A Tight-Lipped Zuckerberg: The Face of Facebook in the Congressional Hot Seat

So it’s over. Facebook’s founder and CEO Mark Zuckerberg has spent two days being questioned by Congress about Russian and Cambridge Analytica malfeasance involving Facebook’s platform, and the verdict from Wall Street is that Zuckerberg did great. Over those two days, the stock price rose more than 5%, adding over $24 billion to Facebook’s capitalization and personally netting Zuckerberg around $3 billion. That’s not a bad return on Facebook’s investment of hiring a team from the law firm WilmerHale to put Zuckerberg through “charm school” before the hearings began.

So far so good, but how did Zuckerberg really perform? Can Congressional leaders and the American public believe what Facebook’s CEO said? The nonverbal signals suggest otherwise.

The goal was for Zuckerberg to come across as humble, contrite, and trustworthy. That would be Zuckerberg as kindly Dr. Jekyll (in a newfound suit and tie) and not the evil Mr. Hyde version (in his usual gray t-shirt and hoodie) as emphasized in the movie The Social Network. Yes, Zuckerberg (mostly) said all the right things. “Our top priority has always been our social mission,” Zuckerberg intoned right on-message as he spoke of “connecting people” and “building communities.” But often the CEO wasn’t especially on-emotion when it came to appearing open-minded and open-hearted regarding users’ concerns about privacy and transparency.  Examples abound.

041318-01 Zuckerberg

 In an opening statement mea culpa, Zuckerberg told the Senators “I’m sorry” while glaring at them defiantly.  Is Facebook a monopoly? Zuckerberg managed a forced smile as he asserted that it “certainly doesn’t feel like that to me.” But by then, his eyebrows had already shot up, while averting his gaze, in initially reacting to Senator Lindsey Graham’s query. Clearly, the question had hit its mark.

041318-02 Zuckerberg

Sometimes, Zuckerberg backtracked. For example, Senator Diane Feinstein wanted to know: “Why not ban Cambridge [Analytica from accessing data]?” Of course, the real answer is that Facebook’s business model depends on harvesting and sharing people’s personal data. So Zuckerberg’s voice got tight and his mouth pulled wide in fear as he dodged the question by saying Cambridge Analytica wasn’t an advertiser (and therefore seemingly immune to any ban). After a break and conferring with “his team,” however, Zuckerberg informed the Senators he’d “misspoke.” Zuckerberg gave that admission with his eyes wide, alert to whatever danger his fudging might bring.

041318-03 Zuckerberg

All in all, it’s true that the Senators and Representatives didn’t extract any firm, worthwhile promises from Zuckerberg to do better in terms of users’ privacy. The team that was so quick to inform Zuckerberg that he’d misspoken in regards to Cambridge Analytica’s initial status as an advertiser apparently couldn’t be as quick to provide specific solutions for the concerns Congress was raising. Relatively unscathed, an ever more confident Zuckerberg eventually moved by degrees to being his usual reckless, happy-go-lucky self.

041318-04 Zuckerberg

Asked point blank by a member of the House of Representatives on day two of his testimony, “Why should we trust you?” Zuckerberg felt comfortable blithely smiling his way through his answer.

041318-05 Zuckerberg

At 1 Hacker Way in Menlo Park, California, “move fast and break things” remains the unofficial model of an enterprise that first found its footing by posting photos of Harvard female students being often harshly ranked by other (male) students regarding their beauty. Anger was Zuckerberg’s primary mode during the hearings, a closed, tightly-expressed emotion about wanting to be in control and move ahead as you see fit.  Zuckerberg’s initial, angry Mr. Hyde tendency, on display this week on Capitol Hill, doesn’t bode well for Congress or users getting anything close to what they want from Facebook going forward. Advertisers, well, that’s another story altogether.

The Incoming Tide: How Facial Recognition and Facial Coding Will Feed Into A.I.

I pioneered the use of facial coding in business to capture and quantify people’s intuitive emotional responses to advertising, products, packaging, and much more. So I’m a believer in Cicero’s adage that “All action is of the mind and the mirror of the mind is its face, its index the eyes.” Yes, an awful lot is in the face: four of our five senses are located there, and it serves as the easiest and surest barometer of a person’s beauty, health, and emotions. But Cicero’s adage also leads to the question: whose eyes serve as the interpreter, and how reliable are they?

