Reasons Behind Yahoo!'s Four-Year Slump

Yahoo! executives and directors aren't the first "smart" ones to fail. Otherwise, Professor Finkelstein wouldn't have a book full of stories on Enron, Worldcom and Webvan. The solutions for Yahoo! senior executives, based on the lessons in the book, are:

• admitting when you/the company have screwed up and dissecting the underlying reasons for the failure;
• encouraging others to admit their mistakes and learning from the mistakes instead of shooting them or encouraging them to cover up mistakes;
• surrounding yourself with other smart people who often will disagree with you in search of the best answer for the company; and
• demanding accountability from everyone in the company including yourself.

The right new CEO can spearhead this kind of effort for change. Mark Hurd at Hewlett-Packard (HPQ) is probably the best example of this type of turnaround. He didn't have to fire the old senior team and board. They got with the program early on and supported it further once they started to see evidence that the ship was turning.

The rest of Yahoo!'s senior team and board will have to buy into a new approach as well, admitting their own past mistakes at the same time. This assumes they pick the right person to serve as Chief Yahoo!, and that remains a big question mark.

>To order reprints of this article, click here: Reprints