Yahoo would be unimaginable without its well-known, although publicly criticized CEO, Marissa Mayer. In the following presentation, we take a closer look at the corporate transformation undertaken by Yahoo’s leadership, while paying special attention to the change strategy used for trying to radically re-establish itself in today's changing environment. In so doing, we analyze the company’s turnaround strategy and discuss the advantages, as well as potential dangers such measures can entail.

1. University of Applied Sciences Dresden
Master International Business
Summer Term
Change Management
Lilo
Pabst
KianaFrank
1

2. CHANGE
MANAGEMENT
Yahoo seems to have lost the internet.
(Honan, 2012)

3. 3
1. Yahoo! History
2. Leadership Change Matrix (Dunphy & Stace)
A. Collaborative & Consultative Leadership
B. Directive & Coercive Leadership
C. Evaluation of Leadership Change Matrix
3. Classification into Organizational Theory
A. Machiavelli
B. Argyris
C. Kruse
Table of contents

4. 4
David & Jerry‘s Guide
to the World Wide Web
at Stanford University
1994
1996
Yahoo! goes
public
(Oreskovic, 2015)
1. Yahoo! History

5. 4
David & Jerry‘s Guide
to the World Wide Web
at Stanford University
1994
1996 Yahoo! goes
public
(Oreskovic, 2015)
1. Yahoo! History
Survival
Yahoo! share at 5$
early
2000s
Yahoo! in
constant rivalry
with Google
Crisis
Dot.Com bubble
Yahoo! share at 118$
2000
2001
(Carlson, 2013a; Oreskovic, 2015)

6. 4
David & Jerry‘s Guide
to the World Wide Web
at Stanford University
1994
1996 Yahoo! goes
public
(Oreskovic, 2015)
1. Yahoo! History
Survival
Yahoo! share at 5$
early
2000s
Yahoo! in
constant rivalry
with Google
Crisis
Dot.Com bubble
Yahoo! share at 118$
2000
2001
(Carlson, 2013a; Oreskovic, 2015)
2012
- CEO: Jerry Yang
Jun 07 - Dec 08
- Failed takeover
bid by Microsoft
2007
2008
2009
2010
2011
- CEO: Carol Bartz
Jan 09 - Sep 11
- Dismissal of 2000 ppl
- CEO: Tim Morse
Sep 11 - Dec 11
- CEO: Scott Thompson
Jan 12 - May 12
- Dismissal of another
14% of the workforce
- CEO: Ross Levinsohn
May 12 - Jul 12
(Carlson, 2013a; Carlson, 2015, p.105/129-131/208-213; Oreskovic, 2015)

7. 4
David & Jerry‘s Guide
to the World Wide Web
at Stanford University
1994
1996 Yahoo! goes
public
(Oreskovic, 2015)
1. Yahoo! History
Survival
Yahoo! share at 5$
early
2000s
Yahoo! in
constant rivalry
with Google
Crisis
Dot.Com bubble
Yahoo! share at 118$
2000
2001
(Carlson, 2013a; Oreskovic, 2015)
2012
- CEO: Jerry Yang
Jun 07 - Dec 08
- Failed takeover
bid by Microsoft
2007
2008
2009
2010
2011
- CEO: Carol Bartz
Jan 09 - Sep 11
- Dismissal of 2000 ppl
- CEO: Tim Morse
Sep 11 - Dec 11
- CEO: Scott Thompson
Jan 12 - May 12
- Dismissal of another
14% of the workforce
- CEO: Ross Levinsohn
May 12 - Jul 12
(Carlson, 2013a; Carlson, 2015, p.105/129-131/208-213; Oreskovic, 2015)
2012 CEO: Marissa Mayer
Jul 12 - Present
2002 -2012
Executive at Google
2012
CEO at Yahoo!
1998
Stanford University
M.Sc. Computer Science
1999
Employee #20 at Google
(Postinett, 2016; McLean, 2014; Carlson, 2013a; Carlson, 2015,
p. 136/144;Fairchild, Kowitt, Leahey, & VanderMey, 2014)

