Advice to Yahoo’s CEO

Marissa: ‘No Margin, No Mission’

The journey of Yahoo has been sad to watch…because I see it as preventable.

Sometimes our human frailty leads us to get enraptured with our company’s 30,000-foot vision. During the consulting engagement to assist the Saint Joseph of Orange’s Board of Directors with their hospital system’s five-year growth plan; ‘we in the suits’ were pitching that the system needed to generate a profit, yet the Sisters on the other side of the board table were certain their purpose in life was service to the poor. The talk grew heated, neither side backing down.

Sister Peggy, the Chairwomen of the Board stands up suddenly and announces, “No Margin, No Mission!” We knew instantly that Sister Peggy, without a speck of business school education, nailed the primary need of all organizations: make lots of money to survive another day. And survival requires after-tax profit or, as it is called in not-for-profit accounting, a surplus. Without surplus funds at the end of the year, Sister Peggy knew her nuns would not have a mission to serve the poor year after year.

Everyone has advice for Yahoo CEO Marissa Mayer, but I suggest following Sister Peggy’s elegant-but-simple servant leader wisdom. Make sure your business will survive to be of service to employees and customers another day. Don’t get engrossed in chasing quick profits without addressing the profitability level of your core business. Because we all know making a healthy after-tax margin delights employees with rising take-home pay, keeps investors off your back with good ROI, and funds your family’s retirement.

So I challenge you to reflect and ask your senior team about your focus:

Are you making the core of your business sufficiently profitable to complete its mission?

(Click to tweet this question to your followers)

Let us know how you’d respond in the comments below.

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