The Leaderboard

Most Read: National

From the Blogosphere

Jena McGregor

Jena McGregor

Staff writer Jena McGregor teases out the leadership issues in the day’s news.

Tom Fox

Tom Fox

Guest contributor Tom Fox, of the Partnership for Public Service, writes weekly about issues in the federal workplace.

Lillian Cunningham

Lillian Cunningham

Lillian Cunningham is the editor of On Leadership and writes features for the section.

Post Leadership
Posted at 03:16 PM ET, 05/23/2012

What Mark Zuckerberg should do now after Facebook’s fumbled IPO

Facebook faced a reality check out of the gate after its Friday IPO. (SHANNON STAPLETON - REUTERS)
The public response to Facebook’s fumbled IPO has been a mix of outrage, shock and more than a little bit of schadenfreude. Much of the hype surrounding the company’s initial public offering has been burst by reports of late cuts in revenue estimates, a review of the process by regulators, and a stock that fell more than 20 percent in its first three days of trading. A company that had been the belle of the ball is suddenly the brunt of jokes. (Actor Al Brooks on Twitter: “When Facebook gets to $9 I'm in.”)

But what’s the response been like inside Facebook HQ? The Wall Street Journal reports that employees are shrugging off the tumult. The Journal spoke with people who said employees ignored the news about the stock drops or were careful to avoid talking about it. Executives had prepared employees since February about how to stay focused amid stock declines, which has surely been helping.  

Still, it’s hard to believe the very public questions about Facebook’s IPO haven’t shaken at least a few folks on Hacker Way. When Zuckerberg faces employees, as the Journal reports, on Friday afternoon for the company’s regular all-hands meeting, the week’s events are likely to come up in some way. When they do, what should he say to keep employees focused? How should he answer questions that might be raised about what happened in the IPO? And how should he calm any frazzled nerves?

Zuckerberg can start by reminding Facebook employees that whatever happened in the IPO doesn’t mean the company isn’t still the promising startup it was last week. The questions surrounding the IPO shouldn’t change the company’s plans for the long term. He should talk about the plan for the next five years, and focus on where the company is going rather than where it’s been.

Then, he should put Facebook’s stock moves into context. When Amazon went public, it jumped on the first day but dropped below its offering price within a week. Apple nearly went bankrupt before it became the juggernaut it is today. And he could point to research, mentioned in the Journal Wednesday, showing that companies that closed at or below their offering price on their second day of trading averaged double-digit growth in their share prices a year later.

Finally, he should remind employees that the stock’s drop may be a blessing in disguise. That may be cold comfort to people expecting to watch their wealth take off overnight. But Silicon Valley is littered with stories of startups whose stock prices immediately rocketed into the stratosphere, allowing overconfidence to creep in before shares fell back to earth. Facebook, meanwhile, faced a reality check out of the gate that should help motivate people to stay focused and work harder in the days and months to come. In the long run, that may be worth far more.


More from On Leadership:

Facebook’s biggest challenge ahead

The art of the Zuckerberg hoodie

The five worst mistakes I made as a new grad

Like On Leadership? Follow us on Facebook and Twitter:

@post_lead | @jenamcgregor | @lily_cunningham

By  |  03:16 PM ET, 05/23/2012

Tags:  facebook, mark zuckerberg, leadership

Read what others are saying

    © 2011 The Washington Post Company