When ByteDance announced in May, that it would hire the former Disney CEO-contender Mayer as the CEO of TikTok and COO of ByteDance, it was considered a clever move for one of the most valuable pre-IPO companies in the world and one of China´s most ambitions companies when it comes to international expansion. His role was also special in a way, because he was not only meant to lead the international main product but also to take over a leadership role on the group level. Without having even started to deliver, his now sudden departure will have limited operational implications but comes at bad timing.
Figure: Mayer leaves earlier than expected (Source: The Drum)
In the following piece, we want to dive into what happened in the last few days at ByteDance, evaluate possible explanations for Mayer´s departure and analyze the implications.
A surprise decision
He came, he saw, he left. Employees at ByteDance were surprised yesterday receiving an email from Mayer announcing his departure after he joined the group only three months ago. Even more so, many people from within ByteDance and outside must have been surprised learning about the reasons Mayer stated when he cited a sharply changing political environment as his main reason for departure. Founder and CEO Zhang Yiming later confirmed this official explanation in a separate letter to employees. This explanation raises eyebrows: After the long-running White House campaign against Huawei, few people expected TikTok would be allowed to operate under the lead of a Chinese company in the US. Many believed it was just a matter of time and once TikTok would gain significant scale, it would show up on the radar of China hawks, rightly or wrongly so. When many people saw this coming, how did a long-standing and well-connected executive lack foresight at the time he signed up for this role? But, if this is not the real reason then, what are possible other reasons and what does this leave ByteDance with?
In search for an explanation
Shortly after the letters were released, many insiders noted that the real reason for Mayer´s departure might have been his lack of involvement into the potential sale of the US business. It appears Mayer has been left frustrated with his inability to influence the future strategic direction. There might have been many possible explanations beyond that though and why this experiment never really took off. While none of these might be the standalone reason, combined they might have led Mayer to his decision.
Failure to adjust to working culture
ByteDance decided to hire Mayer who had never spent longer time in his career outside of the US. Even worse, Mayer had spent most of his career at the same company, Disney. Disney´s working culture is obviously very different from what Mayer experienced then at ByteDance. Before that, Mayer was at the consulting company LEK. Those working at Chinese tech companies know very well the steady reorganizations, the founder-driven top-down culture, the need for execs to be decisive themselves, the lack of clear decision-making processes at times, just to name a few aspects. On top of that, ByteDance is well known for the “always day one” approach to work including big/small working weeks. Feeling lost in the new environment, the fact that Mayer was located in the US for the whole time might have also meant many nightly shifts, weekend work (as it is common in China Tech) and lack of face-to-face meetings which are essential to Chinese working culture and to be part of crucial business decisions. Furthermore, ByteDance´s management team is mostly comprised of leaders from technical career tracks, while Mayer – despite being an engineer by training – spent almost all of his career in general management.
Difficulty to take over intended position
Mayer´s two positions – CEO of TikTok, COO of ByteDance – did not exist before he joined. However, there were already a number of executives in place to handle this work. So far, TikTok only started to internationalize on the front-end. In particular, Vanessa Pappas as the US CEO of TikTok handles some of the external responsibilities overall. Moreover, Blake Chandlee as the VP Global Business Solutions deals with many responsibilities internally. On top of that, at the strategic and back-end level, Zhang Lidong (Chairman ByteDance China) is highly influential for international operations as well and drives many key decisions. Chinese companies are known for internal struggles for power and it is highly likely that Mayer, being located in Los Angeles, even though entitled to but was never actually even able to take over the positions he was meant to due to other execs or Zhang Yiming himself.
Long-term career prospects
Mayer came in with a very aggressive stance when, among other things, in July he published an open letter on the corporate blog accusing the competition of “maligning attacks” that are "disguised as patriotism". Whether right or wrong, it is easy to imagine that friends talked to Mayer in light of his actions and asked him to consider his long-term career prospect as an American in America.
We might never know the real reasons for Mayer´s departure but it is easy to see that it was probably not the sharply changing political environment that caused him to leave alone. It was most likely a mix of factors, some brought up above. But what does that leave ByteDance with?
Short-term: Impact on operations
To be realistic, internally operations will not be really affected by Mayer´s departure, given his short stay at the company. Somehow, he did not even get really started. Moreover, other executives such as Pappas, Chandlee and Zhang are standing by to continue exercise their strong influence in the company.
Mid-term: Negotiations for sale of US business
The departure of Mayer leaves the company in a weakened position as it negotiates the sale of its US operations to the likes of Microsoft, Walmart, Oracle and others. It seems Mayer left in part because of his little involvement externally and internally in the ongoing negotiations, or his inability to make Zhang Yiming change his mind. With the recent development, ByteDance international remains without a strong captain during the negotiation process and after, as it might have to go through a long-running carve-out process.
Long-term: Global talent recruitment in China Tech
Mayer´s stint at ByteDance can be viewed as a failure for both sides. But it also might influence the larger dynamics of global talent recruitment in China Tech. On the one hand, with Mayer´s too-short-to-be-true term, how many (American) executives will still consider joining a Chinese Tech giant in the future? On the other hand, Chinese companies for long experienced failure with hiring high-flying foreign executives from outside without proper knowledge of the Chinese (working) culture, language or local company operations. As such, this chapter might further emphasize the need for Chinese companies to build their own foreign talent pipeline from the mid-management onwards, if they at all want to establish foreigners in leadership positions. This is in particular worth considering since ByteDance certainly leans the most towards a global culture of all Chinese Tech giants.
Looking back at this experiment, Mayer unfortunately adds to a list of foreign outside-hires in exec positions that failed in China Tech. Though, he was certainly one of those facing the highest expectations given his remarkable career track record. His name will probably not be remembered in the context of the history of ByteDance. However, his departure is a pity in so far since ByteDance seemed to be a place where this kind of experiment could work, if anywhere. The real reasons for this failed tie-up will remain unknown for longer. Yet, it leaves Mayer jobless for now and ByteDance truly embarrassed. The impact on the actual day-to-day operations should be very limited but it puts the international business in a weakened position for the upcoming sale of US operations and subsequent carve-out. The bigger question remains on how this failed engagement will affect the global talent recruitment in China Tech for both sides: for foreign execs and Chinese Tech companies. For now it appears that high-flying global execs without previous local work experience and China Tech are still not made for each other.
All opinions expressed in this essay represent my personal views only.
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