August 26, 2007: Thinking about Leadership

A recent leadership change has me thinking about key leadership issues. If you have two businesses with similar resources and opportunities, what causes one to succeed and the other to fail? To take an example from my own employment history, why has Yahoo repeatedly stumbled in recent years, while Google has surged ahead? So often, if you boil down the excuses, the fundamental difference between business success or failure is a matter of leadership. Therefore, I think it's worthwhile to spend some time reflecting on how to be a better leader.

If you're leading an organization, it's critical to develop a strategic agenda that you communicate down to the managers who are responsible for implementing your vision. That sounds like common sense, but it never ceases to surprise me how many businesses overlook the obvious. Without clear priorities and philosophies articulated from the top, the organization becomes mired in reactive, tactical thinking. Growth in revenue and profits--everyone's end goal in a business scenario--isn't a strategy in itself, it's the outcome of a strategic process the leader sets in motion.

Leading isn't managing, but many people come into leadership roles via management positions. Some are better than others at shifting gears from a tactical management orientation to a strategic leadership focus. One thing a leader must do well is select and empower good managers. This frees the leader from concerns about implementation--the "how"--so he or she can concentrate on communicating a vision--the "what." Even if you were a fantastic manager, when you become a leader you must let go of the desire to control and implement tactical details. Not doing so quickly results in a dysfunctional organization where people are frustrated because they can't fulfill their natural team roles. I saw a lot of this at Yahoo, where many leaders who were previously talented managers were reluctant to let go of the hands-on behavior that served them well while they were climbing the ladder. It's an example of the type of leadership blunder that can be filed under "solving the wrong problem."

When I arrived almost two years ago, my initial challenge was to reverse more than two years of decline in key metrics. Influenced by the online media strategies I had observed during almost four years at Yahoo, I distilled the mission of my online team into building out the site in three key areas: community, multimedia, and interactivity. Having this big-picture structure allowed us to allocate scarce resources to projects that mapped well to one or more of the cornerstones--and gave us a rationale for relegating ideas that didn't fit into the framework to the back burner. That helped us set priorities and quickly begin making noticeable changes to the site.

Leadership is a complicated, constantly changing challenge that can't be distilled into a few pithy bits of advice. Still, in the business arena, it's important to recognize it's a skill that can mean the difference between huge profits or embarrassing failure.