Learning from Yahoo!'s mistakes

Yahoo! has been hemorrhaging high-level staff members, according to recent reports, raising troubling questions about CEO Marissa Mayer's turnaround strategy. But Yahoo! is not alone. Many of my coaching clients are reporting staff exoduses of their own these days.

During the depths of the recent recession, I had frequent conversations with unhappy people who were afraid to switch companies. In a shaky business environment, becoming the new kid on the block seemed entirely too risky. Now, however, most of these folks are diligently preparing for a job search.

Marissa Mayer, Yahoo
Elijah Nouvelage | Reuters
Marissa Mayer, Yahoo

This pent-up desire for greener pastures should have every manager worried. Because smart employees never share thoughts about leaving, bosses are often blindsided by unexpected departures. And the people most likely to go are usually the ones they would most like to keep.

Marketing folks frequently talk about how to make an ad or a website "sticky" – that is, how to encourage people to stick around. To increase employee retention, anyone heading up a company or a department should apply this paradigm to their staff. For Yahoo, however, achieving "stickiness" appears to be a difficult challenge.

The four factors listed below can help to strengthen the ties between employees and employer. Unfortunately, "stickiness" may be difficult to achieve at Yahoo because these attributes are largely missing.

1. Belief in the cause

People who strongly identify with an organization's purpose are usually reluctant to leave. In the non-profit world, this sense of personal mission is almost always a significant motivator. But business can also be inspiring, as long as managers clearly articulate a meaningful and worthwhile goal.

Despite much early success, Yahoo gradually seemed to lose focus and still has no clearly defined purpose. The fact that the company has had six CEO's since 2001 probably didn't help.

2. Feeling important

Because everyone wants to believe their work matters, managers must help people see how their efforts connect to key business goals. Whether someone is flipping burgers or heading up the finance department, they need to understand how they make a difference - to the customers, the business, or the world.

At Yahoo, the deadly combination of an unclear purpose and revolving-door management has undoubtedly made it difficult for employees to feel that their work will have a long-term impact. This can be very discouraging.

3. Personal loyalty

When employees feel a strong bond with management, leaving seems like desertion, so they may choose to stay even when the going gets rough. But you can't feel loyal to someone you barely know. And since loyalty is a two-way street, people won't care about the business unless management seems to care about them.

While Marissa Mayer has many strengths, developing strong ties with staff is allegedly not one of them. According to news sources, this may be why top executives were recently told they must pledge to remain with Yahoo for three to five years.

4. Seeing a sunny future

Assumptions about the future drive everyone's behavior, so painting a positive picture is important. While unrealistic forecasts are counterproductive, hopeful optimism can keep people going. Presenting a clear plan and sharing good news will help to counteract a bleak or uncertain outlook.

Three years ago, the arrival of a new CEO reportedly inspired hope and excitement at Yahoo. Since then, however, the company has remained in turnaround mode, and the recent hiring of McKinsey & Co. for additional restructuring only extends the uncertainty about future directions

When it comes to managing morale, some people "get it" and some people don't. In an effort to change attitudes, companies have been known to implement pointless programs, distribute inane memos, and hold useless gatherings. Last year, for example, Yahoo executives held a Wizard of Oz party for employees, with senior managers dressed as characters from the film.

But instead of wasting time, effort, and money on activities which amount to meaningless window dressing, executives should take substantive action. Help employees feel they are making an important contribution to a meaningful cause. Communicate and connect with people so they see you as a real person. Convey a picture of the future which is both realistic and encouraging. Employees who feel inspired, valued, connected, and hopeful are much more likely to stick around.

Commentary by Marie McIntyre, a career coach (www.yourofficecoach.com) and the author of "Secrets to Winning at Office Politics." Follow her on Twitter @officecoach.