In a front-page story in today's Wall Street Journal we
learned that Mark Zuckerberg the founder and CEO of Facebook never
consulted with his board of directors before negotiating a $1 billion deal to
acquire Instagram. Normally a board of directors is comprised of individuals
with disparate skill sets who advise and consult with the CEO on corporate
issues including strategy. A visitor to my class on restructuring at
Northeastern University, a former bankruptcy judge, remarked once that in his
opinion most bankruptcies are caused by CEOs who ignore their board of
directors. Obviously no one would suspect that Facebook is a likely bankruptcy
candidate; but that does not mean that Mr. Zuckerberg was right and what he
did.
I suspect that his behavior was an unintended consequence of previous success. The above-mentioned bankruptcy judge explained that successful CEOs had to fight naysayers on their way to success. He felt that this caused many of them to assume a me against them mentality - even when they're all on the same team such as the Board of Directors. I don't think Mr. Zuckerberg had too long or too arduous a battle on his way to Facebook success. In fact, I suspect his unintended consequence derives from arrogance caused by rapid and unprecedented success.
This unintended consequence is not going to bankrupt Facebook. After the company goes public however, public shareholders may object to his handing out 1% of their company for an acquisition of a firm with no revenues and no profits. After all, Instagram was not the only photo sharing and photo manipulating app out there.
Harlan Platt's blog is harlanplatt.com. His new book is Unintended Consequences: How to Improve our Government, our Businesses, and our Lives.
I suspect that his behavior was an unintended consequence of previous success. The above-mentioned bankruptcy judge explained that successful CEOs had to fight naysayers on their way to success. He felt that this caused many of them to assume a me against them mentality - even when they're all on the same team such as the Board of Directors. I don't think Mr. Zuckerberg had too long or too arduous a battle on his way to Facebook success. In fact, I suspect his unintended consequence derives from arrogance caused by rapid and unprecedented success.
This unintended consequence is not going to bankrupt Facebook. After the company goes public however, public shareholders may object to his handing out 1% of their company for an acquisition of a firm with no revenues and no profits. After all, Instagram was not the only photo sharing and photo manipulating app out there.
Harlan Platt's blog is harlanplatt.com. His new book is Unintended Consequences: How to Improve our Government, our Businesses, and our Lives.
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