co

rpo

rate

Leve

l

Collaborative

Consultative

Directive

Coercive

Man

agem

ent S

tyle

Types of ChangeThe

Dunphy & Stace

Style of Change

Management

Matrix


Evolution


Transformation

STYLE - 3Forced

Evolution


Transformation


•Endofhomeoffices> Home offices increase productivity (The Young Turks, 2013)

> Personal duties: child care/aging parents (The YoungTurks, 2013; Pathak et al., 2015, pp. 12-14)

> Financial benefits to home offices (Hendricks, 2014; Strategic Direction, 2013, pp. 15-17)

Forced Evolution & Dictatorial Transformation

8



9

Acknowledge achievements

Introduction to ban of home offices

Reasoning for ban

Appreciation

(Sw

ishe

r, 20

13; C

arls

on

, 201

5, p

. 263

; Ne

uvi

an

s, 2

016)

Yahoos, Over the past few months, we have introduced a number of great benefits and tools to make us more productive, efficient and fun. (…)

(…) communication and collaboration will be important, so we that is why it is critical that we are all present in our offices. (…)

(…) We need to be one Yahoo!, and that starts with physically being together. (…) Being a Yahoo isn’t just about your day-to-day job, it is about the interactions and experiences that are only possible in our offices. (…)

Thanks to all of you, we’ve already made remarkable progress as a company — and the best is yet to come.

Announcement of home office ban


9

Acknowledge achievements

Introduction to ban of home offices

Reasoning for ban

Appreciation

(Sw

ishe

r, 20

13; C

arls

on

, 201

5, p

. 263

; Ne

uvi

an

s, 2

016)

Sudden top-down changes: negative

effects on long-time employees and their

motivation

Yahoos, Over the past few months, we have introduced a number of great benefits and tools to make us more productive, efficient and fun. (…)

(…) communication and collaboration will be important, so we that is why it is critical that we are all present in our offices. (…)

(…) We need to be one Yahoo!, and that starts with physically being together. (…) Being a Yahoo isn’t just about your day-to-day job, it is about the interactions and experiences that are only possible in our offices. (…)

Thanks to all of you, we’ve already made remarkable progress as a company — and the best is yet to come.

Announcement of home office ban



Fine

tuni

ng

Inc

rem

ent

al

Leve

l

Mo

dul

ar

Leve

l

Co

rpo

rate

Leve

l

Collaborative

Consultative

Directive

Coercive

Man

agem

ent S

tyle

Types of ChangeThe

Dunphy & Stace

Style of Change

Management

Matrix

STYLE - 1

Participative

Evolution

STYLE - 2

Charismatic

Transformation

STYLE - 3Forced

Evolution

STYLE - 4

Dictatorial

Transformation


•Endofhomeoffices> Home offices increase productivity (The Young Turks, 2013)

> Personal duties: child care/aging parents (The YoungTurks, 2013; Pathak et al., 2015, pp. 12-14)

> Financial benefits to home offices (Hendricks, 2014; Strategic Direction, 2013, pp. 15-17)

Demotivation of employees

Constant fear paralyzes company

10



•Abuseofemployee'strust > Mayer lays off people although promised not to (Goel, 2016)

> Mayer has nursery for own children (Larson, Peterson, 2013)

> Mayer is always late for meetings (Carlson, 2013b)

Forced Evolution & Dictatorial Transformation

11

Corporate Transformation using a directive/coercive style is the most common change strategy used when an organization needs to radically re-establish

itself in a changed environment. (Dunphy, Stace, 1993, p.912)

Leadership heavily influences success of

change

Style of leadership has to adapt to business culture

& environment

• Ban of home offices not well accepted

• Abuse of employee’s trust leads to resistance

• Spark new ideas/ambition

• Employees had high expectancies at beginning

Evaluation - Leadership Change Matrix

. 2.C Evaluation of Leadership Change Matrix

(Dunphy, Stace, 1993, p.912)(Rowland, Higgs, 2008, p.62)

12

Great Man Theory- Mayer considered

outstanding and dedicated leader

Focus on benefits for all (≠individual) - Home office ban

Emotionally distant, low degree of personal empathy

- Child nursery only for own children

- Mayer is constantly late

Machiavelli

. 3.A Classification into Organizational Theory - Machiavelli

(Sc

hm

id, M

uc

ho

w,

2014

, pp

. 91-

95)

13

Argyris

Single Loop Learning = problem solving without fundamental re- orientation

- Yahoos only followed instructions from their supervisors

. 3.B Classification into Organizational Theory - Argyris

(Arg

yris,

197

7)

13

Argyris

Single Loop Learning = problem solving without fundamental re- orientation

- Yahoos only followed instructions from their supervisors

.

