Blunt E-Mail Raises Issues Over Firing at Yahoo
“I’ve just been fired.”
With those four words, Yahoo’s chief executive, Carol A. Bartz, did something Tuesday afternoon that dismissed managers almost never do: She told the truth.
In the upper echelons of corporate America, executives are forever leaving to pursue urgent opportunities, develop important new ventures or, that old standby, spend more time with their long-neglected families. Hardly anyone ever admits to being sacked.
Even in cases where the executive has all but been bodily ejected from his executive suite — Rick Wagoner of prebankruptcy General Motors or Tony Hayward of post-oil-spill BP — the most they say is that they have been asked to step aside.
Ms. Bartz’s blunt statement, sent in an e-mail blast to Yahoo’s 13,400 employees, immediately ignited a debate: Was she a pioneer trying to provide more transparency and authenticity at the top ranks of prominent companies, or was her salvo an unprofessional tirade that was a personal and professional mistake?
Jeffrey Pfeffer, a Stanford professor who is an expert in organizational behavior, is in the first group. “The truth helps you improve,” he said. “When people lose their jobs and there’s no acknowledgement, the potential for learning is lost.”
Ms. Bartz’s comments also served her own cause, the professor said. “She’s acting as if this is not her fault. She’s not embarrassed. She’s controlling the story.”
But Jennifer Chatman, a professor and chair of the Haas Management of Organizations Group at the University of California, Berkeley, said Ms. Bartz’s angry words could help sink the struggling search portal. Now the directors who ejected Ms. Bartz are under attack at the moment employees need them to save Yahoo.
“A chief executive who was thinking first about the long-term interests of her company would not have done this,” Ms. Chatman said, adding that there are problems of perception in this case as well: “She’s one of a handful of top female business leaders. It would be easy to attach this to a stereotype of women leaders as not in control of their emotions.”
Whatever the effect on Yahoo, unvarnished comments like Ms. Bartz’s are likely to become more common. Chief executives are increasingly conscious of their personal brand and how it can diverge from the corporate brand.
“I would say this is going to become much more of a trend,” said Homa Bahrami, a senior lecturer at Berkeley and an adviser to several Silicon Valley start-ups. “I see it already in private companies when there is a change in management. The chief executive picks up the phone and tells the investors exactly what happened. The younger generation appreciates this honesty. You’re authentic and you’re vulnerable.”
Authenticity, though, can backfire, and vulnerability is not always something to be desired. Executives who are not on their way out are learning that broadcasting their feelings can have unintended consequences.
Andrew Mason, chief executive of Groupon, may have thought he was only trying to buck up the troops when he sent a long e-mail describing how the daily deals site was being misperceived in the press as it awaited its public offering. Mr. Mason may have even been secretly pleased when the e-mail showed up in the press. Regulators cast a dim eye on such promotion during the so-called quiet period for companies waiting to go public, however, and Groupon’s offering is now at risk of being delayed or even pulled.
In the technology industry as in no other, failure is trumpeted as paving the way to glory. Executives here love to boast about the number of times their company was denied funding or how no one wanted to hire them or how they learned so much when the whole ship went down. But such tales are always told from the vantage point of ultimate success. In the midst of failure, people are as reluctant to admit it in Silicon Valley as anywhere.
In 2005, when Carly Fiorina was pushed out of Hewlett-Packard , she merely spoke about her regret that she and the board had differing strategies, and said she respected its decision. In 2010, when Mark V. Hurd was pushed out of H.P. he said he would “move aside.”
If Ms. Bartz’s directness was so unusual, it was also in character. She has long been inclined to honesty, often in salty language. In one of her more printable comments, she listened to a shareholder suggesting she resign at Yahoo’s annual meeting in June.
“That was certainly a downer,” she replied.
“Usually it’s in the interests of both the executive and the board to sugarcoat these things, but Carol just lays it out there,” said J. Hallam Dawson, chairman of IDI Associates and a former colleague of Ms. Bartz’s.
Ms. Bartz was on vacation on the East Coast, flying from Maine to New York, when she got the call from Yahoo’s chairman, Roy Bostock, relieving her of her duties. It was not a surprise. After being in charge for nearly three years, the company seemed more unable than ever to meet the challenge of Facebook and Google .
“I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s chairman of the board,” she wrote. She went on to say she had enjoyed her tenure at the company and wished the employees the best.
Management experts said the dismissal of chief executives is usually a more stately process, involving lawyers on all sides. It requires negotiation and press releases. And so the crudeness of Ms. Bartz’s firing might have helped spark her response. She did not respond to a request for comment on Wednesday.
At about the same time on Tuesday as Ms. Bartz was getting the news, Bank of America was making some top management changes. In this case the traditional approach was followed, which meant the tone was upbeat. First the bank explained that it was simply “de-layering.”
Then the chief executive, Brian T. Moynihan, saluted the departed, including Sallie Krawcheck, president of the bank’s global wealth and investment management division. Ms. Krawcheck responded that it had been “an honor” to work at the troubled bank. If this was an ouster, it came across as more of a retirement.