For all the time I spent researching Apple I became a late convert to the Church of Corporate Culture. I always thought of culture as a squishy topic that wasn’t as important as organizational behavior experts would have you believe. Then, examining Apple’s culture, I decided I was wrong. It is super important. Indeed, the meme “culture trumps strategy” has become a business truism, including in Silicon Valley.
That said, I write today in defense of strategy. It turns out that bad strategy—or even challenged strategy—will outweigh the best of cultures.
Take Yahoo (please, as the old comics might say). It had one of the winningest cultures in Silicon Valley. But it got outmaneuvered on technology by Google and then couldn’t figure out if it was a technology company or a media company. It still doesn’t know. Yahoo has twisted in the wind for years, binged on acquisitions, and see-sawed on what to do with its most valuable assets. This morning, Yahoo officially acknowledged that it won’t pursue a previously announced sale of its stake in Chinese e-commerce company Alibaba and instead will sell its core business. Yahoo’s strategy hasn’t worked in a long time.
Another example is privately held Dropbox, which pioneered an easy-to-use file storage system. Dropbox, valued at $10 billion, badly wanted to be a consumer business. It developed a nifty photo-organization tool and bought a neat email program. But the money is in less-cool business applications, and Dropbox was slow to shift its strategy to acknowledge that. It is now closing the two cool tools in favor of focusing on business customers.
Japanese phone and Internet giant SoftBank has been a strategic master, led by the visionary Masayoshi Son. He wanted into the U.S. telecommunications market and bought Sprint, hoping to merge it with T-Mobile. That was a bold strategic move that was stymied by regulators. Up next? Son is relying on former Google business head Nikesh Arora to find him a great investment or three, as Erin Griffith entertainingly and insightfully describes in the current issue of Fortune.
Culture, product development, leadership: They’re all important. But sometimes strategy trumps them all.
BITS AND BYTES
Yahoo reverses Alibaba spinoff strategy. After intense deliberation, Yahoo’s board will appease activist investor Starboard Value by seeking buyers for its core media, email, and advertising businesses. Starboard prefers this alternative to Yahoo’s plan to sell its $31 billion stake in Chinese e-commerce giant Alibaba, which was set in motion last January. Yahoo’s stock rose more than 2% Tuesday in sympathy with the idea, which was officially disclosed this morning. (Fortune)
Apple reprograms Internet TV plan. To complement its Apple TV set-top box, Apple wants to sell programming bundles that include more than a dozen channels licensed from well-known media companies. So far, none have agreed to its cutthroat pricing terms. The revelation came after CBS CEO Les Moonves suggested during a technology conference that Apple’s plans were “on hold.” (Bloomberg)
HP and Apple think 3D. The market for 3D printers has been slow to develop—pioneers like Stratasys and 3D Systems are both downsizing. HP Inc. hopes to create new excitement when it enters the game next year, and Toshiba is poised for an early 2017 debut of its own metal-printing machine. Now it looks like Apple wants in, too, based on a recent patent application. (Fortune)
Coming soon (maybe) to Los Angeles and Chicago: Google Fiber. The next two cities for Alphabet’s high-speed Internet service would be its biggest ones yet. They are the second and third largest cities in the U.S., respectively. Both proposals, however, are subject to regulatory review. So far, Google has penetrated 20 U.S. metro areas with its service, covering approximately 5% of the country’s population. (Wall Street Journal)
Cisco talks up cloud communications strategy. Just one week after Microsoft disclosed its plan to turn Skype into a powerful platform for video conferences, Cisco is countering. A slew of startups, including Blue Jeans Network, RingCentral, and Vidyo, are eating into the market by offering voice and video calling services that don’t require expensive hardware investments. (Wall Street Journal)
CEO out at ‘Angry Birds’ creator Rovio. The Finnish company behind the popular mobile phone game is giving more independence to its two operating units focused on games and media. As a result, CEO Pekka Rantala is resigning after just one year on the job. (Reuters)
Need a mentor? This startup plays matchmaker. Praise successful business leaders, and they will invariably gush about influential mentors who guided the way. That idea inspired entrepreneur Mike Bergelson in founding his latest software company, Everwise, almost four years ago.
San Francisco-based Everwise, an online mentoring site, disclosed an $8 million round of venture financing on Tuesday. As part of its service, the company curates videos, books, and other training materials to help customers navigate a promotion or career change. But its primary mission is to match volunteer mentors—many from Fortune 1000 companies—with employees who could benefit from coaching. (Fortune)
MORE FORTUNE TECH COVERAGE
Here are the tech stocks you should buy in 2016 by Kia Kokalitcheva
Google and NASA show off blazingly fast computer by Jonathan Vanian
IBM’s shopping spree continues by Barb Darrow
Why this coding bootcamp is teaching empathy by Rebecca Grant
This startup wants to make installing industrial sensors a breeze
by Stacey Higginbotham
ONE MORE THING
Former Twitter CEO Dick Costolo hints at future plans. He plans to launch a startup next spring, but it won’t be focused on consumer Internet services. (Fortune)