NASDAQ and the Facebook IPO: The Crisis Management Decision (with Lofchie Comment)

On May 29th, the SEC issued findings and imposed a ten million dollar fine against NASDAQ as a result of NASDAQ's technical problems in connection with the Facebook IPO and NASDAQ's responses to those problems. Chris Clearfield of System Logic is writing a series of articles that examine the technical details of the Facebook problems, NASDAQ's decision making in response to that problem, and the broader implications, from the standpoint of technology and related corporate processes, of what may be learned from the Facebook problems.

The first such article, which discusses the core technology problem that led to the other problems, was published on June 3, 2013. The second article, which discusses NASDAQ's decision making in response to the failure to cross, was published on June 11, 2013. This third article, published today and linked below, examines the human factors intrinsic to decision making that make it hard to call a temporary stop to a process going badly.

Lofchie Comment: The process that author Chris Clearfield describes for coordinating decision making teams to deal with crises is very similar to the process that many firms already have in place to approve new products. Firms will often have in place a product approval process that prevents going ahead with a new product without sign off from each relevant function within a firm; e.g., operations, legal, credit, compliance, business line, and so on.

Click here for System Logic Article on NASDAQ, Part 3.Related News: "Nasdaq Charged for Failures during Facebook IPO" (May 29, 2013).