Fiasco at Facebook – A Systemic Analysis

At the Harvard Kennedy School I teach a course titled, “Leadership System – Leaders, Followers, Contexts.” I’ve also written for several years about the virtues of seeing leadership not through the narrow lens of single individuals, but rather through a wider lens, one that encompasses, in addition to leaders, also followers (or, simply, others) and contexts.

For example, in my book Hard Times: Leadership in America (Stanford University Press, 2015), I write, “I take issue with America’s relentless leader-centrism, with America’s obsessive fixation on leaders at the expense of followers, and at the expense of the contexts within which both necessarily are situated. Instead I argue for a more complete conception of how change is created. I have come to see leadership as a system consisting of three moving parts, each of which is equally important and each of which impinges equally on the other two. The first is the Leader. The second is the Follower. And the third is the Context.” (Context is the focus of Hard Times.)

I dwell on the systemic approach to leadership not only as an interesting intellectual exercise, which it is. But, also, because I have come firmly to believe that leadership pedagogy generally is excessively, detrimentally, leader-centric. And because I have come firmly to believe that by relegating or even ignoring entirely the other players that relate, and the circumstances within which every one necessarily is together embedded, we do leader learners a major disservice.

Here I apply the systemic approach to the fiasco at Facebook. My underlying hypothesis is that had Facebook’s two most powerful leaders themselves been less leader-centric, less myopic, they might well have avoided some serious stumbles. In other words, Facebook’s fiasco can be traced in good part to precisely the small-mindedness and short-sightedness the leadership industry should seek strenuously to avoid.

The Leaders

It cannot be coincidence that both Mark Zuckerberg, Facebook’s founder, chief executive officer, and majority stockholder, and Sheryl Sandberg, Facebook’s chief operating officer, and board member, as well as founder of Leanin.org, each have about them the whiff of myth.

Zuckerberg is the boy wonder now grown up – or maybe not quite. His genius – both for technology and for elbowing the competition – was evident at an early age. Zuckerberg’s brief time as an undergraduate at Harvard was so worthy of note it was enshrined just a few years later in a film, “The Social Network,” which, notably, was nominated (in 2010) for eight Academy Awards. Though Jesse Eisenberg’s portrayal of Zuckerberg was unsympathetic – let’s just say Eisenberg depicted him as a hard ass – the fact was that at the tender age of 26 Zuckerberg was the subject of a major Hollywood movie. He was, then, not just another prodigy, not just another marvel and mogul. Zuckerberg was something special, someone extra-ordinary, who had spun out of whole cloth a network that was literal as well as figurative, and that eventually enticed if not ensnared some 2.2 billion people to log on at least once a month.

Sheryl Sandberg has her own claim to extra-ordinary fame.  Yes, she was a preternaturally skilled standout from the start, managing to succeed brilliantly both in a corporate culture, and in a sector (technology), neither of which is usually hospitable to women. But there’s more. Sandberg has had a legitimate claim to be a feminist icon in the wake of her book, Lean In: Women, Work, and the Will to Lead. The book, originally published in 2013, has since sold over 4 million copies worldwide. Moreover, it led to the formation of an international network of women, Leanin.org, which describes itself as a “global community dedicated to helping women achieve their ambitions.” In the five years since Lean In was published, reportedly some 400,000 people joined Lean In communities, creating some 34,000 Lean In Circles in over 157 countries. While it’s likely that the Lean In movement will suffer in consequence of Sandberg’s recent travails, no question that she, like Zuckerberg, has been a star not only on account of her astonishing accomplishments inside Facebook, but on account of the reputation she acquired outside it.

By all accounts Zuckerberg and Sandberg all along shared Facebook’s putatively lofty goals. “Our mission is to make the world more open and connected,” was the company mantra. At the same time, they also came to share, for similar reasons, several deficits that would come in time to bedevil both them and their company: first, an inability or unwillingness to grasp that not everyone who uses Facebook does so with good intentions; second, an inability or unwillingness to see signs warning folks at Facebook that not everyone was following the company’s script; and third, an inability or unwillingness to recognize that as soon as their troubles became evident, they would have done better being transparent than opaque.

Everyone one of these deficits – for which Facebook is now paying a high price in more ways than one – is in consequence of the bubble. The bubble in which Zuckerberg and Sandberg were encased and enveloped, and that precluded them from properly perceiving what was transpiring outside.

