To address brain drain, Yahoo needs to get back to basics

Yahoo is preparing for a wave of employees to jump ship to other startups in Silicon Valley. Only this time, the wound is self-inflicted.

I read an article in the Wall Street Journal this morning and all I could think was, "Man, that's rough."

Amir Efrati reports that Yahoo is anticipating a "jump in departures" as the company's continued gyrations -- management turnover, potential takeovers, and so forth -- sap the morale of its workforce.

The situation is bad enough that workers are choosing to leave even as they hold company stock that hasn't matured.

An excerpt:

"If you're not growing, if you're not giving people challenging things to work on, if you're not holding out the promise of creating some personal wealth during one of the frothiest technology markets in modern history, and if your people don't ultimately believe in your ability to deliver across that whole spectrum, you're toast," [Bob] Cohn said of Yahoo's challenge in retaining workers.

And what's more, Yahoo employees are quite friendly with recruiters as the company's fate plays out before them, the report notes.

It's a tough situation to be in. On one hand, Yahoo wants to be lean and mean to enter any financial deal in the best shape it can be in. On the other hand, that goal encourages short-term, potentially destructive thinking that employees can see right through.

Whatever is actually going on at Yahoo, it's clear that the company has an internal messaging problem. Countless reports have been filed about the company's recent problems; perhaps in its excitement to be the next thing, Yahoo has lost control of the ship.

To me, Yahoo needs to get back to the basics. It starts with your employees -- not your potential suitors, and certainly not your latest chief executive. If they're not happy, say goodbye to your value as a company.