Connect the Dots: Facebook IPO and “Done”
(This article is somewhat off topic, but it’s a way of tying a key project management concept into current events.)
For the past few days, lots of pundits have been complaining or agonizing over the Facebook IPO.
As you probably know, Facebook’s IPO was priced at $38. It briefly went up to $42, then dropped back near the offering price at the end of the day, and (as of this writing) has fallen to around $30.
There’s a lesson in project management here: who should be agonizing over the stock price?
- Buyers who bought Facebook shares on the first day.
- Morgan Stanley, which took Facebook public.
The answers are “probably,” “a bit,” and “no.”
Buyers: I have no idea what Facebook stock will do in the future, nor do I care very much. (I do hope my financial planner didn’t buy any, however.) That said, it’s likely most buyers are unhappy right now. But they’re not the point of this article.
(Too-long-for-a-footnote footnote: The stock offers no dividends, so the only reason to buy it is the “greater fool” theory, in which you hope that someone else will at some future date pay even more than you did. Sometimes it works — see the early years of MSFT, GOOG, AMZN, AAPL. Sometimes it doesn’t — see Webvan, Pets.com, etc.)
Underwriter: Morgan Stanley made a lot of money bringing Facebook public — and, from Facebook’s standpoint (see below), they did it very well. Other companies contemplating IPOs will likely think well of them as they look for underwriters. On the other hand, they have some egg on their face with the general public and will probably face lawsuits in this litigious society. So it’s a mixed blessing. As of this morning, the story is looking less promising for them, with the press portraying them as having bungled the offering.
Facebook: Facebook should be (and likely is) thrilled. After all, what’s the purpose of an IPO? To raise the maximum amount of capital possible.
Facebook did just that with Morgan Stanley’s help — they sold lots more shares than expected at a higher price than expected.
That was their “Done” — raise as much money in the capital markets as possible.1
They achieved it, perhaps even overachieved.
So What Does FB Have to Do With LPM?
In any project, different parties are likely to have different views of “Done.” Legal is particularly problematic, since there is rarely a black-and-white “Done.”
Consider litigation, where winning in court, winning on appeal, the other party dropping the suit, settling early with no bad publicity, and settling on the courthouse steps can all be positive outcomes.
Indeed, you can lose by winning — e.g., face so much bad press that even winning outright in court doesn’t cover the damage you incur.
What might these five players in a product-quality litigation might consider “Done”?
|Product Development Manager||Prove product isn’t flawed|
|Chief Marketing Officer||No bad publicity|
|General Counsel||Don’t get fired|
|Lead Outside Counsel Litigator||Crush the other side in court|
I’m kidding — somewhat — about the GC’s desires, but it’s often hard for the GC to look good in a litigation no matter what the outcome precisely because there are so many different “Done” statements in play.
By the way, in my classes and in my book Legal Project Management I spend some time talking about how to deal with and reconcile multiple versions of “Done.” It’s one of the most critical-to-success things you’ll do as a project manager. (It’s also critical at times to continued employment.)
On your next project, think about the Facebook IPO. Remember Facebook’s “Done.” (Perhaps they haven’t done a good job of communicating their idea of “Done,” but I’m not sure it will matter in the long term.)
Don’t let other people define your “Done” just because they’re defining theirs. Be clear on what your own “Done” is, and understand that there is rarely a single or unanimous-consensus “Done.”
Now go to Facebook and Like this… oh, never mind.2