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Monday, April 15, 2024

Sheryl Sandberg and the Death of 'The Deal'

Five years. That’s how long Sheryl Sandberg figured she’d be spending at Facebook, now called Meta, when she took the job as chief operating officer and Mark Zuckerberg’s much-ballyhooed partner in 2008. Enough time to modulate the company’s swaggering culture into something sustainable, build a wildly successful ad business, and set up a policy operation in DC. And to establish herself as an international standard setter for female executives. Then she’d be off—maybe to run for office or to head a giant company like Disney.

But it wasn’t until today, 14 years later, that Sheryl Sandberg has announced she is leaving the company. For an ambitious corporate superstar like Sandberg, 14 years at the same post—and not the top one—is an eternity. Most observers pegged her as leaving some time ago, either forced out by the collapse of the company’s reputation in the wake of relentless privacy and content management scandals or simply wearied by having to defend it all the time. But she stuck around so long that even the company’s name changed.

So who can deny her the flowery prose of her 1,529-word farewell post—suitable for a Medium “I’ve got personal news” essay but loyally posted on the Facebook blue app Feed—where she profusely thanked her colleagues and boasted of all the good things her company did for its users and small business owners. She even cited some random woman in Poland who sells stuffed animals on the platform. Like every other public communication coming from her, it was carefully crafted, to the point that you could hardly tell the company is among the world’s most castigated. The scathing part of the news came not in her upbeat resignation letter, but in Zuckerberg’s farewell to her.

Sandberg’s tenure would always be shadowed by the deal she made with Zuckerberg when she joined. While she reported to Zuckerberg, the then-23-year-old CEO gave her tremendous autonomy over certain parts of the company—the non-product domains that interested him the least. It made sense for Sandberg to take charge of selling ads. But according to The Deal, her world also included communications, lobbying, policy, and other non-engineering areas. At one point, the chief security officer reported to the general counsel, who reported to Sandberg. When things fell apart after the 2016 election, the troubles in Sandberg’s world were slow to find their way to Zuckerberg. The consequences were disastrous. Zuckerberg later explained to me that he didn’t see The Deal as a mistake, but a necessity. “It would have been impossible, not having the life experience in all these areas, to internalize all the different parts of what running a company could be,” he told me.

In his post today, Zuckerberg dolloped out appropriate gratitude and praise for his departing COO. But while Sandberg’s essay painted her tenure in the rosiest tones imaginable, Zuckerberg’s statement was a giant corporate course correction. He proclaimed that Sandberg’s departure marked the end of an era—and then he mandated changes to Meta’s organization to make sure nothing like that era will ever happen again. Sandberg’s putative successor, Javier Olivan, will assume “a more traditional COO role,” he wrote. Olivan, who cut his teeth on the company’s runaway growth organization, won’t be running parts of the company on his own, as Sheryl originally did.

Some of that had already been in motion. The first big change came last year when Zuckerberg gave the responsibility for policy and communications to senior VP Nick Clegg, who formerly reported to Sandberg. The chief legal officer, Jennifer Newstead, was also shifted to a Zuckerberg direct report. But today, even as Zuckerberg celebrated Sandberg, he ripped up her organization and put it more directly under his control. The head of HR, Lori Goler, will report to him as well. That puts Maxine Williams, the chief diversity officer, also in Zuckerberg’s domain.

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Zuckerberg rightly points out that much of this team was recruited by Sandberg and claims that only a “superstar” like her could have shouldered such corporate responsibility in the first place. But then he says that regardless, the terms of his partnership with Sandberg were unsustainable. “Meta has reached the point where it makes sense for our product and business groups to be more closely integrated, rather than having all the business and operations functions organized separately from our products,” he writes.

And with that go the last traces of The Deal.

Sandberg will gradually transition out of Meta, not leaving until the fall, though I suspect a lot of energy will be expended on her wedding to marketing executive Tom Bernthal this summer. (The engagement was exclusively photographed by People Magazine.) She says she doesn’t know what’s next for her, except for plans to step up her involvement in philanthropy.

But the tragedy of Sheryl Sandberg—if one can use that word to describe a celebrated billionaire executive—is that everyone saw her using this job as a stepping stone to something even loftier. Not slipping away one beat before the regulators descend, with no firm plan in mind. A few years ago, I broke down the various setbacks to her expected ascension in a Grand Theory of Sheryl, which I actually had a chance to run by her.

It was the final interview I had with her for my book about Facebook. We had sat down several times, but the interviews were unsatisfying. Sandberg had been super cautious in those discussions, which she booked in her customary 30-minute slots. I pushed for a two-hour session, an unheard-of ask for those who book her calendar. Amazingly, she agreed.

That was when I spun the following theory to her: After joining Facebook in 2008, she was poised to leave after a successful IPO—ideally to run for office. But the public offering in 2012 was a disaster, ending in lawsuits and recriminations. Not a good time to leave. By the time she and Zuckerberg proved that the company was a business juggernaut, Sandberg suffered an actual tragedy: Her beloved husband Dave Goldberg suddenly died. Quite understandably, Sandberg remained at Facebook while she coped with her grief. Meanwhile, the open Senate seat most people thought she coveted went to Kamala Harris. And then came the 2016 election, and Facebook’s woes after that. Sandberg was honor bound to stick with the company until it—and her own reputation—recovered. But while the bottom line thrived, the company’s woes continued. There was simply no good time to leave.

Sandberg pushed back a bit against my theory—specifically maintaining that Goldberg’s death was not a “stick around moment” but just an all-around cataclysm. And she insisted that she had her eye on an administration post rather than a Senate seat. But she conceded that, in general, the theory was correct—bad timing kept her in the job at several points. At the time we talked, in March 2019, when she’d been at Facebook for over a decade, she felt tremendous responsibility to stay and try to fix the company with Zuckerberg. “It’s going to take more time, and years,” she told me.

Facebook/Meta might not be fixed, but Zuckerberg has determined that it’s time to move on and refocus on the metaverse. Reorganizing for that new mission meant dismantling what’s left of The Deal. And now Sandberg, after 14 years of accomplishments and screwups, has her exit ramp. Let the rehabilitation begin.

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