An article in last Saturday’s edition of The New York Times, “Facial Recognition Is Accurate, If You’re a White Guy” raises exactly those questions. Usually, in “Faces of the Week” I focus on what I guess you could call the rich and famous. But in this case I’m showcasing Joy Buolamwini, a M.I.T. researcher whose TED talk on algorithmic injustices has already been viewed almost a million times on-line. Hooray for Boulamwini for documenting just how accurate facial recognition technology is to date. Take gender, for example. If you’re a white guy, the software has 99% accuracy in recognizing whether you’re male or female. But if you’re a black woman, like Boulamwini, then for now you have to settle for something like 65% accuracy instead.

021218-01 Joy Buolamwini (resize)

The implications of such errors are enormous. The Economist, for one, has written about the emerging “facial-industrial complex.” In airports, cars, appliances, courtrooms, online job interviews, and elsewhere, a tidal wave of uses for automated facial recognition software, emotional recognition software (facial coding), and how both will feed into artificial intelligence (A.I.) systems is well under way.  So it’s no laughing matter when, for instance, a Google image-recognition photo app labeled African-Americans as “gorillas” back in 2015.

In my specialty, I’ve doggedly stuck to manual facial coding in researching my newest book, Famous Faces Decoded: A Guidebook for Reading Others (set for release on October 1, 2018). And the reason is accuracy. A knowledgeable, experienced facial coder can exceed 90% accuracy, whereas the emotional recognition software that forms the second wave behind the identity recognition software that Boulamwini has investigated is, at best, probably in the 60% range as companies like Apple, Facebook, and others weigh in. As Boulamwini has shown, even getting a person’s gender right can be tricky. Then throw in not one variable—male or female—but seven emotions and the 23 facial muscle movements that reveals those emotions, often in combination, and you can begin to see why the task of automating emotional recognition isn’t a slam-dunk.

Add in the influence of money to be made, and credibility suffers because the big claims of accuracy never go away. Plenty of firms offering automated facial coding services claim in excess of 90% accuracy, knowing that they won’t be able to attract customers by acknowledging a lower rate.

That makes for embarrassing moments. One company claiming 90% was appalled when they asked my firm to test and confirm their accuracy. When we found it to be at maybe half that level of accuracy, they rushed to provide us with the results from an academic contest in which they placed first by achieving 52% accuracy (based on standards we weren’t privy to learning). Another company’s software we tested showed all seven emotions flaring into strong action at a certain moment in time. In actuality, however, the person’s head had merely tilted a little—with no big burst of feelings having actually taken place just then. In another instance, automated facial coding software reported that the three judges in a mock appellate hearing had been so endlessly angry that about 75% of their emoting had supposedly consisted of anger during the proceedings. If so, that would have been an astonishing rate considering that the rapper Eminem was, at 73%, the single most frequently angry person in my sample of the 173 celebrities I manually coded for Famous Faces Decoded.

I could go on and on with such examples of automated facial coding not yet being ready for prime time. The case of another firm’s software supposedly detecting emotions in a plastic doll placed in front of a web cam to watch a TV commercial also comes to mind. Meanwhile, the reactions of the three companies Boulamwini tested for the accuracy of their facial recognition software are equally telling. China-based Megvii ignored requests for comment before the NYT’s story was published. Microsoft promised that improvements were under way. As for IBM, the company claimed to be on the verge of releasing identity recognition software nearly 10x better than before in terms of detecting dark-skinned women more faithfully. What’s the old saying in Silicon Valley? If you’re not embarrassed by your initial launch, then you waited too long.

Week 1, 2018: Trump and Bannon Feud, Saban and Smart Prepare to Do Battle, and Thiel Gets Even Richer

Grumpy Old Men

010518-01 Steve Bannon

While North and South Korea try talking out their differences, war has broken out elsewhere here at the start of 2018. Don’t expect Donald Trump and former chief strategist, Steve Bannon, to be talking again anytime soon (except through lawyers). In Michael Wolff’s newest  book, Fire and Fury: Inside the Trump White House, Bannon gets quoted calling Donald Trump Jr. “treasonous,” Ivanka Trump “dumb as a brick,” and the president himself likely to be in legal trouble for money laundering.  For his part, Donald Trump is suggesting that Bannon has “lost his mind” and is “simply seeking to burn it all down.” Despite the verbal warfare, it’s not just the nationalist-populist, alt-right movement the two men brought to the White House that links them, however. They also remain strikingly similar in emotional terms: precious little happiness, above-average disgust and—most of all—a wealth of sadness, all the better by which to instinctively appeal to those who want America to be made “great again.” With a now backtracking Bannon reminding folks that Trump is “a great man,” Bannon looks to be the likelier of the two feuding men to be adding soon to his natural store of regrets, disappointments and all-around woe.

