Mark Zuckerberg: Facebook’s Unjust Strategic Leader in a Crisis

Mark Zuckerberg, founder and CEO of Facebook (and Instagram) “remained silent” during the two days after the data-breach scandal broke in March, 2018 as E.U. and U.S. lawmakers “pummeled Facebook and its stock price” dropped 9 percent.[1] The company lost $50 billion in market value in just those two days![2] Beyond the self-interested investors and the demoralized employees, the company’s 2 billion users—the suppliers of the raw content (to be mined as well as shared)—and the world (i.e., societal level) looked for ethical (i.e., atoning as well as protective) leadership from the company’s CEO. To be just, I submit, the leadership could not have been a mere reflection of Zuckerberg’s or Facebook’s immediate self-interests.

When users had “complained about bugs and problems with Apple Maps app in 2012, Tim Cook, the company’s chief executive, released a statement that said ‘we fell short.’”[3] Even though releasing a statement is more managerial than associated with leadership, the contrition evinces an ethical tone as he held his own (and Apple’s) immediate self-interest at bay. In contrast, Facebook’s faceless statements in the wake of the psychological-political personal-data breach stressed that Facebook had been blameless.

In 2011, “when Netflix tried to split off its mail-order DVD business into a company called Qwikster, its chief executive, Reed Hastings, wrote a letter to the public. ‘I messed up,’ he [wrote]. ‘I own everyone an explanation.’”[4] Hastings’ credibility was boistered by his voluntary assumption of responsibility. Evading the problem would have signaled a lack of leadership, as would have an eventual explanation blaming other companies or people.

Even at Uber in 2017 when “a former engineer revealed a pattern of sexual harassment,” Travis Kalanick, the company’s CEO, informed the public that “he would immediately open an investigation.”[5] Even in a sordid corporate culture, leadership can be shown by taking the proverbial bull by the horns rather than going into hiding until the worst of the storm has passed. It is hardly surprising, given this comparison, that some employees at Facebook tried to jump ship in the wake of the scandal, citing the “demoralizing” nature of their work on Facebook’s main product.[6] Those employees could have used an ethical leader, but Zuckerberg was AWOL internally too.

I suspect that Zuckerberg evaded assuming a leadership role inside the company and societally in the wake of the scandal because his calculating mind was on how to carefully craft a public statement designed in line with his (and his company’s) immediate and long-term self-interest. In his eventual statement, although he admitted that Facebook had made mistakes, he "stopped short of a full-throated apology and was at times defensive."[7] He insisted his company was taking steps to protect its users' data from being harvested. Yet it took a whistleblower for Facebook to react (including admitting to the breach), and years earlier, Zuckerberg had made the same promise. Could he be trusted again, especially considering his track record in favoring investor over user interest?
Zuckerberg used his interview on CNN on March 21, 2018 to try to reframe the issue two degrees of separation from Facebook to Russian meddling. A leadership vision that has another party as principal bad guy is not ethical when the issue on the table lays culpability at the leader's own door. Furthermore, the pivot evades, and thus confirms any determinations that he and his company are not to be trusted.  

Strategic leadership, moreover, lacks credibility for employees and especially societally if the vision component is a mere reflection of the organization’s immediate and even medium-term financial interest; the long-term interest is more in line with a societally-valued vision.[8] For a leadership vision to establish, maintain, or bolster trust beyond an organization at the societal level, the values in the vision must resonate with societal values. This idea itself resonates with Plato’s notion of justice as resonance between a well-ordered (i.e., reason controlling passions) polis (organization or city) and well-ordered psyches (i.e., the human mind). Applying this theory to strategic leadership, I contend that a (societally-recognized) just strategic leader utilizes reason to hold the temptation of (self-interest) strategic interests back from dominating the crafting of a leadership vision such that it can be valid societally. The just strategic leader reasons that accepting discomfort rather than evading the spotlight in a crisis is in a company’s best long-term interest, and that damage-control to defend oneself and the company against the immediate attacks actually evinces weakness, ethically and otherwise. The unjust leader (and organization) insists that a vision is valid societally even though it is actually “window-dressing” to advance strategic interests or protect them. I submit that Facebook’s Zuckerberg was oriented to the latter in the wake of the crisis, and more generally to the advancing the ultra-specific interests of Facebook’s investors (rather than the users who supply the content).

Employees look for leadership in the midst of a demoralizing crisis. (USA Today)

See the essay "Facebook: A Distrustful Company."

See also the booklet, "Taking the Face Off Facebook."