8. Revenue in m$
... despite Mayer’s change
initiatives, there was no significant
improvement regarding the
financial performance of Yahoo!
increased their revenues in the same
time span from 37 bn$ to 75 bn$ (+100%)
(Finanzen.Net,2016;Statista,2016;Russell,2014)
5
1. Yahoo! History

9. Leadership Change Matrix
by Dunphy & Stace
Leadership Style Scale of Change
Australian service industry
Enterprises subjected to
environmental change
(460 respondents from 13 companies)
DimensionsSample
(Dunphy,Stace,1993,p.905-920)
“[...] leaders make the biggest difference between success and failure
in implementing high magnitude change [...] accounting for (at least)
50% [...]“ (Rowland, Higgs, 2008, p. 62)
2. Leadership Change Matrix
6

10. 1.2 Yahoo! - Steps for Change
Finetuning
Incremental
Level
Modular
Level
Corporate
Level
Collaborative
Consultative
Directive
Coercive
ManagementStyle
Types of ChangeThe
Dunphy & Stace
Style of Change
Management
Matrix
STYLE - 1
Participative
Evolution
STYLE - 2
Charismatic
Transformation
STYLE - 3
Forced
Evolution
STYLE - 4
Dictatorial
Transformation
(Dunphy, Stace, 1993, p. 908; Senior, Fleming, 2006, p.285)
7
2.A Leadership Change Matrix - Collaborative & Consultative Leadership

11. 1.2 Yahoo! - Steps for Change
Finetuning
Incremental
Level
Modular
Level
Corporate
Level
Collaborative
Consultative
Directive
Coercive
ManagementStyle
Types of ChangeThe
Dunphy & Stace
Style of Change
Management
Matrix
STYLE - 1
Participative
Evolution
STYLE - 2
Charismatic
Transformation
STYLE - 3
Forced
Evolution
STYLE - 4
Dictatorial
Transformation
(Dunphy, Stace, 1993, p. 908; Senior, Fleming, 2006, p.285)
7
2.A Leadership Change Matrix - Collaborative & Consultative Leadership

12. Yahoo! - Steps for Change
Finetuning
Incremental
Level
Modular
Level
Corporate
Level
Collaborative
Consultative
Directive
Coercive
ManagementStyle
Types of Change
The
Dunphy & Stace
Style of Change
Management
Matrix
STYLE - 1
Participative
Evolution
STYLE - 2
Charismatic
Transformation
STYLE - 3
Forced
Evolution
STYLE - 4
Dictatorial
Transformation
ag, 2. April 16
• FYI-meetings once per week
> Wins of the month & work anniversaries
> More transparency (Carlson, 2015, p.258)
• PB&J (Process, Bureaucracy &
Jams)
> Online suggestion box for improvement
> PB&J list is public (Sellers, 2013a; Sellers 2013b;
Carlson, 2012a; Carlson 2015, p. 262)
• Smartphones & fitness tracker
> Usage of devices similar to those of
Yahoo target users (Carlson, 2012b; Carlson, 2015,
p.261)
Participative Evolution &
Charismatic Transformation
(Dunphy, Stace, 1993, p. 908; Senior, Fleming, 2006, p.285)
7
2.A Leadership Change Matrix - Collaborative & Consultative Leadership

13. 1.2 Yahoo! - Steps for Change
Finetuning
Incremental
Level
Modular
Level
Corporate
Level
Collaborative
Consultative
Directive
Coercive
ManagementStyle
Types of ChangeThe
Dunphy & Stace
Style of Change
Management
Matrix
STYLE - 1
Participative
Evolution
STYLE - 2
Charismatic
Transformation
STYLE - 3
Forced
Evolution
STYLE - 4
Dictatorial
Transformation
8
(Dunphy, Stace, 1993, p. 908; Senior, Fleming, 2006, p.285)
2.B Leadership Change Matrix - Directive & Coercive Leadership

