Kara Swisher

Recent Posts by Kara Swisher

Will Tough-Talking Bartz Reorg Yahoo Soon and Finally Blue-Pill the "Matrix"?

My favorite anecdote collected so far about new Yahoo CEO Carol Bartz is the one in which she recently called together two separate groups of execs who were direct reports of former Yahoo CEO Jerry Yang and President Sue Decker.

Bartz, several sources recounted, went around the table and asked them one by one what they actually did, making various outspoken comments along the way.

Two execs, for example, were a “two-in-one box,” meaning they did the same thing to her mind. And she had to get well around the room until she could find someone who made some dough. “Finally, revenue,” Bartz reportedly joked.

Stories about Bartz’s take-charge style have been ricocheting through Yahoo (YHOO) and outside it too, which is probably just what the tough-talking veteran exec has been aiming for as she navigates the troubled company to come up with a plan to revive it.

And despite all the jokes about Yahoo’s proclivity to constantly rearrange deck chairs, most expect Bartz to launch a significant reorganization as soon as she is up to speed. Which might be very soon indeed.

But of all the various things many employees I have talked to hope she does first is dump the “matrix” and replace it with a much simpler management system where top execs are more directly responsible for their P&L and less with complicated cross-functional corporate hairballs.

Ah, the dreaded matrix of Yahoo–that much maligned organizational structure that was instituted at the company under the reign of then-CEO Terry Semel and complexified drastically under Yang and Decker.

How to explain the matrix, whose goal was to simplify the huge global behemoth that is Yahoo by having a lot of managers over employees working on similar products?

Simply put, shared ownership, presumably, would make the troops of Yahoo work better across geographies.

There are pluses explained one exec: “The theory behind all of this is that if you centralize the functions you can share resources across various projects….Some degree of centralization is absolutely appropriate at big companies. You don’t want each business unit having its own finance or legal people, for example.”

But that also removes a lot of critical tools from line managers, many said, putting them into a larger pot where many are cooking.

Thus, the matrix has come to symbolize a drastic lack of accountability at Yahoo.

And, more to the point, a horrible gridlock in decision-making, which has stopped it from moving quickly in the face of more nimble and, let’s be honest, more dictatorially-run companies–think Apple’s (AAPL) Steve Jobs or Facebook’s Mark Zuckerberg and you have a good idea what I mean.

Said one exec who has left the company about the downside of the matrix: “The great people leave because they don’t feel they have the tools and authority to be successful with what they are notionally responsible for. Or because there are so many people who think they are in charge, they can’t get anything done. The mediocre people stay as they are protected and not held accountable.”

Said another still there, in what is the more prevalent opinion of more than a dozen people I spoke to: “I hope Bartz takes the blue pill and we can forget all about the matrix.”

It’s a reference to the movie, “The Matrix,” in which the hero, Neo, is given a choice by Morpheus between a red and blue pill.

Says Morpheus: “You take the blue pill, the story ends, you wake up in your bed, and believe whatever you want to believe. You take the red pill, you stay in Wonderland, and I show you just how deep the rabbit hole goes.”

Many at Yahoo, by contrast, are hoping the days of rabbit holes are finally over.

In any case, until Bartz acts, here’s the cool red pill/blue pill scene from “The Matrix”:


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work