Help me study for my Management class. I’m stuck and don’t understand.

SOURCE:

Interactive: Entrepreneurship: The Practice and Mindset Interactive eBook

by: Heidi M. Neck; Christopher P. Neck; Emma L. Murray

Chapter 7!!

Case Study

Marissa Mayer, Yahoo Inc. CEO

In 2013, Fortune magazine listed Marissa Mayer in the #1 slot on their prestigious 40 Under 40 list, ahead of well-known Internet tycoons such as Mark Zuckerberg (Facebook), Ben Silberman (Pinterest), and Kevin Systrom (Instagram). In 2014, Fortune magazine listed Mayer as #14 on its Most Powerful Women in Business list, and #18 on its Most Influential Women in the World list. Yet, by 2015, her star quality seemed to be getting tarnished.

Hailing from the farmland of central Wisconsin, Marissa Mayer had a typical small-town American upbringing. In high school, she was active in extracurricular activities, where she demonstrated leadership abilities as captain of her school’s successful debate team and pom-pom squad. She continued in her upward trajectory of success at Stanford University, where she initially studied to become a doctor but earned both a bachelor’s and master’s degree in computer science.

Mayer’s successes coming out of college opened many doors of opportunity. Despite receiving 14 different job offers from a variety of prestigious organizations, Mayer chose to accept an offer with a computer startup company called Google, which at the time was still in its infancy. When Mayer joined Google in 1999, she was only the 20th person hired by the company, which had been incorporated just a year previously.

An entrepreneur at heart, Mayer made contributions to Google in the early days of the company that were prominent, far-reaching, and in many ways foundational to the overarching success the company has enjoyed. She started out as a programmer writing code. Over time, however, she became increasingly involved in leadership roles that allowed her to experiment with policy strategies that proved highly successful. For example, her leadership and example led to clearer communication between executives and floor-level employees, and to the development of a mentoring program that has since been replicated at numerous other tech companies.

During her decade-plus stint with Google, Mayer became known for “her work ethic, eye for detail and vision” (Marissa Mayer Biography, 2016). Her perfectionism led her to experiment and research until she had found design, market, and policy solutions that met her unusually high standards. For example, Mayer once “wanted to test out 41 shades of blue for the toolbar on Google pages to see which one appealed the most to the user.” While such fastidious decision-making processes have surely caused anxiety among some of her colleaguesover the years, they seem to have ultimately served her—and the companies she has worked for—very well.

Like all entrepreneurs, Mayer has always kept her eyes open for new opportunities.

In a 2008 interview . . . she seemed to [already] be looking ahead to her next act. “I helped build Google,” Mayer said, “but I don’t like to rest on [my] laurels. I think the most interesting thing is what happens next (Marissa Mayer Biography, 2016).

What happened next caught the attention of Silicon Valley and the rest of Corporate America in unprecedented fashion. In July 2012, Yahoo Inc.—the search engine giant and competitor of Google—hired Mayer to be its new CEO. With the hire, Mayer became one of only 20 female CEOs in the Fortune 500. And at only 37 years of age, Mayer became the youngest of all Fortune 500 CEOs, male and female.

Yahoo hired Mayer for her entrepreneurial vision hoping she could turn around a troubled company that was facing “a lack of innovation” and “a culture problem.” Innovation and culture building were two things Mayer had excelled in at Google, and she immediately went to work. Her immediate shake-up of Yahoo included a line of executive firings and several new hires to replace them.

With her new leadership team in place, Mayer began leading Yahoo in a series of substantial investments and acquisitions. However, one decision made before she came on board was the sale of over $7 billion dollars of Yahoo stock to the Chinese e-commerce giant Alibaba in order to increase Yahoo’s cash reserves. With added capital for experimentation and expansion, Mayer spent her first year on the job overseeing the acquisition of over 20 smaller companies. The company’s highest profile, and most expensive, move was to acquire the hugely successful microblogging company Tumblr for a price of just over a billion dollars. Ever willing to demonstrate her entrepreneurial capacity for flexibility and experimentation, Mayer pioneered a new path for Yahoo with her nod to acquire Tumblr—a move that “analysts hailed . . . as a shift in industrial strategy” (Riggins, 2014).

After only 22 months at the helm, Mayer was able to announce an 84% profit rise from the previous year. Observers commented that Yahoo’s decision to place its future in the hands of a young and gifted math and science whiz from Upstate Wisconsin had been touched by King Midas. And Marissa Mayer, worth an estimated $300 million, was goldenly compensated for her leadership as well.

Given such accolades, it was a shock to many when, in the summer of 2014, Mayer was forced to announce Yahoo’s lowest quarterly earnings in a decade. By the end of 2014, analysts were questioning not only Yahoo’s financial viability but also Mayer’s leadership.

She may be a woman of power, but she’s been heavily criticised [sic] for her lack of support in helping other women break through the glass ceiling of her industry’s heavily male-dominated hierarchy. Meanwhile, her cold, calculated style has continued to chase some of Yahoo’s most talented engineers into the arms of rivals like Google and Facebook. (Riggins, 2014)

No stranger to ambition and audacity, Mayer was known for following a personal working style that includes the following two principles: “a) work with the smartest people she can find, and b) go for a challenge that makes her feel like she’s in over her head.” As impressive as it is for a woman under the age of 40 to have taken over one of the most prominent tech companies in the world, Mayer faced the risk of being blamed for Yahoo’s demise. Nevertheless, if the company were to be sold, she would take with her a severance package valued at over $150 million.

Critical Thinking Questions

Marissa Mayer’s early successes were rooted in her proficiency as a student in math and science. Why are subjects like math, statistics, logic, and critical thinking essential to product experimentation and market hypotheses?

How might you apply the “Rules of Experimentation” to discovering and developing your own entrepreneurship and leadership skills?

Data generation is critical to market research and product experimentation. What “Data” might you begin collecting to better prepare yourself for a career in entrepreneurship (journal writing, subscribing to a professional journal or blog, asking questions of entrepreneurial role models, seeking out a mentor, etc.)?

Marissa Mayer’s executive opportunity at Yahoo came about because of her outstanding work at Google, and skilled marketing of her own career along the way. In what ways are you currently expanding or contracting future opportunities for yourself based on your present performance as a student, employee, entrepreneur, networker, friend, and human being. Secondly, how are you marketing your own career to achieve future success?