14. .2 Yahoo! - Steps for Change
Finetuning
Incremental
Level
Modular
Level
Corporate
Level
Collaborative
Consultative
Directive
Coercive
ManagementStyle
Types of Change
The
Dunphy & Stace
Style of Change
Management
Matrix
STYLE - 1
Participative
Evolution
STYLE - 2
Charismatic
Transformation
STYLE - 3
Forced
Evolution
STYLE - 4
Dictatorial
Transformation
Samstag, 2. April 16
• End of home offices
> Home offices increase productivity
(The Young Turks, 2013)
> Personal duties: child care/aging
parents (The YoungTurks, 2013; Pathak et al., 2015, pp.
12-14)
> Financial benefits to home offices
(Hendricks, 2014; Strategic Direction, 2013, pp. 15-17)
Forced Evolution &
Dictatorial Transformation
8
(Dunphy, Stace, 1993, p. 908; Senior, Fleming, 2006, p.285)
2.B Leadership Change Matrix - Directive & Coercive Leadership

15. 9
Acknowledge
achievements
Introduction to ban of
home offices
Reasoning for
ban
Appreciation
(Swisher,2013;Carlson,2015,p.263;Neuvians,2016)
Yahoos,
Over the past few months, we have introduced a
number of great benefits and tools to make us more
productive, efficient and fun. (…)
(…) communication and collaboration will be important,
so we that is why it is critical that we are all present in
our offices. (…)
(…) We need to be one Yahoo!, and that starts with
physically being together. (…) Being a Yahoo isn’t
just about your day-to-day job, it is about the
interactions and experiences that are only possible
in our offices. (…)
Thanks to all of you, we’ve already made remarkable
progress as a company — and the best is yet to come.
Announcement of home office ban
2.B Leadership Change Matrix - Directive & Coercive Leadership

16. 9
Acknowledge
achievements
Introduction to ban of
home offices
Reasoning for
ban
Appreciation
(Swisher,2013;Carlson,2015,p.263;Neuvians,2016)
Sudden top-down
changes: negative
effects on long-time
employees and their
motivation
Yahoos,
Over the past few months, we have introduced a
number of great benefits and tools to make us more
productive, efficient and fun. (…)
(…) communication and collaboration will be important,
so we that is why it is critical that we are all present in
our offices. (…)
(…) We need to be one Yahoo!, and that starts with
physically being together. (…) Being a Yahoo isn’t
just about your day-to-day job, it is about the
interactions and experiences that are only possible
in our offices. (…)
Thanks to all of you, we’ve already made remarkable
progress as a company — and the best is yet to come.
Announcement of home office ban
2.B Leadership Change Matrix - Directive & Coercive Leadership

17. 1.2 Yahoo! - Steps for Change
Finetuning
Incremental
Level
Modular
Level
Corporate
Level
Collaborative
Consultative
Directive
Coercive
ManagementStyle
Types of Change
The
Dunphy & Stace
Style of Change
Management
Matrix
STYLE - 1
Participative
Evolution
STYLE - 2
Charismatic
Transformation
STYLE - 3
Forced
Evolution
STYLE - 4
Dictatorial
Transformation
Samstag, 2. April 16
• End of home offices
> Home offices increase productivity
(The Young Turks, 2013)
> Personal duties: child care/aging
parents (The YoungTurks, 2013; Pathak et al., 2015, pp.
12-14)
> Financial benefits to home offices
(Hendricks, 2014; Strategic Direction, 2013, pp. 15-17)
Demotivation of employees
Constant fear paralyzes company
10
(Dunphy, Stace, 1993, p. 908; Senior, Fleming, 2006, p.285)
2.B Leadership Change Matrix - Directive & Coercive Leadership
• Abuse of employee's trust
> Mayer lays off people although promised
not to (Goel, 2016)
> Mayer has nursery for own children
(Larson, Peterson, 2013)
> Mayer is always late for meetings
(Carlson, 2013b)
Forced Evolution &
Dictatorial Transformation

18. 11
Corporate Transformation using a directive/coercive style is the most common
change strategy used when an organization needs to radically re-establish
itself in a changed environment. (Dunphy, Stace, 1993, p.912)
Leadership heavily
influences success of
change
Style of leadership has to
adapt to business culture
& environment
• Ban of home offices not well
accepted
• Abuse of employee’s trust
leads to resistance
• Spark new ideas/ambition
• Employees had high
expectancies at beginning
Evaluation - Leadership Change Matrix
2.C Evaluation of Leadership Change Matrix
(Dunphy, Stace, 1993, p.912)(Rowland, Higgs, 2008, p.62)