The Contexts  

When Mark Zuckerberg was first asked about evidence that during the 2016 election Facebook had been to some extent ill-used, his response was to become defensive. “The idea that fake news on Facebook – of which, you know, it’s a very small amount of the content – influenced the election in any way, I think, is a pretty crazy idea.” While he later admitted that his initial reaction was “glib,” the damage was done. It seemed evidence that top management at Facebook was unable and/or unwilling to see and/or to disclose the truth. Given the contexts within which Facebook was operating, Zuckerberg’s defensiveness and evasiveness were more likely to do him, and his company, harm than good.

Here ten components of context that impacted on Facebook’s capacity to operate – and that therefore should have been foremost on management’s mind.

  1. Admiration for the tech industry generally was wearing thin. Indeed, the environment was growing increasingly hostile – the importance of which is impossible to overestimate. As Evan Osnos wrote last September in The New Yorker: “In barely two years, the mood in Washington had shifted. Internet companies and entrepreneurs, formerly valorized as the vanguard of American ingenuity and the astronauts of our time, were being compared to Standard Oil and other monopolies of the Gilded Age.”
  2. Admiration for the “astronauts” of the tech industry was also wearing thin. Several of those who previously were lionized such as Zuckerberg, Steve Jobs, Travis Kalanick, and Elon Musk were found to have clay feet, which tarnished not only them but tech moguls more generally. Arguably Bill Gates, who because of his shift away from Microsoft and toward philanthropy, is the only member of the tech vanguard to have lost not a single iota of his original luster.
  3. Whatever is going on in the United States is not necessarily the same as what is going on elsewhere in the world. Nor are Americans or American companies separate and distinct from the global context within which they are situated. It happens, for example, that in Europe antitrust laws are notably stronger, and sensitivities about privacy issues are notably greater. The European Union’s top antitrust regulator, a Dane by the name of Margrethe Vestager is especially tough on what she perceives to be unwarranted intrusions by Silicon Valley.
  4. Whatever is going on in the United States is not necessarily the same as what is going on elsewhere in the world. Nor are Americans or American companies separate and distinct from the global context within which they are situated. It happens, for example, that as far back as 2013 experts on Myanmar were meeting with Facebook officials to warn them their platform was spreading hate and fueling attacks on the Rohingya Muslim minority. Since then, blame for the calamity in Myanmar has been placed at least in part on the doorstep of Facebook. While how history will assign responsibility remains unclear, it is improbable that Facebook, that is, those who have led it,  will escape it entirely.
  5. We see it in politics – and in business. The context within which we are operating generally demands total or near total transparency. Woe to leaders who try to conceal the truth. Who to leaders who try to fudge the truth. Woe to leaders who try to bend the truth. Woe to leaders who try to escape the truth. Woe to leaders who try to deny the truth. At least in liberal democracies, such leaders are vulnerable to be hounded down until the truth be told.
  6. We live in a time that is fractured and fractious – and in which our public discourse has been coarsened and corroded. Even the most temperate among us are more likely, therefore, to attack than they would have been a decade ago. And they are more likely to be extreme in their position and aggressive in their opposition. For example, David Kirkpatrick, author of The Facebook Effect, recently argued that Sheryl Sandberg’s legacy will be “her inaction in solving the problems in fake news, the undermining of democracy, the failure to control hate speech.” Somewhat similarly, of Facebook itself the New York Times recently editorialized that, “perhaps uniquely, [it has] demonstrated a staggering lack of corporate responsibility and civic duty in the wake of the crisis.” Harsh judgments in harsh times.
  7. Not since the end of the Cold War has there been such Russia paranoia as there is now. This is not to claim that there is no good reason – even paranoids have real enemies. It is simply to say that Facebook’s role in enabling Russian wrongdoing – and then when it was found out to be seemingly offhand and cavalier in response – rankles more now than it would have several years ago, when America’s relationship with Russia was less hostile. Putin has – for the best of reasons – become an American punching bag, a contextual sensibility and sensitivity to which Facebook executives seemed initially oblivious.
  8. This is a great moment for American journalism. The press has distinguished itself by its careful, consistent investigations into a wide range of issues, including the politics and personality of Donald Trump. And including the stumbles and stonewalling at Facebook. Just last week the Times published an exceedingly detailed and damning article titled, “Delay, Deny, Deflect: How Facebook Leaders Leaned Out in Crisis.” Clearly,  among the many things that Facebook’s leaders did not comprehend about the context within which Facebook was situated was that this is a time in which journalists are eager to go after those with power and money – and unwilling to be deterred by their deflections and shenanigans.
  9. Apologies have gotten stale. They no longer work as well as they once did. Just a decade ago it was unusual for corporate executives – or for anyone else for that matter – publicly to admit their mistakes and then publicly to apologize. No longer. Now apologies are ubiquitous – famous men of every stripe especially regularly apologize for whatever their transgressions. What this inevitably means is that apologies themselves have become devalued – discounted. Clearly neither Zuckerberg nor Sandberg understood this – understood that the context within which they repeatedly apologized, not only at home but abroad, had become resistant to expressions of regret. Further, their apologies, as well as their retractions, typically came late. Just a few days ago, in a Thanksgiving eve memo, Sandberg issued an about-face, acknowledging that her earlier insistence that she was out of the loop on a matter of major importance was erroneous. That is, either it was a mistake, or it was a lie.
  10. In The End of Leadership (2012) I argued that especially in liberal democracies, leaders across the board were getting weaker and followers were getting stronger. While Sandberg is still being protected by Zuckerberg, and while Zuckerberg is still being protected by his board, I recommend both pay attention to the context within which Facebook is located. It suggests that no matter how apparently secure their positions, neither is immune from the temper of the time.

