Why Tech Companies Don’t See Their Biggest Problems Coming

Since Mark Zuckerberg’s recent congressional testimony about Facebook’s unauthorized release of the private data of millions of users, many flaws in the company’s business model have come to light. Crises related to member privacy, misuse of data, and loss of public trust in the company have been emerging in an almost uninterrupted stream.

That’s what can happen when organizations do not make crisis management a central feature of their everyday operations. Tech companies are especially prone to this shortcoming. Five blind spots, in particular, make tech companies likely to face crises they never even remotely anticipated. Each one is troublesome in its own right, but together they lead to disaster.

Let’s take a look at each one of those blind spots in turn.

1. Too much early success. Peter Drucker famously wrote about the failure that ensues when companies succeed quickly and spectacularly, as Facebook has. The cascade of great news can make an organization blind to serious problems that lurk within its basic business model and are embedded in its culture and structure. A recent New York Times article argues, for example, that Facebook’s platform not only provides safe harbor for extremists, but actually creates extremists by promoting content that riles (or, euphemistically, “engages”) them. Because of the early success of its business model, in terms of both user numbers and advertising dollars, Facebook was insufficiently wary of how the model itself could cause a crisis.
2. Overconfidence after weathering small crises. Facebook’s ability to manage the public’s outrage about how its platform promotes cyberbullying may have bolstered the company’s sense that it could address crises as they arise, rather than building a serious crisis management program. This kind of reactive approach, particularly when it appears to be effective in a company’s early days, can lead to a dangerous sense of invincibility.
3. The assumption that management is easier than technical work. The technological skills and systems required to run an operation as massive as Facebook’s are clearly impressive. But smugness about achievements in the IT arena can make management, even crisis management, seem deceptively easy. If management practices are not given the serious attention they require, crises are more likely to blindside a company.
4. Inadequate responses to major crises. Companies that are well-prepared to handle crises take immediate responsibility when things go wrong.