February 28, 2014

Prof. Jay Prag: ‘Why being the outside leader – like Marissa Mayer – is one of the toughest jobs in business’

By Jay Prag

[From the Inland Valley Daily Bulletin]

One of the first things Marissa Mayer did when she left Google to become CEO of Yahoo was to end Yahoo’s flexible policy that allowed people to work from home. This was shocking to many because Mayer is a young mother as well as a CEO and it was expected she would understand the importance of what is called a family-friendly workplace. In addition, she was coming from Google which has famously worker-friendly labor practices.

But there’s a big difference between ping pong tables in the break room and allowing people to work from home; especially at a struggling internet company in need of something innovative to keep it relevant. What Mayer probably saw was that her people were doing their basic jobs at home, but weren’t able to brainstorm, weren’t able to synergize, and weren’t able to find the breakthrough that the company really needed when they weren’t working in the same space.

“All hands on deck” in the modern, thought-driven workplace is the clarion call for a corporate culture which finds that the sum of one hundred “ones” really can be much more than one hundred.

This isn’t an article about Marissa Mayer; it isn’t clear yet whether she will be able to turn Yahoo around. This is about one of the hardest jobs in all of business: coming in as the “outsider” leader.

Leadership is never an easy position. You need to find the right motivations and the right approaches for a wide variety of people that you’re trying to lead. In addition, good leadership is always situational.

There’s no such thing as the right way to lead all people all of the time.

A leader who has come up through the ranks of an organization will know the people that she is leading.

An inside leader will know the histories, the cultures and the problems of its organization. Of course, such knowledge does not automatically make the insider a leader. It may, for instance, bias the leader against change.

And so, many organizations reach out to people who have proven their leadership abilities in other organizations. There are no born leaders, but there are experienced ones and the outsider leader might be perfect for some organizations. But for them the circumstances would be the opposite. The outsider leader has leadership skills but none of the knowledge that helps her know how to keep the “good” while eliminating the “bad.” Outsider leaders usually know that they have to listen and learn before they act. But listen to whom? Learn how?

When Marissa Mayer came to Yahoo she determined that the work-at-home policy was getting in the way of collaboration and thus impeded the innovations that the organization needed to succeed. The leader of a company whose output is creative and innovative has to make sure the circumstances exist for creativity and innovation to occur. You can’t order someone to be creative. Creativity doesn’t work that way. But you can foster creativity. So in eliminating the work-at-home policy, she should have made it clear that this was not a punitive move but rather a corrective one that the organization needed.

If a new coach is hired to revive a struggling professional sports team, he might find very different problems. He might find players who are out of shape or lackadaisical about their job. The new coach can be more directive in this case. You can tell players to lose weight, pass the ball more or watch videos of the next opponent. You can tell them that they will not get to play if they don’t improve.

But the real world outsider leader, brought into a struggling company, is likely not running a company like Yahoo or coaching a losing sports team. She is being asked to lead an organization that’s a blend of these and other types of businesses. So there needs to be a blend of leadership styles.

The tough task ahead for this outsider leader is figuring out when to change the culture and when to change to personnel. Whom to promote and whom to ignore. Get it right and the organization will have a chance to turn around. Get it wrong and you’ll almost certainly lose the people who have kept the ship afloat.

Jay Prag is a finance professor at the Peter F. Drucker and Masatoshi Ito School of Management at Claremont Graduate University and serves as academic director for the school’s Executive Management Program.