The Followers

The word – “followers” – still sets people’s teeth on edge. Many dislike it because they still equate followers with being passive, with being in some way weak. But, followership is simply the obverse of leadership. And leadership is simply a relationship in which the leader must have at least one follower. A follower, then, is no more than, and also no less than, an individual or a group the leader must bring along if he or she is to create change.

The point here is not to defend the word – “follower.” I myself use it simply because it is the antonym of “leader.” Here in any case my use of “follower” refers to those Facebook must bring along, or at least have on board, if it is to be left alone, not to mention thrive.

Here ten groups of followers that impacted on Facebook’s capacity to operate – and that therefore should have been foremost on management’s mind.

  1. The public. No surprise: the negative publicity Facebook faced in recent years has started to bite. The company’s relentless expansion has slowed, and its reputation for being trustworthy has taken a heavy hit. For some time now, the company has been embroiled in conversations about, among other things, fake news and Russian weaponizing of its platform to help Trump become president. As a result, Americans now trust Facebook less than any of its big tech competitors. According to a poll conducted by Reuters earlier this year, 51 percent of those surveyed “either said they didn’t trust the platform at all or didn’t trust it very much.” Moreover, 57 percent of people who were not on Facebook reported choosing to avoid it because they did not trust it.
  2. The press. In recent years, the press started to smell blood. And when the press smells blood, it chases its quarry until it brings it down. Of course, all behemoth companies are grist for the press’s mill. Additionally, because Mark Zuckerberg and Sheryl Sandberg are famous, both individually and as a pair, they make especially tempting targets. Here The Guardian (in 2016) on just this issue: “Facebook has emerged as newspapers’ public enemy number one. Hardly a day passes in which there is no negative article about the social media website [and] in the past couple of weeks there has been something of an overload of criticism on a range of topics.”
  3. Facebook customers. In 2017 Facebook users in the 12 to 17-year old demographic declined by nearly 10 percent. This number was almost three times the decline that was anticipated. In 2018 the downward trend continued, in all age groups. But the group that hit Facebook hardest was the youngest. Some 20 percent of users aged 50 to 64 deleted Facebook’s app sometime between mid-2017 and mid-2018. But during the same period fully 44 percent of users between 18 and 29 told the Pew Research Center that they had done the same. Given Facebook’s continuing troubles during the last six months, it is unlikely, certainly in the short term, that this slide will be reversed.
  4. Facebook’s employees. Morale at Facebook has recently been reported to be “down in the dumps.” According to the Wall Street Journal, one year ago 84 percent of employees said they were optimistic about Facebook’s future. Now this figure has dropped to 52 percent. Employee commitment also took a hit: on average those who worked at Facebook said they planned to remain with the company for another 3.9 years, down from 4.3 twelve months earlier.
  5. Facebook’s prospective employees. There is at least preliminary evidence that young engineers are turning “sour on jobs with Facebook.” This from the New York Times (11/16/18): “As Facebook has been rocked by scandal after scandal, some young engineers are souring on the company. Many are still taking jobs there, but those who do are doing it a little more quietly, telling their friends that they will work to change it from within or that they will have carved out more ethical work at a company whose reputation has turned toxic.” While describing Facebook’s reputation as toxic might be hyperbolic, there is little doubt that the best and brightest might well elect to go elsewhere, at least for now.
