tv The Communicators CSPAN July 11, 2015 6:31pm-7:01pm EDT
>> why a book about marissa mayer? nicholas: she has -- he is 35 years now. she got to google when it had 20 employees. she joined an extremely troubled company as basically a wonder woman superstar ceo. i wanted to know how was she doing trying to turn around this company. how did she become so rich and famous in the first place? >> what was her path to yahoo!? nicholas: she was going to be a doctor and she decided that was too much memorize asian. it just wasn't that exciting for her. she would learn at the science summer camp what was really important in life, the things
you know but how you think about things to determine what you should know. she decided medicine wasn't for her. specifically -- washer was in stamford she went on to get a graduate degree. she had a real report as a student teacher. very good at this program in particular. she could have gone to be a professor. she had a lot of her advisers say what you look at economy called google.
she went in and sort of was overwhelmed with how intelligent and bright the people were at google. she felt they were much smarter than her, which may or may not be true. this will be a real challenge. this will be a scary opportunity. from there she entered into google. another lesson to learn from marissa mayer. her first big project was going to be google's first ad delivery system. she was going to make the first one. google went out and hired new talent and company. he is really known for being one
of the best twitterverse on the pratt -- on the planet. it had been taking her months. to her credit she looks at this and says she loved working at google and said i will not make my mark at this company for the long-term to really prove i'm along by being a coder. she sort of threw herself at whatever problems the company had. she got involved in pr and marketing. also strange things a coder may not get into. she took that she ended up finding a role. she developed a role with the ceo of larry page. she ran meetings with the rest of google staff and set the agenda for what is going to be discussed. she's to know her vision for him where google's vision is going.
she got herself involved in the user airspace review process. every process had to go through this checklist before it went to launch. the final thing meyer did over her many years at google was she really taught the company how to hire. her boss was a guy named jonathan rosenberg, who kept bringing project managers -- product managers. people who can really push forward to create a new product. jonathan rosenberg kept bringing people to larry page, the then ceo of google's here is a good candidate. finally meyer said here's what you are doing wrong. you are trying to hire mbas out
of great schools. they are intelligent people. but what you need to do is hire people like me, people who are technically trained and have a real interest in business. rosenberg said that is a great idea, why don't you run such a program? it's modeled across silicon valley. a lot of big companies have these programs were they higher people from stanford or harvard or m.i.t. or what have you, and put them in charge of managing groups at a very young age. this was interesting because not only was she still an charge of the look and feel of all google products, she also started hiring googles managers into the company. they felt they had traditional bosses they need to report to. but they all individually reported to meyer, the person
who hired them. it meant she had a lot of power and became one of the most powerful internet companies. she was doing a great job and ended up being a ready big senior at google. she was promoted at the end of her career. that is how she gained so much influence and power. host: how many years was she had google and how much of the 700 million to chi make at google? nicholas: it started around 2000 through 2012. she joined when there were 20 employees and left when there were maybe 50,000. she made $300 million or so from working at google, being one of those early employees. she has fabulous wealth. she has lived in many homes.
there are two we know of for sure. one is at the top of the four seasons in san francisco and another is in palo alto, which is near where stanford's campus is. like many of the wealthy people she has done this thing where she loves the neighborhood and she decided to buy some of the homes around her. host: how did she become ceo? nicholas: first let's talk quickly about yahoo! and the history of the company, which takes up the first 150 pages. what i wanted to do is explore
how yahoo! got into such bad shape before meyer got there and why they needed someone like her to possibly come in and try to turn the place around. just before meyer had got there in the company had gone through several ceos in a short period of time. there was an interim ceo named tim morrison and after that there was a permanent ceo named scott thompson, who was put out of the company for lying on his resume. all of that happened within the period of a year. it was so tumultuous that there were a lot of expectations at the company, which is to say let's hire this interim ceo. he has a vision for what do with the company. that had been the expectation.
one july day marissa mayer was hired as the ceo of yahoo! and people were shocked. it was such an upset. basically what happened was in 2011 yahoo! fired its ceo. she gets a phone call. she is in new york and gets a phone call from the chairman who starts reading a script. she says it sounds like you are reading from a script, why don't you have the guts? she was fired. it was very public and very well-known. over at google one of meyer's long time confidant's, a person who really helped her career along, a person named gabriel stricker.
he was a pr guy at google. he made her into something of a business celebrity. he helped. she said to her, i think you would be a great fit for the yahoo! role. there is no way i'm doing that with yahoo!'s current board of director. the reason she said that is over its many years yahoo! had a notoriously bad board of directors. these are people who hire talented ceos. but they were a bad fit for the company. people who prevented the company from making sound business decisions. there was a moment where yahoo! got a big offer.
yahoo! got this large offer from microsoft and the company fumbled it. they pushed it off and said they wouldn't do it. it is just a notoriously bad board of directors. what she did -- what she didn't known -- what she didn't know was across the country in new york there is a hedge fund manager. this is another chapter in the book. his job is to be an activist investor. what he does as he goes in and buys large stakes in public companies and says i am now a big owner of your company and i have some ideas how we should be running the company. if you don't do what i say i'm
going to go to the other shareholder and we're going to get you fired, meaning public companies are shareholder democracies. if enough shareholders get together they can throw the board of directors and set a direction for the company. what may or didn't know is dan loeb had taken a 5% stake in yahoo! and is really gearing up. he had watched the disastrous behavior of the board for many years and thought this was an underperforming asset, and if only the board is removed someone can be hired into the company had really run it. he invested lots of money, bought 5% of yahoo!, and launched a proxy campaign, and activist campaign against the yahoo! board and eeo, and push for it to hire someone like marissa mayer.
the board did not listen. they went out and hired president of paypal, which is another division of ebay. they hire this guy named scott thompson. thompson went into yahoo! and all the strange plans for what he was doing with the company had itraconazole a off plan. he just indicated he had never been into the media business. it was just like the yahoo! board once again. low sort of settlement keep this proxy war going. he found that thompson had allowed for a long time there to be a mistake. one might say thompson lied on his resume about having computer science at stonehill college.
his method of convincing other shareholders is to write the scathing letters for what he calls mass can -- mass destruction. after this will or between dan loeb and scott thompson and the board of yahoo!, it is may 2012. scott thompson, the ceo of yahoo! is in a meeting with all his executives. the mood of each executive starts to change. there is electricity in the air. they all start looking at their laptops and blackberries. a reporter had just published this story, saying dan both had just published his latest letter.
scott thompson just bolts upright from the room and starts dealing with it. he didn't survive. he had a lovely career going. he was out within weeks. they really had this planned to make it a sort of media company make it much smaller in that kind of thing. instead of hiring ross levinsohn, dan loeb had been out researching and speaking with people in the valley about what kind of ceo yahoo! needed. they met with a famous investor and creator of netscape. demo and michael wolff -- dan loeb and michael wolff -- he
said, what you need is a tech company like yahoo!. the product isn't necessarily like a product for it -- which is a thing that comes off of a -- off of an sme line. you need a technical leader, someone who has an understanding of how products are made. that is how places like amazon or google or facebook or other companies. they need to go find someone like a larry page or mark zuckerberg, someone who understands what products have a native understanding of the web in a way that yahoo!'s prior ceo has not. it was a pretty all-star list. at the top of the list was marissa mayer, the executive from google. gmail, google maps, obviously google search, is that people use every day.
google products need to be something you use as often as your toothbrush. it is difficult to come up with a product used that much. meyer was instrumental in making it pass that test. that was top of the list. they hired a recruiter who reached out to her. they were stunned to learn that meyer was interested in the job because loeb successfully turned this letter of mass destruction nook the yahoo! board, and put it on himself instead. if there is one thing about marissa mayer, she is the best repairer in the world. if she knows she needs to have a set of data understood then she will have it understood and be more than fluent on it but convincing. she completely blew the board away.
while there was some reluctance to hire her because she had not actually run a division and profit and loss statement, there was reluctance on that part. michael wolff and dan loeb was able to convince the rest of the board she was the right hire. they made this grant -- this grant announcement in july. a little piece of information was she was five months pregnant. here you have a 37-year-old who was pregnant and the ceo of massive internet companies. how would she do? that is what the world wanted to know. nicholas carlson from page 300 marissa mayer and the fight to save yahoo!. host: the honeymoon between marissa mayer -- 50,000 employees lasted a year.
