Yahoo Walks Away Leaving $47.5 Billion On the Table

Like many business people I have been watching the Microsoft / Yahoo saga with interest.

On May 5^th, 2008, Jerry Yang, CEO of Yahoo, and his band of accountants, negotiators and consultants walked away from Microsoft’s $47.5 billion offer to acquire the second most popular search engine/portal site in the world.

Interestingly, despite prognosticators dire predictions of a 30% drop in Yahoo share price, May 6^th revealed investors had pumped up Yahoo’s share price by 6%. Indeed, there are Yahoo shareholders still holding out hope for some sort of buy-out on the part of Microsoft, and though the software giant is known to play hardball in negotiations, Yang knows a thing or two about search engines. He knows even more about content – and plenty of it.

The Marriage Between Google and YouTube

In ’07, Google bought fledgling YouTube (founded in 2005) for $1.65 billion, making instant millionaires out of the two college roommates who thought it would be fun to post funny videos. This corporate alliance changed the way people use the web.

Google quickly integrated the thousands of video clips from its acquisition into Google’s SERPs. Now, to watch a video clip, you Google the subject, Google generates the SERPs and links to the video are provided right there on the SERPs. You, the searcher, never leave Google. Google comes to you. With content. Stupid content, poignant content, political content, how-tos – it’s endless.

This marriage between search engine and content developer showed the synergies that can be created between SEs and good stuff to watch or read.

That’s Why Bill Gates Wants Yahoo

Microsoft owns the OS market. Certainly in the home and small business worlds. However, Microsoft doesn’t have a search engine (MSN employs Inktomi) and it doesn’t have much good content. The company’s online presence, MSN is a perpetual also-ran with a short life expectancy.

Microsoft, to maintain its pre-eminent position at the apex of computing and information dissemination, needs content and a means of accessing that content.

Today, Yahoo closed up on the NASDAQ. Let’s see if Microsoft comes back to the bargaining table. From my perspective, Gates and company don’t have much choice and Yahoo knows it. Yang wants more, and don’t be surprised if this hard-headed negotiator gets what he wants – a bigger payout for Yahoo shareholders. 

You Don’t Know What You Don’t Know!

I was preparing a presentation titled “The Winning Edge” for a group of insurance brokers and I was thinking about the importance of data.

A small company of 20 or 30 employees generates a lot of important data – data critical to making fundamental business decisions, to determining the company’s course and to increasing productivity.

Unfortunately, much of the data is never collected and that which is received by mid- and upper-tier management is virtually useless. Why?

Because too often data is collated and reported by IT professionals for IT boffins.

Even in the boardrooms of enterprise-grade corporations, each individual board member has a different level of understanding of the information contained in a report. For example, it’s unlikely that the Head of Marketing will understand the consequences of downstream cash flow on R & D based on 200 pages of numbers, charts, graphs, circles and arrows. It’s still gibberish to that executive.

Read the rest here

More about Hiring, Firing and Litigation

Three more bad hiring decisions:

1. Being Lazy

Employers who are lazy hire the first person who looks “almost” suitable. If you don’t want to do the job properly, then hire someone to do it for you.  Recruiters and search firms do this for a living.

2. Allowing Emotions to Influence Decisions

We buy a car by first choosing the car we want from an emotional viewpoint and then searching for logical reasons to justify the decision.

Some people hire the same way.  They make their decision within the first few minutes and then they spend the next half hour justifying the decision.

We all know that “emotion sells and logic tells”. Don’t let emotion into your interviews. Guard against it by having someone else involved in the employment process.

3. Failure to Recognise and Fix Bad Hiring Decisions

Many businesses know when they have made a bad hiring decision but don’t do anything about it.

The “wrong” employee must be dismissed as soon as possible. Do it quickly and try to help the person by offering assistance – but act before it is too late. 

Hiring, Firing and Litigation

With businesses facing high rates of employee turnover, wrongful dismissal claims and sexual harassment allegations (just to name a few issues), it surprises me that more thought isn’t put into hiring decisions.

Here are three mistakes I see all too often.

1. Not really identifying the business needs.

What are the skills, experience, character, and competencies you need? More importantly what are the organisation’s short-and long-term needs and the effect this hiring will have upon those needs.

When these are clear define the standards a candidate must meet including the educational background, work experience, and technical skills they must have.

