My hat is off to Marissa Mayer, CEO of Yahoo, for her bold move to shake up an institution that has fallen way behind its competition.
Innovation in the U.S. is declining dramatically (according to UNESCO, even Mexico has surpassed the U.S in innovation), and Yahoo seems to be one of the leaders in declining innovation. It appears that much of their recent innovation has come from acquisitions.
Now, Mayer has given that innovation-lethargic company just what it needed—a good shaking by its boot heels. She certainly has everyone’s attention by pulling all the workers back into the office.
As a turnaround manager I would quickly go one step further and start cutting out the deadwood in the management group. What were all these managers doing while Yahoo’s innovation was tanking?
But, oh my, what a furor by all the pundits who complain that Mayer is wrecking the family home by making all the employees come into the office to work.
The claim being that today’s employees can work at home more efficiently than in the office, and that the work-at-home concept is the “standard” of today and will be the continuing wave of the future.
(I wonder if that has anything to do with the decline of innovation in the U.S.?)
Studies on this subject seem to show that productivity is high for work-at-home employees—but those same studies also show that innovation is lower for the isolated home-working employee.
At the moment, Yahoo doesn’t need better productivity as much as it needs more innovation from its workforce. No one has demanded innovation at Yahoo for so long that it now appears to be as elusive as the Holy Grail.
Managing employees who work at home requires top-notch managers, and obviously Yahoo has few of those. So, until the management structure is corrected, the only sensible thing to do is bring all the employees together in one big group. The sorting out and reassignments (even for telecommuters) can happen later.
Anyone who hasn’t done a hands-on turnaround doesn’t know what it takes to change a long-standing culture and entrenched bad habits of a large organization. Perhaps the best analogy is Vince Lombardi when he took over the habitually floundering Green Bay Packers and called all his players together to explain to them what a “football” was.
Ms. Mayer needs to do the same and make sure that everyone understands the “basics,” and that there will no longer be “business as usual.” Hopefully, this is only the first step in a major overhaul of a potentially great company.
So, Ms. Mayer—my humble suggestion is to ignore all the whining (and forget Sir Richard Branson; he can bring all the people who do his bidding to his Caribbean hideout anytime he wants—he doesn’t need an office to work in). Just keep on doing what you’re doing and make sure the house is “clean” before you start rebuilding.
What do you think of working communally at an office vs. working alone at home?
Many of today’s business “gurus” and investors do not consider a person an entrepreneur—nor their business a startup—unless they have a high-tech product. Business web sites, blogs, and ezines all seem to promote high-tech as the primary means to innovative salvation of America’s economy.
That’s a shame because with more and more U.S. high-tech being outsourced to other countries, it is now more important than ever that we acknowledge and support the “real” startups—those that do not involve high-tech products. Of the over six million new businesses started each year, only a handful of them are considered high-tech, yet they are the ones that attract the attention of investors, the government, and the media. Very few people acknowledge that the remainder of the six million even exist.
Take for example, Annie Haven, who started her business in 2005 and has steadily grown 30 percent a year ever since…with customers as far away as Spain and Singapore. And what is Annie’s business? She sells dried cow manure on the Internet.
Annie grew up on a cattle ranch and developed a process for drying cow manure and packaging it in 3 inch by 5 inch “tea” bags. The “tea” bags can then be steeped in 5 gallons of water to make liquid fertilizer for plants and gardens. Since the cattle are free range and eat only organic food, the fertilizer is also organic—and all natural.
To me, that is pure innovation…good old-fashioned American ingenuity…and we need to encourage and support more people like Annie Haven. Whether through the media, private investors, or the government, more attention needs to be paid to the “simple” innovations and creations that are being carried out every day by totally unknown and out-of-the-spotlight people.
My hat is off to Annie, and all the many unsung innovative entrepreneurs around the world.
I recently read an article in the New York Times about women in the high-tech industry, particularly Silicon Valley. It was quite discouraging information, but it does give some insight into why the U.S. is falling so far behind the rest of the world in innovation and information sciences.
Here are some highlights from the article:
- Women own 40 percent of private businesses in the U.S., but create only 8 percent of venture-backed tech startups.
- Just 14 percent of Venture Capitalists are women.
- Women outnumber men at elite colleges, law schools, medical schools, and the overall workforce, but are noticeably scarce in the high-tech world.
- Only 18 percent of college students graduating with computer science degrees in 2008 were women—down from 37 percent in 1985.
- Only 1 percent of girls taking the SAT in 2009 said they wanted to major in computer or information sciences.
- Mixed-gender teams have produced technology patents that are cited 26 percent to 42 percent more often than the norm.
- Women have few role models in high-tech.
