Dealing with the morning-after syndrome at Facebook

February 29, 2012, 10:00 AM UTC

After the IPO buzz wears off, the new kid on Wall Street will face an old problem: how to adjust to a post-public world.

Any day now there’s going to be one helluva party at Facebook. And why not? Companies don’t go public for a gazillion dollars very often.

So party on, Facebook. Just beware the day after. Actually, beware the year after and the year after that.

Because once Facebook has its massive new liquidity infusion, the company stands to get nailed by something that can hurt a lot more and last a lot longer than a hangover — a changed culture. The reason: It’s just plain hard to generate wide-scale paranoia, passion, and humility — the defining values of an energized enterprise — when everyone’s feeling fat and happy.

And after the party, Facebook is going to be feeling pretty darn fat and happy, especially the people who have been around the longest and control the most action — its senior managers.

Oh, come on, you’re thinking now, Facebook’s managers aren’t stupid. They’re not going to let the IPO wreak havoc with their winning culture. And we agree — with the first part. Sure, many Facebook managers are top-notch. Look what they’ve done so far.

Facebook’s nouveaux riches

But a new world order is about to dawn in Palo Alto, one where Wall Street will soon start demanding to know how Facebook plans to spend the company’s newly created equity. Will it own the social media space by buying Twitter? Will it expand its global reach by rapid acquisition? Such questions are important, of course, and Facebook’s managers will focus on them. Indeed, they must — the only caveat being that strategy making often tends to distract leaders from culture building.

And then there’s another dynamic sure to take hold. After its IPO, Facebook is going to have two classes of citizens. That’s just reality. Some of its 3,000 or so employees — several hundred in number by some counts — will have significant riches in the hand. Newer hires, though, will mostly have options in the bush.

Not good.

Unless, that is, someone makes sure that Facebook’s haves care desperately about the fate of its have-nots, who will do well only if the whole company continues to thrive. “Someone” meaning Facebook’s top-notch managers.

How can they do that? Well, it actually starts with a kind of campaign stumping on their part, complete with vivid imagery about how great Facebook is going to become in the years ahead — if, and only if, every last employee recommits to the company’s mission.

But words are only the half of it. Performance reviews are the other.

Yes, yes, we’ve heard people claim performance reviews are not a Silicon Valley thing. But we would argue that the facts of organizational behavior are universal. If Facebook wants urgency, speed, and intensity around its mission, those values must be evaluated, and when demonstrated, they must result in bonus money and upward mobility — or not.

Not to get mired in the details of Facebook’s HR process. The bigger point we’re trying to make is that good cultures don’t happen by accident.

Like any company with its coffers full and its managers feeling a bit impervious, Facebook — without a top-down commitment to values — runs the risk of letting its guard down and inadvertently creating an organizational mess. Mission and values — and the culture they create — really do matter.

In a few short years, Facebook’s winning culture has brought it a long way. And if Facebook continues to get that right after its IPO, it will really have something to party about.

This article is from the March 19, 2012 issue of Fortune.

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