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Now that Facebook is a publicly traded corporation, its wunderkind chief executive, Mark Zuckerberg, is suddenly beholden to Wall Street. That means a new level of performance. There will be investor calls every quarter, the awareness that people are buying his stock based on expectations of future earnings, shares being traded daily.
This kind of transition dramatically changes a company and its culture. And often it brings a CEO down. Very few chief executives—Amazon’s Jeff Bezos comes to mind as one—do a good job withstanding the pressure. Will Zuckerberg, reportedly worth an estimated $19.1 billion after first day of trading last week, rise to the occasion?
He has been incredibly impressive so far, surrounding himself with very smart people old enough to balance out his glaring youth. As part of taking public financing, he had to have certain levels of governance in place. The Facebook tribe was hardly a bunch of kids in a garage running a makeshift business. Nevertheless, upping the ante with respect to accountability is a must. Here are five tips for Zuckerberg. They’ll work for any entrepreneur with hopes and dreams of taking his or her business through an initial public offering.
1. Balance the old culture with the new reality. Shortly after Facebook’s shares were offered for sale, its employees had one of their all-night signature hackathons. Facebook’s culture was created partly in events like these, which reinforced its workers’ engagement with and commitment to the company. Now as Facebook grows and the new pressures of being publicly traded set in, Zuckerberg must be adaptable in finding new ways to maintain the same level of commitment and engagement so that it remains as desirable a company as before it went public.
2. Don’t succumb to short-term focus. In driving the Facebook story to long-term success, Zuckerberg and his team mustn’t lose sight of its objectives and goals as they’re swept into the rush to meet quarterly numbers.
3. Don’t go bureaucratic. Becoming a public company means new layers of policies and procedures, a far cry from the informal world of the organization’s early years. To help ensure that employees don’t become frustrated by these add-ons, the changes need to be articulated very clearly and applied very fairly.
4. Let employees speak freely. As Facebook grows, Zuckerberg has to allow his team members at all levels to speak their minds, especially when they have issues about what they’re required to do. If they become uncomfortable about their own or others’ job duties or performances, they need to feel they can challenge or question expectations.
5. Make employees accountable. Zuckerberg needs to make clear that actions that go against newly imposed standards of conduct carry consequences. In a start-up, the CEO can be flexible, and even forgiving, because there’s no responsibility to public shareholders. Now, however, Facebook is beholden to the Securities and Exchange Commission. The CEO of a publicly traded company under regulatory oversight needs to wield a much firmer hand if employees’ behavior veers off course.
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