If you are a big company getting your butt kicked, it seems like the thing to do is issue a memo. Bill Gates did it after Microsoft lost out on the first wave of the Internet. Ray Ozzie wrote one for Microsoft about the importance of software as a service last year (see an earlier blog post). The most recent memo is from Brad Garlinghouse of Yahoo (see WSJ Article – annoying that it is password protected) who wrote a "call to arms" for Yahoo to stop doing everything and to focus on a few things and to do them well. According to Brad, "we want to do everything and be everything — to everyone" which means they are investing in too many areas and are spread way to thin. Brad goes on to outline a number of basic issues that can and will kill any business, small or large (see memo here):
1. We lack clarity of ownership and accountability
2. We lack decisiveness
Rather than just outline the issues, Brad recommends some much needed solutions:
1. Focus the vision
2. Restore accountability and clarity of ownership
3. Execute a radical reorganization (blow up the matrix where there is no clear owner and kill redundancies and overlap)
This is all just basic Business 101, but sometimes if you grow too quickly and don’t take a step back and strategize about what’s important, you can get lost pretty quickly. Whatever happened to the whole media group in LA with Lloyd Braun? How about all of the turf wars between the tech team in Sunnyvale with the media guys in LA? As an example, whenever one of my portfolio companies wanted to do something with Yahoo we were always never sure of who the real owner of the decision was and consequently it made it incredibly frustrating to work with them. When there is no overarching vision and when there is overlap in terms of responsibility, you can imagine how much time executives can spend fighting amongst each other rather than focusing their aim on the competition. And inevitably this leads to slow movement, bureaucracy, and an exodus of top talent. While outlining a vision can sound hokey, it is important for every employee to not only know, but live, eat, and breathe the company mission. It sounds like Yahoo’s mission to be the "most essential global Internet service for consumers and businesses" lacks clarity for the executives. While I do use and love a number of Yahoo services, I always use Google for my searches. I am sure all of these basic changes and suggestions, if taken up by Yahoo, will help them execute in a more streamlined and efficient manner, but at the end of the day it is going to be tough to outsearch Google in terms of technology and monetization (2x the monetization rate per search for Google vs. Yahoo). Assuming Yahoo does narrow its focus, I can’t wait to see what ultimately will be the top 3 priorities for the company.