Double Loop Learning = problem solving includes a re-orientation

- PB&J: employee participation

- Smartphones to help identify with younger target group

3.B Classification into Organizational Theory - Argyris

(Arg

yris,

197

7)

14

Deutero Learning = reflection and analysis of previous learning & problem solving processes: “Learn how to learn“


(Arg

yris,

197

7)

14

No trust in CEOs as former leaders didn’t support the company

Initial efforts by Mayer paid off (impressed employees with new

company culture), Mayer acts as role model (late night e-mails)

Mayer’s hypocrite attitude caused her employees to lose trust: punctuality, child nursery, lay-offs

No learning

Learning

No learning

- Take focus off Mayer as CEO - Create awareness of problems by conducting business theater or paradoxical intervention

Recommendations:

Deutero Learning = reflection and analysis of previous learning & problem solving processes: “Learn how to learn“


(Arg

yris,

197

7)

1. CEO does all or nothing

• Mayer decides on changes on her own

2. Spread rumors

• Secret lay-offs

3. Overstrain employees with tasks

• Many parallel projects, sudden ban of home offices

4. Find someone to blame for problems

• Never takes responsibility for her mistakes (late for meetings)

15

Kruse: 8 rules causing a company's deadlock

(Kru

se, 2

008)

. 3.C Classification into Organizational Theory - Kruse

5. Bend & wait Yahoos survived 5 other CEOs and will survive Mayer too

6. Survival of the fittest Mayer wants people who aren’t open to change to leave

7. Discrepancy between speed of decision-making and implementation Mayer implemented ban of home offices over-night

8. Too hasty decision-making followed by immediate questioning Mayer never questions her decisions afterwards

16

Kruse: 8 rules causing a company's deadlock

. 3.C Classification into Organizational Theory - Kruse

(Kru

se, 2

008)

... for your attention!

Any Questions?

17

18

Argyris, C. (1977) Double Loop Learning in Organizations, Harvard Business Review, https://hbr.org/1977/09/double-loop-learning-in-organizations, link accessed May, 2016.

Carlson, N. (2012a) Marissa Mayer Just Gave EveryYahoo Employee An iPhone 5, Business Insider Online, http://www.businessinsider.com/marissa-mayer-just-gave-every-yahoo-employee-an-iphone-5-2012-9?IR=T, link accessed April, 2016.

Carlson, N. (2012b) Marissa Mayer Sent A Late Night Email Promising To Make Yahoo ‚The Absolute Best Place To Work‘, Business Insider Online, http://www.businessinsider.com/marissa-mayer-sent-a-late-night-email-promising-to-make-yahoo-the-absolute-best-place-to-work-2012-8?IR=T, link accessed March, 2016.

Carlson, N. (2013a) The Truth About Marissa Mayer: An Unauthorized Biography, Business Insider Online, http://www.businessinsider.com/marissa-mayer-biography-2013-8?op=1&IR=T, link accessed May, 2016.

Carlson, N. (2013b) Marissa Mayer Is Late All The Time, Business Insider Online, http://www.businessinsider.com/marissa-mayer-has-a-bad-habit-of-being-late-all-the-time-2013-1?IR=T, link accessed May, 2016.

Carlson, N. (2015) Marissa Mayer and the fight to save Yahoo!, NY/Boston: Twelve Publishing.

Dunphy, D.; Stace, D. (1993) The Strategic Management of Corporate Change, Human Relations, Vol. 46.8, pp. 905-920.

Fairchild, C.; Kowitt, B.; Leahey, C.; VanderMey, A. (2014) Fortune Magazine Online, http://fortune.com/most-powerful-women/2014/safra-catz-14/, link accessed May, 2016.

Finanzen.Net (2016) Yahoo 2011-2015, http://www.finanzen.net/bilanz_guv/Yahoo, link accessed March, 2016.

Goel, V. (2016) Yahoo’s Brain Drain Shows a Loss of Faith Inside the Company, New York Times Online, http://www.nytimes.com/2016/01/11/technology/yahoos-brain-drain-shows-a-loss-of-faith-inside-the-company.html?_r=0, link accessed May, 2016.

Hendricks, D. (2014) 5 Ways Telecommuting Saves Employers Money, https://www.entrepreneur.com/article/235285, link accessed May, 2016.

. Sources

19

Honan, M. (2012) How Yahoo Killed Flickr and Lost the Internet, http://gizmodo.com/5910223/how-yahoo-killed-flickr-and-lost-the-internet, link accessed May, 2016.

