Two new media company CEOs started this month. Scott Thompson moved from president of eBay’s PayPal unit to CEO of Yahoo, and Laura Lang moved from CEO of Digitas, the world’s largest digital advertising agency, to CEO of Time, Inc.
What do these two have in common? Both come to their new companies after a long search, both are replacing fired CEOs, and both come from outside their new companies and have limited, if any, direct experience in the medium they are going to lead.
This being the beginning of a new year and a time when predictions are traditionally in order, I’ll hazard a guess about how long Thompson and Lang will last in their new jobs: Both will be out at the end of two years because it will take that long for their respective boards of directors to deflect blame from themselves to the two they have hired.
Yahoo’s board is led by co-founder Jerry Yang and board chairman Roy Bostock, both of whom have reputations in Silicon Valley and Silicon Alley of being major bozos who have fumbled by having four CEOs in five years (Terry Semel, Jerry Yang, Carol Bartz, and, now, Thompson). Thompson like Bartz and Semel, came from outside Yahoo.
The Yahoo board, led by Bostock, backed Jerry Yang, the only insider of the four CEOs, when he made the bonehead decision to turn down Microsoft’s desperate and excessive $45 billion offer to buy Yahoo in 2008. Soon after this embarrassment, the board hired Carol Bartz, and then fired her two years later.
Time, Inc. is owned by Time Warner, which is headed by CEO Jeff Bewkes, who does pretty much what he wants because he has strong support from his board. Time, Inc. was headed by Ann Moore, a 30-year Time, Inc. veteran, who was CEO for eight years, but couldn’t lead the web-backward magazine group into the digital age. So Bewkes hired web-savvy Jack Griffin, head of the magazine division of Meredith Corp.
The Ivy League, cliff-dwelling, web-ignorant editors at Time, Inc. couldn’t stand the outsider Griffin trying to drag them into the digital age, and they undermined him, just like they trashed the Warner Communications people in 1990, when Time, Inc. bought Warner Communications for cash and, especially in 2001 when they trashed the AOL people after the AOL purchase of Time Warner was approved.
When Griffin was fired, The New York Times quoted a confidential source who was close to the situation at Time, Inc. as saying:
“Jack’s exit had nothing to do with management style and everything to do with the question of whether Time is manageable so long as entrenched interests fiercely resist the change necessary to position the organization for the future,” this person said. “Fortunately, the team Jack leaves behind is first rate and he wishes them all the best of success.”
So what does Bewkes think will be different when the digital marketing expert, Laura Lang, tries to herd the Time, Inc. cats? I give her two years before the cliff-dwelling editors get her.
And I’ll give Thompson two years at Yahoo, not because anyone below him will torpedo him like they will Lang, but because those above him on the board are clueless. The board will blame him for failure to turn around a dinosaur business, which Lou Gerstner couldn’t save from shrinking. Huge, lumbering, mass-appeal portals are dead; they’ve been painfully nibbled down by smaller, more nimble, speedier, niche-appeal websites and, especially, apps.
What hiring from outside their organizations says about the boards of Time Warner (and Bewkes) and Yahoo is that they are not doing their jobs well. They are not doing effective leadership training and they are not doing adequate succession planning. It’s their fault there is no one in their organizations who is qualified to step up. And if or when Scott Thompson and Laura Lang fail, it will not be their failure, it will be the failure of leadership at the very top of Yahoo and Time, Inc. once again.
