The Frances Haugen case: lessons for companies in dealing with whistleblowers

Do you use Facebook? If not, you probably feel the same as many other Germans.

Facebook is not a discontinued model because of this. Last year, both turnover and profit increased, and the company's services are still used worldwide. Nevertheless, there is increasing displeasure on the part of investors and the public.

The image crisis

The main reason is a serious image problem. An ever-growing front of opponents from politics and civil society is emerging. The focus is on the handling of private user data and the business model of the platform and its affiliated services.

Frances Haugen

The defining event in recent months was the appearance of whistleblower Frances Haugen. The former Facebook employee gave an interview to CBS News in which she made serious accusations against Facebook.

According to her, Facebook profits from inflammatory content because users interact with it a lot. Facebook deliberately promotes this and wants to be a hate network, so to speak - according to the accusations.

Furthermore, Haugen accuses her former employer of lying to the public. Internally, no progress is being made against grievances and disinformation, unlike Facebook's public statements.

Reactions

There were strong reactions after Haugen's appearance. The tech giant has become too powerful, they say from almost all political camps. Meanwhile, even the idea of breaking up the company is being discussed.

The bigger problem for Facebook itself is that its reputation among users is also sinking. Users are switching to other messenger services like Telegram, Signal or Twitter. Most recently, hundreds of thousands called for people to leave the network under the catchphrase "Delete Facebook".

Lessons

The Facebook story makes two things clear: First, if you want to be successful as an entrepreneur in the long run, you must orientate yourself towards social norms and values. The idea of connecting people and enabling communication has made Facebook successful. In doing so, the company has achieved a decisive added value for users and society.

If one believes Frances Haugen's statements, it now seems to be primarily about ruthless profit. This will drive any company against the wall in the long run.

Secondly, companies should settle grievances internally before they become public. Whether what Frances Haugen claims is true is not clear. Facebook denies the allegations. But the fact is that the allegations have been made public and thus they stand like an elephant in the room. So, whether they are true or false, the reputational damage has been done.

Prevention

Facebook could have potentially prevented this damage with an effective internal whistleblowing system like whizzla. whizzla allows employees to send anonymous reports to the compliance department. This way, they can inform management about potential wrongdoings in the company and management can intervene.

This is not only about stopping illegal activities, but also gives management the chance to become sensitive to the concerns of the workforce.

Entrepreneurship with attitude is crucial for external and internal impact. whizzla contributes to both the signalling effect and the operational prevention of grievances. Take advantage of the opportunity!