A good CEO should take risks, but shouldn't have to do "big, crazy things" too often, according to Mark Zuckerberg.
The Facebook CEO offered this management advice in two parts in an interview with Y Combinator president Sam Altman.
When Altman asked him for the best advice controversial board member Peter Thiel had ever given him, Zuckerberg quoted him as saying "In a world that's changing so quickly, the biggest risk you can take is not taking any risk."
He continued by saying that if a company is "stagnant" and doesn't make changes, then it's "guaranteed to fail and not catch up."
In the same interview, Zuckerberg also cautions that CEOs shouldn't feel like they need to make huge product changes very often, because that's a sign that the company wasn't forward-thinking enough, listening to its community, and evolving as it should have been.
"So I actually think when you do stuff well, you shouldn't have to do big, crazy things, right?" he said.
He uses Facebook's $2 billion acquisition of Oculus as an example. Ideally, Facebook wouldn't have needed to buy the company, because it would have already had the right talent inside Facebook. But, making big moves when they are necessary — like buying Oculus — is better than than being too proud to make changes, he said.
It's interesting to look at Facebook's recent roll-out of Instagram Stories, which works almost exactly like Snapchat Stories, through this lens.
Facebook said at the launch of Instagram Stories that its community had signaled that it wanted the feature. Although it's easy to burn Facebook for copying Snapchat, the company realized that people loved ephemeral content and made the change, not caring about the inevitable calls of "copycat."
Here's his full quote on doing crazy things:
"We bought the Oculus team for a lot of money. I actually view that as if we'd done a better job of building up some of the expertise to do some of that stuff internally, then maybe we wouldn't have had to do that, but instead we hadn't done that. And the Oculus team is by far the most talented team working on that problem, so it just made sense to go make this big move. But I actually kind of think as CEO it's your job to not get into a position where you need to be doing these crazy things. Of course it's inevitable over the period of doing stuff, you can't be ahead of everything. So it's better to make big moves and be willing to do that than have pride and not do that and never admit that you could have done something better in the past. But I think when stuff is working well, you're learning incrementally and growing that way."
And here's what else he said about taking risks:
"I mean a lot of people, I think, think that...Whenever you get yourself into a position where you have to make some big shift and direction or do something, there always...people are going to point to the downside risks of that decision, and locally they may be right. For any given decision that you're going to make, there's upside and downside, but in aggregate if you are stagnant and you don't make those changes, then I think you're guaranteed to fail and not catch up. So to some degree, I think it's really right that over time the biggest risk that you can take is to not take any risks."
You can watch the whole interview here: