Meet Marissa Mayer, Yahoo's Recruiter-in-Chief
The new CEO aims to turn the company around by fixing its people problems.
Mayer, 37, has made retooling Yahoo's 12,100-employee workforce a top priority in her quest to right the ailing tech giant, which has seen profits and revenue shrink as more aggressive competitors such as Google Inc. and Facebook Inc. have overtaken its core businesses and as Yahoo has slipped behind in mobile development and other areas.
Soon after joining Yahoo in July, the former Google executive said she would personally oversee all new hires. In her first 75 days, she brought on board four C-level executives, one of who is Jacqueline Reses, a former private equity partner who assumes control of Yahoo's human resources function despite minimal HR experience.
Mayer is making workforce, product and other changes to fix the company and appease its board and shareholders, who've had three CEOs come and go since 2009. She's also faced additional scrutiny because of her pregnancy, which she announced the day she was hired. Mayer had a baby boy on Sept. 30, and, according to the company, she is expected to work remotely during a brief maternity leave.
"She has to move fast and get the right people in those slots. It's bold, but I don't think she has another option," says Nancy Eberhardt, a Richmond, Virginia-based bank president turned executive coach who counsels CEOs of enterprise-size companies. "The number of people judging every move she makes is huge," says Eberhardt, with Pathwise Partners. "It's like where most people have to bring their 'A game,' this has to be 'A-plus-plus-plus.' "
Mayer isn't the first newly minted CEO to take over recruiting and other personnel matters in a turnaround. In such situations, it's typical for new CEOs to bring in people they've worked with before or recruit individuals with connections and a reputation for their accomplishments, according to executive recruiters and other experts.
It's also common for new CEOs to fill upper-management roles with industry veterans, which Mayer did by hiring Ken Goldman as chief financial officer. The Silicon Valley veteran of three decades will receive a compensation package worth $18 million, according to a regulatory filing. Goldman's first day coincides with Yahoo's third-quarter earnings call on Oct. 22.
Mayer picked up her hands-on hiring philosophy at Google where, even with a workforce of 23,000, CEO Larry Page still signs off on every new hire, according to Steve Levy's 2011 book about the company, In the Plex.
Companies such as Google, where the CEO is directly involved in workforce management, are more successful, says Caren Fleit, a Korn/Ferry International senior client partner who finds chief marketing officers for consumer companies and retailers. "If they recognize the talent agenda is a critical point they have to focus on, particularly when there's a transformation agenda, the human capital piece of it is critical."
In September, Mayer announced plans for "acqui-hires," acquiring Silicon Valley startups in order to secure the services of top engineering and developer talent for Yahoo. She's also earmarked $1.3 billion of the proceeds from selling Yahoo's stake in China's Alibaba Group on recruiting and acquisitions.
There has also been some speculation that Mayer's workforce plans could include job cuts. Yahoo trimmed 2,000 jobs, or about 14 percent of its global workforce, earlier this year as part of an overall cost-cutting strategy. Company officials did not respond to interview requests for this story.
It's up to C-level players, such as Reses and Goldman, to drive Mayer's directives lower in the organization, says R.J. Morris, talent acquisition and staffing director at McCarthy Building Cos., a $2.4 billion commercial construction company based in St. Louis.
But even a crackerjack upper management team isn't a guarantee of success. "While she was successful at Google, it's a significantly different" situation at Yahoo, Morris says. "It's a sinking ship and in a drastically different situation. If she's identified where they have talent gaps, it will help, but it will have to be in tandem with good sales and marketing" and other business practices.
J.C. Penney Co. is a good example of what can go wrong. The company hired former Apple Inc. senior vice president of retail operations Ron Johnson as CEO in late 2011 and he in turn tapped Target Corp.'s longtime director of marketing Michael Francis as president to lead a brand makeover at the century-old company. But Francis left after only eight months when a new marketing campaign didn't "resonate" with J.C. Penney customers, Johnson told Women's Wear Daily. In mid-September, Francis joined Gap Inc. as a marketing adviser, according to Workforce sister publication Advertising Age.
At Home Depot Inc., things didn't work out as anticipated after Robert Nardelli took over as the home-improvement chain's CEO in 2001 and brought in a colleague from his days running a General Electric Co. subsidiary as vice president of HR. As Nardelli's No. 2, Dennis Donovan oversaw a corporate downsizing and re-centralization of store management that ultimately proved disastrous. Nardelli resigned under a cloud in early 2007 and Donovan followed soon after, but not before pocketing almost $13 million in severance pay.
Michelle V. Rafter is a Workforce contributing editor. Comment below or email firstname.lastname@example.org.