What health care leaders can learn from Yahoo’s failure

I’ve been following Marissa Mayer’s tenure for nearly four years at Yahoo.  Not just because I was initially tapped to lead athenahealth’s integration of another mature advertising-driven mobile company — Epocrates — but because Yahoo, with its complexity and technology legacies, and highly competitive, fast-paced market environment, reminds me of many of the country’s largest health care delivery systems.

Both are facing significant headwinds to stay relevant in their respective industries and both need to change quicker than they each probably want to.

Recent news, that Yahoo was laying off 15 percent of its nearly 11,000 employees, was just the latest downward trend, which includes open calls to sell off significant pieces such as its stake in Alibaba and Yahoo Japan, the stock is down, the board is falling is apart, the optics are bad, and there’s an open question now as to whether Ms. Mayer will even survive the year as CEO.

Four years ago, she was hired not just to turn around Yahoo, but to strategically bring it out of its Internet 1.0 doldrums. Her hire drew the world’s attention and was greeted with high praise. Finally, Yahoo had a high-profile executive who understood the web, with a sparkling reputation for launching new services as one of the original leaders at Google.

In 2012, she said, “we’re sitting on $5 billion in deteriorating revenue with no clear sign for growth.” Yet, that growth is still waiting to come under Mayer’s leadership. Its ad revenue is stalled at $1.2 billion, yet over the same timeframe Facebook has built a mobile ad business from scratch that just generated $13 billion in Q4 2015. Yahoo’s competitors, such as Facebook, Microsoft, Google, Amazon, and Apple are roaring ahead and not looking back.

Mayer has had four years to turn around Yahoo, but her strategy has amounted to numerous little bets like the acquisition of Tumblr and other assorted mobile start-ups adding up to and signifying essentially nothing. Perhaps she needed one big bet to give the company a purpose – acquiring Netflix would have been one, for example – instead they acquired Tumblr and then did nothing with it.

Several industry pundits have been saying the same thing:   Notes New York Time’s technology columnist Farhad Manjoo:

The larger story of Ms. Mayer’s tenure at Yahoo is one of a transformation so modest it borders on stasis. Overall, Yahoo remains much the same business it was three years ago. It is a far-flung collection of news, entertainment and communications destinations supported by ads. Ms. Mayer was hired to build something novel. Instead, at best, she appears to be building a better Yahoo — with debatable results. […]

If Ms. Mayer had picked a single project on which to hang the future of Yahoo — or, even better, some other new thing that no other company was working on — she could have accomplished something transformational, finally giving Yahoo a purpose.

Further, Manjoo concludes: “Marissa Mayer wasn’t hired to do the safe thing. She was picked to be bold, and so far, she has failed.”

In leadership circles, Yahoo’s dilemma is referred to as having to cross the chasm. By any anecdotal measure, Ms. Mayer has failed to lead as CEO of Yahoo.

The analogy, obviously, I see for health systems is many of them are facing a similar chasm as Yahoo. The majority are strategically stuck in neutral placing small bets here or there on new reimbursement contracts, technology or “innovation” labs, etc.

And then there is Mount Sinai in New York. This is an advertising campaign to attract physicians to work for them.


On the surface, it appears that the leadership of Mount Sinai gets it.  The ad tells a story of a very big bet, and a big, hairy, audacious vision.  You can be sure the doctors, staff, patients, trustees, state health care workers, politicians, etc.  seeing this ad also get it.   And perhaps Mount Sinai leadership also gets that crossing the chasm from fee for service to value-based care will require giant leaps of leadership moxie, not small steps into the shallow end of the pool.

Most health care leaders also need to cross the chasm to value-based care with a visionary strategy, new operational capabilities, and cultural buy-in from physicians and other staff. Like Yahoo, this will not be easy, and it will be very risky.  But perhaps the Yahoo story tells us that not making a single big bet on change, is the riskiest move of all.

Rob Cosinuke is executive director, athenahealth’s Leadership Institute. This article originally appeared in athenahealth’s Health Care Leadership Forum. 

Image credit: Shutterstock.com

Leave a Comment

Most Popular

Join 150,000+ subscribers

Get the best of KevinMD in your inbox

Sign me up! It's free. 
✓ Join 150,000+ subscribers 
✓ Get KevinMD's 5 most popular stories
Subscribe. It's free.