These are just a few of the key points presented in this illuminating article. I highly recommend the article, because it speaks directly to our country’s decline in innovation and loss of high-tech leadership.
The title of the article is Out of the Loop in Silicon Valley, by Claire Cain Miller. I included a link here.
Innovation creates so many jobs and so much opportunity for our country…it is absolutely key to our long-term success in the global economy, [and patent filings] are a reflection of innovation.”
—David Kappos, Director of the Patent Office
It would be hard to argue with Kappos statement—the U.S. has been a world leader in innovation for decades. Unfortunately, that reign may be coming to an end.
The number of patents filed in 2009 dropped 2.3 percent from the prior year…the first year since 1996 that fewer patents were filed by U.S. inventors year over year.
Yes, you say, but we are in the midst of the Great Recession, and we should expect patent filings to drop. True enough, but it does not explain why U.S. patents (yes, U.S. patents) issued to inventors in foreign nations increased 6.3 percent over the same period.
Here is what Bijal Vakil, partner on White & Case’s intellectual property team, in Palo Alto, CA had to say:
…this trend could spell financial ruin for some U.S. companies. We’ve lost our competitive edge, and other companies from other countries stand to benefit.
I’m about to go and watch the President’s State of the Union speech, where he is supposed to talk about jobs and getting our economy back on track. We’ll see!
But, here’s the real deal—Congress and the Administration can posture and postulate all they want, but if they don’t come up with a plan to get our kids and schools revitalized in the areas of math and science, innovation leadership will soon be taken over by other countries…and where does that leave our high-tech businesses then?
I read a couple of disturbing articles recently about the upcoming financial control of the Internet. Here is what Rupert Murdoch said recently:
“…you can confidently presume that we are leading the way in finding a model that maximizes revenue return for our shareholders… The current days of the Internet will soon be over.”
It seems that big business made a mistake some time ago by not charging for Internet service the same way they charge for cell phone service. Now they are trying to put the toothpaste back into the tube. Will they succeed?
About 360,000 people recently downloaded an iPhone app for the Wall Street Journal. Murdoch said these users would soon be made to pay “handsomely” for accessing WSJ content. And that is just a start.
Recently, Time Warner announced plans for a new billing system that “meters” Internet usage and charges customers according to how much they download. In addition to subscription rates for services (see WSJ above), customers would pay for Internet usage “plans,” and would face stiff penalties if they exceeded their limit of Internet usage.
Not only is high speed Internet access out of reach of 40 percent of American homes, it is more costly and slower in the U.S. than in 21 other developed countries. Now, with the new pricing plans, like Times Warner, high speed Internet would be even further out of reach of 10′s of millions of Americans.
Is this how America is going to reassert itself as the innovation leader of the world. The Internet is an integral part of innovation, design, invention, developing, and building—and the Internet in the U.S. is already technologically behind most of the rest of the developed world.
Where does this leave America on the new world stage of information technology and innovation?
“There is an almost inevitable institutional drift toward Centralization & Complex Processes & Hierarchy…at the expense of Innovation & Adaptation.”
It is this “…at the expense of Innovation & Adaptation” that has plunged the U.S. down the list of innovative nations. If what Tom says is true–and I believe it is–then it is definitely up to small businesses to be the innovators who brings the U.S. (or any country) back up the list.
Typically, when someone thinks “Innovation,” they immediately think of electronic gadgets, the Internet, social media, Silicon Valley, or any new invention that may change our social status or the future of mankind. Nothing could be further from the truth. Yes, those things mentioned certainly are innovations, but they are not what innovation is all about. Here is Webster’s definition of Innovation: “the introduction of something new: a new idea, method, or device.”
Innovation can, and should be, everywhere…in our businesses, in government, and in society in general. Here is an example of a basic form of innovation:
Justin Esch and Dave Lefkow were having drinks with friends when they came up with the idea for “Bacon Salt.” They quit their successful jobs at a Seattle technology company and set out to perfect their idea. Working out of Esch’s garage, with zero marketing budget, they sold “Bacon Salt” products to 25 states and 12 different countries, and are expanding worldwide as rapidly as they can.
They also continue to innovate by expanding their “Bacon Salt” concept to other products. Their current hot seller on their web site is bacon flavored lip balm…they’ve sold 10,000, and many sales are to repeat customers.
Esch and Lefkow are a worldwide phenomenon, and last year raked in $1.4 million in profit–just from a combining bacon and salt. Not what one would call “high tech.”
(Justin and Dave will appear on Oprah Friday April 24).
How does the U.S. (or any country) develop and promote a culture of creative thinking–Innovation–in jobs; in society; and in the lives of their citizens? It is going to take changes in education, in family values, in governments, and in individual entrepreneurs. Can we do it?