048
CHAPTER NINE
YAHOO!
This chapter outlines an approach to leadership that focuses on
strengths, both at the personal and organizational level, and uses the
power of development to reinforce the corporate brand.
There is a well-trodden expression in leadership development circles: “People don’t leave companies, they leave managers.” The inference is presumably that when the relationship between a manager and his or her direct reports or coworkers breaks down, or the manager acts in a way that is detrimental to the well-being of the individuals around him or her, this can lead to the loss of talent, unanticipated cost in managing or replacing the gap they leave behind, or even sometimes costs resulting from errors and poor performance.
The responsibility for creating an environment where people can give their best and generate outstanding results is shared with all the players in the complex web of relationships, structures, and dependencies that define organizations today. Designing an organization that is aligned and fit for its purpose is every bit as important as the clarity of strategy or the adequacy of information and the extent to which the structure enables people in the system to work together.
Alignment of the organization with the strategy, key processes, structures, and people in the organization is clearly essential, and it is common sense as well. But all too often, common sense is not common practice or easy, and organizations can flounder badly when alignment is lacking. The importance of helping employees in organizations to succeed among this complexity and frequent uncertainty is the central and shared role of the manager and his or her charges. When this fundamental relationship works really well, it can create a unity and engagement that is viral and infectious in nature. I contend that the challenge of building strong, lasting relationships in the matrix of the organization is the most important role and influence managers have, and it is their prime and special responsibility.
If effective relationships between relevant people is the most fundamental means for organizations to react and interact, then interdependency drives effectiveness in decision making, problem solving, communications, creativity, and the other key wealth-generating behaviors inside organizations. Aligning relationships within teams and across the usual matrix structure and groupings is essential. Doing this in a way that is consistent with both the hard measures of success, such as revenue, profitability, and growth, and the softer measures of organizational life is essential because people often value these latter measures just as much and experience a strong emotional resonance with the environment and the culture of the organization they choose to be part of.

The Psychological Contract

Knowledge-based organizations such as Yahoo! know only too well the importance of the softer measures. The concept of the psychological contract—the often unspoken agreement about how economically powerful organizations and the individuals who work in them coexist in a mutually acceptable bargain—is becoming less relevant. The power is shifting, and the so-called digital economy needs the skills and talents of those capable of driving success more than those individuals often need their jobs: demand is outstripping supply. People move constantly, and talent retention and engagement is the name of the game. Certainly great benefits and brand value really help, but newly minted young graduates joining the workforce today understand their value and the options this affords them, and they are seeking powerful experiential development that, coupled with strong market awareness, creates discerning choices. As they move into leadership roles, we have seen compression in the time required to get them ready to lead, as well as the type and length of development intervention needed to make them effective or develop readiness.
At the end of 2003, Yahoo! was at the crest of the wave in recovery of the Internet media sector as the effects of the dot-com crash began to wane, and a resurgence in opportunities for advertising created a powerful platform for growth. Since 2003, Yahoo! has been growing in revenue, market share, users, profitability, and the number of people it employs—up from thirty-five hundred in 2003 to more than thirteen thousand people in early 2008. In a sense, the decimation of the Internet media industry after the end of the first dot-com era in 2001 meant that many organizations were forced back into something akin to start-up mode. Driving this at Yahoo! was a supremely confident and energized executive team, leading a global team of managers from entry-level supervisors, managing upward from one person, to directors and vice presidents running large global businesses and functions.
Part of Yahoo!’s psychological contract was the understanding that a career with the company meant the chance to take on big jobs with heavy responsibility—sometimes very early in one’s career or in an untested manner so as to share in the success of the brand and the financial performance of the company. In a sense, this careful management of risk versus opportunity has been very successful: business performance over this period has been strong, and careers have flourished. The strong “relater and achiever” culture at Yahoo!, where bright, socially confident, and ambitious people drove personal success hand in glove with the hours they put into the job, has also created a competitive task-oriented culture. When the competitive landscape changes or growth and size demand increased emphasis on process, planning, and learning to drive scale and success, the behaviors needed have to mature and shift. The emphasis on accountability, communication, and decision making and teamwork became vital.

