Back on June 1, I argued here that Facebook's CEO Mark Zuckerberg needed to lead an effort toward greater transparency in conducting the newly public business of the social network behemoth. Two weeks after its epically hyped IPO, Facebook had plunged 28% from its opening price of $38 to reach a new low of $27.50.
I had no pretensions of Zuckerberg noticing my advice, let alone heeding it, even though there were plenty of other voices calling for more business transparency from Facebook. And indeed, the famously maverick young founder of the company continued to keep a fairly low profile. Facebook continued to be vague in detailing its plans to monetize its enormous base of "friends" and failed to provide guidance on future revenue projections. When he did speak, Zuckerberg reminded us that Facebook's mission was never to simply make money but to "give people the power to share and make the world more open and connected."
Having a well-articulated, noble and inspiring mission is critical for encouraging an active and participative employee culture geared to execute corporate strategies. Shareholders can likewise be inspired by the vision. But they also want some guidance to help them figure out if their invested dollars are wisely held in the company, or should be put somewhere else.
(And BTW, employees also want to be reassured that the business has a sustainable trajectory of profitable growth. In short, every stakeholder wants to invest in, work for, do business with...winning companies. "Winning" encompasses all aspects of reputation including social responsibility as well
as, yes, profitable growth.)
Throughout the summer, Facebook stock continued its downward trend, dropping below $18, less than half of its initial price four months earlier. That will get your attention, no matter how maverick you are.
Finally, this week at a tech conference in San Francisco, Zuckerberg let it be know that the company's profit performance was indeed important to management. As John Shinal wrote for MarketWatch:
Now that Zuckerberg has seen the damage that the stock drop has done to the image of his company — not to mention to the morale of employees with restricted stock grants — he’s on board with the whole profit thing.
Today, Facebook closed at $22 -- up a cool 25% from its low 10 days ago. There's still a long ways to go before Day One investors recoup their investment. But it's a good start.
So, yes, transparency is critical for all stakeholders, including (especially) employees. And that includes detailing efforts being made to ensure sustainable, profitable growth.
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