60. How to Deal with a Direct Attack
“That was certainly a downer!”
The annual shareholder meeting of Yahoo! Inc. in June, 2011, was an “unlikely lovefest”—according to the report of the event in the New York Times1—unlikely because the company’s stagnant stock price and poor performance against its competitors would seem to have invited a more critical session. The lovefest carried through more than an hour of glowing outlook from the board and management as well as softball questions from the shareholders.
But then a man named Steve Landry took the floor and identified himself as a personal investor who also advised institutional investors holding more than a million shares of Yahoo! Mr. Landry then proceeded to attack the company in general and its Chief Executive Officer, Carol Bartz, in particular. Addressing her directly, he said, “It came out earlier this week in a blog that the board is secretly talking to other potential CEO candidates. I’ve heard similar details and believe that it’s true.” He then went on to say, “the last thing Yahoo! needs is a lame duck CEO.... The buyout talks of your contract need to start today and a search needs to be accelerated.”
According to the transcript of the webcast, Ms. Bartz responded: Thanks for your opinion, the bloggers and the rumors. What else? Wonderful—that was certainly a downer. So again, thank you for coming to Yahoo! We are working very, very hard in this company and managing our assets and we will see the benefit of that.2
However, the reports of the exchange in the major financial press—the Wall Street Journal,3 the New York Times,4 and CNET5—carried only the central phrase of Ms. Bartz’ answer, “that was certainly a downer.” This left readers with the impression that Mr. Landry’s direct attack had damaged her.
While Ms. Bartz did the right thing in ending her answer on an upbeat note, she made two tactical errors at the front end of her response, both of which outweighed and therefore overshadowed her positive effort.
• She neglected to address the issue in the attack.
• She validated the negativity.
Instead, Ms. Bartz should have addressed the issue of the rumors by saying:
Yahoo!’s policy is not to comment on rumors and blogs. What I can tell you is that...
And then she could have gone on to conclude with her original upbeat ending, “We are working very, very hard in this company and managing our assets and we will see the benefit of that.”
These two issues provide larger lessons for how any presenter should handle tough questions or direct attacks.
1. Presenters have every right to take every opportunity to make positive statements about their companies, but they must first earn that right by addressing the central issue in the challenger’s tough question or statement. They may agree, disagree, admit, correct, or deny the issue, but presenters cannot ignore it. Ms. Bartz would have addressed the issue of rumors by stating Yahoo!’s policy on rumors.
2. Negative facts may be sad but true—Yahoo!’s stock price had been stagnant—and presenters can actually be forthright about it, but they should not validate the negativity. “That was certainly a downer” carried forward the negative balance.
Instead, presenters can admit to negative facts—so as to be accountable—but then, after a brief, very brief, admission, immediately follow it with an upbeat counterpunch. This known as the “Yes, but...” approach:
Yes, the stock price has been stagnant, but when you consider the outlook for the new products that you’ve heard about today and the fact that we are working very, very hard in this company and managing our assets, I am confident that we will see the benefit of that.
Following the annual meeting, CNET reported that a Yahoo! spokesperson emailed to say, “Rumors suggesting there is or has been any sort of search for a replacement to Carol are categorically untrue.”6
Three months after that, however, with the stock price still stagnant, the Board of Directors did fire Ms. Bartz. Undoubtedly, it was the performance of the stock and not her testy performance at the annual meeting that brought about her dismissal. As the New York Times report of the firing noted, “She has long been inclined to honesty, often in salty language.”7
Carol Bartz can afford to be direct. Before Yahoo!, she was the CEO of Autodesk for 14 years and has served on the Boards of Directors of Intel, Cisco, BEA Systems, and Network Appliance. Unless you have that kind of track record, when you are asked a tough question, you must:
• Address the issue
• Avoid negativity
• Be accountable
• End upbeat