And don’t forget to ask yourself if these could be supplied more effectively through outsourcing?

2. Hiring out of desperation

A key manager quits and must be replaced.

Most businesses have become so desperate at some stage that just about anyone will do. It’s only later that we realise how bad our decision really was.

If you can’t conduct a proper hiring process, hire a “temp” or borrow someone. But don’t hire in haste—too often you end up with a very bad taste.

3. Promoting from within

Remember the Peter Principle. (People get promoted until they reach their level of incompetence.)

Your best performers aren’t necessarily always the most qualified candidates for a specific job. This is especially true when promoting to management level. Just because someone is good at a particular role doesn’t mean they are capable of managing bigger teams or other functions.

Make sure you follow a thorough process when promoting from within. Not only could you lose other good people because of a bad promotion, just like incest, you can also create inbreeding and stagnate creativity.

The Accountability Factor

My observation is that many managers simply don’t know how to implement change. 

What do you do if people don’t enter information into your client contact system?  What do you do if reports are incomplete or missing all together?  Do they get fired? 

Everyone wants to be liked.  No one wants to be the bad-guy.  So instead of holding employees accountable, and gaining respect by demonstrating leadership, a manager may try to be everyone’s friend, ignore the “slips” and hope for respect that way.  It never works.  The employee will continue to under-perform when what they really need is a strong hand to mentor them and mould them into the type of employee your business needs.

If you set rules for the team, they should apply to the whole team, not just particular members.  Some managers have a bad habit of allowing good performers some slack while holding others accountable.  What they are doing is sending a message to their team that if you perform well you don’t have to be as accountable.

This is not to say you shouldn’t reward performers. You should – in a way that sends the right message to the rest of the team.

Maybe you are the cause of the problem.  Perhaps because you have been too lenient on your people or maybe you inherited the situation from a previous manager who didn’t want to offend anyone by being too harsh.  Regardless, it’s your problem now.

So – what to do…?

Before you consider replacing anyone, I recommend you try to rectify the situation by helping him or her change their behaviour.  Arrange a meeting to outline the issues and ask for ideas about how to make the changes.  Use the following three-step process for uncovering and solving problems.

1. First get general agreement from the person as to what the problem is.  Then ask what he or she thinks are the causes?  Let the person talk.  Keep your views to yourself.  It’s his problem and you want him to uncover the reason for it.
2. Next ask what can be done to minimise or eliminate the problem?  Let the other person come up with solutions.  You may be surprised.  If nothing else, try to negotiate rather than mandate a solution.  If you are taking action on his ideas rather than yours, good things are more likely to happen.
3. Finally set firm, achievable and measurable goals so the employee can demonstrate their progress on eliminating the problem.

After the meeting summarise your agreements in writing.  That way there can be no doubt later about what was agreed.

In summary, if you have set reasonable targets and some of your people aren’t meeting them, first try to correct the problem through counselling, coaching or training.  If that doesn’t work, then make them understand it is ‘your way or the highway’.

If all else fails replace them.  Do everything you can to make it work but, in the end, you have to do what is right for your business.

Are you really accountable?

Have you ever looked at a room full of people and asked – “Who is responsible?” and watched every person squirm and look at someone else?  It’s not a pretty sight. 

One of the biggest issues I see negatively impacting on business success is lack of accountability.  Nine times out of ten when a business is underperforming accountability is missing.

Everyone agrees that a key to having a successful business is setting, achieving and measuring against a strategic set of objectives.  However, when managers don’t hold their employees accountable for results, the message that is sent is that missing targets and performance goals is acceptable … and your business will suffer.

Below-average performance may appear in a variety of ways.  The employee may consistently arrive late to work, fail to submit timely expense reports or simply not follow company procedure.  What message do you send people when there is no consequence for non-performance?  When managers allow below average performance they are, in effect, encouraging mediocrity.

Not only does the acceptance of an employee’s under-performance encourage a blatant disrespect for co-workers, the manager and the company, it breeds a negative environment where this type of behaviour is perceived as acceptable.

One of the consequences of the lack of accountability is it always effects the good performers.  Your “A-team” will either become frustrated, possibly quit and go to a company that encourages their employees to achieve a higher set of standards, or they will begin to question why they need to work so hard – and slip into the easier role of under-performance. 

Either way – your best employees will not be happy, and again, your business will suffer.