Yahoo has always been one of the stars of the internet world, and one of the few that survived the "great reconciliation of 2001" when illusions of "new economy" financial metrics finally met the real world. It’s interesting that "web 2.0" companies are once again attempting to redefine the real world, but I’m confident there will be a similar outcome.
After growing like gangbusters, Yahoo has been faltering recently, and falling behind the likes of Google, AOL Time Warner, Fox’s MySpace, and even Microsoft. Search revenue is lagging, technology has become sub-par, and hence their share price has fallen 31% this year compared to an increase of 20% for Google. This problem hasn’t gone unnoticed by a couple of Yahoo executives.
Today’s Wall Street Journal tells us about Brad Garlinghouse, a ballsy Yahoo senior vice president, who wrote a four-page "Peanut Butter Manifesto" last month that is being circulated internally… and now externally. If you have a subscription to the WSJ you can read the full text here. The name was coined as a result of Garlinghouse’s argument:
Yahoo is spreading its resources like peanut butter on bread, thinly and evenly across all its activities. Thus we focus on nothing in particular. The company needs to pick specific areas to focus on and make bigger bets on them while dropping nonessential activities.
That probably sounds like a lot of companies or organizations you know of. It’s highly likely that you’re working in one now. Mr. Garlinghouse hinted at some lean knowledge when suggesting potential solutions. For example, with the fundamental "vision thing":
There is an absence of focused, cohesive vision for Yahoo, which means it wants to do everything and be everything – to everyone. The result is a company that is reactive and scared to be left out. We’ve got to get back to basics and zero in on a few key priorities.
Perhaps it’s time for a dose of hoshin kanri. Or how about his thoughts on the organizational structure itself:
There’s currently a matrix corporate structure where responsibility is spread among multiple executives – in engineering, product, marketing and corporate strategy. Garlinghouse suggests creating manager positions with responsibility for all aspects of a particular business, from marketing to engineering and business development and including its bottom-line results.
In other words, value stream management. The good news is that it sounds like other Yahoo executives are being receptive, and are taking the recommendations seriously. Now we’ll see if any have the leadership guts to actually take action.
Stop eating peanut butter.
Good advice for pretty much any organization.