Yahoo CEO Carol Bartz got fired last night via a phone call, and notified the company via email (from her iPad).

Carol Bartz terminated as CEO of Yahoo

To all,

I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s Chairman of the Board. It has been my pleasure to work with all of you and I wish you only the best going forward.

Carol

Sent from my iPad

Let’s do some root cause analysis of this situation leveraging the 5 Why’s technique shall we and see if we can’t get a better idea of what led up to this situation?

Why was Carol Bartz terminated?

According to BusinessInsider, Bartz “checked out” last week and was not really participating in the day-to-day management any more.

Why did Carol Bartz act “check out” for her last week on the job?

Purely theorizing, of course, perhaps conversations with the board of directors left her seeing the writing on the wall where she felt it was best not to further invest herself into a company that will soon be without her.

Why did Carol Bartz see the “writing on the wall” that she was going to be terminated soon?

You can’t get to a position of respect like Bartz, having led Autodesk into a leader of computer-aided design software from an aimless maker of PC software (according to Forbes) without having some sense and being able to read your environment.  As an example, an investor openly called her a lame duck during Yahoo’s 23 July 11 2Q11 earnings announcement and called for her termination while industry insiders rumored that Yahoo’s board was talking to potential CEO replacements.

Why was there such a negative perspective of Carol Bartz’s performance?

Revenues were at $1.076 billion versus the expected $1.11 billion for the quarter.

Why were earnings below expectations?

During their earnings call, Bartz identified poor display ad sales by the sales team as the reason.  A reorganization of the sales team resulted in fewer sales people in front of YHOO’s big clients.

Why was the sales team reorganized?

Bartz was cutting costs, setting new goals and rearranging senior leadership in the sales organization since as early as November 2010.  In the wake of the various terminations from paring down 8 regional teams down to 3 and the aggressive goals for these teams, other senior sales staff have resigned, leaving gaps that needed to filled with additional hires and training.

Why did the team need new goals and rearrangement?

Yahoo has long considered themselves a media outlet, and has focused on brand building messages, while competition has evolved with context-driven placement in emails, on mobile devices, and in social media outlets.  Yahoo didn’t have the team set up to make that happen and Bartz was adjusting the infrastructure to those ends.

And so we reach the end of our tale…

ROOT CAUSE: Why was Carol Bartz fired from Yahoo?

The root cause appears to be that stockholders and investors are merciless.  As the highest paid CEO of the S&P 500, if you fail to bring in solid quarterly earnings, they want to swap out players even if you have plans in place to make Yahoo a stronger company overall.  Bartz just failed to execute her plan quickly enough to satisfy a marketplace hungry for returns amidst a flailing economy overall.  Trying to recover from the failed Microsoft buyout, then the subsequent acquisition of the Huffington Post properties, she failed to keep strong talent to handle the organizational changes.  And the board was being grumped at by the shareholders about the dropping stock price, and so the proverbial ball of defecation rolls downhill.

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