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5/21/2012
10:30 AM
Patrick Houston
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Yahoo ResuMess: The Trouble With Entitlement Culture

The resume drama for Yahoo CEO Scott Thompson had a quiet player: a corporate culture that seeks fairness but produces employees who feel entitled. Here's what his successor, and all managers, must know about that problem.

In all the coverage surrounding Yahoo's "ResuMess" scandal, one major development remained largely buried. But as a former Yahoo exec, I took quick notice. The reasons: It may have played a significant role in CEO Scott Thompson's departure, it represents one of the biggest challenges confronting his replacement, and it holds lessons for anyone faced with managing the growing legions of employees who consider their jobs a birthright.

But before I explain, I'm duty-bound to issue the same disclaimer I did in my last column about lessons in Yahoo's meltdown: After working there as a general manager and VP, Yahoo sent me packing in 2008. Take that into account as you assess my conclusions herein.

Here's what happened to make me go "oh oh." As reported by the New York Times, after Thompson attempted to explain away a computer science degree he didn't have, Yahoo employees and managers contacted board members directly, seeking his dismissal.

Directly!

Does anyone beside me consider that brazen, especially when it comes to an egregious but hardly criminal ethical breach represented by an inflated resume? I've groused about my leaders to my colleagues. I've even kvetched to my boss. Who hasn't? Complaining about the mucky mucks is as ubiquitous as the water cooler itself. But never have I gone to a director to call for my CEO's head. Not even when I worked at a startup where I regularly ran into board members, sometimes over drinks.

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But then again, this is Yahoo. I can attest to its culture of entitlement. Individual employees claimed not only a right to their opinion but a wont to invoke it too. Or as one of my former exec-level colleagues put it, "The failing of Yahoo had as much to do with the culture [where] anyone can pull the cord and shut down the assembly line."

[ Corporate leader as hero is a myth. See The Fall Of The Messiah Leader. ]

Yahoo did its own part to spoil the child--what with stock options, subsidized lunches, and free gym memberships, lattes, and sodas. What's more, Yahoo democratized itself too. When I was there, everyone at Yahoo HQ sat in a cube.

Of course, I'll side with those of you already keystroking the flame mail about the virtue of empowered employees. But what happens when it gets to where they become ungovernable? Yahoo may have a broken business model, an errant strategy, and a hapless board. It may have had weak leadership. But it also may be just as wanting for stronger "followership."

Consider one of the most revealing, publicly available datasets I've encountered beyond a company's balance sheet. It comes from Glassdoor, a jobs and career community where employees have already anonymously offered 2.5 million ratings and reviews for more than 160,000 companies.

According to Glassdoor, 879 respondents have given Yahoo's leadership an average 2.4 rating on a scale that tops out at 5. That compares to a 3.9 for nearby Google, or 4.5 for neighboring Facebook. Ouch.

Yahoo! CEO Approval Rating by Quarter - courtesy of Glassdoor
Image courtesy of Glassdoor

Glassdoor also tracks leadership approval ratings, a number that hearkens to those that bedevil presidents. According to Glassdoor, Yahoo employees have been swift to give their CEOs the thumbs down. Co-founder Jerry Yang became the chief at an 81% approval. In just three quarters, his rating plunged to 24%. When his successor, Carol Bartz, took over, she started with a 91% rating that steadily drifted downward -- to 33% by the time she got the heave ho.

I discussed Yahoo's prospects with Rusty Rueff, a member of Glassdoor's board and a workplace consultant. Rueff rose through the ranks at New York-based Pepsico before arriving as an HR exec in 1998 at Silicon Valley's Electronic Arts gaming company where, he admits, he was shocked by the egalitarian way things were done. Even during his own interview process, "everyone had a say," he told me--bosses, peers, and subordinates alike.

His advice for Ross Levinsohn, the 48-year-old Yahoo exec anointed to replace Thompson, is the same for anyone at any level managing in a "teetering" company. "You have to paint for your employees the best vision you can," he says. In my own experience that means finding a mission that transcends money, self-interest, or company success. People who make a living with their intellect really do want to change the world, and you need to find a genuine way to tap their idealism.

"If there's a time to be transparent," he added, it's at times of turmoil. It's okay to stray from the damn-the-torpedoes-full-speed-ahead line companies invariably invoke. He encourages managers to be "way empathetic." In my book, that means telling them something like this: I know you're ticked and frustrated and anxious about this corporate BS, and, honestly, I am, too.

But the main lesson for you may reside in what Rueff suggests for the rest of Yahoo's managers. And he agreed with me when I paraphrased it in the form of an old saying: People don't quit their job--they quit their boss.

