• Nuno Moreira da Cruz

Leadership in times of Crisis: The best and the worst in the same week



May 17th 2020

In a recent “Have a great and impactful week” message, we suggested each leader should ask: “How do I want my leadership from this time to be remembered?” The real test to leadership shows up when “bad news” need to be conveyed – especially when those are “you are going to lose your job”. Last week the corporate world saw two examples of the best and the worst of Leadership in times of crisis. In a statement sent to all 7.500 employees around the world, Brian Chesky, CEO and Co-founder of Airbnb explained why almost 25% of its employees will be laid off due to the COVID19 crisis. It is hard to find a better example of transparency and honesty in such a difficult exercise. “I am going to share as many details as I can on how I arrived at this decision, what we are doing for those leaving, and what will happen next”. And he goes on detailing the process that took them to this tough decision - from new strategic direction, to the implementation plan of what needs to be done. This is an uncommon example of inclusiveness. Typically, in these situations, two different messages happen: one sent to those leaving and another one to those staying. He does not do that – he is sending the same message to everybody, making clear how important everybody is and how much he regrets having to do so. This has implicitly two very powerful messages: those who stay understand what they can expect if anything goes wrong for them, and those who leave, get the feeling that they do are important and feel part of the family until the last minute (it is not about them, it is about market conditions). “While these actions were necessary, it became clear that we would have to go further when we faced two hard truths: a) We don’t know exactly when travel will return; b) When travel does return, it will look different”. And he proceeds to explain what comes next, “Since we cannot afford to do everything that we used to, these cuts had to be mapped to a more focused business”. What is this? “Travel in this new world will look different, and we need to evolve Airbnb accordingly. People will want options that are closer to home, safer, and more affordable. But people will also yearn for something that feels like it’s been taken away from them — human connection”. The part of the letter on the decision making process on ”How we approached reductions” will remain as a fantastic exercise of transparency: “It was important that we had a clear set of principles, guided by our core values, for how we would approach reductions in our workforce”. The guiding principles are completely clear in the letter, from the future business strategy to the commitment to diversity. “Here is what will happen next” is, yet again, another masterpiece in terms of transparency and dedication to their key stakeholders – the employees. It details not only the process but everything the Company will do for them: “To take care of those that are leaving, we have looked across severance, equity, healthcare, and job support and done our best to treat everyone in a compassionate and thoughtful way”. And in terms of communication he adds: “I’ve asked all Airbnb leaders to wait to bring their teams together until the end of this week out of respect to our teammates being impacted. I want to give everyone the next few days to process this, and I’ll host a CEO Q&A again this Thursday at 4pm pacific time”. It is specifically impressive the commitment for a 1:1 communication with senior executives for all those impacted. Responsible Leadership in difficult times – how much better can it get? Now compare this with the same sort of measure undertaken by Bird, the electric bikes and scooters company. In 2018, Bird became the fastest company in history to reach unicorn status. Shortly after that, it achieved a $2 billion valuation in less than a year and announced it had expanded to 100 cities with 10 million scooter rides. Bird employees received a generic Zoom webinar invitation titled "COVID-19 Update.". Since Travis VanderZanden (a former top Uber executive, who founded Bird only three years ago), had not addressed Bird's thousand-plus employees since they were forced to leave their offices to work from home, most assumed he was giving an update on the company's response to the worsening global pandemic. And what happened? Bird laid off 406 people in two minutes via Zoom and employees were locked out of their email and Slack accounts as they were told their jobs were gone. Moreover, those invited to the Zoom webinar were exactly the 406 to be dismissed, nobody else – as for the others it would be “business as usual”. Brian Chesky and Travis VanderZanden – how do you think you will be remembered? Have a great and impactful week! Nuno Moreira da Cruz Executive Director Center for Responsible Business & Leadership Católica Lisbon School of Business and Economics