Senior executive shakeups, mass employee layoffs and resignations, major advertisers halting their ads—it is safe to say nothing about Elon Musk’s acquisition of Twitter has gone smoothly from the start.
Just days after finalizing his purchase of the platform for $44 billion on Oct. 27, Musk began his tenure as the social media giant’s new chief executive by immediately axing top management, including his predecessor CEO Parag Agrawal; Chief Financial Officer Ned Segal; Vijaya Gadde, head of legal, policy, trust, and safety; and General Counsel Sean Edgett. Additionally, in a securities filing, Musk announced the dismantling of Twitter’s nine-member board and that he “became the sole director.”
Musk did not stop with the senior executive team. He also gutted half of Twitter’s 7,500 employees globally. In the days following the firings and mass layoffs, Twitter Chief Compliance Officer Marianne Fogarty, Chief Privacy Officer Damien Kieran, and Chief Information Security Officer Lea Kissner each resigned.
“These are core components of an organization that, if they’re not functioning for even a small period of time, it can be a massive disaster,” said Andrew Brodsky, assistant professor in the management department at the McCombs School of Business.
Looming FTC investigation?
A group of seven senators are demanding the Federal Trade Commission (FTC) investigate Twitter for potential breaches of its consent decree or other violations of consumer protection laws.
In May, Twitter reached a $150 million settlement with the Department of Justice and FTC for violating a 2011 administrative order by “misrepresenting” how it used nonpublic user information.
According to the FTC’s complaint, from May 2013 to September 2019, Twitter violated the FTC Act by misrepresenting the “controls it implemented to keep user accounts secure” after prompting users for phone numbers and emails for two-factor authentication. The company, in turn, allegedly used that data for targeted advertising without consent.
The senators in a Nov. 17 letter to FTC Chair Lina Khan urged the agency to “bring enforcement actions against any breaches or business practices that are unfair or deceptive, including bringing civil penalties and imposing liability on individual Twitter executives where appropriate.” The senators also expressed concern Musk “has taken alarming steps that have undermined the integrity and safety of the platform.”
When massive organizational change is necessary, “Sometimes coming in as a strong force and throwing out everything that was previously done can be useful for bringing about change,” said Andrew Brodsky, assistant professor in the management department at the McCombs School of Business. “But the other side of that is if you come in too fast and too hard, you tend to create problems that can be really severe.”
As indicated by the Twitter posts of other former employees, Musk also cut the company’s human rights team, its accessibility experience team, and its ethical artificial intelligence team.
Josh Bersin, president and founder of talent management firm Bersin & Associates, said in his podcast discussing Twitter that Musk did “what basically any equity investor does: He cut costs; he cut about half the people; and he did it in typical, private-equity fashion—not thinking about the culture, not thinking about the brand, just getting rid of as many people as fast as possible.
“There is an argument that that is a good idea, but I’m very much against it because what it does is it damages the culture, damages the brand, damages the skill set, and creates all sorts of problems.”
Musk’s handling of his acquisition of Twitter highlights how not to communicate with employees or manage a newly acquired company out of the gate. Below is a discussion comparing what experts in business management describe as effective versus ineffective leadership styles as it concerns fostering an ethical and compliant culture.
Get employees focused on, and connected around, a common vision. In his first town hall meeting with employees—the transcript of which was obtained by The Verge —when asked how he plans to bring employees together around a common vision, Musk answered, “I don’t know. I don’t have a great answer to that.” That is not the message people generally want to hear from leadership.
Intrinsic motivation is one way to connect with employees, Brodsky said. In part, this is about motivating workers through a common purpose, “such as bringing everyone around a common vision to make them feel they are contributing to an important cause and that their work is meaningful,” he said.
Ruling with an iron fist is not for everybody. “Different companies are different types of societies,” Bersin said in his podcast. “Some are hyper-competitive, dog-eat-dog societies,” whereas others—for example, the healthcare and education sectors—are “caring, giving, supporting environments. They attract people that want that kind of life, that kind of career. You get to decide.”
Musk has made it clear, under his leadership, Twitter will fall under the former category. In his opening email to employees, he warned, “The road ahead is arduous and will require intense work to succeed. We are also changing Twitter policy such that remote work is no longer allowed, unless you have a specific exception.”
He added he expects everyone to be in the office “a minimum of 40 hours per week” and gave employees an ultimatum they can choose to work those hours or take three months’ severance, the New York Times reported.
“I’m a big believer that a small number of exceptional people can be highly motivated and can do better than a large number of people who are pretty good and moderately motivated. That’s my philosophy,” Musk said at Twitter’s first town hall. “[For] those who go hardcore and play to win, Twitter is a good place. And those who are not, totally understand—but then Twitter is not for you.”
The problem with this leadership philosophy is its effect can be that “you end up with this reverse selection [of employees] that you ideally want, which can be a real problem in terms of retaining key talent,” Brodsky said. This is because “employees who are the most talented, the most hirable, are the ones who will choose the three-month severance. The ones who will end up staying are the ones who have no other options.”
Constructive criticism helps foster innovation and ethical workplaces. Through his own Twitter posts, Musk appears averse to constructive criticism. In a now-deleted post on the platform, Musk said he was firing an engineer who publicly challenged him about why the app was running slowly in certain countries.
“Employees who are the most talented, the most hirable, are the ones who will choose the three-month severance. The ones who will end up staying are the ones who have no other options.”
Andrew Brodsky, Assistant Professor, McCombs School of Business
Musk’s communication style “seems to be very spontaneous and sometimes not particularly well thought out,” Brodsky said. This can effectively make employees feel uncomfortable to “challenge the status quo or, in terms of someone in compliance, point out when they see something wrong,” he said.
“You’re going to end up having a lot of ‘yes’ people,” he said.
Focus on a greater good. In Twitter’s case, this focus could mean framing the message around all the good the platform has done—for example, giving underprivileged people around the world a stronger voice through social media or playing an integral role in the safety and security of vulnerable populations.
Musk appears to be sending the opposite message, however, particularly demonstrated by his firing of employees who were focused specifically on human rights, user accessibility, and those who monitored posts for hate speech. Human rights advocacy groups have expressed concern Musk’s announced offering of “amnesty” to Twitter users whose accounts were previously suspended for spreading messages of hate and violence jeopardizes human rights globally.
In a joint open letter to the CEOs of Twitter’s 20 largest U.S. advertisers, more than 60 advocacy groups urged the business leaders to cease their advertising on the platform.
“We know that brand safety is of the utmost importance to you. As such, you also have a moral and civic obligation to take a stand against the degradation of one of the world’s most influential communications platforms,” the letter stated.
According to analysis by Media Matters, 50 of the top 100 Twitter advertisers have either announced or seemingly stopped advertising on the platform. “These advertisers have accounted for nearly $2 billion in spending on the platform since 2020 and over $750 million in advertising in 2022 alone,” the organization noted.
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