Make it so they won't quit you. "Create personal relationships as strong as you can," Rueff said. That means making an earnest effort to help them grow. And by all means, nurture the team. People may abandon a cause or an institution, but they're loath to desert friends and colleagues with whom they've shared the struggle.

And when someone won't play it as a team sport? "If they can't change, they have to go."

The workplace is changing, and fast. But everyone, managers and employees together, need to understand that there's one certainty in uncertain times: Doing business always entails a struggle. No one's guaranteed an easy time.

Patrick Houston is the co-founder of MediaArchiTechs. He is a former SVP for a new media startup, a GM at Yahoo, and editor-in-chief at CNET.com. He can be reached at patrick.houston@mediaarchitechs.com.

At this year's InformationWeek 500 Conference C-level execs will gather to discuss how they're rewriting the old IT rulebook and accelerating business execution. At the St. Regis Monarch Beach, Dana Point, Calif., Sept. 9-11.

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TreeInMyCube
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TreeInMyCube,
User Rank: Apprentice
5/21/2012 | 7:26:01 PM
re: Yahoo ResuMess: The Trouble With Entitlement Culture
I'm a little confused. Are you advocating the new execs to be "way empathetic" as a way to change the entitlement culture, or as a way of working around / dealing with the entitlement culture? I agree that the workplace is changing, and fast. Are you saying that employees who are steeped in the entitlement culture need to see that, and stop pulling the cord as often? Should readers of the IW Global CIO feature promote this culture, discourage it, or just deal with it?
PatrickH
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PatrickH,
User Rank: Apprentice
5/21/2012 | 8:26:58 PM
re: Yahoo ResuMess: The Trouble With Entitlement Culture
Here's a point Rueff made, but didn't get into the piece, even though I concur:

Companies verge into an entitlement culture when they lack strong executive leadership -- and by strong I mean leaders with the vision, will, and credibility (most of all) to say: Here's where we're headed and you either need to get behind it or leave.

Yahoo hasn't had that kind of leadership, for whatever reason. Those approval ratings are telling, especially when you compare them to Yahoo's competitive set. But those approval ratings may say as much about the employees who are giving them.

While knowledge workers need to be treated well, like people and not machines, there's line that companies like Yahoo cross the line. And Yahoo operates the way many successful Silicon Valley companies do. I have a friend who's a contactor -- and contractor mind you -- at Google and he still gets perks like free meals in the Googleplex' gourmet cafeterias.

My own management style has been to take this position with my charges: I'm not here to make you happy. Happy is something you make for yourself. I am here to treat you fairly, communicate with you, and help you to help yourself as much as I can.

This is a major workforce issue today. I've only scratched the surface.

It woud be helpful to me and to other IW readers, I'm sure, if you told us what you see as possible ways to change or operate in a culture of entitlement.
informationweekuser2012
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informationweekuser2012,
User Rank: Apprentice
5/22/2012 | 5:35:15 AM
re: Yahoo ResuMess: The Trouble With Entitlement Culture
This is an amazingly ill-founded and poorly thought out opinion piece. So you're saying that employees should just follow whatever their CEO and board of directors says and never voice their opinion? And that holding Thompson accountable for lying on his resume -- which is an immediately fireable offense for any rank-and-file employee --- and telling the board of directors to fire that SOB is "brazen"? Explain to me why employees shouldn't speak out against what they perceive to be embarrassing and unethical behavior on the part of the CEO.

The problem is not the attitude of the employees. No, the problem is you, Mr. Houston. It's authoritarian attitudes like yours that embolden SOBs like Thompson to think that he can get away with lying. No wonder Yahoo! fired you.
MyW0r1d
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MyW0r1d,
User Rank: Strategist
5/24/2012 | 12:13:57 AM
re: Yahoo ResuMess: The Trouble With Entitlement Culture
I have to disagree and say it is well founded in centuries of history. RHIP was popular before the "matrixed" organizations (which may well be called ill-founded). A captain cannot steer a ship if a popular vote has to be taken of 100% of the crew before giving the order to turn (well they can but the Italian ship captain of Concordia is still under trial). Information is a strategic instrument to be controlled for company success and to assume a rank and file employee has access to the same decision making information as the CEO is hardly credible. I do not believe Mr. Houston was advocating quietly following the leader as any successful manager knows feedback is crucial, but perhaps he is opposing anarchy and subversion. As governance principles grow and identifies the responsibilities of the board from those of the corporate management staff (the CXOs), will it now be necessary to also identify those which are not occupying management roles? Looking at the chart, Yahoo's directors seem more inclined to run a popularity contest such as American Idol than a competitive business based on sound strategy and economics.
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