Elon Musk is preparing to stand down as Twitter CEO, to be replaced by Linda Yaccarino. The incoming boss faces a number of issues from reassuring advertisers to working out what to do with Twitter Blue.
By guest author Rohan Banerjee from the Raconteur.
May 16, 2023
Elon Musk has been the CEO of Twitter since he bought the company for $44bn last year. But it doesn’t look like a job he has particularly enjoyed, describing it as “painful” and anyone who would take over from him as “foolish”. However, he has now managed to find such a person, with Linda Yaccarino set to join in around six weeks from NBC Universal, where she served as the broadcaster’s chair of global advertising and partnerships.
Her job, according to Musk, is to focus on “business operations”, with the 60-year-old drafted in to act as “an accelerant” and turn Twitter into “X, the everything app”. Musk will stay involved as executive chairman and chief technology officer.
Yaccarino, who graduated from Pennsylvania State University in 1985 with a degree in telecommunications, joins the company at a crucial time. Here are four key issues she needs to deal with quickly:
1. Reassure and reinvigorate staff
Since Musk acquired Twitter in October, the company’s workforce has reduced by around 80% due to a mix of layoffs and resignations in response to his leadership. Musk has also made huge cuts to the company’s perks and benefits, including home internet provision, training and development programmes, and child daycare schemes.
For John Colley, associate dean at Warwick University Business School, Musk’s erratic cost-cutting will have alienated many of its remaining staff, giving them the impression that they are expendable and unimportant. “Twitter’s excessive costs could have been reduced more humanely, in a way that retained its best talent,” he explains. “Musk’s approach ensured the opposite occurred.”
Yaccarino, then, is tasked with reassuring talent that it is appreciated. Those that remain have been through a lot over the past seven months, so she needs to let them know she recognises that and cares about their wellbeing and mental health, as well as their contribution to the company. In any successful modern workforce, perks and benefits play as important a role as pay, so pushing Musk back on this point should be a priority.
2. Bring back advertisers
Twitter advertising revenue reportedly fell by 40% last year, with commercial clients likely spooked by the direction towards deregulated content that Musk has taken the platform in. Musk’s purported commitment to “free speech”, it appears, involves reinstating previously banned accounts and turning a blind eye to plenty of unsavoury, explicit or potentially abusive posts. And brands are concerned about it, with companies including General Mills, Audi, Pfizer and Volkswagen rethinking their spend.
In a recent blog post, however, Musk indicated he may have mellowed on this front and is working on a new content moderation policy. Indeed, reassuring advertisers that Twitter is a hospitable and valuable space for brands to operate in will be another key challenge for Yaccarino and she, rather than Musk, with her advertising background, should take the lead here.
“Transparency will be crucial, with detailed analytics and insights provided to advertisers for better campaign performance understanding,” suggests Pat Lynes, CEO of management consultancy firm Sullivan and Stanley. “Strengthening brand safety measures, such as improved content moderation and enhanced filtering will ensure ads appear alongside appropriate content and reassure advertisers for whom this is a concern.”
3. Work out what to do with Twitter Blue
The botched launch of Twitter Blue is one of the lowlights of Musk’s time at Twitter so far. When Musk tried to charge a subscription fee for verified user accounts last year, the poor security planning around it resulted in a host of impersonators of major companies and celebrities.
From an advertising perspective, it is crucial that the technology and processes around verified usership becomes and stays airtight. But, more broadly, Yaccarino needs to work out what Twitter’s paid-for experience should entail – and what it should represent.
For Tamara Littleton, CEO of The Social Element, a brand consultancy, it is important that Yaccarino comes up with a strategy to make Twitter feel “cool” again. “Relying on Musk super-fans to buy it [Twitter Blue] because they buy into him is not a robust business model,” she warns. “Revenue drivers should be about keeping the community motivated to engage with and enjoy the platform. Really it’s about finding the ‘why’ again for the user, which will subsequently lead to advertiser confidence.”
The problem with the current subscription model, Littleton explains, is that there is an “incredibly low perception of its value… In fact, many Twitter ‘stars’ seem to absolutely deride the idea of paying for a blue tick, and mock those that do, so either something needs to change about what is offered in a subscription, or the model needs a rethink.”
This, says Littleton, will deliver other benefits. “Brands use the platform as a customer service and research tool, as well as for ads.” If the Twitter community leaves, all of those benefits are at risk.
4. Manage Musk
Ultimately, Yaccarino’s new role will involve a considerable amount of managing upwards. She needs to re-establish the Twitter brand as something other than an extension of the owner’s ego, while being careful not to fall foul of it herself.
“For the sake of Twitter,” says Julie Oxberry, CEO of creative agency Household, “I hope that the distinction between the day-to-day activities of Musk and Yaccarino is made clear at the outset, giving her a chance to reframe the game, decide the best direction for the platform, and establish priorities for content moderation.”
The Harvard Business Review’s CEO Genome Project identified that the best CEOs are not necessarily extroverts. “Instead,” notes Oxberry, “it is essential that they are steady, reliable, set a clear course and behave with clarity and consistency, using disciplined communications and influencing strategies. No waffling or backtracking and give people a voice, if not necessarily a vote.”
Musk likes to be both flattered and impressed. Can Yaccarino, who the Wall Street Journal described as the “velvet hammer” come up with cool, exciting ideas, while letting him share in the credit?
In the long run, Yaccarino will benefit from appointing her own CTO, and Musk may revert to his other business ventures, such as Tesla or SpaceX. But, for the time being Yaccarino must focus on becoming the acceptable face of Twitter, while never admitting that her boss was ever unacceptable.