Close Quarters?

010518-02 Kirby Smart & Nick Saban

Some scores get settled in courtrooms, other scores emerge on a football field. With the national college championship getting decided this year by a game between Alabama and Georgia, the official word is that there’s “nothing personal” about a contest that pits Alabama’s head coach Nick Saban against his long-time assistant Kirby Smart. Eleven is the key number here. For 11 seasons, Smart helped Saban amass victories; and 11 times, Saban’s former assistants have come up against him and lost. Will this time be different? It could be. Already, Smart’s won one battle: Just two seasons after Smart left Alabama, Georgia finds itself now atop the 2018 recruiting class rankings, with Alabama in fifth place. So if Smart can’t win this year, maybe next. What might be helping Smart lure the best players? It could in part be as simple as the fact that emotions are contagious, a principle that carries over into happiness. Smart shows a third more happiness than Saban does over the course of patrolling sidelines and sitting in press conferences. Smart also smirks less. Are those kinds of emotional tendencies just plain, well, smart? Do they not only possibly help win over high school players and their parents, but also help settle a team down and lead to victory? We’ll find out after the kick-off if the underdog Bulldogs of Georgia can keep the game close. (Saban’s 11 victories against former assistants have all involved wins by a margin of at least 14 points.)

Serious Money, After All

010518-03 Peter Thiel

Back in my junior high days, a friend and I printed our own currency, Krump Notes, all the better by which to bet on poker games at lunchtime in the cafeteria. We didn’t want anybody’s nose getting bent out of shape by losing a pile of real cash on a losing hand. Now comes word that PayPal co-founder and early Facebook investor Peter Thiel is sort of all in when it comes to Bitcoin. Thiel’s Founders Fund has amassed holdings of between $15 and $20 million (chump change for Thiel, actually) in Bitcoin during 2017, causing the newly disclosed holdings to inspire a 13.5% climb in the virtual currency’s value after some recent volatility in its outlook. Thiel could yet take a bath on Bitcoin, but don’t bet against him. From bankrolling Hulk Hogan’s suit against Gawker to seeing his candidate take the White House, Thiel’s on a roll. What kind of person can be so successfully opportunistic again and again? To me, with Thiel it’s all in the eyes. Some years ago, I decided to investigate what might help make somebody a great lead-off hitter in baseball. The strongest statistical pattern in terms of facial expressions was a tendency to come to the plate with eyes open wide, seemingly looking for gaps into which to poke the ball. Think of hunters. Think of Derek Jeter. Think of Peter Thiel. Think about Cooperstown’s heroes or Silicon Valley’s serious money entrepreneurs, or me with my former stash of Krump Notes: same stratosphere, not really.

From Wells Fargo to Uber, Anger Rides Roughshod

The saying “The buck stops here” has certainly taken on new meaning in an era of enormous executive pay. But in focusing in this case on a pair of CEO’s, let’s not overlook the fate of their less-well compensated employees and abused customers.

Two companies stand as cautionary tales. The first is Wells Fargo, with its brand image of a stage coach heralding the San Francisco-based bank’s heritage in the Wild West. The other is the ride-sharing service Uber, also based in the Bay area, a start-up already valued at nearly $70 billion. While Wells Fargo and Uber represent the old versus the new economy and are in different sectors, ultimately they share one problem in common: newly departed leaders that have run roughshod over others.

The founder and now former CEO of Uber, Travis Kalanick, has gotten more media ink, making him the juicer target to start with. Should the company’s backers have known there was going to be trouble before it erupted into public view? Absolutely, if an emotional read of Kalanick’s temperament has any bearing. I’ve facially coded dozens of company leaders and Kalanick is way out of the normal range on a key barometer: anger. That emotion constitutes nearly half of Kalanick’s emoting – a level I’ve seen in only one other executive, Mark Parker of Nike, who has the saving grace of also showing three times more sadness as Kalanick. (By the way, in 2015 Parker was named Businessperson of the Year by Fortune magazine.)

