Changing the Culture at Yahoo!: Marissa Mayer's Challenge
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Case Details:
Case Code: HROB154
Case Length: 13 Pages
Period: 2012
Organization: Yahoo!, Inc.
Pub Date: 2013
Teaching Note: Not Available
Countries: Global
Industry: Information Technology
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"The human element is central to bringing Yahoo back to its one-time spot as a top consumer Internet company. My goals are simple: To execute faster, hire top talent, and make Yahoo the absolute best place to work".
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- Marissa Ann Mayer, CEO of Yahoo!, Inc. in October 2012.
"Overall, we think that Marissa Mayer's efforts to change the culture at Yahoo! can provide long term benefit to the company. As a CEO she, by herself, can only do so much. To ensure long term innovation, and relevance, the company must foster a culture of innovation, something that Mayer seems to be striving for."2
- Trefis , in September 2012
"[W]e are a little more optimistic in terms of what they could potentially do, but by no means is this an overnight fix. This is something that likely will be a few years in the making."3
- Ron Josey, analyst, Think Equity LLC (ThinkEquity), in September 2012.
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In an email sent to the employees of Yahoo! Inc. (Yahoo) on August 25, 2012, Marissa Ann Mayer (Marissa), the new CEO of Yahoo, unveiled a new program called Process, Bureaucracy, and Jams (PB&J). The new initiative, one of the many planned by Marissa since she had joined Yahoo, aimed to remove the bureaucratic culture prevalent in the company. The initiative encouraged the employees to give their suggestions on improving the work environment at Yahoo. Suggestions and ideas given by the employees were to be ranked by the other employees in the organization and the best of them would be implemented by the management.
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The new initiative was democratic and encouraged more participation from Yahoo's employees in taking key decisions regarding the future of the organization. Marissa had also implemented many other initiatives to boost the morale of Yahoo's employees like giving free mobile phones and free food, keeping the office lights on late in the night, etc.
Since the mid-2000s, Yahoo had been steadily losing its dominance in the internet services space to new rivals and had not been able to introduce any major innovations. Many analysts felt the organizational culture prevalent at Yahoo was one of the major reasons for its failure to compete effectively with its rivals. Yahoo followed a matrix organizational structure which made decision making difficult, they said. Yahoo's board appointed Marissa, a former senior executive at Google, Inc. (Google) , as the new CEO of Yahoo in July 2012 based on a recommendation by the search committee appointed by it. Marissa was the fifth CEO of Yahoo in as many years. Yahoo's board had shown many of its former CEOs the door as they had failed to provide the leadership needed to turn the company around. Marissa was given the responsibility of reviving Yahoo's fortunes and making the organization competitive again. As soon as she took over the reins of Yahoo, she started to focus on changing the organizational culture at the company as a major strategy to revive the company. She replaced many senior executives of the organization to bring fresh perspectives into the organization. According to Chris Sacca, Independent Venture Investor, "Yahoo finally has someone who has both business acumen and geek cred at the helm. She stands for a work hard/play hard, product- and engineering-driven culture, and Yahoo has been missing that for years."
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But opinions were divided on whether Marissa would actually be able to bring about a change in the company's fortunes. While some analysts opined that she might not be able to affect a change in the culture of an established organization like Yahoo quickly, others felt that it might not be so difficult with good commitment from the top management.
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