Under Pressure
Cue the song...under pressure....
The feds haven’t declared this current slump a depression, but it sure feels like one, doesn’t it? As I write this post, about 40,000 jobs have been lost as the tech sector continues to tighten its belt and braces for economic headwinds and global uncertainty. When the market sours, executives and senior leaders don’t ignore it. Long gone are the days when tech companies could ‘ride’ out recessions because they were flush with cash. These days, they must prepare for the worst, including making some tough decisions.
However, in almost every company I have worked for, when executives make hard changes, their employees often look at them with a healthy level of skepticism. Employees frequently believe that the changes made by executives are not beneficial for the long-term health of the company or are short-sighted in nature, and executives become frustrated with employees for not understanding their rationale for the tough changes. Essentially, both sides retreat to their corners, viewing each other with deep distrust. It doesn’t have to be this way. In a previous post, I explored what employees can do to navigate a tough time. This post focuses on how executives and senior leaders can make those tough decisions without losing the trust of their employees. Let’s dig in!
Don’t hide the pain - I still vividly remember this. Me, sitting in a massive auditorium, listening to the new president of our company. I remember their suit looking very expensive. Sorry, I digress.
This was sometime in 2009, and the housing bubble was very close to bursting. The newly hired president talked about how well things were going and also requested feedback from the employees on how to improve our work lives. A few weeks later, the firm laid off 3,000 employees and, in the course of the next year or so, laid off another 6,000. Every time I heard about a colleague being let go, the president’s fake dog and pony show ran through my mind. Why didn’t they just tell us the truth?
Executives often think of their employees as temperamental children. One misguided reason senior leaders tend to hide the truth about how the company is doing from their employees is that they fear employees will start focusing on the worst-case scenario and stop being productive. Well, guess what? They’re already thinking about it! Another reason executives tend to gloss over the truth is that they worry employees will start looking for new jobs and stop being productive or that the company will have a capacity problem because employees will bail en masse. Well, tech employees are already doing that anyway, recession or not. Tech employees are constantly seeking greener pastures.
I treat my team as adults. I tell them when things aren’t working. If I miss my numbers and get yelled at by my board, I tell them. If the company is in financial trouble, I tell them. I know different executive teams and companies have various thresholds for sharing bad news, but I would recommend against not sharing any news and then turning around to do a layoff. The only thing I wouldn’t share is personal information like individual salaries, but aside from that, I’m fairly transparent with my teams.
Have a clear call to action - You can’t show them pain without offering the remedy as well. After sharing the company's precarious situation, provide your team with a way forward. Whether it involves putting in more hours, pivoting to a new roadmap, or whatever the case may be, let them know how they can contribute. In my experience, even the most disengaged team has a 50% chance of getting fired up again when you put them under pressure, give them a clear goal, and ask them to hit it. If you don’t have a way out, be honest. If the company is facing bankruptcy, tell the employees what’s happening instead of stringing them along or, worse, sending them on wild goose chases that lead only to disappointment.
Make yourself available - During moments of crisis, it’s important to spend time with your team. Set aside time to meet with them regularly and provide consistent updates about what is happening with the company, whether the team’s efforts are helping turn the tide, future next steps to take, the competitive landscape, or anything else that could assist your team in making better decisions to navigate the crisis. When I engage my team in crisis resolution mode, I hold a weekly meeting with the entire team where we review the work completed, address blockers, and answer any questions they may have. Lastly, many leaders I coach dislike taking on the role of a therapist for their teams. Unfortunately, during crisis situations, it’s a necessity.
Be Human - If everything fails and you have to let people go, close the entire company, or sell your business at a bargain price, remember that the individuals you are about to let go are real people with lives, families, dreams, and aspirations. Try to do the right thing by them. Provide as much support as you can through severance, COBRA coverage, and placement services. I also extend my network and connections to those I had to let go and direct opportunities their way. Please do the same if you can. And please don’t lay them off via a mass email or a group Zoom call.
Until next time!
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Leadership Coaching - If you are an engineering or product leader and want to learn how to make high velocity decisions under pressure, shoot me a note at info@maheshguruswamy.com. I am limiting the number of coaching clients I take on, so don’t wait :)
Book - If you are struggling with how to navigate messy leadership conversations and haven’t picked up my book https://www.amazon.com/How-Deliver-Bad-News-Away/dp/B0D7FHTTNN …tsk tsk tsk. Just kidding, please buy my book :)
Is this written by AI? Stumbled on this from HN