Most Powerful Women

How Yahoo CEO Mayer fixed 1,000 problems

October 22, 2013: 10:33 AM ET

Besides acquiring 24 startups and reformulating her team at the top, Marissa Mayer has done something else key to doubling Yahoo's stock price. She has fixed a load of little problems to transform the corporate culture.

FORTUNE -- When Marissa Mayer landed at Yahoo (YHOO) as its new CEO 15 months ago, some employees told her, "There are 1,000 things you need to fix."

"It's really overwhelming when people come up and say that to you because, how are you going to fix 1,000 things?" she said on stage last Thursday at the Fortune Most Powerful Women Summit.

What enabled Mayer to fix 1,000 things was a piece of advice she got from Eric Schmidt, her former boss at Google (GOOG). "Eric says that good executives confuse themselves when they convince themselves that they actually do things. It's your job to be defense [rather than] offense. Clear the path. Get obstacles out of the way"—and then let employees run "as far and fast as they can."

MORE: Fortune's Most Powerful Women Summit

A self-proclaimed geek, Mayer translated Schmidt's advice into her own science-based theory of leadership. She told the MPW audience—including Warren Buffett (BRKA) and Xerox (XRX) chief Ursula Burns—that she thinks of culture as DNA. "I don't know a lot about genetics, but I know a bit," Mayer said. "You want the genes that are positive to hyper-express themselves."

To motivate Yahoo's 12,000 employees around the world, Mayer says she's tried to "take some of the negative genes that are getting in the way and shut them off. It's not about injecting new mutant DNA. It's not about changing the culture. It's about making the culture the best version of itself."

Her tactic has been a program she launched called PB&J, which is designed to rid Yahoo of poisonous processes, useless bureaucracy and jams. As part of PB&J, Mayer and her new management team created an online tool to collect employee complaints and employee votes on whether the problems are worth trying to fix. Any complaint—such as underpowered laptops or onerous rules at the company gym—that generates at least 50 votes gets management attention--and the onus on the rank and file to fix the problem. Employees get evaluated on how they do that.

One year in, Mayer reported at the Summit, "We fixed 1000 things, some big, some small."

The cultural overhaul clearly is making Yahoo a more attractive place to work. Last quarter, Mayer says, the company received resumes from 17,000 job applicants. That's up from 2,000 last year. Here's my full interview with Mayer at the MPW Summit:

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About This Author
Pattie Sellers
Pattie Sellers
Senior Editor at Large, Fortune
Executive Director of MPW/Live Content, Time Inc.

Pattie Sellers has written more than 20 Fortune cover stories including "Marissa Mayer: Ready to Rumble at Yahoo," "Muhtar Kent's New Coke," "Oprah's Next Act", "The $100 Billion Woman" (Melinda Gates), and "Gone with the Wind" (Ted Turner). She co-founded Fortune Most Powerful Women and oversees the Fortune MPW Summit, the preeminent gathering of women leaders in business and beyond—and programs such as Fortune MPW Entrepreneurs and the Fortune-U.S. State Department Global Women Leaders Mentoring Partnership. Pattie also develops Live Content across Time Inc. Her blog, Postcards, is about how power players lead and navigate their careers. Pattie won Time Inc.'s prestigious MVP award for her performance in 2012.

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