Reflections Blog

Scott Thompson's Abrupt Exit

CEO Scott Thompson’s recent resignation from Yahoo—after only four months on the job—is a stark reminder that leadership legitimacy can be lost in a heartbeat if the leader’s integrity is called into question.  Moreover, that breach of integrity does not have to be substantial.  In Thompson’s case, it was the claim, in his biography, that he had dual degrees from Stonehill College in accounting and computer science (at the time he graduated, Stonehill did not offer a computer science degree).

Thompson, who was named Yahoo’s CEO in January 2012, came to the company with solid technology credentials and a long track record as a successful executive.  Before joining Yahoo, he had been the chief technology officer and then president of PayPal and, before that, the executive vice president of technology solutions for Inovant, a subsidiary of Visa.  Earlier in his career, he worked for Coopers and Lybrand, where he specialized in information technology solutions for financial services clients.  In each of these roles, Thompson had demonstrated not only a grasp of technology but the ability to lead people and organizations successfully.  He would appear to have been an ideal executive to turn around a struggling technology giant like Yahoo. 

It is not clear how the phony degree wound up in his biography, whether he had added it or someone else, perhaps a well-intentioned assistant, had assumed it.  But Thompson did not correct the error, and he would surely have noticed it in the many times his credentials were cited in print and broadcast media.  Even if we make the most generous assumptions about how it came about, Thompson is nonetheless guilty of a sin of omission—and when it comes to perceptions of someone’s integrity, that is enough to cast doubt.

Scott Thompson’s fall from power is a reminder that a leader’s legitimacy depends in large part on people’s perceptions of his or her character.  No one has a divine right to a leadership role.  Leaders may be visionary and entrepreneurial.  They may seize the initiative, start new ventures or pave new roads, attracting many followers, but they always lead through the consent of the governed, and this is true whether they are politicians, religious leaders, executives, or CEOs. 

One might argue, as some observers have in Thompson’s case, that a little padding of the resume is not such an awful thing.  Thompson was an effective executive with or without the degree in computer science.  He had already proven himself many times, and he hadn’t committed an egregious falsehood (like Enron’s Fastow and Skilling, who willfully misled investors to improve share value and line their own pockets).

But a little distrust goes a long way.  Once that seed of doubt is planted, a person’s legitimate right to lead loses its most important foundation—our ability to trust that what a leader tells us is true.  We may be asking too much of mere mortals, but the fact remains that when we choose to follow people—or when we name them to leadership roles—we take it as an article of faith that they are persons of high integrity, that they will not mislead us.  And at the slightest shred of doubt, we lose faith in them, and they lose their legitimate right to lead.

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