The Challenges of Reworking Twitter

After months of uncertainty, Elon Musk seems to be transferring forward on a deal to accumulate Twitter for $44 billion. (In all probability.) If the deal goes via, the subsequent large query is: How will he change the corporate? Musk’s particular targets for Twitter have been onerous to pin down, however the issue of how one can rework the technique of a expertise enterprise is a well-known one. What Musk might want to overcome is just not not like the problem confronted by an outdoor government becoming a member of a brand new firm, a non-public fairness agency on a brand new deal, or a normal supervisor overseeing an acquired enterprise unit on behalf of a conglomerate.

Granted, this case has its personal distinctive challenges. For one, Musk’s expertise is primarily with constructing new companies, not remodeling present ones. For an additional, Twitter epitomizes the continued challenges within the enterprise of social media: It faces questions of how one can monetize, what content material it ought to reasonable (or censor), and what position it ought to play in society to permit it to create essentially the most worth.

Particulars apart, although, there’s a framework of greatest practices for how one can implement and execute on a technique that essentially adjustments the course of a expertise enterprise — one which any chief would do properly to observe. Our view is that, no matter what path Musk decides to take, efficient strategic change would require that Musk observe 5 key ideas.

Precept 1: Prioritize an goal.

Earlier than designing and implementing a brand new technique, a brand new chief must prioritize a transparent goal. This might be long-term income development or short-term profitability; present buyer worth or novel new merchandise. Managers of revolutionary corporations at all times face these tradeoffs.

In follow, failing to determine a main goal virtually at all times means an organization finally ends up pursuing contradictory ones — resulting in an inefficient technique at greatest and a self-defeating one at worst. And not using a clear precedence, management can not formulate a technique that aligns all elements of the group. Enterprise items and frontline workers will seemingly find yourself making their very own selections about what to prioritize, or kick in any other case small choices as much as management, distracting them from higher-level technique.

Musk has been profitable at this prior to now. At Tesla, as an example, his dedication to development over short-term profitability has allowed the group to focus solely on reaching scale in manufacturing whereas innovating on new merchandise. (Luckily, he has investors that agree together with his priorities.)

That is likely to be more durable at Twitter. For one, he’s an outsider coming in to a corporation with present goal(s). Moreover, Musk faces stress from all sides to pursue competing aims, equivalent to boosting revenue vs. transformational change without regard for profit. Musk himself has suggested he’s within the firm’s societal worth.

Any of those are defensible aims, however he must concentrate on only one to start out. He can then design, implement, and talk a technique.

Precept 2: Talk the technique.

For any technique to be efficient at remodeling a corporation, it must be communicated shortly and decisively, and be clear and easy. Particularly, a technique needs to be “the smallest set of selections to optimally information (or drive) different selections,” argues our colleague Eric Van den Steen.

Think about the transformation of the airline Ryanair — a case we train within the technique course at Harvard Enterprise College. Ryanair began as a extra normal airline and struggled. So, it redefined its technique, which will be summarized as merely as “providing the most affordable point-to-point flights in Europe via a low-cost mannequin.” The simplicity makes it straightforward for anybody in Ryanair to use the technique to their specific context. Think about an airport employee who must determine whether or not to load a airplane utilizing a jet bridge or a stair truck. By figuring out the technique, that employee can simply make the choice herself: to make use of the stair truck as a result of it’s the lower-cost possibility. That frequent technique retains everybody within the firm aligned, and importantly, the CEO of Ryanair now doesn’t have to be concerned in that call.

Musk is unquestionably able to speaking a easy guiding technique to his companies. At Tesla, the strategy has been “to speed up the appearance of sustainable transport by bringing compelling mass market electrical automobiles to market as quickly as potential.” This technique guides different choices like whether or not or to not construct a large battery manufacturing facility (or a number of factories) and deploy a world community of retail charging stations.

Instantly upon taking on, Musk must put in place a decisive technique for Twitter’s subsequent few years, which might information his staff with out him needing to be overly concerned. Our sense is that the technique should, at minimal, lay out a transparent path for what merchandise Twitter needs to be concerned in (e.g., video, audio, or simply textual content?) and what content material needs to be allowed (e.g., political speech? Specific content material?).

Thus far, Musk has been ambiguous about his technique for Twitter — resulting in others keen and keen to fill within the logic themselves. There may be broad hypothesis on what he will likely do to what he could do to what he might do. Musk must shut down this confusion and talk a transparent technique so his staff at Twitter can get to work.

Precept 3: Rethink norms.

Over time, firms naturally accumulate habits and routines. Many of those as soon as served the enterprise, however don’t make a lot sense immediately. A change in possession or administration supplies a particular however restricted alternative to problem present assumptions and rethink norms round what the corporate does.

We’ve seen this downside at many firms. Think about Microsoft’s modern transformation. Earlier than Satya Nadella took over as CEO at Microsoft, a lot of the corporate was targeted on closed-source, on-premise licenses of Home windows and Workplace merchandise that had been a number of many years previous. Despite the fact that he was an insider, Nadella took the chance to rethink the underlying assumptions and shift the corporate in direction of open-source cloud computing, a technique that positions Microsoft significantly better for the longer term. Rethinking norms is just not solely potential at a longtime agency, however it’s essential to convey the strategic change that positions the agency for the longer term.