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1. Jessica Guynn, “As Facebook Reels from ‘Catastrophic Moment’ in Cambridge Analytica Crisis,” Mark Zuckerberg Is Silent,” USA Today, March 21, 2018.

2.  Kevin Roose and Sheera Frenkel, “Missing From Facebook’s Crisis: Mark Zuckerberg,” The New York Times, March 21, 2018.

3. Ibid.

4. Ibid.

5. Ibid.

6. Ibid.

7. Sheera Frenkel and Kevin Roose, "Facebook's Mark Zuckerberg Vows to Bolster Privacy amid Cambridge Analytica Crisis," The New York Times, March 21, 2018.
8. Skip Worden, “The Role of Integrity as a Mediator in Strategic Leadership: A Recipe for Reputational Capital,” Journal of Business Ethics, 46 (August, 2003) No. 1, pp. 31-44.

The Founder of Theranos: A Flawed Charismatic Vision and Leader

“Theranos rose quickly from being a college dropout’s idea to revolutionize the blood analysis industry to a hot tech bet that accrued $700 million in funding and many famous names for its board.”[1] Elizabeth Holmes, the company’s founder, was stripped of her position at the company in 2018 after the SEC discovered her deep involvement with the fraud at the company. Her “smarts, fierce determination and Steve Jobs-inspired look . . . were critical” to her being able to perpetuate the lie that the company had a device that could do blood tests with just a scant amount of blood, obviating the unpleasant experience of having blood drawn by needle.[2] Although Jack Welsh, Bill Gates, and Steve Jobs accomplished enough to warrant their fame, I submit that companies are too prone to create “champions”—even strangely calling them “rock stars.” In other words, even though charismatic vision is of value to a business, neither such a leader nor his or her vision itself should be overplayed. Business, I submit, has a marked tendency to do just that, and often with impunity.

At 19, Elizabeth Holmes dropped out of Stanford University because she had an idea of how blood tests could be done without the need of so much blood that a needle is required. She was “determined to create a company that would help anyone who, like herself, was afraid of needles and dreaded taking blood tests.”[3] Where the school Northern Illinois University or the University of Arizona, her decision to drop out for such a reason could be reasonable, but to give up a Stanford education so people wouldn’t have to feel a needle for “blood work” indicates a flawed judgment. Where were her parents? She was 19! Finish college then start your company. That it took her a decade of work before she debuted her company—and even then without the requisite technology—suggests that there was no rush. Simply out, it is very odd that she dropped out of Stanford. Yet this point was somehow missed by investors such as Rupert Murdock, Cox Enterprises, and Walgreens, and board members including George Schultz and Henry Kissinger, former U.S. Secretaries of State,  former U.S. Senator Sam Nunn, former Secretary of Defense William Perry, and the current Defense Secretary James Mattis. Did they all show up drunk at board meetings? Was there even an audit committee that reported directly to the board?

Clearly, we can be dazzled by celebrity, and the famous can cash in on their reputations. That no flags were raised concerning the founder raises larger questions in business related to the troublesome transfer of power and position from charismatic founders to managers. Investors should not rely on the charisma of founders; even the promises of Bill Gates and Steve Jobs warranted being independently checked out. CPA firms should not have to rely on founders, or even managers, for renewals. Business, in other words, can easily get too cozy, leaving investors out in the dark.

In terms of leadership, charismatic vision should be distinguished from the implementation of strategy. I’m not even sure “avoiding needles” is big enough to warrant being reckoned as a vision. Founders and managers alike may distend what are actually good ideas into charismatic vision.[4]

In conclusion, the background of Theranos, including that of its founder, should have raised red flags. Likening her to Steve Jobs because she wore black turtle-neck shirts borders on the ridiculous, and yet a self-aggrandizing company can easily get on that band-wagon, ignoring the hypertrophy. Leadership vision is valuable, but in a business context the vision thing must be related to concrete strategies, with realizable benchmarks. This is not to say that leadership vision should collapse into strategic interests, for such reductionism rids the vision of its own integrity and coherence.[5] The point is not to get carried away with charismatic vision in business even as such vision should not reduce to strategy.

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[1] Marco della Cava, “Behind the Scenes of Theranos’ Dramatic Rise, Fall,” USA Today, March 16, 2018.

[2] Ibid.

[3] Ibid.

[4] On leadership vision, see Skip Worden, The Essence of Leadership: A Cross-Cultural Foundation

[5] Skip Worden, “The Role of Integrity as a Mediator in Strategic Leadership: A Recipe for Reputational Capital,” Journal of Business Ethics, 48 (August, 2003) No. 1, 31-44.