What kind of leader are you?
Thursday, 1st December 2022
Leading is easy in the good times, when all graphs are trending up and to the right, profits are increasing, and headcount is rising. But the task of leading, motivating, and decision making becomes harder in the crucible when conditions take a turn for the worse.
As the technology sector retrenches after a period of rapid growth, Twitter, Patreon and Stripe provide a useful contrast in leadership styles at times of crisis.
To explain why they were cutting 14% of the workforce, Stripe’s co-founders Patrick and John Collison jointly penned an email to all employees. Over the course of 1,354 words, they lay out in detail and clear language why the layoffs are happening. They candidly admit responsibility for the decisions that led them here.
There’s no attempt to hide behind buzzwords, jargon or euphemisms.
There’s no attempt at evasion, or blaming only outside forces. It’s not hard to imagine many leaders reaching for readymade excuses like the geopolitical environment or the energy crisis. Instead, they take full responsibility for the decision.
“Around 14% of people at Stripe will be leaving the company. We, the founders, made this decision. We over-hired for the world we’re in (more on that below), and it pains us to be unable to deliver the experience that we hoped that those impacted would have at Stripe.”
Jack Conte, the CEO of Patreon, took a similar approach when announcing the difficult decision to lay off 17% of the company’s workforce recently. From the very first line, Conte was clear about which departments were involved in the layoffs. The third sentence then pivoted quickly and effectively to empathising with those most affected:
“Before I get into the reasons for this decision, I want to recognize that today will be difficult for much of our team and even harder for those leaving Patreon.”
For Conte and the Collisons, sorry doesn’t seem to be the hardest word. In fact, it appears in the opening sections of their respective letters. Empathy and clear explanation shine through.
Contrast that with Twitter, which Elon Musk recently bought for $44 billion. Musk quickly concluded that Twitter was top-heavy and haemorrhaging money, and went about an extremely rapid cull. That’s his prerogative, of course – he owns the business and doesn’t feel he ‘owns’ the mistakes of his predecessors. But it’s worth reading the memo he sent to staff, studying its cold and distant language.
“In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday. We recognize that this will impact a number of individuals who have made valuable contributions to Twitter, but this action is unfortunately necessary to ensure the company's success moving forward.”
It is worth saying that Elon Musk may believe he had no choice about his unapologetic approach given the amount of money Twitter is losing each day. And he was not at the helm when the company grew too fast. (Former CEO Jack Dorsey recently took responsibility for Twitter’s current situation.)
Nevertheless, these examples raise interesting questions about leadership. According to Lauren Landry of Harvard Business School, effective leaders are transparent in their actions, they balance hard truths with optimism and act decisively.
Qualities like kindness and compassion are important for leaders, according to Arthur Brooks, a Harvard Business School professor and bestselling author. “Great leaders fight contempt and bitterness by personally modelling warm-heartedness. Kindness and compassion are not for weak people. They are for leaders,” he has said.
If your business was in a similar position, have you reflected on how you might handle this scenario? If you’re interested in exploring your own leadership potential, or deepening your skills as a leader, find out more by visiting the Advanced Leadership Programme from Timoney Leadership Institute.