Kruse, P. (2008) 8 Regeln für den totalen Stillstand in Unternehmen, https://www.youtube.com/watch?v=Ug83sF_3_Ec, link accessed May, 2016.

Larson, L.; Peterson, H. (2013) Yahoo! boss Marissa Mayer under fire for building personal nursery next to her office - before telling employees they can NOT work from home, http://www.dailymail.co.uk/news/article-2284828/Yahoo-boss-Marissa-Mayer-angers-employees-building-nursery-baby-office.html, link accessed May, 2016.

McLean, B. (2014) Yahoo‘s Geek Goddess, Vanityfair Online, http://www.vanityfair.com/news/business/2014/01/marissa-mayer-yahoo-google, link accessed March, 2016.

Neuvians, N. (2016) Change Management, Lecture 2, Slide 15.

Oreskovic, A. (2015) Here’s how much Yahoo is really worth, Business Insider Online, http://www.businessinsider.de/history-of-yahoo-troubles-2015-12?r=US&IR=T, link accessed April, 2016.

Pathak, A.; Bathini, D.; Kandathil, G. (2015) The ban on working from home makes sense for Yahoo: It needs the innovation and speed of delivery that come from office-based employees, Human Resource Management International Digest, Vol. 23.3, pp.12-14.

Postinett, A. (2016) Die Todesspirale scheint unaufhaltsam, Handelsblatt Online, http://www.handelsblatt.com/unternehmen/it-medien/yahoo-chefin-marissa-mayer-die-todesspirale-scheint-unaufhaltsam/12913908.html, link accessed March, 2016.

Rowland, D.; Higgs, M. (2008) Sustaining Change: Leadership That Works, NJ: Wiley-Blackwell, pp.62-63.

Russell, K. (2014) These Quotes Show Marissa Mayer‘s Remarkable Rise To The Top At Yahoo, Business Insider Online, http://www.businessinsider.com/marissa-mayer-biography-2014-1?IR=T, link accessed April, 2016.

Schmid, T.; Muchow, K.-C. (2014) Klassiker der Organisationsforschung (12) Nicolló Machiavelli, in: Organisations-Entwicklung, 33, pp.91-95.

. Sources

20

Sellers, P. (2013a) Interview: Marissa Mayer‘s 3 biggest decisions as Yahoo CEO, Fortune Magazine Online, https://www.youtube.com/watch?v=fALEg5HtF-w, link accessed April, 2016.

Sellers, P. (2013b) How Yahoo CEO Mayer fixed 1,000 problems, Fortune Magazine Online, http://fortune.com/2013/10/22/how-yahoo-ceo-mayer-fixed-1000-problems/, link accessed March, 2016.

Senior, B.; Fleming, J. (2006) Organizational Change (3rd ed.), Essex: Pearson Education Ldt., pp. 284-286.

Statista (2016) Google global annual revenue 2002-2015, http://www.statista.com/statistics/266206/googles-annual-global-revenue/, link accessed April, 2016.

Strategic Direction (2013) The end of flexible working? Has Yahoo!’s Marissa Mayer sounded the death knell for remote working, Vol 29.6, pp. 15-17.

Swisher, K. (2013) Physically Together: Here's the internal Yahoo no work from home memo for remote workers and maybe more, http://allthingsd.com/20130222/physically-together-heres-the-internal-yahoo-no-work-from-home-memo-which-extends-beyond-remote-workers/, link accessed May, 2016.

The Young Turks (2013) Yahoo bans working from home, https://www.youtube.com/watch?v=uXGCsRpsGE4, link accessed March, 2016.

. Sources

Secondary Literature

Leitl, L.; Braun, G. (2016) Auf zu neuen Ufern - wie sich Unternehmen besser organisieren, Manager Magazin, http://www.manager-magazin.de/unternehmen/artikel/agile-managementkonzepte-von-holacracy-bis-scrum-a-1075193.html, link accessed May, 2016.

Pechlaner, H.; Raich, M.; Schön, S.; Matzler, K. (2010) Change Leadership: Den Wandel antizipieren und aktiv gestalten, Wiesbaden: Gabler Verlag.

Rao, A. (2013) Changing the culture at Yahoo!: Marissa Mayer’s challenge; IBS Center for Management and Research.

Stolzenberg, K.; Heberle, K. (2006) Change Management: Veränderungsprozesse erfolgreich gestalten - Mitarbeiter mobilisieren, Heidelberg: Springer Medizin Verlag.

Vahs, D. (2012) Organisation: Ein Lehr- und Managementbuch (8th ed.), Stuttgart: Schäfer-Poeschel Verlag für Wirtschaft.

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. Sources

yahoo leadership challenge

Economy & Finance