Twitter’s New CEO Will Serve A Constituency Of One
Originally published at Barrons.com
Twitter has a new CEO, Elon Musk says. Linda Yaccarino resigned today as the head of global advertising and partnerships at NBCUniversal, and according to Musk, is headed to Twitter in a matter of weeks.
Yaccarino’s appointment makes sense. Musk desperately needs to rebuild relationships with Twitter advertisers, restoring the revenue stream that comes from them. As a longtime expert on ad revenue, Yaccarino is a logical choice. She can focus on reputation management, convincing advertisers that the Twitter brand is indeed intact and worthy of billions of ad dollars.
Maintaining healthy relationships with advertisers must be Twitter’s primary goal in the short run. More than half of Twitter’s top 1,000 advertisers cut back or stopped advertising on the social media platform after Musk’s acquisition. Advertising revenue will be the main driver of the company’s financial results.
But, even more importantly, Twitter’s success will depend on culture. It will flow naturally from cohesion at the top. Yaccarino needs to foster a culture of cooperation and collaboration with Musk. Whatever their process is for making decisions, they must present a unified front on the decisions that are announced.
Early signs indicate that Yaccarino is in sync with Musk’s view of Twitter as a free-speech platform. There doesn’t seem to be an ideological clash. She seems to be a cultural fit, while also matching the skill set and expertise that Musk needs to complement him in his new role as chief technology officer and executive chairman.
Let’s be clear: Culture is key. Twitter’s owner and its next CEO need to see eye-to-eye on the grander vision for the company.
When the particulars are announced, it will be a fun thought exercise to review the research on CEO succession—what “the book” says about searching for CEOs the right way—and then compare or contrast it with Musk’s actual decision-making process.
The bottom line from decades of research and experienced corporate executives is that there are three stages to bringing in a new CEO, and empowering that individual with the best chances for success. All three stages have to be executed properly. A sound process leads to an optimal outcome.
The first stage is matching the Twitter CEO’s skills with the “must have” specifications. Essentially all external searches for CEO jobs have the same top six must-haves:
A demonstrated history for getting results
The ability to think strategically
Superior communication skills
Fit with the company culture
Interpersonal skills (high E.Q.)
Previous comparable experience
Culture is the second stage, and the more difficult one to execute. With it comes a series of questions: Does Twitter simply maintain its current business model? Does the company shift certain degrees of emphasis? Or does it undergo a wholesale reworking to match where Musk needs to go?
Musk is clearly open to finding a new business model for Twitter, and he is prepared to act radically to get there. But to make that happen will require matching Yaccarino’s leadership style with what Musk’s culture strives to become in the years ahead. That’s why the second stage is more challenging than the first. Alignment on a single, unified vision of both strategy and culture is paramount.
The third stage is managing the handoff. It will be incumbent on Musk to master this process without hiccups and delays. Too many CEO succession plans that are well-designed blow up early because the proverbial handoff gets botched. (Robert Allen at AT&T and Armand Hammer at Occidental Petroleum come to mind.)
The transition to Yaccarino will not be a traditional “pass the baton” moment, with the retiring CEO withdrawing visibly and quickly. Musk will stay involved both on the board of directors as chair and in the company as CTO. And, since Musk is actually the owner of Twitter, he is the constituency that the new CEO must serve and satisfy. Musk also needs to make clear to Twitter’s entire leadership team that the new CEO is not him—not anymore—and that that person speaks for both of them all the time.
Let’s hope that Twitter’s CEO succession process goes smoothly in the weeks ahead. Let’s hope for an optimal outcome, without needless drama. A successful transition has the potential to reinvigorate public discourse for years to come.