In her eye-opening piece this week, The Guardian’s SF reporter Olivia Solon opens the curtain on the draconian efforts by Google, Facebook and others to muzzle their employees from speaking publicly about their company’s doings.
Aptly titled “‘They’ll squash you like a bug’: how Silicon Valley keeps a lid on leakers,” Ms. Solon opens with one employee’s tale of his performance review meeting when he was ushered into a room and ambushed by Facebook’s security team armed with incriminating evidence of private correspondences he had had with a journalist he knew.
“It’s horrifying how much they know,” he told the Guardian, on the condition of anonymity. “You go into Facebook and it has this warm, fuzzy feeling of ‘we’re changing the world’ and ‘we care about things’. But you get on their bad side and all of a sudden you are face to face with [Facebook CEO] Mark Zuckerberg’s secret police.”
As with any publicly traded company, the importance of controlling material information is crucial. Virtually all centralize their external communications through their PR and IR departments, working alongside legal and the C-suite. On top of that, nearly all have clear employee policies dictating what’s acceptable and what’s not on social media. The New York Times, whose reportorial staff is not shy about weighing in on Twitter, just made news by updating its guidelines:
“In social media posts, our journalists must not express partisan opinions, promote political views, endorse candidates, make offensive comments or do anything else that undercuts The Times’s journalistic reputation.”
. . . .
Over the weekend, Facebook’s security guy Alex Stamos thought it was a good idea to opine on Facebook’s latest dilemma wherein a conservative billionaire-funded company Cambridge Analytica hired a Russian professor in the UK to abscond with the personal data of 50 million (!) Facebook users and weaponize it to denigrate one and elevate the other Presidential candidate.
. . . .
I therefore would have to wager that Mr. Zuckerberg and Ms. Sandberg not only had advance knowledge these initiatives, but purposely dispatched Messrs. Goldman and Stamos — the company’s ad and security leads, respectively — to tweet about them in a well-intentioned, but ill-conceived effort to set the record straight.
And therein lies Facebook’s PR problem. Rather than get out ahead of this potentially reputation-damaging news, the company waited until the news was upon them before taking remedial action. The lede from Axios sums it up:
“Facebook was caught flat-footed again Saturday as it scrambled to deal…”
You can see this short-sighted PR approach again with the company’s decisionto suspend Cambridge Analytica from its platform. Good move, right?
Link to the rest at Medium
PG says it’s an unwritten article of faith in Silicon Valley that the founders and early participants in major tech companies are the smartest people in the world. The chief evidence of this intelligence is the success of the companies they started.
Of course, this is silly. Very smart people can make stupid mistakes and do so all the time. In addition to intelligence, luck may also be involved, particularly in the early success of a company that has experienced rapid growth.
The other problem is that a great deal of intelligence is domain-specific. The genius programmer with no social skills is not hard to locate in any tech company ghetto. The genius programmer with some social skills has risen to the top of more than one successful enterprise.
The recent Facebook/Cambridge Analytica disaster certainly came out of left field for Facebook’s management. However, competently-managed large and valuable companies understand that left field exists and that preparation for an intelligent response to surprises is one of management’s responsibilities.
Facebook has over 25,000 employees. Starbucks has over 250,000 employees. Each of these companies is going to have employees who leak company secrets. The difference is that nobody cares very much about Starbucks’ secrets.
Despite all the non-disclosure agreements in the world, some current and former employees of Facebook are going to talk about what happens inside the company. Trying to discover who these people are is a reasonable response, but it’s far from the most important response to leakers. (And if Facebook employed the smartest people in the world, corporate security would never be able to track down who the inside leaker was.)
The most important response is to be prepared with an honest and proactive explanation of whatever the subject of the leak is. Plus actively working with any press organization that is covering the story. Pulling up the drawbridge is pretty much the worst thing a company can do. It’s an indication of management failure.
By now, regular visitors to TPV are wondering how this relates to books and authors.
One of the ways in which Amazon is an extraordinary company is that it has never experienced the type of negative media storm that Facebook is having and that is something a great many large companies experience.
The Seattle Times and others have tried to create some exposés, but they haven’t really gained much traction in terms of having any real impact on Amazon’s finances. A great many people are currently deleting their Facebook accounts or vowing to stop posting, but PG is not aware of any big bumps in Amazon’s revenue growth arising from stories about exhausting work in Amazon’s warehouses.
Amazon was ranked #2 in Fortune magazine’s 2018 list of the world’s most admired companies (Apple was #1).
Amazon had the same #2 rank in the 2017 list. It was ranked #3 in 2016, #4 in 2015, #2 in 2014 and #3 in 2013.
Facebook did not rank in the top 10 during any of those years despite having one of the highest market capitalizations of any company in the world and close to 100% name recognition.
Although Amazon has impressive technical chops (Amazon Web Services; what is almost certainly the best product recommendation system in the world), Bezos isn’t much like a typical tech CEO. After college, he worked at a telecommunications startup, a bank and a hedge fund before starting Amazon.
Amazon also avoids at least some Silicon Valley groupthink because it’s not located in Silicon Valley. PG understands Bezos initially funded the company out of his own pocket and from friends and family and turned down a venture capital investment, a decision which permitted him to personally control the company’s early business decisions.
It wasn’t until Amazon’s first book-sales website was up and generating increasing profitable sales each month that he accepted a small no-strings investment from a venture fund. PG thinks Bezos’ financial smarts helped keep Amazon away from the types of unwise management decisions that VC’s can force on a small tech company.
None of this guarantees that Amazon won’t someday make a Facebook-style screwup, but PG would bet against it.