Yahoo! – Cast in His Image

I’ve wondered off and on about how much a company’s culture is modified in its CEO’s image. (It’s a heavily-researched issue, but I haven’t read up on any of it). There is evidence galore about Jack Welch’s effect on GE’s culture, Steve Jobs’ on Apple’s, and Clinton’s on the U.S.

A recent article in BusinessWeek about Yahoo! underscores this:

[Current Yahoo! CEO and co-founder Jerry] Yang is drawing on his background as a Stanford-trained engineer to galvanize the rank and file and make Yahoo a safe place to be a geek again. It’s a tall, much-needed order. [Former CEO Terry] Semel made Yahoo into the online media giant it is today in part through his own reengineering of its culture. The Warner Bros. veteran pushed employees to focus on profitability, sealing lucrative business deals and securing the kind of content capable of attracting large audiences and advertisers—instead of toying with unproven technology ideas.

Though Semel’s discipline proved just what the company needed at the time, Yahoo employees say the company is now overly cautious when it comes to launching new products or experimenting with concepts that do not have a proven business model.

Yahoo is in the midst of a transformation from showman to geek. And as the article indicated, it’s a fairly dramatic one. How much time should the firm give Yang to deliver results? Will the company need to transform itself before it can return to its winning ways of old? Will investors be that patient? And if not, will they replace Yang with someone who’ll proceed to give the company yet another avatar? If so, how can the company get out of this cycle?