The Underlying Themes

Yahoo! recognized that the most important component of the success formula was to concentrate on helping leaders at every level throughout the business feel confident and tooled up to manage their people—whether it was understanding the basic principles of being an effective people manager or focusing in a more personal way on how to lead and the extent of the impact of their values and attitudes on their beliefs and actions. In a sense, we were just as interested in tackling the people system as we were the processes and tools needed to create a great product.
The vital underlying theme to our development strategy was to accentuate the positive and the practical. For too long, performance management systems and training interventions have focused on weakness, and we were convinced that this presented only a small portion of the story in understanding what drives high performance and engagement. In partnership with the Marcus Buckingham Company, we drove hard the notion that focusing on strengths and understanding and managing weaknesses will do more than yield better individual performance. It will also:
• Drive engagement whereby individuals feel drawn to work they know they enjoy and can do well
• Drive employee satisfaction, which is delicately linked to how people feel about the work and the meaning it holds for them
• Contribute to team effectiveness because well-rounded teams benefit when they consist of powerful strengths
• Help to drive employee retention and create an environment where diversity can be seen in its broadest sense as the abilities and strengths of all are recognized
Creating a congruent strengths-based strategy is a work-in-progress. It seems that for the most part, people are pretty good at ensuring they operate in a manner that allows them to leverage their strengths. So for some managers, the question is, “How can I understand the strengths and abilities of my team, so I can leverage them and the work more effectively?” For others, the issue is about using this understanding of strengths to know how to build a new team well from the start, or even to know how to tackle perceived poor performance differently. We have taught and discussed these principles through our core curriculum, foundation manager class, executive development program, and team workshops and planning sessions.
The other critical theme to our development strategy was to focus on how managers led and engaged their people—through both the way they helped people perform in the role they had hired them to do and in the way managers engaged their hearts to create a compelling and mutually exciting view of their career with the company. Developing a congruent and effective leadership development strategy was essential for driving employee engagement and company performance.
There was no appetite within the organization for creating a corporate university structure, which was considered inappropriate for the culture and speed of the organization; moreover, providing managers with the tools and resources to focus technical skills development on the job was outside our purview. Our focus instead was to drive awareness of and confidence in managing and nurture the best each individual had to offer in how to inspire and lead.
In tackling this task, we studied and benchmarked the leadership development structure and programming at a number of similar organizations and spent time talking to colleagues in other industries about their best practices and their challenges. We knew we needed to supplement in-class programming with a needs identification process, on-the-job development, coaching, and succession management methodology. Our international staffing team had already established a best-in-class reputation for hiring solid, astute, and culturally aligned leaders, and our colleagues responsible for organizational development had established a broad competency framework and talent identification process as part of the company performance review cycle. The complementary component to this was a strong leadership development program.
We built a simple leadership development strategy complemented by an executive coaching program and support for senior managers to broaden their business acumen. We also used company-sponsored networking events, book talks, “big thinker” industry luminaries, and support to return to business school to acquire new knowledge and qualifications.
Initially this program was focused on the key leaders at the vice president level and at the manager level on a much broader basis of invitation. Participants in the executive program were brought by invitation only to help drive engagement and interest in the program and to begin to build a strong bench of high-potential leaders who could be seen as potential successors to the executive team within a few years.
As the reputation of the programs grew, we opened these up, particularly at the executive level, to all eligible senior leaders in the company. We extended this curriculum to our international business in 2006-2007, running programs around the world for key leaders in major Yahoo! locations. The flagship element at the managerial level was a development program called Leading Big, and at the executive level, a program called Courageous Leadership. Both programs were supported with a curriculum of classes that aligned to the strategic priorities of the business and the competency framework that supported it, including programs on understanding Yahoo! financials, coaching skills, organization awareness, and employee engagement.

