Over the last few weeks, Facebook has been rolling out its latest redesign. Within days of the first changes, a polling application on Facebook showed that 94% of the 634,484 users who took the poll hate the redesign, and some 1.7 million users signed a petition to bring back the old design.

Author: Ravit Lichtenberg is the founder and chief strategist at Ustrategy.com — a boutique consultancy focusing on helping companies succeed. Ravit works with CEOs, marketing groups, and Social Media managers to craft customer-centric engagement strategies that result in higher customer value, stronger customer community, improved monetization, and higher profitability. Ravit authors a blog at www.ravitlichtenberg.com.

Facebook made more news in recent weeks when the Electronic Privacy Information Center (EPIC) announced it would file a formal complaint with the Federal Trade Commission over Facebook’s updated privacy terms, which essentially make user information the property of Facebook and give it free reign to use it as it may.

By now Facebook should be accustomed to criticism. Despite having had a tremendous growth spurt, it seems to be on a trial-and-error journey, guided by an ever-changing map and an elusive destination. In a way, it acts like a child in transition to puberty, slow to catch up on change, impressed by its new-found power, and definitely not bothered by such nuisances as “planning” for its future. But in the end, by will or by force, it too will have to grow up. What can Facebook do to make the transition less painful? What will it take for Facebook to start thinking like the grown-up company it is becoming?

Better to Have B-Level Strategy but A-Level Execution

That’s what Kulwant Singh, Dean of the National University of Singapore’s Business School, told us each day when we entered his classroom. It’s a pretty basic principle, but one of the toughest for companies to uphold.

Facebook is still a pretty simple business: it is an online platform that facilitates community-building and provides multiple methods and points of interaction for users to express themselves and connect and share with each other. Its strategies, then, should also be pretty simple and its execution near flawless. That hasn’t been the case, however. Facebook has failed to demonstrate that it is truly able to monetize its platform, and it continues to invest in meaningless endeavors, such as the recent redesign. This is due not to a lack of vision or talent but rather to the mile-long canyon between Facebook’s strategy and its ability to execute.

Facebook’s Strategy Simplified

In a recent interview, Sheryl Sandberg, Facebook COO, said the company will be focusing on growing its community and on monetization. To add some clarity to an otherwise generic statement, we can say that Facebook’s strategy most likely includes these three key goals:

  1. Increase user base. Grow network effect even beyond the current 175 million user base.
  2. Increase wallet share. Leverage existing platform and find new ways to make money (e.g. applications, advertising, revenue share on partnerships, paid services).
  3. Maintain and grow leadership in social media/networks. Effectively compete with and beat other online media platforms and
    tools on which users spend time and money, or form a partnership (like with Twitter) for a piece of the action.

As with all strategic plans, each of these goals can be further broken down into multiple objectives, each of which has its own specific requirements. All that’s left to do is execute them. But in Facebook’s case, the flow from strategy to execution is disjointed, resulting in a very bad case of broken telephone. What should have been a relatively easy and flawless execution has turned into a terrible blunder that continues to put Facebook in the hot seat for not realizing its potential.

Facebook Vision Realized

While it may have started out as a project by a couple of passionate students, Facebook today, like most successful startups, is in the business of making money. Advancing this vision does not mean spending what must have been countless hours of team meetings to discuss the corner radius on the new profile chicklets. Nor does it mean risking getting sued for quietly attempting to take over user data. It’s time to lay down some fundamental principles to help Facebook bridge strategy and execution:

  1. Start thinking like the large company you are becoming. Instead of kneejerk responses to competition and internal whim, Facebook needs to set a long-term vision and work backwards, taking into consideration priorities, technological capabilities, and company as well as (most importantly) user needs. When a company knows what targets to keep its eyes on, it can choose one of many roads depending on the circumstances at the time.
  2. Choose an identity and stick with it. Is Facebook a fun startup, or a large successful company? Engineers and geeks, or business people? Is it about connecting or sharing information? The next couple of years are going to shape Facebook’s identity and redefine its culture, focus, and value proposition. Planning ahead by testing a few ideas can be of tremendous help to reducing noise and confusion.
  3. Listen to your users. It’s not just about blogs, notes, and user comments. Facebook should proactively seek to understand its growing base of user segments, their needs and desires, and their relationship to upcoming technologies and Facebook’s own strategic objectives. This will enable Facebook to design a complete experience (not thumbnails) that turns users into customers, while making it extremely difficult for competitors to match the experience.
  4. Grow with your market segments: While Facebook may have started with tech-savvy early adopters, it is now certainly crossing the chasm and attracting different user segments. Does Facebook understand the value proposition it offers to each of these segments? What about the growing base of 35- to 49-year-olds who are now flocking to social networks? Does Facebook know how to keep its original evangelists active? Keeping a close eye on these evolving segments and making sure its services speak to their unique needs will be key to Facebook’s success.
  5. Implement a co-creation architecture. Facebook could learn a great deal from the open-source environment by creating both feedback and contribution channels. The addition of OpenID and the increased flexibility for developers were significant steps forward, but they need to be integrated into a more holistic tool set and be linked to a strategy that answers more than, “How do we make money off our users?”
  6. Dare to change. Fear of change is one of the greatest pitfalls of established businesses and makes it easier for startups to take a significant share from them. Apple’s iPhone, BlueNile, and Zappos are but a few examples. Only by focusing on the whole experience and daring to break out of its own mold will Facebook maintain momentum and growth.
  7. Seal those gaps. This is a tough one for most people, more so for companies. It means pulling up the curtains, going from room to room, and figuring out what works and what doesn’t. It also means sitting down and devising a strategy to address all those gaps in a way that enhances the business while not hindering its operation. Not an easy task, but crucial for growth.
  8. Stay honest. Stating that public-figure pages are good for users is borderline disingenuous, and placing friends’ photos on ads is probably grounds for lawsuits. Take the example of Hulu CEO Jason Kilar, who says clearly that ads mid-program are Hulu’s way of monetizing an otherwise free platform. Facebook should clearly distinguish between pursuing business objectives and meeting users’ needs and should thus communicate the true intent of its actions.

For a people-based business, it’s shocking how little attention Facebook pays to understanding its own users. Less shocking is how poorly it has been executing its strategy, given the nature of this developmental stage it is going through. Parents often look for signs that those terrible teenage years are over and that their child is finally coming out of his or her self-involved state. For Facebook, this will happen when execution matches strategy, when the terms “user” and “customer” are integral to every single one of its strategic goals, when useless design tweaks finally meet their end, and when Facebook provides services and goods that users actually want. If nothing else, though, we can always take comfort in knowing that teenagers don’t stay teenagers for long.