What makes anger so dangerous, and why might sadness be an offsetting benefit (at least in Parker’s case)? In the now infamous Uber ride caught on camera on Super Bowl Sunday earlier this year, Kalanick is heard telling one of his fellow passengers regarding Uber’s corporate culture and future goals: “If it’s easy, I’m not pushing hard enough.” Anger can be about assertiveness and trying to take control of your circumstances in order to make progress, as befits any entrepreneur like Kalanick. But excessive anger brings us back to the underlying reality that anger causes people to hit out or even demolish whatever presents itself as a barrier to progress and control.

Sometimes that “barrier” was the few women at Uber, generally ignored, except when being  sexually harassed in one of Silicon Valley’s ultimate “bro culture” firms. Sometimes it was the regulators that Uber was seeking to hoodwink and bully. Sometimes it might have even been Google, whose driverless car designs Uber may have pilfered illegally. In contrast, the offsetting advantage of sadness is that it is often an empathetic, caring emotion. Paired with anger, sadness can soften anger’s rough edges. Whereas anger wants to race ahead, sadness in effect puts on the brakes and helps us ponder the consequences of our actions.

Whereas anger wants to race ahead, sadness in effect puts on the brakes

“Bullshit,” says Kalanick on that Super Bowl evening to the driver who complains that changes in Uber’s business model have devastated him financially. Now leaning forward inside the car to refute and berate the driver, Kalanick comes out of the shadows and is clearly angry. His lips are compressed, and they stay tight as he calls the driver one of those people who “blame everything in their life on somebody else.” The driver’s retort, as Kalanick leaves the car in a huff, is to tell him: “I know you won’t go far.” How prophetic that remark proved to be given Kalanick’s recent, forced resignation!

The Wells Fargo situation was another mess long in the making. As it turns out, for up to half a decade the company’s very modestly paid tellers and other employees were being told to pursue a total of eight separate accounts per household.  Why such a high standard for cross-selling, when the industry average was maybe half of that? “Eight rhymes with great” was always the answer of the now-departed CEO John Stumpf. Forged signatures, stolen social security numbers: those were among the tactics that beleaguered employees resorted to, hoping to fulfill their inflated, arbitrary, cross-selling quotas. And in instances where they didn’t get there, over 5,000 “team members” were terminated.

Uber WF Blog Photo (resize)

A couple of years ago, Stumpf was caught on camera talking about how “You can’t teach caring.” I guess Stumpf was right, at least in his own case. When he next was memorable on camera it was to testify before Congress this past September, with a hand conspicuously bandaged because apparently he hurt it the weekend before “playing with his grandchildren.” Really, that was the cause?  I’d lay 5 to 1 odds on that excuse as opposed to actually slamming his hand into a wall, or something else, while boiling over with anger knowing his goose was cooked.

Before Congress, Stumpf was his usual self. His right eyebrow raised repeatedly in a clear sign of fear, accompanied by eyes wide open and a mouth that pulled wide. Is fear endemic to Stumpf’s personality? Or does all that fearful emoting, over the years, reflect the emotional toll of enforcing results by whatever means necessary? Who wouldn’t be uneasy when you’re being asked for the number of senior leaders at Wells Fargo who got fired for the cross-selling fraud, and the answer is exactly zero?  It must be hard to talk about “deepening relationships” with customers when actually cross-selling is all you mean. Moreover, an uneasy Stumpf must have known the mess he ended up leaving his former colleagues at the bank.

Always look for the repeat patterns in people’s behavior. They tell the truth more than words ever will. The latest news involving Wells Fargo is a lawsuit accusing the bank of making improper changes to people’s mortgages, changes that would extend the loans for decades, changes that would net the bank far more in earnings over the course of the elongated loans. What was that sanctimonious observation, again? Oh, yeah: “You can’t teach caring.” What Stumpf was actually good at was selling off $13 million worth of Wells Fargo stock just prior to heading to Washington, D.C. to dodge the bad news as best he could.

“Baby Buffett” Takes a Bath on Valeant

Investor Blog (Resize)

No stranger to being in the business news headlines, William A. Ackman is at it again. This time, however, it’s for suffering a loss of about $4 billion for his investors after his firm, Pershing Square Capital Management, finally dumped its holdings in Valeant Pharmaceuticals. How does a billionaire investor like Ackman handle buying 27 million shares, on average, for $190 and selling for $12.11? He declares that “I have an enormous stomach for volatility,” and tries to quell the humiliation by having his firm say the change of fortune enables it to “realize a large tax loss.”

Only later in his annual letter to investors would Ackman admit that he had made “a huge mistake” by wagering so big on Valeant.

