The “Peanut Butter Manifesto”

Brad Garlinghouse, Yahoo! senior vice president https://twitter.com/bgarlinghouse , wrote internal memo, urging Yahoo! company, famously known as The “Peanut Butter Manifesto” pointed out Yahoo’s lack of focused, cohesive vision, using peanut butter as a metaphor for spreading its resources too thinly.

he wrote in that memo:

RECOGNIZING OUR PROBLEMS

We lack a focused, cohesive vision for our company

We are separated into silos that far too frequently don’t talk to each other. And when we do talk, it isn’t to collaborate on a clearly focused strategy, but rather to argue and fight about ownership, strategies and tactics..

I’ve heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular. I hate peanut butter. We all should.

We lack clarity of ownership and accountability. For far too many employees, there is another person with dramatically similar and overlapping responsibilities. This slows us down and burdens the company with unnecessary costs.

There’s a reason why a centerfielder and a left fielder have clear areas of ownership. Pursuing the same ball repeatedly results in either collisions or dropped balls. Knowing that someone else is pursuing the ball and hoping to avoid that collision — we have become timid in our pursuit. Again, the ball drops.

We lack decisiveness. Combine a lack of focus with unclear ownership, and the result is that decisions are either not made or are made when it is already too late. Without a clear and focused vision, and without complete clarity of ownership, we lack a macro perspective to guide our decisions and visibility into who should make those decisions. We are repeatedly stymied by challenging and hairy decisions. We are held hostage by our analysis paralysis. We end up with competing (or redundant) initiatives and synergistic opportunities living in the different silos of our company. . . .”

he said:

There are three pillars to my plan:

1 Focus the vision.

a) We need to boldly and definitively declare what we are and what we are not.

b) We need to exit (sell?) non core businesses and eliminate duplicative projects and businesses.

2 Restore accountability and clarity of ownership.

a) Existing business owners must be held accountable for where we find ourselves today — heads must roll

b) We must thoughtfully create senior roles that have holistic accountability for a particular line of business. . . .

c) We must redesign our performance and incentive systems.

3 Execute a radical reorganization.

a) The current business unit structure must go away.

b) We must dramatically decentralize and eliminate as much of the matrix as possible.

c) We must reduce our headcount by 15–20%. I emphatically believe we simply must eliminate the redundancies we have created and the first step in doing this is by restructuring our organization. We can be more efficient with fewer people and we can get more done, more quickly. We need to return more decision making to a new set of business units and their leadership. But we can’t achieve this with baby step changes. We need to fundamentally rethink how we organize to win. . .

– a company with a clearer vision and clearer ownership and clearer accountability. We may have fallen down, but the race is a marathon and not a sprint. I don’t pretend that this will be easy. It will take courage, conviction, insight and tremendous commitment. I very much look forward to the challenge. So let’s get back up. Catch the balls. And stop eating peanut butter.

Source: Extracts from Brad Garlinghouse’s memo to Yahoo! managers, November 2006. Reprinted in Wall Street Journal, 16 November 2006.

Yahoo! faces the complexity both of a fast-moving market environment and poorly organised internal businesses.