Some leaders grow into their roles while others aren’t able to grow at the same pace or in the right ways to support the businesses they create. This is the crossroads at which we find Mark Zuckerberg. On one hand, he has been able to take Facebook from little more than an online version of a college directory into a global network. On the other, he hasn’t put in place the governance and controls that are incumbent on a global information management company. So, where does he stand and what can we learn from Mark Zuckerberg?
Over the course of the last few months over been thinking about what makes a great leader. It’s a question I discussed recently with Kate Fuelling and one I’ve been long interested in, since the days when I did my Masters in Information Systems Management (which is actually, officially abbreviated to be M.IS Management).
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In that interview, Fuelling said “I’m in two minds about him [Zuckerberg]. I feel like he’s trying to do the right thing. Perhaps he is the person we blame when there’s a bigger issue. I can’t paint him as a good guy or a bad guy”.
This is Facebook’s 15th year of operation. Over that time, Facebook’s reach has expanded and the world in which it operates has changed significantly. And that creates a set of important challenges for the founders and managers of fast-growth companies.
Over the last couple of years, Zuckerberg’s faults as a leader have been in the spotlight. But for 13 of the last 15 years, he has enjoyed incredible success.
Over that time, he took Facebook (or The Facebook as it was originally known) from an idea at Harvard Univeristy through to other Ivy League universities to high schools and then the UK. Within two years, it was opened to the world and he refused to sell the business despite offers in excess of US$2B.
In 2018, Facebook had revenues of about US$55.8B.
By any measure of corporate financial success, he has been an incredibly successful founder and executive.
He transformed the company from being a way to connect and interact into a data-centric marketing company that uses the information it collects from users to generate advertising revenue. There is a rich application development environment around the platform that has created an ecosystem for others to leverage and generate their own revenues.
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There are other useful features such as being able to let people you’re connected to that you are safe during natural disasters and other life threatening incidents. And during those incidents law enforcement and rescue agencies can use the platform to get their message out.
Facebook outages are rare suggesting that the company has invested widely in technology to ensure the service remains available.
So, from an operational perspective, Zuckerberg has been a very successful executive.
When you’re the CEO of a company, the buck stops with you. And the one area that Zuckerberg has failed in is his ability to assess and react accordingly to a changing world.
The last five years or so have seen a marked change in the world. At the end of 2013, we saw the first publicly reported mega-breach with Target in the USA hit by cybercriminals that were able to steal over 100 million credit card and personal data records through a sophisticated attack on the retailer’s point of sale systems.
Not long after, there were other breaches at health insurer ANTHEM, the US Government’s Department of Personnel Management and others. We also saw the emergence of Wikileaks and significant attention was being put on Google and others for the way they track users.
Facebook had an opportunity to strengthen its data protection and privacy protections for users but failed to do so. If they had, we could be talking about how Facebook made things better for users. Instead, we’ve seen Zuckerberg face government inquiries across the world in the aftermath of the Cambridge Analytica scandal.
More recently, Facebook has been forced to admit that it ‘unintentionally uploaded’ 1.5 million people’s email contacts without their consent. That’s not the data of 1.5 million people – that’s the address book data held by 1.5 million people.
That’s on the back of storing hundreds of millions of user passwords as plain text with poor access control.
What can we learn from Zuckerberg?
One of the traits that separates great leaders from the others is the ability to single-mindedly focus on what is important.
When it emerged that Facebook had the potential to become a highly successful business, Zuckerberg did what all start-ups do; he focussed on growth. He expanded the channels he was reaching. He ensured the company’s infrastructure could handle the number of users he was gaining. He created a revenue stream.
For any aspiring entrepreneur, these are good lessons to learn.
In the midst of that growth, he also hired some smart people to support that mission of growth. No CEO or founder knows everything. Seeking out people who fill your blindspots and the gaps in your skills is is critical. Importantly, those people need to also be able to disagree with you and you have to be open to listening to that disagreement.
Against that fast growth, it’s clear that Facebook has failed to keep up in one critical area; governance.
While the company keeps up with all the mandatory filings and statements it’s required to under the laws in which it operates, the company hasn’t adapted quickly enough to the changing privacy and security expectations of its users.
Those two recent issues with user credentials and data, as well as the widely reported Cambridge Analytica scandal, tell us that the company simply isn’t adjusting its business model to the world.
Facebook has announced an increase in its bug bounty program and Zuckerberg published an extensive manifesto how it wants to make social networks more private but those seem hollow when millions of user records are left wide open.
With agencies such as the ACCC worried about the market power of large tech companies, as well as increased scrutiny in the EU and by regulators in the USA, Facebook will need to adjust how it operates. If it doesn’t it could waste years in the courts fighting off attempts to break the company up or have Zuckerberg give up one of his posts of CEO or company chairman.
Microsoft faced a similar existential crisis in the late 1990s and early 2000s. After the Code Red security scare, Microsoft halted all new development and focussed on securing its existing product portfolio.
Facebook now faces its “Code Red” moment. What it does next will answer the question of whether Mark Zuckerberg is a great founder who is out of his depth or becomes a great leader.