Inadvertently giving a customer an excuse to try something else is a truly bad idea. Holding on to regular users requires relentless vigilance on product, on technology, and on customer service for starters. And when the business you are in is social networking, it requires trust. And a series of corporate scandals at Facebook have shaken the trust of the user base—not just members, millions of whom have figured out how to drop the service, but also advertisers.
Cambridge Analytica, Russian (and Iranian and others) influence campaigns; privacy violations; the use of the platform to spread hate, fake news, and even facilitate genocide; secret data-sharing agreements; security bugs; shady opposition research operations; inflated user metrics . . . and that was just 2018. Shockingly, this catalog of unfortunate events actually followed CEO Mark Zuckerberg’s New Year’s pledge to make it his “personal challenge” to focus on “fixing” the issues related to misuse of the platform that had already emerged before that time. Since then, at least according to a blog post by a group of anonymous Facebook employees, “things have gotten worse” on a number of existing and new fronts, from increasingly vocal charges of institutional racism to an employee “virtual walkout” protesting the company’s continued refusal to police political speech, no matter how inflammatory, to intermittent advertiser boycotts.
When the experts weighed in on what went wrong at Facebook, they overwhelmingly pointed to its culture. Specifically, the story goes that its “cult-like” culture “has contributed to the company’s well-publicized wave of scandals” by discouraging dissent, using the “stack-ranking” performance pioneered by Jack Welch at General Electric in the 1990s, and using peer reviews to artificially encourage collaboration.
Ironically, until recently, Facebook’s strong culture had been frequently cited—even by those who now saw it as the source of the trouble—as maybe even “the best-run company in technology.” What’s more, the intense mission-driven performance culture was typically given as a key driver of why it was ranked for the third year in 2018 as the single best place to work in America. After the scandals of 2018, the company fell to number 7 (marking the ninth consecutive year on the list) and was still higher ranked than any of the other FAANG companies.The following year it fell another 16 slots to 23rd, falling behind Google and even Microsoft.
There is obviously a problem at Facebook. It is not clear, however, that its maniacal commitment to continuous improvement is the problem. Rather, the problem would seem to be the narrowness of the objectives upon which those improvements were applied and their relative priority. The structural fragility of even the largest social networks demands that protecting trust requires a vastly broader and more nuanced set of corporate aims than optimizing customer engagement and short-term monetization.
The range of issues that have threatened Facebook actually highlight the need for greater, not relaxed, operating discipline. As a user or an advertiser, I love the idea of a cult committed to protecting the integrity of the network in the face of everything from hostile governments, scam ads, and fake profiles. The problem has not been that Facebook is a cult. The problem is the end to which that cult has been dedicated.
Trust, once broken, is not easily regained. Whether the current leadership at Facebook is up to the task remains an open question. An irony, not widely appreciated, is that there is strong evidence that Facebook’s enormous scale has enabled it to combat “fake news” and other subversive forces on the internet far more effectively than its smaller peers. After the 2016 election, Facebook hired thousands of engineers and content moderators to great effect. A recent study demonstrates that this reduced the problem on Facebook by more than half, even while it continued to grow on other networks like Twitter. The fact that the overall problem of misinformation on social media has increased during the last election cycle highlights the inherent challenges to effectively combating this scourge. But although the public and regulators see Facebook with some justification as the biggest part of the problem, it also has potential to be the biggest part of the solution.
This is not to imply that anyone should feel sorry for Facebook or that it is without fault. To borrow from a superhero movie, with great power comes great responsibility, and the bar for Facebook should be significantly higher. But in designing optimal regulatory solutions, both the advantages and dangers of scale must be considered. And in the meantime, users and advertisers do not seem inclined to give Facebook credit for making an important but necessarily imperfect contribution to the problem of malicious use of the internet regardless of how much the company invests in the effort. But the fact that this will represent a continuing and potentially intractable PR problem for Facebook does not diminish the importance of Zuckerberg devoting his cult to doing everything it can to solve the issue nonetheless.
The good news for Facebook, or whatever alternative “social mechanic” succeeds it, is that the business does not rely simply on the flywheel of network effects. If it did, recent events would have ensured a swift exodus of users to any number of competing social platforms. Instead, the complex web of mutually reinforcing competitive advantages that bolster the network effects have bought Facebook something priceless in the otherwise mercilessly competitive digital jungle: time to get it right.
From The Platform Delusion: Who Wins and Who Loses in the Age of Tech Titans by Jonathan Knee with permission from Portfolio, an imprint of the Penguin Publishing Group, a division of Penguin Random House, LLC. Copyright © 2021 by Jonathan A. Knee.
Since 2014, Jonathan A. Knee has served as the Book Entry columnist for the New York Times Dealbook. He is the Michael T. Fries Professor of Professional Practice in Media and Technology at Columbia Business School, where he also serves as co-Director of the Media and Technology Program.