Facebook's IPO didn't go as planned, and now the share price is dropping. Wall Street is doing what it usually does in such cases. They over-react. They make a lot of noise about how the 28-year-old Zuckerberg should step aside and let a professional CEO take over.
There are two main problems with this picture. First, Wall Street has, for several decades, had a very narrow, short-term vision for publicly-held companies. Profits drop for the quarter? They are very quick to try to analyze what went wrong, and who to blame. Sometimes however, nothing did go wrong, and nobody is to blame, it's just that the visionary leader of the company is working on a long-term strategy that doesn't mesh with Wall Street's "need money now" approach. What's even more frustrating is that even if a particular quarter is profitable, if it doesn't meet the previous quarter's predictions, all the Wall Street wonks will still get their panties in a bunch. Predicted 30 cents a share profit, but only made 28 cents? Horrible! Time to replace the CEO! But then, a new CEO will take time to fit into the new role, and profits will drop anyway.
The other main problem is that the tendency of Wall Street is to want to replace visionary entrepreneurs with management wonks once the company has become successful. So-called "professional CEOs" however, can ruin an innovative company, effectively taking all the steam out of that innovation and pushing it into a preconfigured mold designed to meet the needs of Wall Street first, and its customer base second.
Make no mistake, big companies need those business wonks to make things run smoothly, and keep a check on the visionaries, who sometimes to tend to get too excited about the "coolness" factor and lose sight of the bottom line. But a vision-less, professional CEO is going to change the culture of a company, and effectively kill off what made it great in the first place. The business wonks and visionaries have a symbiotic relationship. They need each other.
We saw the same thing with Apple in the '80s and '90s, when it was perilously close to being an also-ran after it gave Steve Jobs the heave-ho in 1985. As the company stood on the edge of the cliff looking into the abyss in the late '90s, Jobs came back, and it was his vision—not a focus on quarterly profits and day-to-day stock price—that made the company the massive money-making machine that it is today.
This story, "Wall Street Wonks Over-React to Questions on Zuckerberg's Leadership" was originally published by ITworld.