The Leadership Curriculum

The leadership curriculum consists of several core and required programs. At the manager level, we developed and offered an intensive two-day program entitled Leading Big, which taught all people managers essential principles of managing at Yahoo!
1. Be accountable.
2. Set goals.
3. Delegate effectively.
4. Engage your team.
5. Develop your people.
6. Coach your people.
7. Recognize their achievements.
This program has been delivered throughout our global business and has recently been revised and delivered to incorporate winning behaviors at Yahoo!—the key attributes we have identified that are seen as the vital cultural component in our continued success. These provided the major emphasis in the program in 2008 and centered on decision making, teamwork, results delivery, and customer satisfaction.
Leading Big has been a spectacularly effective and popular program. The combination of practical tools, discussion, and a focus on strengths as the technology to help get them there has proven popular with leaders. Supplementing this program has been a combination of supporting interventions intended to delve into a small number of the essential elements of managing, a focus on coaching, building financial competence, and setting and managing goals well.
The other key element in this process is recognizing that workshops like Leading Big not only play a part in shaping the culture but also help reflect it back to participants so they can challenge their perceptions about themselves and how effective they are as leaders in creating a great culture. For this reason, we also offered a personal self-assessment for participants in 2008, enabling managers to see how their own perceived style compares to the cultural norms and artifacts of the organization. This is then debriefed inside the workshop, and participants are coached through the conclusions to be aware of and the steps needed to ensure we continue to create a great work experience inside teams. Managers are almost always at the front line of culture, organizational change, and business success, and without personal context setting, which such an assessment helps to provide, we cannot realistically hope or expect them to know how to shift their beliefs and actions or help their team to do the same.
For executives, Yahoo! has partnered with a third-party executive development practice, Axialent, for several years, in the delivery of an intensive leadership program entitled Courageous Leadership. This program is rare in the legion of executive development programs offered in corporate America today, as it deliberately focuses on the heart and consciousness of the individual. It propounds that great leadership starts with a fundamental awareness of self, the core platform that enables these leaders to be seen as compelling and trusting to others, where those within that leader’s area of responsibility see meaning in the work and solidarity in the relationships at work.
Much of the focus in business today is on the “it” dimension of life: “What is ‘it’ that we need?” “What is ‘it’ that is the problem?” The Yahoo! program moves past this, and considers the “I” and the “we,” thereby building on the need for personal integrity and great relationships as the foundation to knowing who I am and what is expected of me as a leader. As the Army Ranger credo states, “Leadership starts with what a leader must be, the values and attributes that shape a leader’s character. Leadership is a matter of how to be, not how to do.” We have chosen to help participants see the link between their beliefs and values and the kind of organization they lead.
Our vision for preparing and helping leaders to lead is wisely championed by author Mihaly Csikszentmihalyi in Good Business (2003):
The search for a life that has relevance or meaning beyond one’s material existence is the primary concern of soul. This is the need felt by a person aware of his or her own finitude; the need that motivates us to become part of something greater and more permanent.
If a leader can make a convincing case that working for the organization will provide relevance, that it will take the workers out of the shell of their mortal frame and connect them with something more meaningful, then his vision will generate power, and people will naturally be attracted to become part of such a company.
A leader will find it difficult to articulate a coherent vision unless it expresses his core values, his basic identity. For that reason one must first embark on the formidable journey of self-discovery in order to create a vision with authentic soul.
We chose to invest our resources and the time of our leaders in examining and applying this notion because we knew that these leaders have a hand on the lever that contributes to the experience and enthusiasm that users, customers, and employees feel about Yahoo! The emotional resonance of this brand is felt in the quality of this experience. If Yahoo! is more than just a business that creates or sells widgets, then starting with the heart meant that we needed to start with ourselves and ask how and why we lead—as a company and as individuals.
After all, no one can be forced into being led; we exercise free choice in what we think and feel about the place where we work, the people we work with, and the boss we have. Our premise in Courageous Leadership therefore is to ask, “How do you get someone to give you the gift of their energy? . . . to be led by You?” It’s a tough question, partly because the company’s culture had never articulated leadership in quite this way before, but also because it strips away the trappings of power and material success that often actualize leaders and forces them to take a look at themselves, and ask. “Where am I today? What do I need to do?”
This popular program, open to all senior leaders across our global business, can be an intensely profound experience for participants. In its first two years, this program was open to participation by invitation only, although we later offered it as a public curriculum event to encourage senior managers to network together and come together in the spirit of “One Yahoo!” to talk about themselves and the business in a way that is rare in such a busy organization.
Courageous Leadership is supplemented with a multirater assessment of personal style that enables the participant to understand his or her perceived work style in relation to the cultural norms Yahoo! has today and is building for tomorrow. It shines a bright light on the delta between where this person currently is and where he or she wishes to be behaviorally. Yahoo! also operates a large and extensive executive coaching program targeted toward its high-performing key players and emerging leaders.