Musk already commonly does this at his personal enterprise. He as soon as explained a guideline for design needs to be “Make your necessities much less dumb.” Musk’s philosophy of questioning norms, attempting the unorthodox, and speaking that failure is tolerated (equivalent to popularizing the time period “rapid unscheduled disassembly” (RUDs) to check with explosions) indicators that it’s not solely acceptable, however fascinating, to problem assumptions.

Twitter has struggled to alter. Its head of shopper product, Kayvon Beykpour, has said that “the notion of Twitter even altering appears like a novel idea.” But there are many present norms at Twitter which can be ripe to be challenged: an advertising-first income mannequin, its 280-character content material format, and the alleged favoritism towards liberal political content. Take into consideration how lengthy it took for it so as to add an edit button. This inertia has left Twitter enjoying catch as much as opponents like Snap, Meta, and Clubhouse, and it usually takes years for Twitter to just copy something.

By each 1) rethinking norms and a pair of) constructing a tradition that permits workers to rethink norms, Musk can empower Twitter to launch first-mover improvements and transfer past the previous.

Precept 4: Set excessive however achievable expectations.

Setting cheap expectations throughout a interval of strategic change is very tough. As certainly one of our (Andy’s) analysis with HBS doctoral scholar Aticus Peterson showed, managers consistently struggle to set realistic timelines on complicated technical tasks. And whereas anticipating timelines on new applied sciences is tough sufficient, many would argue that it’s even more durable to anticipate timelines for organizational change. However when organizations set unrealistic expectations — on timelines or the rest — workers can get pushed past what’s truthful and find yourself burned out.

Setting daring expectations is certainty a energy of Musk, however setting achievable expectations is commonly a weak spot. Tesla’s progress in advancing electrical automobiles is certainty commendable, and infrequently superb, however that has come at an awesome price. Musk steadily proclaims unachievable timelines for Tesla merchandise: He already missed his unique plan to launch the Cybertruck in 2021, and manufacturing has been further delayed into 2023.

At Twitter, Musk would do properly to rigorously handle inner and public expectations. Think about the issue of content material moderation. No matter Musk’s particular imaginative and prescient right here, enhancing and altering content material moderation requires large fixed-cost investments in expertise infrastructure and ongoing variable prices with (tens of) 1000’s of human moderators. The complexity of this effort is precisely the type of factor that managers underestimate — maybe Musk particularly. Different ambitions, equivalent to transferring Twitter to a brand new open-source protocol, would require fully rebuilding Twitter’s expertise backend and have vital penalties for each facet of its enterprise. We can not say whether or not that’s a good suggestion, however we are able to say that it’s a dangerous concept to enter one thing that excessive with no life like expectation of the time and value of seeing it via.

Precept 5: Interact stakeholders.

Strategic change at all times leaves somebody sad. The present prospects and workers are used to a sure expertise, even when that have could also be main the corporate within the unsuitable route. To beat this, managers ought to have interaction transparently with stakeholders in regards to the product roadmap, and the imaginative and prescient and values of the place the enterprise goes to go.

The instance of Meta is a cautionary story for Musk and Twitter on how one can have interaction with customers, regulators, and buyers. As we’ve written about before, Meta and Twitter face the identical problem of moderating social media content material whereas being watched carefully by customers and regulators, and Meta has struggled. First, Meta CEO Mark Zuckerberg under-communicated with stakeholders in regards to the tradeoffs in moderating content material (e.g., one individual’s free speech is one other individual’s hate speech), after which Meta implied it had more control over its issues than it really does. Second, Zuckerberg failed to ascertain expectations of accountability within the eyes of stakeholders by defining boundaries on which elements of its platform it desires to — and will be — accountable for, and so nobody is accountable on the finish of the day.

Participating stakeholders isn’t straightforward, and could also be Musk’s largest problem at Twitter. Participating individuals on the thought of constructing electrical automobiles and going to Mars is comparatively simple. However on the subject of social media, the stakeholders are themselves already deeply divided. The response to the acquisition is far from universally positive, polarizing individuals alongside ideological traces. In a normal sense, that is about extra vs. much less moderation. In a extra particular sense, that is about particular situations of moderation — whether or not to permit the return of President Trump to Twitter, as an example. Additional augmenting the problem, Musk might want to cope with quite a lot of worldwide stakeholders from Europe or China who’ve their very own tastes; the EU, for one, has warned Musk that he’ll must observe Brussels’ guidelines on digital content material moderation or face “hefty fines or perhaps a ban.”

There may be completely no resolution that makes everybody blissful. However no matter Musk decides to do, he must be taught from Zuckerberg’s errors and have interaction stakeholders by transparently speaking the underlying tradeoffs and defining boundaries on what he’s going to be accountable for.

. . .

Thus far, Musk has constantly had the posh of rising new organizations round his imaginative and prescient for the corporate (and society). Main and proudly owning Twitter might be a stark departure. New managers and house owners arriving for the primary time to a legacy expertise firm must wrestle with the tough activity of organizational change within the face of cultural inertia. With Twitter, Musk will, for the primary time, expertise the problem of fixing established cultural norms. To make issues much more tough, Musk’s infamy for radical concepts will enhance the energy of the headwinds he’s more likely to face. Even when he was in a position to management virtually each facet of an organization prior to now, Musk’s radicalness has resulted in brushes with chapter many instances at his different corporations.

Twitter is a novel type of problem for any supervisor, and it will likely be the last word check of Musk and his capability to show an organization round. However for the remainder of us watching, we are able to study what works and what doesn’t when remodeling technique in a expertise enterprise.