PROBLEM-SOLVING APPLICATION CASE With Trouble Comes Conflict, and with Conflict Comes Trouble Facebook's meteoric growth and central role in revolu- service exploded in parts of the world where messaging tionizing social media has been overshadowed in services were either expensive or social networks like recent years by its many controversies, such as the Facebook had not penetrated. Mr. Koum, in particular, company's role related to influencing the presidential valued secure communication due to his upbringing in election in 2016, the improper harvesting and use of the Soviet Union where everyone was monitored all of nearly 90 million user accounts by Cambridge Analyt- the time. The founders continued to develop Whats- ca, and the widespread concerns by users and regula- App's end-to-end encryption after the Facebook acqui- tors that the company insufficiently protects its more sition, avoided advertising, and maintained offices than 2.2 billion users' data and privacy. These issues separate from Facebook's campus. In fact, WhatsApp's are significant, as they can and have cost the company offices do not even bear the company's name; how users, advertising revenues, damage to its reputation, about that for dedication to privacy? along with fines and restriction from regulators. Adding As for Instagram, Systom and Krieger also pre- to the troubles, top level executives like Mark Zucker- served considerable autonomy over the app and grew berg and Sheryl Sandberg's conduct has been ques- advertising revenues to $6 billion in 2018. The app is tioned on ethical grounds for how they've responded. 108 growing and is particularly popular with younger peo- ple. Despite the controversies consuming Facebook PRECIOUS JEWELS, NOW and Zuckerberg, the founders' relationship with Zuck- COSTLY CONFLICT erberg seemed harmonious and was often touted by Zuckerberg and others as a model for how to acquire However, the issues that grab fewer headlines but per- and work with small tech companies. haps signal other significant troubles are the depar- tures of key executives of companies Facebook has acquired, notably Instagram and WhatsApp. Facebook ZUCKERBERG ASSERTS CONTROL bought Instagram in 2012 for $1 billion, when it had Facebook, fairly or not, is equated with its founder, Mr. only a few employees and about 30 million users. It Zuckerberg, who maintains control and largely deter- now has 1 billion users and an estimated value of $100 mines the direction and structure of the company he billion if it were independent. WhatsApp was purchased founded. And therein lies the source of many of the in 2014 for $19 billion at a time when it had approxi- conflicts. Zuckerberg envisions integrating Facebook's mately 50 employees and about 450 million users. Just apps (Messenger, WhatsApp, and Instagram) which will two years later the number was over 1 billion users. require the sharing of user data between the products These acquisitions have been central to Facebook's in ways not done previously. Part of this effort has strategy and growth, but the founders of these two included reorganizing senior management and install- companies (Jan Koum and Brian Acton of WhatsApp, ing Adam Mosseri as VP of product design at Insta- and Kevin Systom and Mike Krieger of Instagram) have gram, a role previously filled by the founders. But it all left in the period of a few months, signaling conflict didn't stop there. Zuckerberg also inserted Chris Cox, and trouble at the social networking icon. 109 Facebook's chief product officer, between him and Systom and Krieger, which many internal to Instagram viewed as a move to put a trusted "Facebook first" per- HARMONIOUS AUTONOMY son in place to control the direction and guard against The founders of both Instagram and WhatsApp stayed the departure of the founders. in place for several years after their companies were acquired, which is not the norm given many cash out and leave. They however were allowed to run their CONFLICTS GROW AND companies much as they had, maintaining autonomy FOUNDERS EXIT and the ability to creatively realize their visions for the Instagram's founders increasingly disagreed with companies they created. For WhatsApp founders, Zuckerberg and other Facebook executives during Koum and Acton, their passion was the privacy of meetings, and although historically quite cordial, the communication. WhatsApp's encrypted messaging disagreements became more severe and spilled over Managing Conflict and Negotiations CHAPTER 10 419onto internal message boards. As for WhatsApp, Zuck- APPLY THE 3-STEP PROBLEM- erberg is determined for the app to start using adver- SOLVING APPROACH TO OB tising and making money, which requires sharing user Use the Organizing Framework in Figure 10.6 and the data between the apps. Koum had taken issue with 3-Step Problem-Solving Approach to help identify how data was used by social media companies, espe- inputs, processes, and outcomes relative to this case. cially by Facebook, and abruptly resigned. As one reporter put it: "Instead of changing his values, Mr. STEP 1: Define the problem. Koum is leaving Facebook."1 10 His departure was fur- A. Look first at the Outcomes box of the Organizing ther complicated due to his seat on Facebook's board Framework to help identify the important of directors (he resigned). problem(s) in this case. Remember that a prob- In the period of only a few months all of the found- em is a gap between a desired and current ers of these crown jewel acquisitions had left. Although state. State your problem as a gap and be sure some of the motives were unique to individual execu- to consider problems at all three levels. If more tives, they appeared to share a growing dissatisfaction than one desired outcome is not being accom- with Zuckerberg and the direction of the company. polished, decide which one is most important and Power and decision making were shifting away to oth- focus on it for steps 2 and 3. ers and becoming more centralized. It is likely the departing executives felt their objections would not B. Cases have key players, and problems are gen- erally viewed from a particular player's perspec- prevail and resistance would be futile. tive. You need to determine from whose perspective-employee, manager, team, or the THE PROBLEM IS BIGGER AND THE organization-you're defining the problem. In CONFLICTS MORE NUMEROUS this case you're asked to assume the role of The problem is not just confined to WhatsApp and Ins- CEO Mark Zuckerberg. tagram. Justin Rosenstein (creator of the "like" button), C. Use details in the case to determine the key Chamath Palihapitiya (head of user growth), and Sandy problem. Don't assume, infer, or create problems Parakilas (platform operations manager) have all left. not included in the case They, too, have taken issue with protection of data and D. To refine your choice, ask yourself, why is this a privacy, the use of the platforms to manipulate thought problem? Explaining why helps refine and focus and behavior, as well as the lack of personal account- your thinking. Focus on topics in the current ability by executives. Their issues reflect a growing chapter, because we generally select cases illus- concern across the industry about increased growth trating concepts specifically located within the and connectivity, but at what cost. Zuckerberg and current chapter. other social media executives are being pressed to justify if not alter their own values, or at least the prac- STEP 2: Identify causes. tices of their companies, related to data protection, Using material from this chapter and summarized in usage, and privacy. 111 the Organizing Framework, identify the causes of the Some view the conflicts and departures of key problem you identified in Step 1. Remember, causes executives as pushback against Zuckerberg's mission end to appear in either the Inputs or Processes boxes. for Facebook, to "make the world more open and con- A. Start by looking at the Organizing Framework nected." Increasingly, as described in this case, impor- (Figure 10.6) and decide which person factors, tant players both inside and outside the company are if any, are most likely causes of the defined taking issue with the means for reaching this end. problem. For each cause, explain why this is a Zuckerberg, as the founder and face of the company, cause of the problem. Asking why multiple times s now forced to confront challenges and genuine con- is more likely to lead you to root causes of the flict on many fronts, and how effectively he does this problem. For example, do executive characteristics will determine the direction, path, and outcomes for help explain the problem you defined in Step 1? years to come. B. Follow the same process for the situation fac- Assume you are Mark Zuckerberg, and you can go tors. For each ask yourself, why is this a cause? back in time before the departures of these key execu- By asking why multiple times you are likely to tives. Apply the knowledge and tools in this chapter arrive at a complete and more accurate list of and the 3-Step Problem-Solving Approach to deter- causes. Again, look to the Organizing Frame- mine how you would deal with the conflicts described above. work for this chapter for guidance. Did particular policies or practices play a role? PART 2 Groups