Yahoo vs. Best Buy: How not to screw your employees on Christmas

Yahoo is slated to execute layoffs today and Best Buy just announced troubling results from last quarter.

However, Best Buy’s CEO is crediting his employees for the company’s successes which clearly suggests a radical difference in approach. 

Of course, the real contrast – which likely helps point to the difference between the long term successes of both companies – is in leadership. 

Yahoo is doing the layoff in the absolute worst time of year for its employees, while Best Buy issued a letter to its staff giving them credit for improved customer satisfaction and store performance.   

One firm treats employees like equipment that can be discarded at will and the other treats its employees like valued partners in a joint adventure, thereby reaping the benefits of that close partnership.

Best Buy is obviously a great place to work. Yahoo? Not so much. 

There are clearly good lessons to be learned here.

Executive Leadership

Part of Yahoo’s problem is that it hired Carol Bartz who is currently ranked as the most overpaid, underperforming CEO in the world.    

This alone is an issue because if you don’t have someone competent driving the company there is little likelihood it will get to a destination.

Part of the problem is that Carol Bartz came from Autodesk, a well managed firm in its sustaining phase that did CAD/CAM software. 

But this is software largely sold to engineers to build things.

And as most of us know, the engineering market is a unique one with little relation to what Yahoo was supposed to do for a living.   

In effect, this was like hiring a dental hygienist to do major surgery on an elephant.

It really won’t end well at all and is trending in the wrong direction. 

This is a bad skills mismatch and the Yahoo board should take a good deal of the blame.

Importance of People

Adding insult to injury is that Bartz, like a lot of CEOs who get into trouble, clearly manages by the numbers.  

Doing layoffs and mandatory vacations at year end looks good on paper because it pushes costs into the current year setting a better financial foundation for the following year.

Yet, it doesn’t treat people like people and erodes trust making it far more difficult to lead the company out of a problem. 

It not only puts folks out of work during the most stressful time of the year, it puts a substantial amount of pressure on those that remain and have to do multiple jobs as well to finish the year off.

Such actions create a distrustful and toxic environment that can be easily exploited by external recruiters. 

This means that the very people you want behind you to turn the firm around are generally out looking for jobs, have left, or are so tied up in dealing with the mess you’ve helped create that you lack the viable resources to do the turn around you envisioned. 

In short, to make a tactical move to appease the financial analyst you create a strategic mistake that pretty much assures you can’t recover the company. 

In the end, what most seem to forget, is that if you don’t take care of your people you won’t get the best folks and those you do get won’t take care of you.

Brian Dunn vs. Carol Bartz

In Brian Dunn’s letter to employees, he is not only giving them credit for the Best Buy results, but also articulating his vision for the company. 

This second item is in many ways more important than the first because people are more likely to follow a leader, despite adversities, that has a vision of where he or she is going.   

This is because if people can see the destination they are both more likely to get there and are more confident there is a destination to get to.   

Now, Best Buy actually reported disappointing performance in consumer electronics. But instead of blaming the employees – and the cause was a reduction in store traffic not in store performance anyway – Dunn is spending his time building them up so they are prepared to execute more strongly the rest of this quarter and into next year. 

This is treating people like people and that should bode better for Best Buy which continues to show strong customer satisfaction and in store performance scores but is struggling with on-line sales – which once again appear to be particularly strong this year for competitors like Amazon. 

Best Buy is weathering a storm well and should emerge stronger as a result while Yahoo continues on death watch. Essential to this paradigm are the two company’s top executives.

Wrapping Up

I am saddened at how many executives simply don’t get that employees are people and I, like many others, partially blame this on excess CEO compensation which creates a huge separation between the people running company and those working there.   

But there also is a huge gap in skills on boards where few board members appear qualified to do job searches and the end result is CEOs like Bartz who are very poorly matched to the companies they are asked to run. 

In many ways, her selection is at the core of Yahoo’s problems and bad CEOs appear to be a recurring problem at a lot of companies.   

However, what most upsets me is the treatment of employees during the holidays and I think that the executives that choose short term financial results over the wellbeing of their employees shouldn’t be executives. 

They simply lack the heart for the job and they likely should be the first name on the list of people let go as a result. 

You have a choice of where to work, this is a lesson to all of us to pick places where they treat employees well over those that do not. Life is short, avoiding this kind of stress should make it less likely you wished it was shorter.

Best Buy is a good example, Yahoo not so much.

Rob Enderle is one of the last Inquiry Analysts. Inquiry Analysts are paid to stay up to date on current events and identify trends and either explain the trends or make suggestions, tactical and strategic, on how to best take advantage of them. Currently, he provides his services to most of the major technology and media companies. The opinions expressed in this commentary are solely those of the writer.