This is the final post in our series. I apologize for the delay, it’s been a long time coming. I’ve been preoccupied with thinking and writing about my country’s crisis. You can read my post on what business leaders need to ask themselves in light of the Capitol Hill riots here.
- Build ethics into your business model
- Reflect before you act
- Look beyond your target market
- Do your homework before you enter a market
- Think about political and cultural context
- Exercise empathy and make it part of the way you do business
In this post, we’ll be talking about Facebook’s third mistake in moving into the Ethiopian market: not adequately assessing the risks and consequences. This has led to a firefighting strategy, where the company is expending resources trying to clean up the destruction it has left in its wake.
Ethics and Risk Management
Some definitions are in order. Ethics is a system of principles that govern human behavior and activity. Our system of principles guide decision-making. Risk management is “the process of identifying, assessing, and controlling threats to an organization’s capital and earnings.” Given that risk management is a process leading to the execution of decisions, it is necessary that those engaging in this process make considerations based on sound ethical principles.
I agree with Dr. George L. Head on the connection between ethics and risk management. He says, “First, for an organization to manage its risks well, everyone who represents that organization must practice good ethics. Second, for an organization to act ethically, everyone who represents that organization must manage risk well.” I also concur with his point that permitting or encouraging people in your organization to act unethically is a failure in risk management, and, conversely, not managing risks well is an ethical failure.
I’ll say briefly that I find both utilitarian (or consequentialist) and secular deontological systems of ethics inadequate for dealing with the complexities of real life, including business.
I’m a virtue ethicist for two reasons: 1) for a utilitarian it is possible to say, “It is better that one innocent man should die than that the many should perish,” and I think that the murder of an innocent person for any reason is profoundly unjust and unconscionable, and 2) I find Kant’s formulation of the categorical imperative utterly ridiculous because what we would have in practice is each individual legislating for him or herself and, considering the weakness and fallibility of human beings, I can see that this would result in disaster.
I’ll write a separate post on this, but I will say here that if risk management teams are going to be successful, they themselves must be striving after moral excellence and hold their considerations up to the light of justice, charity, and other virtues.
If you are in business, particularly if you are in a position to make major decisions, consider virtue ethics as the main underpinning of your decision making. I tell you now, based on my personal experience and reviewing a breadth of literature and case studies, committing to moral excellence and thinking in terms of virtue will change your life and your business. If you care to do some philosophical reading, start with G.E.M Anscombe’s “Modern Moral Philosophy” and Aristotle’s Nicomachean Ethics.
Facebook’s Risk Management
Facebook’s risk management team is relatively new, which is unsurprising to me considering their history as a company. It was formed in 2018 at the behest of concerned investors who saw that the company’s reactive put-the-fires-out strategy was not working. Seeing the issues in Ethiopia, in Myanmar, and in the United States, I’d say this team has their work cut out for them.
Here’s why it’s so important that Facebook finally formed a separate team for risk management: everyone is getting sick of their apologies.
When discussing data privacy at the World Economic Forum in 2019, COO Sheryl Sandberg issued the following apology, what I and many others see as a tired reiteration of the, so far, empty apologies Facebook has made over the years: “We did not anticipate all of the risks from connecting so many people. We need to earn back trust.” This apology over data privacy issues is quite telling for the case we are examining in this blog series. Based on the inadequacy of Facebook’s response to the crisis in Ethiopia, it is apparent, at least to me, that they didn’t do a thorough risk assessment of that decision either.
The takeaway for business leaders who run sizable companies is that investing in a good risk management team is wise. It will bolster your reputation as a responsible corporation. Your investors will thank you.
Yes, in the short-term, you will be spending money, but in the long-run, it will actually save you the money you otherwise would have spent on litigation, PR, environmental clean-up, and other crisis mitigation measures.
Questions for Facebook
Here are some possible questions that might have helped Facebook to better assess the wisdom of moving into the Ethiopian market. I created these questions with the virtues of prudence (the ability to reason carefully about what the right thing is to say or do in a situation), foresight (thinking ahead, being prepared, and considering consequences), and justice (giving to each person what is due to them) in mind.
- Have we done enough research to make this decision? How well do we know our market? Have we anticipated the effects on people outside our target market? Have we looked at the political and cultural context of our market?
- Do we have the human resources to moderate content that violates our terms of service? Are we able to provide enough mental health support for our moderators?
- What are the top three worst-case scenarios that could occur with our services in the particular market we are looking to enter? Are we prepared to handle those?
- Given what we know about the negatives of our service in our current markets, are we prepared to handle the same or worse in another market?
The Consequences of Connecting the World
With our global connectivity via Facebook, we are able to keep up with friends and family, easily share our photos with the people we love, and create communities online with like-minded people. Activists are able to more easily organize. We are able to discuss and debate ideas with people across the country, across the world even.
But what if someone’s values and beliefs are vicious? What if, as we’ve seen, emotionally unrestrained individuals blinded by confirmation bias and duped by misinformation get together online and start organizing and encouraging real-world destruction?
I think the Big Tech decision makers need to ask themselves some hard questions about the interaction between their creations and human nature, the impact these have on human beings and our societies, and whether they really think a little more profit is worth endangering human life.
Facebook’s many mishaps, including its contribution to the destruction of life and property in Ethiopia, raise an even bigger question for business leaders and for all of us: could it perhaps be the case that the paradigm of infinite economic growth, the chase after greater and greater profits, is killing humanity and the planet? That’ll be another post.