19. 12
Great Man Theory
- Mayer considered
outstanding and dedicated
leader
Focus on benefits
for all (≠individual) - Home office ban
Emotionally distant,
low degree of
personal empathy
- Child nursery only for own
children
- Mayer is constantly late
Machiavelli
3.A Classification into Organizational Theory - Machiavelli
(Schmid,Muchow,
2014,pp.91-95)

20. 13
Argyris
Single Loop Learning
= problem solving without fundamental re-
orientation
- Yahoos only followed instructions
from their supervisors
3.B Classification into Organizational Theory - Argyris
(Argyris,1977)

21. 13
Argyris
Single Loop Learning
= problem solving without fundamental re-
orientation
- Yahoos only followed instructions
from their supervisors
Double Loop Learning
= problem solving includes a re-orientation
- PB&J: employee participation
- Smartphones to help identify with
younger target group
3.B Classification into Organizational Theory - Argyris
(Argyris,1977)

22. 14
Deutero Learning
= reflection and analysis of previous learning & problem
solving processes: “Learn how to learn“
3.B Classification into Organizational Theory - Argyris
(Argyris,1977)

23. 14
No trust in CEOs as former leaders didn’t support the company
Initial efforts by Mayer paid off (impressed employees with new
company culture), Mayer acts as role model (late night e-mails)
Mayer’s hypocrite attitude caused her employees to lose trust:
punctuality, child nursery, lay-offs
No learning
Learning
No learning
- Take focus off Mayer as CEO
- Create awareness of problems by conducting business
theater or paradoxical intervention
Recommendations:
Deutero Learning
= reflection and analysis of previous learning & problem
solving processes: “Learn how to learn“
3.B Classification into Organizational Theory - Argyris
(Argyris,1977)

24. 1. CEO does all or nothing
• Mayer decides on changes on her own
2. Spread rumors
• Secret lay-offs
3. Overstrain employees with tasks
• Many parallel projects, sudden ban of home offices
4. Find someone to blame for problems
• Never takes responsibility for her mistakes (late for meetings)
15
Kruse: 8 rules causing a company's deadlock
(Kruse,2008)
3.C Classification into Organizational Theory - Kruse

25. 5. Bend & wait
Yahoos survived 5 other CEOs and will survive Mayer too
6. Survival of the fittest
Mayer wants people who aren’t open to change to leave
7. Discrepancy between speed of decision-making and implementation
Mayer implemented ban of home offices over-night
8. Too hasty decision-making followed by immediate questioning
Mayer never questions her decisions afterwards
16
Kruse: 8 rules causing a company's deadlock
3.C Classification into Organizational Theory - Kruse
(Kruse,2008)

26. ... for your attention!
Any Questions?
17

27. 18
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2016.
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Carlson, N. (2012b)
Marissa Mayer Sent A Late Night Email Promising To Make Yahoo ‚The Absolute Best Place To Work‘, Business Insider Online, http://
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time-2013-1?IR=T, link accessed May, 2016.
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Hendricks, D. (2014)
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28. 19
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8 Regeln für den totalen Stillstand in Unternehmen, https://www.youtube.com/watch?v=Ug83sF_3_Ec, link accessed May, 2016.
Larson, L.; Peterson, H. (2013)
Yahoo! boss Marissa Mayer under fire for building personal nursery next to her office - before telling employees they can NOT work from home, http://
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accessed April, 2016.
Pathak, A.; Bathini, D.; Kandathil, G. (2015)
The ban on working from home makes sense for Yahoo: It needs the innovation and speed of delivery that come from office-based employees,
Human Resource Management International Digest, Vol. 23.3, pp.12-14.
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Die Todesspirale scheint unaufhaltsam, Handelsblatt Online, http://www.handelsblatt.com/unternehmen/it-medien/yahoo-chefin-marissa-mayer-die-
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Sustaining Change: Leadership That Works, NJ: Wiley-Blackwell, pp.62-63.
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29. 20
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21
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