Eating humble pie certainly isn’t Ackman’s style. He cuts a dapper presence and as recently as last year was hailed by Forbes magazine as a “Baby Buffett” for becoming the hottest new name among the so-called activist investors who used to be known as corporate raiders. What distinguishes Ackman emotionally? Easily his most common facial expression is a combination of a slightly cocked right eyebrow, steely-eyed glares and slight, frosty smiles. Alert, determined and only a little congenial, Ackman couldn’t be temperamentally farther from the Sage of Omaha, Warren Buffett.

Bold with blind spots is a phrase that could describe both the since-departed CEO of Valeant and Ackman.

If Buffett has a signature expression, it’s the combination of furrowed eyebrows and a hearty smile. There’s a warmth to Buffett that eludes Ackman. Buffett exudes folksy charm, and his furrowed eyebrows express, among other feelings, an emotion that Ackman and his investors could benefit from: sadness. One advantage to sadness is that it slows you down and makes you more reflective. Certainly, Ackman has enjoyed coups. But he’s also been burned by his holdings in J. C. Penney and his on-going spat with the senior management at Herbalife may end badly for him.

At 28, Ackman made a name for himself by bidding for Rockefeller Center. Pershing Square’s office in Manhattan features a jet fighter’s ejector seat as a reminder that investors can bail on a bet any time they choose. The reminder is helpful, I suppose, but do Ackman’s investors fully understand that he’s not really running a hedge fund that hedges against risk so much as pushing the envelope again and again?

Valeant was a spiritual fit for Ackman, a pharmaceutical company rapaciously buying up other companies and refusing to do its own research and development work to establish new drugs. Bold with blind spots is a phrase that could describe both the since-departed CEO of Valeant and Ackman. Being a “Baby Buffett” on the other hand is a non-starter of a comparison. A Buffett lieutenant called Valeant a “deeply immoral” company for its loose accounting practices and price-gouging strategy. Ackman shot back at one of Buffett’s most famous investments, Coca-Cola, chiding the company for contributing to obesity and diabetes. Both men are wealthy investors, but one has plenty of EQ and the other isn’t bothered by himself or the management teams he invests in lacking it. A cocker spaniel and a pit bull are both dogs, for instance, but there the similarity ends.

When Every Kiss Begins with Groping

Sterling Jewelers Blog

Surprise and fear are closely aligned emotions because many a surprise is unwelcome and all surprises require adapting to strange, new circumstances. By now, sadly, many of the female employees of Sterling Jewelers are well past the surprise stage in recognizing that they inhabit a corporate culture rife with problems. A gender bias suit against the company goes all the way back to 2008, and involves a downright shocking 69,000 women joining in allegations focused on pay and promotion inequalities.

Some of the details coming to light now go far beyond those inequalities, into the territory of sexual harassment and, at times, even reports of rape. It apparently became common practice over the years for male managers at Sterling’s mandatory managers’ conference to be seen in swimming pools with topless female employees. Or for a woman who wanted a promotion to submit to “going to the big stage,” according to company lingo. At times, male managers would allegedly send scouting parties to the company’s stores to find female staffers to target for sex.

It should be no bouquet of flowers for Sterling that they’ve used arbitration to hold off settling the various charges for almost a decade by now.

Where was senior management during all of this? Joining in, it would seem. The allegations also accuse Sterling’s CEO, Mark Light, of demanding sexual favors and joining in the pool parties himself. Every corporate culture comes from the top, down. So it’s hard to take much solace in Sterling’s official denials, which emphasize that the bias allegations are separate from the almost 250 women and men who describe the company as a hotbed of sexual harassment.

It should be no bouquet of flowers for Sterling that they’ve used arbitration to hold off settling the various charges for almost a decade by now. Or that plenty of other companies also, regrettably, struggle with reports of gender issues. This is Sterling Jewelers, after all, the parent company of various brands, including Kay Jewelers – whose slogan is “Every kiss begins with Kay.” We should be thinking about romance, weddings, innocence, white dresses, and not female employees being groped.

Studies that have pitted male mice in battle have found that winning increases the secretion of testosterone and invites risk-taking. Winning makes the superior mice welcome returning to the place of their previous conquests. When asked if he was a man or a mouse, Groucho Marx said: “Give me a piece of cheese and you’ll find out.” Mark Light commands a salary of over $3.5 million and stock awards that exceed $4 million, but I guess that’s not enough to keep him from heading for the pool.