Measuring Value

As with all other such interventions, sometimes it is difficult to assess the return on investment. Matters of the heart and issues of style are sometimes intangible or a little abstract in definition, and not easily measured. However, without clear and unequivocal evidence that these interventions were driving engagement, career development, and ultimately business results, it would be difficult for us to make a case for continued or increased funding and, just as important, the active involvement of senior executives.
To understand value, we commissioned an independent study in mid- 2007 from a trusted development partner to answer these key questions. We asked them to survey all managers who had attended the manager-level curriculum classes in the first half of 2007 (at least ninety days out from attending the programs) and to carry out a series of in-depth one-on-one interviews with a number of senior managers who had participated in the executive program. In all, we worked with more than four hundred managers and spoke at length to thirty executives (vice presidents or above).
Until that point, our evaluation had been largely reactive and based on the so-called level 1 Kirkpatrick model (satisfaction after a learning event) after people had attended the class. Although these data were positive in indicating that people were happy with the experience, we wanted to go much further and understand what impacts it had on the performance of the organization and the effectiveness and engagement of the participants.
Our starting point was to conduct a level 2 evaluation and ask, “Has learning taken place?” and then move to level 3 questioning: “Has behavior changed?” When we asked respondents to discuss their learning, the key concepts of both programs continued to resonate strongly, particularly the underlying theme of strengths at work and issues relating to the core principles of managing.
Some 75 percent of all respondents said that they remembered and had internalized the learning from these concepts into their routines at work, particularly in leveraging the strengths of others, setting goals, driving recognition, and engaging their teams. In addition, 97 percent of respondents felt that the programs had made a significant contribution to their ability to be effective at work.
At the executive level, we found that 93 percent of those interviewed believed the programmed content helped them to improve their attitudes and performance at work significantly, and 63 percent also cited significant improvements in their home life. When asked to judge whether they perceived this was a good investment for Yahoo! 91 percent said “yes” or “absolutely.” The elements of the program that resonated most strongly with this constituency related to notions of personal humility, accountability, and the importance as a leader of keeping promises. Twenty-five percent of respondents cited a major job change (promotion of increased responsibility) in the months following attendance at the program.
There are obviously significantly more data than presented here. The point is that we were able to demonstrate fairly conclusively that the investment in leaders is a valuable factor in affecting how they show up for work, how they feel they behave with their people, and the impact they have on the culture of the organization. Our next stage is to consider level 4 evaluation: What business impact has occurred and how can it be measured?

How Development Reinforces Brand

Yahoo! is deservedly proud of the brand reputation of its products and services; consumer research has consistently indicated that users see the brand as powerful, fun, engaging, and reliable. Internal brand guidelines at Yahoo! help to reinforce and protect this perception. It is therefore no surprise that internal programs are seen as key not only in the importance they attach to support this perception but also in the way they reinforce a complementary employment brand perception among current and prospective employees.
Research consistently demonstrates that engagement is critical to performance and that employees need to be deeply connected with their job and their employer. The experience of working on a great team and for a great company is important to employees, often to the exclusion of other factors such as location, level, and compensatory elements. In such a fierce employment market, most employees have multiple choices about what they choose to do and for whom, which places great pressure on organizations to offer best-in-class environments, benefits, and opportunities.
Effective and meaningful performance and career development are intrinsic to this. Programs that help people understand how to do their job more effectively and drive their perception that the company is investing in them play a valuable part in their decision to stay and the perception that others have of them. In the study of the senior executives who participated in the Leading Big and Courageous Leadership programs, 25 percent felt that participation in the program had been a factor in positive job change in the months following their attendance. The other element to this is the extent to which effective leadership drives team performance and retention: Yahoo! has historically enjoyed below-industry-average levels of employee turnover.

