In the WSJ today, Thompson is out. Yahoo has a long way to go to restore trust in the company and its brand.
According to today’s Wall Street Journal:
Yahoo Inc. YHOO -1.62% CEO Scott Thompson agreed to resign this weekend after the company’s board obtained evidence that contradicted his claim of innocence over his misstated academic record, people familiar with the matter said.
The board is continuing its probe of the matter to determine whether it can fire Mr. Thompson with cause, meaning he would lose out on millions of dollars in severance pay, one of these people said.
Ross Levinsohn, Yahoo’s executive in charge of its media websites, will be named interim CEO with the possibility of the role becoming permanent, this person said. Fred Amoroso also was named Yahoo’s nonexecutive chairman, succeeding Roy Bostock.
The changes at the top of the long-ailing Internet company are a major victory for dissident shareholder Third Point LLC, which brought the matter of Mr. Thompson’s inaccurate academic record to light.
Yahoo’s board plans to give Third Point three board seats to end a proxy fight initiated by the hedge fund, which owns around 6% of Yahoo’s shares. Third Point’s leader, Dan Loeb, will join the board along with restructuring expert Harry Wilson and media-company consultant Michael J. Wolf, this person said.
Now, Thompson is saying he never submitted a resume. Well, he may have been hired based on his ability and proven capability, but I think what people are reacting to is that Yahoo in general has had trust issues and now, they have a CEO who has, in the past, lied on his resume. Even if he did not lie to get that job specifically, it is only semantics–he did lie at some point on his resume.
I have my students write a resume and linkedin.com profile in every marketing class I teach as part of a self-marketing plan. I always stress (as was stressed to me at the University of Michigan Ross School of Business) that you never lie on your resume–never. There were times I was tempted to change the wording of one of my past job titles to get a job I wanted and I was probably passed over for a job because I did not have the exact wording on my resume that they were looking for, but I knew that I could not change what was true. If you lie on your resume, it will come back to haunt you when you least expect it.
Thompson might be able to say with a clear conscience that he got his job by his proven track record of ability, but there will always be a glimmer of doubt about how he was able to obtain that experience because of the first time he lied on his resume.
Original Post 5-10-12
Warren Buffett said it–Yahoo has a trust problem. We agree. When your CEO is questioned about his credentials, you’ve got a problem. When Yahoo fired their ex-CEO, Carol Bartz, over the phone, that should have been their first sign that they’ve got trust issues. We don’t know the ins-and-outs of what is going on there, but obviously, they’ve got some work to do. Now, it appears they are vetting all board credentials to make sure this is not a wide-spread credential problem.
How can you expect employees and investors and customers to have faith in the Yahoo! product and service when there is so much turmoil going on at Yahoo!?
Yahoo needs to stop for a moment and figure out where they went wrong and what they need to go to regain trust in each other at the highest levels. There is no way that they can expect customers and employees to be their advocates until they put forth a united front.
I’d like to suggest that the Yahoo board work on the ROCC of Trust and do it soon.
1) Commit to being reliable with each other. Promise to act in a consistent manner. That includes sharing information in a consistent manner. The current CEO can’t say one thing one time and another thing another time. Either he does have a computer science degree or he doesn‘t. If he is not consistent about something like his credentials, people will wonder what else he is not consistent about. This is something HR recruiters will tell you all the time–never lie on your resume–it will eventually catch up with you.
2) Promise to be open and honest with each other. This is absolutely critical in order to re-build trust. There is a reason that the board could not fire Carol Bartz in person but felt the need to do it over the phone. It is not necessarily an indictment of her, but of the inability to be open and honest with each other. Being open and honest includes sharing the bad news with the good, all in an effort to build the business and make it better for all stakeholders.
3) Prove to all stakeholders that you are competent. With so much turmoil and mistakes, it makes an outsider wonder who is competent at Yahoo. The board needs to use their open and honest communication in a reliable way to show its stakeholders that it is truly competent to manage the company. There are doubts and you can understand why.
4) Finally, demonstrate some compassion. Despite what they thought of Carol Bartz, it was not compassionate to fire her over the phone, just as it was abhorrent for the PSU Trustee’s to fire Joe Paterno over the phone. Compassion means having the other party’s interest at heart and your organization’s interest at heart. Sometimes you have to consider the big picture and do what is best for the organization, even if it means that the CEO must stepp out of the way so that the organization’s credibility can be restored.
Yahoo has been a pioneer. It would be a shame for it to all fall apart because of a lack of trust.