What Do Yahoo and GM Have in Common?
On the surface, you wouldn’t think that there would be many similarities between Yahoo, former innovator in the world of bits and bytes, and General Motors, former leader in the world of nuts and bolts. (Well, we’ve already identified something they have in common. They’re both “formers.”)
Here’s another similarity. In 2008, both companies have had CEOs who have demonstrated a real talent for being completely out of touch with the rest of the world. In Yahoo’s case, founder and Chief Yahoo, Jerry Yang resumed the role of chief executive officer about 18 months ago. In a mutual agreement with his board, he stepped down from that position last week. His biggest accomplishment during his latest run? In a memo to employees announcing his resignation, Yang described it as creating a “more open, competitive Yahoo!” His shareholders might offer another opinion citing the more than 60 percent decline in market value that came from Yang’s unwillingness to play ball with Microsoft when they bid as much as $33 a share for the company earlier this year. Yahoo is now trading around $9.00.
That brings us to Rick Wagoner, the CEO of GM. Here’s a fun fact that I just looked up on Bloomberg.com. GM’s market capitalization is about $1.9 billion. That’s about $11 billion less than Yahoo’s market cap (you can look it up!). And yet, as so many commentators still cannot believe, Rick Wagoner and his colleagues from Chrysler and Ford all found it appropriate to fly to Washington on their own corporate jets last week to beg Congress for money. There’s not much more I can add to the jet fiasco beyond what’s already been said (see Dan McCarthy's Great Leadership, Stanley Bing and Bob Sutton for some smart takes on that topic.)
So, what do Yang and Wagoner have in common? I don’t know either of them personally, but from reading their stories and watching them over the past year, I’d argue that they both consider themselves to be indispensable to their company’s success. It’s not a real big step from there to the kind of arrogance on display in D.C. last week. Here’s a quote from Charles DeGaulle that every leader should remember, “The cemeteries are full of indispensable men.” When you’re surrounded by people who have an investment in pleasing you or your financial or positional status insulates you from the “real world,” it’s pretty easy to start believing that you’re all that and a bag of chips.
One of the things that encourages me about President-elect Obama is his expressed concern about being walled off from the external world. (This morning’s Washington Post offers the details.) For all of our sakes, let’s hope that he and his team come up with some ways to keep him connected with reality.