The Power of Focusing on Strengths

Strengths-based thinking seems obvious when you stop to consider what makes people feel strong at work. Of course, it makes sense that we might focus on the things we do well and perfect them. And yet you would be wrong. For the most part, organizations reference strengths but instinctively talk much more about weaknesses: the things that do not work or the well-trodden euphemism of human resource departments everywhere of “development areas” or “areas of opportunity.”
It is no surprise that we think like this. Deficit-based thinking about excellence is everywhere around us: we study divorce to understand happy marriages, provide remedial education time to subjects a child finds hardest at school, and examine sadness to try to define joy. This begins in families and schools and percolates through to companies, creating a performance management disaster in many cases where employees feel misunderstood or neglected or managers feel ill equipped to know how to truly engage their charges.
Creating a more positive strengths-based environment can be tackled by looking at the system or changing the way people and teams think. The former is significantly harder in planning and executing since it is systemwide and requires strategic planning and broad support. Tackling this challenge one piece at a time seemed much easier to us, which is why we implemented strengths-based thinking through all key development programs, including Leading Big and Courageous Leadership.
We also implemented a strengths-based coaching program in partnership with three of the company’s most trusted external coaching partners. Our thinking was that in addition to building awareness and confidence in how they manage the strengths of their teams, individual leaders needed help as people themselves to define, enhance, and ultimately draw on their strengths for the benefit of their job and the performance of Yahoo!
The other major element to this work is to see how leveraging strengths can help the team perform more effectively. Research by the Marcus Buckingham Company suggests that the experience of the team trumps that of the company at large. When people work on a great team, they feel energized and insulated from the wider difficulties a company may be experiencing. We saw strengths-based team development as a natural fit to this challenge and created a set of strengths-based team tools to help intact groups figure out what their individual strengths were and how they could leverage them.
The team-based development work was, and continues to be, very different from the public curriculum of classes. This work is exclusive to the individual needs of the team and is 100 percent referral-based work. Several members of the talent development team at Yahoo! spent a large amount of their time on only this kind of work. A lot of team development work is focused on strategic business planning and team formation. Strengths-based activities are highly complementary to these activities and provide a practical foundation of understanding why people perform the way they do. In other circumstances, we were brought to a team for the sole purpose of introducing them to strengths-based thinking.
There are several components to this work. The first step is to build awareness of strengths and facilitate a discussion with team members about performance and contribution. The Clifton StrengthsFinder, an assessment tool developed by Gallup used to measure and apply strengths, is a highly complementary tool to help with this process. This first step helps teams understand what strengths are, differentiate them from the things they might define to be a weakness, and share this awareness with the rest of their team.
The second stage of this process can run concurrently with the first session or as a follow-up stage in the work we did with specific teams. This involved inviting teams to participate in the Simply Strengths program by the Marcus Buckingham Company. Based on Buckingham’s best-selling book Go Put Your Strengths to Work (2007), this immersion program helps individuals examine their job in the context of day-to day tasks and activities, understanding the things they “love” and things they “loathe,” ultimately as a precursor to setting their strengths free, and focusing on what makes them feel strong. This program operates as both an immersion workshop for intact teams and a virtual classroom for teams or for individuals.
The strengths work proved to be highly popular and was consistently cited by teams across diverse sections of the company as a basis for building understanding of colleagues, greater patience and understanding of their role and contribution, and team morale and effectiveness. This anecdotal feedback was borne out in the study of talent development work at Yahoo! In follow-up evaluations between three and twelve months after completing Yahoo! public curriculum programs or team development programs, the value and practical application of strengths was the most frequently recurring positive feedback that respondents felt had helped them to understand and manage their team more effectively or feel better about how to perform in their role.

Conclusion

Investing in the talent of the organization seems a given as you look from the outside in to a knowledge-based business like Yahoo! with its assets and powerful and successful brand image. The study examined here explains in part some of the steps we took to get the process started. The data suggest that the investment is seen as positive and reinforcing to the culture and performance of the business, and we continue to consider how to augment this with new practices, tools, and interventions.
Leader and manager effectiveness stem from a keen focus on the core things leaders need to know and do. Giving them the time and space to reflect, practice, and improve is equally important. Putting off the investment needed to create great leaders is foolish in our view because leaders play a critical role in the customer value chain; underinvestment will play itself out in poor retention or a restricting or confusing environment for employees.
We also believe that accentuating the positive is important, which is why we have focused on strengths over the past few years and eliminated deficit-based thinking where we can. But if leaders are not held to account for driving the right behaviors in the organization, much of this powerful message could be lost. Ultimately the best learning takes place on the job, not in the classroom, so we have tried to keep class-based learning to a minimum. Although time in class is rare and valuable, the application of this learning back at work is where people get the chance to apply, practice, and grow.
In this sense, the performance strategy of the organization and positive reinforcing behaviors of the most senior leaders to create a model for those beneath them is important if the investments in the classroom are to be nurtured and developed. Like the industry we are a part of, we are probably still at the early stages of a long and interesting journey, but we feel that we have made a solid and interesting start.

References

Buckingham, M. Go Put Your Strengths to Work. New York: Free Press, 2007. Csikszentmihalyi, M. Good Business. New York: Viking Press, 2003.

About the Contributor

Stuart Crabb is a human resource leader with twenty years of experience in building high-growth organizations in the United States and Europe. This has included key leadership roles in Yahoo!, HP/Compaq, and Siemens, among others. He has conducted business in more than twenty-five countries and has lived in the United Kingdom, Germany, Australia, and the United States. His most recent corporate role was global head of talent development with Yahoo! Crabb is principal partner and cofounder of Oxegen Consulting, a leadership development and coaching practice based in the San Francisco Bay Area that focuses on strengths-based leadership programming and coaching.
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