Mar 11, 2013
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THEME: Workplace

It’s Time for a Turnaround: A Tale of Two Tech Companies

By now, you’ve likely had a chance to reflect on the commentary regarding Marissa Mayer’s decision at Yahoo!, specifically to bring all employees back to the office to participate in the culture and increasingly collaborate by way of hallway conversations and impromptu meetings. My opinion on this bold move still remains the same: decisions like this must be made, and judged, in the context of a particular organization and their current business demands. 

Great leaders realize that creating change in any organization must be carefully orchestrated, and it’s likely that Yahoo’s decision was closely analyzed before it was announced. For all we know, Mayer considered a number of options but felt strongly that this one would drive the necessary change with the least negative impact. If Yahoo’s goal is to foster greater engagement, collaboration, and faster decision making—and the mandate to return to the office was a calculated choice by Mayer—it is not the time to criticize the policy, but rather the time to wait and see if she achieves the desired results. In fact, the most pertinent responses that I have seen so far are not about Mayer’s goal of greater engagement, but about the way in which the decision was communicated, and the potential implications of it—that her employees don’t have the maturity, tools, or know-how to make decisions on where their best work could be done.    

There is another major organizational leader, just a few miles away in Silicon Valley, with a similar background who is facing a similar challenge. Meg Whitman was named CEO of HP in September 2011. At that time, HP was fraught with negative publicity over their business model, their questionable potential for growth, and an unsuccessful buyout resulting in an $8.8 billion write-off.  The company needed a turnaround, and Whitman left a successful position with eBay to take on the significant challenges facing HP. 

Interestingly, the same day that Yahoo! announced its policy shift to employees, Meg Whitman posted a memo on her LinkedIn page. Her memo, “Taking on a Turnaround,” addressed the current challenges faced by HP. It outlined what Whitman, her team, and HP employees were going to do to succeed. A number of her points, in addition to the overall tone of the memo, immediately provided the opportunity for a direct comparison with the policy shift at Yahoo!. 

As a workplace strategist, I am not as qualified as a financial analyst or related expert to assess the viability of either organization’s business model, but what I can do is provide my own set of complementary questions that assess the organizations’ readiness for change. In Perkins+Will’s strategic planning practice, we help a variety of organizations achieve their business goals through the alignment of the physical workspace, the tools available, individual and team workstyles, and organizational culture. We recognize that the need for change exists on a continuum from status quo to full-blown transformation for every business, and that conflicts in the treatment of space, technology, workstyles, and culture can result directly in decreased engagement of employees.  A simple example of this discord is a company that expects all employees to be available after hours, but pays for mobile phones only for management. 

To assess an organization’s readiness for change, we frequently lead with the following questions:

  • Is the vision defined and clear to employees?  Can managers apply and describe the vision to project teams?
  • Are the desired behaviors visible and easily understood?  Do employees know what they should start, stop, and continue doing as changes are proposed?
  • Is the workspace conducive to the work—is there a variety of space to connect, collaborate, communicate, and concentrate? 
  • Do employees have the right tools to support collaborative workstyles?  Are employees adept at using the tools?
  • Is the reward structure aligned with the expected behaviors?

Whitman’s memo articulates a clear message and provides path by which to understand her vision and related expectations. She includes the following language:  

  • Results matter.  Hit your numbers.
  • I don’t want excuses.  I want actions.
  • …make the journey visible and acknowledge mistakes.
  • …I made the decision to move our executives, including myself, out from offices and into cubicles. …we have to communicate and collaborate as one HP if we are going to succeed.
  • Be a leader.

Her inspirational memo makes it easy to imagine what a successful future looks like. It establishes expectations for success and provides actionable steps that could be taken to achieve it. Whitman clearly laid out the specific tactics that she wants to see executed—stop sending emails and walk around, engage employees, and over-communicate. Whereas Yahoo!’s message indirectly addresses the value of the workplace by requiring people to work at the office, HP’s memo overtly addresses the value of space through specific examples. Furthermore, Whitman delivered this message from the first person, making the statement that she is accountable to investors and employees for the success of HP. She also reinforced that her own management team was moving out of protected, enclosed offices into an open area to foster improved communication. Such a move expresses leadership’s desire to ‘walk the talk’ and drive communication from the top. Overall, Whitman’s message can help employees to envision where the organization is going, and to feel confident that leadership is going there with them.

Interestingly, the comments posted to Meg Whitman’s memo show that many of HP’s employees believe in her, a great advantage to a leader who needs people to embrace change. Those who don’t seem to be in full accord also felt comfortable enough to ask hard questions. While she doesn’t seem to be using this forum to answer these questions (please do, Ms. Whitman!), the public nature of the memo and its responses is another great example of the trust she is fostering. Just look into her straightforward message about the additional 4 years that HP will need to successfully turn around, or her reported agreement to be compensated through stock options rather than a traditional salary, for more examples of her transparent and credibility-building approach.

As Mayer and Whitman continue to work toward creating healthy, resilient organizations, we probably won’t be able to point to one specific choice as the cause of their successes, though the overall notion of leadership style will certainly be a component. Since November 2012, both stock prices have risen; in fact, HP’s has increased by almost 100%. And from a short-term perspective, Yahoo!’s stock has jumped up since their announcement. I hope that both Mayer and Whitman continue to succeed, despite increasingly competitive marketplaces and constantly shifting organizational cultures. Just be sure to keep watching closely, as this is a unique opportunity to compare and contrast the leadership styles of two dynamic women with their own distinct approaches. Their actions will certainly provide great insights for both current and future organizational leaders.

Check out the precursor to this post, “To Telecommute or Not to Telecommute: 4 Tips to Help You (and Yahoo!) Decide,” also by Rachel Casanova, for additional insight on this topic.

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