  6. Facebook’s advertisers. Marketers have been worried about Facebook for some time. They are concerned that one of their ads will appear on Facebook in proximity to fake news or, worse, hate speech. Still, whatever their past reservations, recently they escalated. Again quoting the Times (11/16/18): “Advertisers are the financial engine of Facebook, but lately the relationship has gotten rocky.” The article quotes the chief growth officer of one of the world’s biggest ad companies who was harsh in his judgement. “Now we know that Facebook will do whatever it takes to make money. They have absolutely no morals.”
  7. Facebook’s competition. Facebook has broken ranks with other big tech companies more than once. Moreover, every now and then the competition becomes conflictual, and the exchanges veer from professional disagreement to personal dislike. For example, in the case of Tim Cook, CEO of Apple. There is no apparent advantage to Zuckerberg getting into a pissing match with Cook. But, that’s just what the CEO of Facebook choose to do. In fairness, Cook started it, when he ventured last spring that Facebook’s business model was founded on “an invasion of privacy” by trafficking in user data. Rankled by Cook’s insolence, Zuckerberg chose to hit back. He defended Facebook’s model, saying it was the only way to reach a mass global audience. He further accused Cook of being “glib.” He charged that Apple itself had a flawed business model. And he insisted that Facebook, presumably in contrast to Apple, was “not just serving rich people.” Suffice to say that if Zuckerberg wants a friend in Silicon Valley, he better get a dog.
  8. Facebook’s Investors. Some numbers and some analysis: As of this writing, Facebook’s stock has plummeted 40 percent from its all-time high. Additionally, Facebook’s earnings are expected to “slow materially” in 2019, and technical analyses suggest the company will be hit by still further losses. Of course, some would argue that this is a time to buy Facebook, not sell it. Still, attention must be paid when a major pension fund investor like NYC Comptroller Scott Stringer issues a statement such as this one: “Facebook plays an outsized role in our society and in our economy. They have a social and financial responsibility to be transparent – that’s why we’re demanding independence and accountability the company’s boardroom.”
  9. Facebook’s Opponents. Here I will single out for special mention just one group of activists, “Freedom from Facebook.” I will not delve into the history of this group, or address from where it gets its funding. Suffice to say in this space only that it has been at the forefront of the opposition. Freedom from Facebook has, for example, staged protests against the company on Capitol Hill. It has disrupted the company’s annual shareholder meeting (last May). And when Sandberg gave a talk at MIT, it took out an ad in a student newspaper that called for Facebook to be broken up.  The point though is less about what Freedom from Facebook has done in the past, than it is about what likeminded groups might do in the future.
  10. Republicans and Democrats – and civil servants. In the past, Democrats, including Senate Leader Chuck Schumer, allied themselves with Facebook. But such loyalties are now frayed. When the company ran into obvious trouble, and when the press and the public became increasingly critical, members of both parties did what they typically do – they fled. To be sure, Republicans have long been critical of Facebook, certain the platform censored conservative views. But now Democrats have piled on, embarrassed by their associations with a company whose reputation “turned toxic.” Nor have government agencies stayed on the sidelines. Facebook is being investigated by the Federal Bureau of Investigation, by the Securities and Exchange Commission, by the Federal Trade Commission, and by the Justice Department. Need I say more?

This is a blog not a book. It is not a dive deep dive into exactly how and why Facebook unspooled as it did. Instead my intentions have been first to weave a tapestry not just with one thread but with three, each of which is integral to the whole, leaders, followers, and contexts. And second to tell a story that is cautionary. A caution to leaders who focus too much on what is internal – themselves, their organizations – and too little on what is external. That is, everything else and everyone else.

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