In this post, we raise questions about Marissa Mayer’s contribution as a Walmart director. Specifically, given the enormous challenges she faces at Yahoo, does Mayer have the time and focus to help Walmart implement a winning eCommerce strategy? And could Mayer’s aggressive recruitment of top Silicon Valley engineers conflict with Walmart’s own effort to hire the best and brightest for its Bay Area technology shop, known as @WalmartLabs?
At Walmart’s 2013 shareholder meeting, CEO Mike Duke said the company was “starting to gain traction” in eCommerce but “we still have a long ways to go.”
The Wall Street Journal reported recently on just how far “a long ways” is:
Despite countless promises to become an online force since it got into e-commerce a decade ago, Wal-Mart has fallen far behind Amazon. Last year, Amazon posted Web sales of $61 billion, compared to an estimated $7.7 billion for Wal-Mart, according to trade publication Internet Retailer.
Marissa Mayer was named to Walmart’s board last June to help the company sort out the seemingly intractable eCommerce problems that have left the company eating Amazon’s online dust. At the time, she was a vice president at Google.
There was a lot of excitement about Mayer’s selection in the business press. She seemed to bring two things Walmart desperately needed to finally make a go of eCommerce – serious technology chops and credibility in Silicon Valley.
Retail analyst Natalie Berg told Bloomberg BusinessWeek that Mayer would contribute in areas where Walmart does not have “core competencies.” Walmart Chairman Rob Walton proclaimed that Mayer’s “insights and expertise in the technology and consumer areas are valuable assets to Wal-Mart as we move forward.”
Of course, it didn’t hurt that Mayer also brought a dash each of charisma and celebrity, items which are generally in short supply at Walmart corporate.
Then it happened. Just weeks after joining Walmart’s board, Mayer left category-dominating Google to become the CEO of crisis-wracked Yahoo. She’s been on a series of self-described “sprints” to save the company ever since.
At Yahoo, CEO Marissa Mayer inherited a company in crisis:
- Yahoo’s revenues fell 29.5 percent between 2009 and 2012 (from $6.46 billion to $4.98 billion).
- When Mayer came on board she was the fifth CEO in a year (see here and here).
- Yahoo’s most recent quarterly earnings revealed “continued deterioration of its core business of selling online ads,” according to the Wall Street Journal.
- Yahoo’s image is that of a has-been – brand expert Alfredo Muccino recently told the Silicon Valley Business Journal that Yahoo is perceived as a “bloated company that has not been able to innovate and has tripped over itself many times.”
None of this is Mayer’s fault, of course. But she’s charged with cleaning up the mess left behind by years of failed leadership. Mayer acknowledges it’s no cakewalk. “I’m not confused; I know we have a lot of work to do,” she told Bloomberg Businessweek.
Mayer has variously described that work at Yahoo as a series of sprints, or chain reactions: hiring the right people and putting them in the right positions where they can develop products which will attract more users, allowing Yahoo to sell more advertising, and increase revenues – a lot.
Mayer’s first year at Yahoo has been marked by a flurry of activity that includes twenty-one acquisitions to date, major comings and goings at the executive level, internal re-organization and cultural change, and a major acceleration of product development (Mayer brags that Yahoo is pushing one or more products out the door each week).
Fans and detractors both report that Mayer’s leadership style is hands-on. Mayer herself reviews every new hire (see here). And she’s been known to direct a product team’s attention to an issue with an individual pixel.
If Mayer’s responsibilities at Yahoo are not taxing enough, she has a number of other obligations, in addition to her directorship at Walmart. Mayer serves on the boards of one private company (Jawbone) and several non-profits (the New York City Ballet, the San Francisco Ballet, and the San Francisco Museum of Modern Art) and she is a member of the Tech Net Executive Council (a political network of tech CEOs).
Notwithstanding her reputation as a brilliant technologist and a relentless workhorse, we have to wonder if the demands of trying to save Yahoo leave Mayer sufficient time and energy to make a meaningful contribution at Walmart.
Whatever else she’s brought to the Walmart board, Mayer does bring some star power. But is this enough? The National Association of Corporate Directors suggests skepticism.
Part-time, ornamental “star directors” may appear to add luster to a board roster, but a director cannot provide outstanding professional service on a board unless his or her energies and competencies are truly available. 2005 Report of the National Association of Corporate Directors Blue Ribbon Commission on Director Professionalism
Outside the question of her availability, Mayer’s role at Yahoo raises other questions about her commitment to Walmart. As Brad Stone writes in his recent Bloomberg Businessweek profile, a good number of Mayer’s twenty-one acquisitions at Yahoo have been about getting the companies’ best engineers rather than their core technologies (see here also). Walmart has been pursuing a similar program of “acqui-hires” since 2011, when it bought the Silicon Valley startup Kosmix and turned it into an eCommerce development arm called @WalmartLabs. Thus, Yahoo and Walmart are effectively competing against each other in this very tight labor market, and particularly for the same pool of developers who specialize in mobile applications.
Walmart shareholders would probably like to think that Marissa Mayer is looking out for their interests as she scans the horizon for engineering talent and emerging technologies. But can they really be certain that is the case? (we’ll have more on this and related questions in a future post).
We don’t know what Mayer has been doing at Walmart. But we do know that Mayer was not the CEO of a large and deeply troubled internet company when she made the deal to join Walmart’s board. It seems reasonable for Walmart’s shareholders to ask whether Mayer is able to simultaneously guide Yahoo back to health and hold up her part of the bargain with them.