Fuzzy Strategy Fells Yahoo CEO

Yesterday, Yahoo replaced CEO Terry Semel with co-founder Jerry Yang. The consensus is that Semel, who joined Yahoo as CEO in 2001, was axed because Google galloped past Yahoo is search volume, revenue, share price performance and market cap during his watch. While true, the root cause of his demise is that he failed to focus Yahoo on a clear strategy, which, to me, is CEO job one.

In a February post, I wrote:

On Tuesday, Yahoo announced to journalists with a bit of fanfare that it had a new mission statement it had developed last year as part of its management restructuring. Here is the previous Yahoo mission statement:

"Our mission is to be the most essential global Internet service for consumers and businesses."

This was vague enough to cover just about any Internet activity and what makes a service "essential" is surely in the eyes of the beholder. No one could operate on the basis of this fuzz, though it could be used with slight tweaking as a vision statement.

Now here is the new Yahoo mission statement:

"Yahoo's mission is to connect people to their passions, their communities, and the world's knowledge. To ensure this, Yahoo offers a broad and deep array of products and services to create unique and differentiated user experiences and consumer insights by leveraging connections, data, and user participation."

A mission statement must communicate three essential ideas:

• What the organization does
• Who it does it for
• How it does it differently from others

The new Yahoo mission statement attempts to do this. It drops the reference to businesses and aims at consumers, so there is a bit more clarity as to the "who."

The first "what" is "connect to passion." This surely is intended to imply entertainment, but the Yahoos could not simply say that. Then again, perhaps they did not want to limit themselves and intend to appeal to other forms of passion, which I leave to the reader's imagination.

The second "what" is "connect to communities," which again casts a wide net, though it is likely a pitch for Web 2.0 relevance.

The final "what" is "connect to the world's knowledge," which is so Google-esque that we get that it means "compete effectively with Google in search."

As for the "how," the Yahoos used 31 words in their second sentence to be as fuzzy and broad as possible. They will do almost anything for which the Internet can be used.

Mission statements beg for clear, unambiguous language. If you work for Yahoo, how do you use this mission statement to help you make decisions? By trying to be the sun, the moon and the stars, Yahoo has crafted a mission statement that assures continuing lack of focus. They continue to suffer from a grandiose fuzziness of mission, as we discussed last November in Peanut Butter Portals.

Lack of focus kills careers and companies. But don't cry for Semel. He made $72 million last year and remains non-executive chairman of Yahoo's board. It is that very board of director's that deserves castigation.

Copyright © 2007 Philip Bookman

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