After a corporate mistake, the next test is how to handle the fallout. If Scott Thompson ends up joining the ex-Yahoo CEO club now, it won’t be because of a false degree claim. It will be over the way he responded.

Wizard of Oz unveiled
photo: WB

People make mistakes. We make bad choices, flawed decisions, say or do things we wish could be called back, take calculated moves based on the wrong data. Some face another test: how to handle the fallout.

They probably shouldn’t use Yahoo CEO Scott Thompson as a template. Thompson could have ‘fessed up when his resume padding was revealed by Third Point CEO Daniel Loeb during a proxy battle. He could have explained why he decided to claim a phantom degree in computer science or to let it stand if it started as a mistake by someone else.

In the past, that was best accomplished by telling your story to an interviewer who would be tough but fair. Today, he easily could have gone direct via a blog post or a memo. He even could have gone Kanye by taking it to Twitter.

With the right explanation and tone, a sincere apology and possibly some kind of penalty like a cut in pay, Thompson and the Yahoo board might be able to escape major fallout from this tornado.

Instead, Thompson is channeling the Wizard of Oz, first ducking behind a company statement about an “inadvertent error” and promise of a probe, then telling fellow Yahoos in a terse e-mail posted at All Things D:

I am sure you have seen the reports of questions raised regarding my undergraduate degree. As we said yesterday, the board is reviewing the matter and, upon completion of its review, will make an appropriate disclosure to shareholders.

In the meantime, Thompson urges everyone to ignore the yipping dog, pulling the curtain back to reveal a mere mortal operating a machine rather than an all-knowing wizard. (Taking this analogy all the way, that would make Loeb Toto but not gonna go there.)

… I’m doing what I hope all of you are doing — staying focused on our customers, our shareholders, our team and moving Yahoo! forward, fast.

True, Thompson has much more to focus on: getting a vital Ali Baba stake sale done; dealing with the aftermath of laying off some 2,000 employees and executing the massive re-org that started May 1. It’s hard to believe anyone involved at the company wants to go through another CEO switch at this point. It’s even harder to believe Thompson or anyone else on the board wants to be perceived as giving into Loeb’s demands that he be fired by Monday at noon.

Kara suggests the current board will turn the whole problem over to the new one, which places any resolution weeks out and ostensibly gives Thompson time for a win with a sale of at least part of the Ali Baba stake:

What do I really think? I think this cursed board will maintain its 100 percent score of doing the wrong thing at the right time.

But from another perspective, the anemic response and lack of any admission of personal responsibility so far may force swifter action.

If Thompson ends up joining the ex-Yahoo CEO club due to this, it won’t be because of the false degree claim. It will be over the way he responded.

Update: Dan Lyons weighs in with the “so what, take”:

Here’s the thing. The people howling about Résumégate don’t really care about Thompson’s credentials. They just want the guy out, for different reasons, and they see this résumé business as a pretext to get rid of him.

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  1. Steffen Konrath Saturday, May 5, 2012

    “Instead, Thompson is channeling the Wizard of Oz, first ducking behind a company statement about an “inadvertent error” and promise of a probe, …” – Do you really think Yahoo’s board would allow him to comment? It’s more likely that they prohibit any action in this case right now.

    – Steffen Konrath, Future of Journalism

    1. Smart, level-headed rebuttal? On the Internet? You need to be more cynical, like this great cheery columnist you’re responding to… ; )

    2. Steffen, he’s been involved in communications, at least one going out under his name to staff. I think part of the test of leadership now is how he comes across, even under those constraints. Granted, there may be legal reasons behind certain formations.

      1. His response has been laughable, the company’s failure to fact-check his bio is pathetic, and while public company have legal constraints, a true leader can get around them. I read his memo as confirmation that he is on the way out.

  2. Heath Boral Saturday, May 5, 2012

    This fella is a perfect match for Yahoo. Remember the high flying stock days for Yahoo when their stock price was quite more than it was really worth and clearly not at all on paper what people thought it was? Ya, perfect for this company. Perfect. Cheers, Mate.

  3. Jack Greene Saturday, May 5, 2012

    Oh definitely. Because if he responded by saying a mea culpa, you’d be defending him, Mr. Cynical Internet columnist guy? I am so sick of the internet. You all need some xanax and take it down a notch. Everyone gets so offended by things like they were lied to about someone’s resume directly. None of us are involved. The Internet just makes us hate more. Why should we kick a guy when he’s down? It’s too easy.

  4. Why the board needs to wait and see? they need to fire Thompson right now before he makes a mistake of selling Yahoo’s share @ Alibaba, $ 1B investment in Alibaba is now worth around $16B and taking into all consideration that there’s no way it would go down but up, so why sell in a hurry? We’ll never know Yahoo’s stake of $1B becomes $40B in a few more years, so why do we need to sell right now? It would be a big mistake if we make a deal at the moment, let’s wait a few more years……

    1. He should be treated as any Yahoo employee that made a false statement on their employment application. If the rule is that they are fired, then so be it.

  5. Fully realizing CEOs live in a different world, it is still aggravating that he can get away with this, while you or I would be justifiably fired in a heartbeat if we lied on an application or resume.

    1. Bruce Kendall John Saturday, May 5, 2012

      John I totally agree with you. Powerful people just operate by different rules than the rest of us.

  6. This is ridiculous. I worked for this man at PayPal for 4 years. We made billions $!$!$!. I studied something in college 20 years ago too. Don’t remember all of it. Who cares?

    1. Track record matters a lot. A lot of people build successful careers that have little to do with the degrees they earned or whether they even had a degree. But at some point, it looks like listing a computer science degree or going along with it meant something to him.

  7. Scott Thompson is focused on one thing: His regular salary direct deposit, each bank deposit from Yahoo to Thompson’s bank account more than some families earn in a year. Nothing must interfere with those regular bank transfers. Understand?

  8. I can’t believe they hired this guy based on his resume. He must have work history to be hired as ceo. This is all about nothing..

  9. This whole farce is getting WAY too much publicity. The Yahoo board has an obligation to all its shareholders to investigate this issue and take appropriate action. A knee-jerk reaction to appease one disgruntled shareholder, who is obviously trying to get a disproportionate voice in company affairs, would be yet another big mistake.

    1. This is the first sane comment I’ve read.

      While lying about credentials is unacceptable let Yahoo deal with it and be done with regardless of the outcome!

  10. where is the employee background check?

    1. It got………. misplaced, perhaps? We’ll get back to you once it is located. Good day, sir.

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