By Annika Kim Constantino
September 12, 2022
Update September 13, 2022
Source: CNBC
Photo Source: Unsplash, Brett Jordan
Mark Zuckerberg's poor leadership skills are slowly dragging Meta toward failure, a Harvard expert says.
Zuckerberg's shortcomings as CEO are "continuing to derail" the tech giant formerly known as Facebook, according to Bill George, a senior fellow at Harvard Business School and former CEO of medical technology company Medtronic.
"I think Facebook is not going to do well as long as he's there," George tells CNBC Make It. "He's likely one of the reasons so many people are turning away from the company. He's really lost his way."
George has spent the past 20 years studying leadership failures in the workplace, recently compiling those findings into a new book called, "True North: Leading Authentically in Today's Workplace, Emerging Leader Edition."
In short, George says bosses that lose sight of their most deeply held beliefs, values and purpose as a leader — especially in the name of money, fame or power — are doomed to fail. And after decades of researching high-profile corporate collapses, he says he sees striking similarities to Zuckerberg and Meta today.
Zuckerberg and Meta did not immediately respond to CNBC Make It's request for comment. The Meta CEO is largely responsible for his company's meteoric growth to this point, transforming the company he co-founded in 2004 into a tech giant with a $450.46 billion market cap, as of Monday morning.
In doing so, he helped create the modern-day social media industry — a move he's attempting to replicate now by repositioning his company into the metaverse space. Given his past success, it might be unwise to bet against him, as CNBC's Jim Cramer said on "Squawk Box" in February.
p "I know that this is probably out of fashion, I have total faith in Mark Zuckerberg. I think Zuckerberg's going to be able to pull off ... the metaverse," Cramer said, adding that Meta has a track record of rebounding after stock dips, scandal and controversy. "There's some people you have to bet on. And if you go back to 2018 to that horrible summer breakdown ... no one thought these guys could come back."
Still, George says Meta is bound to fail as long as Zuckerberg remains at the helm. Here's why:
George's book looks at five different types of bad bosses. Zuckerberg falls into not one but three of those categories, George says.
First: George says Zuckerberg is a rationalizer, the type of boss who isn't willing to acknowledge or learn from their mistakes. Instead, they rationalize missteps by placing that blame on others.
In February, Meta lost more than $232 billion of its market value, marking the biggest one-day drop of any U.S. stock in history. Zuckerberg and his executives blamed the results on several factors, including Apple's privacy changes in 2021 that have made it harder to target ads to smartphone users, as well as increasing competition from rivals like TikTok.
Those factors may have played a role — but it's also likely that heavy spending on metaverse research and development factored in. Meta's virtual reality division reported more than $10 billion in losses during 2021 alone, and $2.8 billion during the second quarter of 2022 alone.
At least publicly, Zuckerberg has yet to acknowledge or take responsibility for it, George says — though Zuckerberg did say during a shareholder meeting in May that he expects his company to lose "significant" amounts of money over the next three to five years, as it invests in metaverse technologies.
Zuckerberg has become a loner who avoids forming close relationships and pushes others away, George says. Those bosses often don't accept help, advice or feedback, which makes them prone to mistakes.
To an extent, Zuckerberg is known for trusting his own gut over conventional wisdom: It's part of how he built Meta into a multibillion-dollar tech giant. Still, in the early days, he took at least some advice from trusted advisors.
One example: Roger McNamee, the co-founder of private equity firm Elevation Partners and an early investor in Facebook. In 2006, McNamee advised Zuckerberg to turn down Yahoo's offer to buy Facebook for $1 billion. McNamee later encouraged Zuckerberg to hire former COO Sheryl Sandberg, who ultimately played a critical role in building the company's advertising business and internal operations.
Both times, Zuckerberg's decisions hewed to McNamee's advice — and both decisions have proven very successful. Yet as Meta grew, Zuckerberg eventually stopped listening, McNamee told the New Yorker in 2019.
The decision may have had at least one major consequence: In 2016, McNamee tried to warn Zuckerberg about the impact of Russian meddling in U.S. elections on Facebook's platforms. Zuckerberg reportedly dismissed the warning, ignoring McNamee for months.
U.S. intelligence agencies have since concluded that Facebook was a key platform in Russia's interference efforts, which may have contributed to the election of President Donald Trump.
Lastly, Zuckerberg is a glory seeker who puts fame and fortune above anything else, George says. Those types of bosses are never truly satisfied with what they have, and are willing to go to extremes to gain more.
Zuckerberg prioritizes Meta's profits and growth, even at the expense of the company's billions of users, George says. It's not a unique observation: Zuckerberg's company has long been embroiled in controversy over issues related to the privacy and health of its users.
In one instance, a Wall Street Journal investigation last year foundthat the Meta-owned Instagram platform was contributing to users' mental health problems, particularly in teenage girls. The investigation found that Meta leadership actively chose to ignore the problem, to avoid jeopardizing user engagement and growth.
The decision points to Zuckerberg's desire to prioritize revenue over anything else, George says.
George's advice for Zuckerberg to get back on the right track: Take some time away from work and reset your brain.
"You need to pull back, take a sabbatical to ground yourself in your purpose and your values," he says, adding: "Then bring your team and board together on a retreat to recreate Facebook around its new mission and values."
Update: This story has been updated to reflect additional comment from Bill George, and previous comments from Mark Zuckerberg and CNBC's Jim Cramer.
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