How the power players do it - by Fortune senior editor at large Patricia Sellers

Facebook COO Sandberg: How to build a business

October 24, 2012: 10:59 AM ET

So, Facebook (FB) knows how to grow. On Tuesday, the company that everyone loved to discount reported better-than-expected profits and a 32% increase in third-quarter revenue to nearly $1.3 billion. The stock is popping.

Substantial credit goes to Sheryl Sandberg, Facebook's chief operating officer and CEO Mark Zuckerberg's No. 2, who has learned a thing or two about scaling businesses. When Sandberg  joined her previous employer Google (GOOG) in 2001, that company had about 275 employees. By the time she left for Facebook in 2008, she recalls, Google had about 20,000 employees. During the past four years, she has seen Facebook grow from 550 to more than 4,000 employees. In the past year alone, active Facebook users increased 26% to more than 1 billion.

When Sandberg regretfully bowed out of this year's Fortune Most Powerful Women Summit, I asked her if she would do something else: share her expertise on scaling an organization. She agreed and sums up the challenge for any company this way: "If you can't envision where you're going to go, you're not to get there."

Having both advised and learned from the two guys who top Fortune's 40 Under 40 list--Zuckerberg (No. 2) and Google CEO Larry Page (No. 1)--she came up with three guidelines:

Think Big. While management is "the science of administering a business," Sandberg says, "leadership is the art of accomplishing more than the science of management says is possible." Thinking really big--such as making the world more open and connected, which is Zuckerberg's vision--gets people excited. They follow the leader not only because they are paid to follow. They believe. "Repeat the mission," Sandberg advises. "Only by stating what's most important and by framing the conversation can you keep everyone focused."

Hire big. Sandberg's organization at Google grew from four to 4,000 people in five years. Which meant that the original four employees had to do 10 or 15 years worth of growing in a very short period of time. Sandberg learned a lesson from this: "Hire for what you think you're going to need," she says. "Hire people who are more qualified, have more experience, or are right out of school but can overachieve." Make sure that the person you're hiring to manage a 100-person office can manage the office if it reaches 1,000 people.

Plan big. Early on, Sandberg and her fellow Googlers celebrated everyone's birthday on their actual birthdays. "The problem was, six months later, we had so many people that we couldn't possibly celebrate everyone's birthday on that day," she recalls. So, Google shifted to weekly, then monthly, then quarterly celebrations. "We had these ginormous sheet-cakes with everybody's name on them," Sandberg recalls. "If I had been better at thinking ahead, I would have realized that celebrating everyone's birthday on the real day would not scale." Plan events and celebrations that will scale, she advises. For instance: Zuckerberg's hackathons--when Facebook engineers and tech talent gather to share products and features they developed outside their main jobs. "You can do these with three, 3000, or 30,000 people if we ever get there," Sandberg says, dreaming of Facebook's future growth.

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About This Author
Pattie Sellers
Pattie Sellers
Senior Editor at Large, Fortune
Executive Director of MPW/Live Content, Time Inc.

Pattie Sellers has written more than 20 Fortune cover stories including "Marissa Mayer: Ready to Rumble at Yahoo," "Muhtar Kent's New Coke," "Oprah's Next Act", "The $100 Billion Woman" (Melinda Gates), and "Gone with the Wind" (Ted Turner). She co-founded Fortune Most Powerful Women and oversees the Fortune MPW Summit, the preeminent gathering of women leaders in business and beyond—and programs such as Fortune MPW Entrepreneurs and the Fortune-U.S. State Department Global Women Leaders Mentoring Partnership. Pattie also develops Live Content across Time Inc. Her blog, Postcards, is about how power players lead and navigate their careers. Pattie won Time Inc.'s prestigious MVP award for her performance in 2012.

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