CXO

Was Terry Semel the wrong guy for Yahoo?

On paper it looked pretty good. When Yahoo co-founder Jerry Yang brought Terry Semel aboard as that company's ceo in 2001, most of the pundits hailed it as a decision to use the right guy and the right time.

The dot-com implosion was still burying other formerly superstar companies. It was widely agreed that one of the reasons for those failures was that the companies didn't the depth of management experience needed to deal with difficult environments. So bringing in a guy with gray hair and years of experience seemed to be prudent - even astute.

However, I work with people from a few well known companies in Hollywood, and what makes someone successful in that environment isn't necessarily what works in any other one. In fact,  it's often not even - as us coaching types like to say - "transferable technology".  Studios, like Warner Bros where Semel came from, have awesome up's and down's. While some executives like to contend that the business elements of running any business can be applied with equal success to the movie industry; that's just not the case. A single huge hit can make a company's year. Likewise one huge bomb can erase all the other good productions which each made money. The industry is filled with larger than life ego's and success stories. Executives with CPAs or even B-School educations rarely succeed for any length of time. In short, it's a creative industry with strong demands on finding today's best talent and marketing expenses that are often equal to the costs of the product being promoted.

I believe that Semel's failure to bring Yahoo up to the level of #1 Google had a great deal to do with the differences in management style which are inherent to the tech and studio industries.

Google is pretty famous for its approach of hiring a lot of people with skill levels equal or better than others in their fields. Then they enter into an organization which outwardly seems to be all about brainstorming between groups and divisions and where a good idea can get green lighted if it has any chance of providing even a small benefit to the organization as a whole. They also acquire other companies if they seem to have a great concept - they aren't afraid of ideas generated by others and it shows.

Yahoo's failure to get the best and newest people and acquire the leaders in areas where growth is showing up has held it back while other "old media" companies like Disney (especially with the their new media charge at ABC), CBS and News Corp is telling. When the announcement was made that Susan Decker was being appointed as president, Semel noted that he, "saw himself much more as a coach than a player.." Companies in turmoil or even successful companies in dynamic environments don't need a leader who thinks of himself as a coach first. They require leaders who have a background in successful management and who know how to lead.

Yang has said that he intends to reinvigorate the company and attract top talent, not to overhaul its strategy. Don't bet on that last part. Yahoo's strategy will change, and quickly.

- john

Success Coach

About John McKee

John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion d...

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