Marissa Mayer’s 2 Years at Yahoo and How Confidential CEO Searches Are Done

March 10, 2015


In the spring of 2012, as has been publicly reported, a Spencer Stuart team and I worked with the Board of Yahoo! to recruit Marissa Mayer as CEO. Much has been written about her (4.4 million Google responses for “Marissa Mayer Yahoo CEO”) and how she’s performed since her appointment was announced on July 16, 2012. It is not appropriate for any professional adviser to write a public report card on the performance of one of their clients. And certainly no executive recruiter worth their salt should ever comment publicly on the performance of their placements.

However, considering Nicholas Carlson’s expansive New York Times Magazine Article and after giving Marissa a heads up that I would do so, I made a few specific comments for LinkedIn about one important point. That she is executing the plan that she laid out with clarity back in the summer of 2012. Marissa said at the time that turning around Yahoo! would be a two to four year process and that her approach would be to fundamentally fix the product, which would require hiring great engineers, product people, and other talent. And only when the product was fixed could the audience start growing again, which is what was required to drive revenue. She and the team have been following that playbook to the letter, throwing in 20 acquisitions, and monetizing the spectacular investment in Alibaba along the way.

New CEO appointments are typically big news in business. There are influential journalists and investors who watch for executive changes, especially at the CEO level, with hawk eyes. But how can a board of directors go through a secret process of identifying, cultivating, assessing, and hiring a new chief executive? And what are the consequences when they can’t pull it off?

In doing a CEO search a board can and should have a very tight, confidential process that starts with establishing a project name and shared commitment among the board and outside advisers to keep things strictly under wraps. A spec is developed by interviewing members of the board, reviewing strategic plans, and determining what the forward looking leadership requirements are to achieve the strategy. A targeted list of prospective candidates who meet the criteria is identified, reviewed, and prioritized by the board and a short list is agreed on for outreach. Then either board members or an executive search firm reaches out to the high priority candidates and invites them into the process. Extensive interviewing, assessment, and referencing is conducted and when there is a candidate of choice selected, negotiations and transition planning ensue. When all goes smoothly, the board has a robust slate of candidates, each representing different trade offs, and decides to put its confidence behind the chosen candidate. All the other candidates go back to their day jobs and hopefully feel well treated and communicated with in the process.

Several high profile companies in technology and other sectors have tried to follow this path but for one reason or another were not successful. Candidate identities were revealed in the media. Rumors spread inside of the companies leading to morale issues and factions. For the candidates whose names were leaked it was even worse forcing them to speak to their bosses or boards and declare their loyalties. Breakdowns in a process can be bad for the individuals and their careers, just as they are bad for a hiring company. It is even bad for the candidates who stay through to the end; no one wants to be a second choice.

So if you are involved in a CEO search in any way it is in your and everyone’s interest to ensure confidentiality.

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