Thoughts on Jeff Weiner’s “Pay No Attention to the Stock” Message

From everything I’ve heard for a long time, Jeff Weiner is a wonderful guy and great CEO.  In addition, LinkedIn is certainly a great company, so please don’t view this post as dissing either Jeff or the company.

I will say, however, that I found media coverage of Jeff’s now famous all-hands speech after the stock fell nearly 50% in a day (and the company lost $11B in market cap) to both be rather fawning and to miss one absolutely critical point.

Here’s the video:

http://www.slideshare.net/linkedin/jeff-at-company-all-hands

What Jeff Got Right

• He faced the issue directly.
• He communicated quickly.  (Conveniently they seem to have biweekly all-hands meetings already in place which made that easier.)
• He made good arguments (e.g., this happens in public markets; we are the same company we were yesterday, with the same vision and the same team; we are well positioned against macro trends)
• He spoke with great delivery and articulation
• He was authentic and sincere

What the Media Missed
Jeff’s basic message — when you strip to the core — is “ignore the stock price.”  This is absolutely the right message.  Markets are fickle, stocks go up and down seemingly without reason, markets over-correct punishing errors severely (particularly for companies price-for-perfection liked LinkedIn) — having worked at several public companies and often with insider status, I can assure you that (1) daily fluctuations are usually inexplicable from the inside and (2) employees will go crazy if they pin their emotions to the ups and downs of the stock market.  So the best advice is:  ignore it.

However, the place where most CEOs fail is that they only want to ignore the stock price when it goes down.  You can’t send emails celebrating* a big uptick, have a party when you break $50/share, or anything like that and then have an ounce of credibility when delivering the message that Jeff so successfully did.

I know Jeff Weiner is very smart, so I’m guessing that LinkedIn never put employee focus on the stock price on the way up, so Jeff’s message is credible on the way down.

But the question isn’t how beautifully your CEO can say “ignore the 50% drop in the stock price” the day after the stock goes down.  The question is what the CEO says and how he or she behaves on the way up.

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* I’m OK with celebrating IPOs as long as you celebrate liquidity and not the day-one stock uptick.  One way to see the day-one uptick is the amount of value left on the table that the company did not capture for itself in the IPO pricing process.  Some of that is normal and part of the process; too much of that is, well, nothing to celebrate.