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Yahoo: Pregnancy As The New CEO Job Requirement

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This last couple of weeks has been interesting. First there was a Vanity Fair article on Microsoft which pointed to the company’s lost decade and largely blamed Forced Ranking for the firm’s inability to compete. Forced Ranking appears to have come from a practice Jack Welch used to save General Electric and CEOs, like lemmings, implemented this practice widely and that probably contributed more to U.S. industry decline post Ronald Reagan than any other single practice.

Now Yahoo has a new CEO, Marissa Mayer, and she is pregnant. That pregnancy will force some practices that new turnaround CEOs often forget, like assuring a strong executive team with high loyalty and personal redundancy. If she is successful could pregnancy become a requirement for turnaround CEOs?

I’m going to argue that maybe every turnaround CEO, hell every CEO, should get a little pregnant. Now as I try to get the image of a pregnant Steve Ballmer out of my head let me explain what I mean.

Following Success

Forced Ranking is probably one of the dumbest practices U.S. companies have ever implemented. This is not to say that when Jack Welch implemented it at GE he was being stupid; it had a purpose, but that purpose was to set an initial review framework, not institutionalize rating buckets that people would eternally have to fit in. I mean, can you imagine managing to a set failure rate that was greater than zero? No executive who could spell quality would ever do that, yet Forced Ranking specifies a company will have 5% to 15% failures depending on which firm is setting that lower tier. And how about over-performers? We know that if you hire well and provide strong incentives you can institutionalize over achievers, but if you then rate those achievers down you won’t retain them or you will destroy their tendency to overachieve. In short it doesn’t take someone with a degree in Manpower Management (which I have) to see that this practice is brai- dead stupid. But executives implemented this practice nearly without question.

What is funny is there is actually a standing recommendation to avoid companies that follow this practice and I’m convinced it only survives because it typically isn’t applied to senior executives, particularly CEOs. It is in place at Yahoo which alone should be a reason to avoid it. But the point is that because Jack Welch was so successful, even dumb ideas like Forced Ranking were widely followed. Yahoo is a very visible failure and it is likely Marissa Mayer’s turn-around process will be followed nearly as closely. If she is successful her practices will also become textbook, right or wrong, and she is doing this turn around pregnant.

The Pregnant Turn Around

Normally, with women CEOs we focus a lot on their sex negatively, either applying terms to common behaviors in male leaders that disparage their female counterparts (results orientation can become “bitchy” for instance.)  Even their appearance can become a negative. In my own experience women executives tend to be less likely to get caught making public mistakes because they are more used to being watched more closely and criticized more tightly. That often can make them less willing to take risks but it can also make them far more aware of the need to maintain and nurture loyalty and to keep the drama to minimum. But one of the things often used to argue against women executives is the likelihood they will become pregnant, which could remove them at critical times, and take their focus away from the business.

But, in a turnaround situation, it could also be a benefit. You see, what often happens in a turnaround is that the executive (let’s use HP’s failed CEO Carly Fiorina as an example) focuses excessively on assuring they are unchallenged. They can becomes excessively involved in some aspect of the business that attracts their interest and ignore others, and in Carly’s case, ignore the need to surround themselves and then protect loyal subordinates. The end result typically is a failure; Carly was fired even though strategically she was one of the strongest executives that HP has ever had.

Pregnancy can become a forcing function; Marissa to survive will have to assure loyalty. She will have to remain broad because excessive focus coupled with the complications of being pregnant would quickly destroy her effectiveness. In short, she will have to assure she has strong lieutenants and can delegate to them without worrying if they will stab her in the back. And, as an inexperienced turnaround CEO, if it weren’t for the pregnancy, these critical steps would likely be forgotten.

Wrapping Up: Pregnancy Requirement

Given the physical limitations, I kind of doubt pregnancy will be a requirement for male or female CEOs any time soon. But, assuming she is successful, and given Yahoo’s shape that is far from a given, her pregnancy could form a template for how a successful CEO might approach a turnaround.    I now have these mental pictures of male CEOs with artificial pregnancy prosthetics at workshops in order to train for a turnaround and, if you have the same thing in your head, I am deeply sorry. But the point remains if bad practices can follow a successful CEO like Jack Welch maybe good practices can follow a successful CEO like Marissa Mayer.

In short, maybe a successful turnaround CEO needs to think like they are pregnant. In other words, focus heavily on being able to stay above the fray and create an office of the CEO that jointly has the needed skills and can continue to execute at a high level regardless of the availability of any member, including the CEO, and that won’t stab any of their peers in the back (especially the CEO) at the earliest opportunity. Or, maybe the successful CEO needs to get a little pregnant. If Merissa is successful, that likely should be the conclusion. How much you want to bet it isn’t the one we reach?