nicholas: when meyer came and there was an incredible amount of optimism. she took advantage of it and it seems the optimism wasn't worthwhile. a call came in from the time -- from the 2008 presidential election. there was a poster made of barack obama in his dramatic primary colors. on the bottom it says hope in capital letters. when meyer arrived in yahoo! there were posters of her done in the same style with the word written underneath them. the founder of yahoo!, one of the founders, met her at the front door and rolled out a purple carpet for her to enter the company on. she comes into the company and her office is full of things. she is a renowned cupcake
enthusiast. it is actually kind of funny. the room was full of cupcakes and balloons. calls on her answering machine. calls from j.p. morgan, calls from celebrities and all sorts congratulating her on the job. there is a humongous enthusiasm and optimism. she brought an increased level of transparency into yahoo!. for years the way yahoo! employee has learned what was going on at yahoo! was not through the channels of communication and management. particularly reports by -- she would break news about yahoo! all the time. meyer came in and said that
needs to end. it is actually a sort of a common thing in the valley. but, because successful companies had done it, which is the weekly meeting -- weekly meeting where the ceo and his or her executive team sit in front of the stage in front of all the copies employees who can either watch the reading through their computers or in person. they take questions from employees. they ask quite hard questions. how hard the questions were and how candid meyer was in answering these questions is kind of amazing. she brought this level of transparency. she also did other things. she brought yahoo! to parity with the rest of -- with what the rest of the valley is doing.
all of a sudden you can go early morning, stay late at night, and go early in the day. for a long time yahoo! employees were out trying to make tech web products and apps. at the same time yahoo! executives and employees are not using iphones and android phones . they were using blackberries. mercer mayer said that is going to have to end. she gave employees new iphones for free. she did some things that weren't exactly -- that would have been a bit more controversial. she banned working from home. she said employees really need to come into office and this is a creative company where we need creativity to flow between people.
we have looked at some data and it looks like a lot of people working from home aren't logging and all that much. she said that is enough. very controversial outside of yahoo!. a lot of women who argued working from home is very flexible for me. they were offended by the fact that meyer was entertaining this policy that they regarded this anti-woman. outside of yahoo! the policy was not nearly as controversial. there were a few people who complained. they particularly complained there was this policy that was not hopeful to the working mothers. she and hundreds of millions of dollars had built nurseries in her office.
this is a thing most yahoo! places do not do. yahoo! for -- yahoo! employees felt this needs to be done in order to get up and moving again. she really got yahoo! moving quite a lot faster. before she got there it took yahoo! 18 months to launch a new version of yahoo! e-mail. next time it took three months. 18 months down to three months. it is kind of impressive. she hit back in a way that was very different from how most ceos come in and try to turn around companies.
most will say i have a strategy. it will take 100 days. then they will delegated out and ask people to push down the ladder. we talked about how we are having this role in google where she is the user interface. everything that went through and live had to go through her. she went into the product meetings where these things are being made. you don't see this. you don't see ceos coming in to meetings like this and sit down. she is looking at him. where he is getting his data from, what kind of surveys he is using, here's the picture getting -- he is using, this is
her getting under the hands of yahoo! and bringing it up to her standards. she got the place moving again by doing that kind of thing. the reason the honeymoon ended is that when meyer decided to join yahoo! the company needed to cut costs. it needed to lay off people. a lot of people outside the company thought that yahoo! -- one of the main things it needed to do was go to the place that had 15,000 employees and a few thousand part-timers around the world who are called freelancers and contractors, working as much as full-time employees, just not getting the income benefits. they thought it was reducing down to 5000 people.
the silicon valley star investor who we have mentioned before really advocated for yahoo! hiring someone like meyer, he was public about yahoo! firing 10,000 people. she did not want to fire people. she thought the last thing we needed was to lose talent. she looked at the layoff plans that some of her predecessors laid out. she thought this was a disaster. he is going to fire people regardless of their talent or specialty. she says i think i can find a smarter way to reduce costs and improve the talent. they have this process of objective key results. every corner every google employee meets their manager. that employee decides on a set of key results for the next quarter.
they are greeted basically on how will the perform these goals. yahoo! has some review processes for sure. she really prioritized and emphasize this idea. there was a twist. meyer thought what we need to do is we need to have these people greeted on what he said they would do each corridor. we need every manager to take all of their team and in -- and grade them on a scale of one to five for how they did. these grades matter. if you have an average about three or four you are eligible for a promotion and all sorts of things. this matter to people in a way that was it.
if you managed to pull off a couple of quarters in a row and then that drag your whole average score down, you are not able to transfer into a new department, you are not able to get a raise you are expecting. all of that would have been fine if they had just instituted and accountability program. what she did was she asked her managers to put their employees in a force curve, put them all on a curve. 15% will get a five and so on. in each bucket there had been certain percentage of employees in every group. you had managers who believed that they had to get some failing grades. this created a lot of confusion. stack ranking