Monday, February 9, 2009

Yahoo! Bets on a Capitalist

Last month, Yahoo!, the company that owns that search engine none of us use anymore, appointed Carol Bartz as CEO to succeed founder and former CEO Jerry Yang. Mr. Yang will returned to his previously held position as the appropriately named "Chief Yahoo." This article in The Economist offers a brief glimpse into Ms. Bartz's life. I had never heard of her before Yahoo named her CEO, but certain traits mentioned in the article grabbed my attention. Consider this short bio:

She was born in Minnesota but lost her mother when she was a child, so her grandmother raised her in a small town in Wisconsin. This early setback appears to have left Ms Bartz with insecurities that would forever motivate her to achieve. She became a homecoming queen and a mathematics star in high school. She worked her way through college by serving cocktails, maintaining a Spartan exercise regime in order to fit into the uniform—a red miniskirt and black fishnet stockings.

Ms Bartz then went to work at 3M, one of America’s blue-chip companies, in the 1970s. But when she requested a transfer to headquarters, she was told that “Women don’t do these jobs.” She walked straight out of 3M and into the computer industry. Eventually this led to her big break, when she was appointed chief executive of Autodesk. But there was a catch.

Just as she began her new job, Ms Bartz was diagnosed with breast cancer. She was 43 at the time, and decided to fight on all fronts. She took a single month off work for a mastectomy and reconstruction, and then went back to her new job full-time, while having chemotherapy for seven months on the side. She defeated her cancer, gained weight and lost it again, and launched Autodesk into a period of astonishing growth.

Her discipline was iron—and possibly excessive. To keep her family in Atherton, she commuted to the office, which required a long, traffic-clogged drive across the Golden Gate Bridge. To regain these lost hours each day, she spent the whole time behind her chauffeur reading and working, often stopping several times along the way to throw up out of carsickness. Her driver knew all the best places to pull over along Highway 101.

The article stipulates that, since Autodesk, while very successful, is much smaller than Yahoo, and since Ms. Bartz has no experience in Yahoo's market, the main reason Yahoo picked Bartz for the top spot is simply that she is one tough bitch (my words, not theirs). In addition to her perseverence and drive, she exhibits a rare quality a good capitalist must have to be successful, appreciation of ability in others. Consider this:
Unlike a lot of men in her position, Ms Bartz kept her power in perspective. She had groomed a successor at Autodesk and became worried that he might leave if she stuck around too long. So she made way for him and became Autodesk’s chairman. “There is a real difference between managing and leading,” she once said. “Managing winds up being the allocation of resources against tasks. Leadership focuses on people. My definition of a leader is someone who helps people succeed.”
I would say this characteristic makes her unlike a lot of people in her position, but I won't split hairs. In his book, The Prime Movers, Objectivist business scholar Edwin Locke devotes an entire chapter to the absolute necesity of nurturing human ability if you are a CEO. Poorly planned CEO succession can be absolutely devastating to a corporation. (See: Oh, let's start with GE and work our way down by market value)

It will be very interesting to see if Bartz can salvage Yahoo and turn it into something decent for its shareholders. If she can manage a successful turnaround, or even a beneficial sale of the company, she might earn herself a place in the business history books.

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