3 Leadership Lessons (or lack thereof) from Better.com CEO
What can we learn from Vishal Garg’s layoff of 900 workers over Zoom?
About 900 employees of mortgage company Better.com were asked to attend a Zoom call on Wednesday (Dec 1). But rather than the encouraging holiday message they were likely expecting, CEO Vishal Garg informed all attendees they were “terminated effectively immediately.”
Videos of the Zoom termination have been posted online. A transcript of the 2:33 minute call is below.
Umm. Thank you for joining.
Umm. I come to you with not great news.
Um. The market has changed, as you know. And, uh, we have to move with it in order to survive so that hopefully, we can continue to thrive and deliver on a mission.
This isn’t news that you’re going to want to hear.
Uh. But ultimately, it was my decision. And I wanted you to hear from me. It’s been a really, really challenging decision to make. I’ve, this is the second time in my career I’m doing this, and I do not, do not, want to do this. The last time I did it, I cried. This time, I hope to be stronger.
But we are laying off about 15% of the company.
The market, efficiency, and performances, and productivity.
If you’re on this call, you are part of the unlucky group being laid off. Your employment here is terminated effective immediately.
What does this mean for what’s next?
You’re going to get an email from HR, askHR@better.com, and your benefits. For all US employees we’re providing four weeks of severance, one month of full benefits and two months of COBRA for which we will pay the premium. So, three months total benefits if we, umm, if you elect for COBRA.
Thank you for each and every one of yours individual contributions to Better. I wish the news was different. I wish we were thriving enthusiastically as we were at the beginning of this year. That’s not the case. And I am sure you will leave us, and be more successful or fortunate, and luckier in your next endeavor.
I wish you all the best of luck. Thank you for everything you’ve done for Better.
I know every busines must make tough decisions. I know labour costs can drown a business. I know layoffs are sometimes necessary. I know having a job is not a forever guarantee. I know the CEO sometimes has to be the bad guy. BUT…!!??
Below are 3 leadership lessons we can learn from Mr. Garg’s inept handling of business reality.
Leadership Lesson #1 ~ Ensure your people feel heard
Even if you dont love your job, getting fired stings (I once got fired on the last day of my final 2 weeks of a job). I can’t think of anyone who likes bad news. But there are of course ways to take a little bit of the burn out of an unwelcome message.
In January of 2008, Starbucks founder, Howard Schultz returned as CEO after an 8-year absence. Shortly after, in an attempt to cope with an economic downturn and increasing competition, Starbucks announced it would close 600 stores and cut up to 12,000 employees.
Obviously, these cuts are much deeper than Better.com enacted last week. But the difference is in how the situations were handled. In Schultz’s own words, here is how Starbucks chose to deliver the bad news to employees.
There are a lot of ways you can communicate bad news. We decided that we had to be in front of our people, so we held a companywide meeting with me at the center to announce the layoffs and closures. We had an open mike, and people went after me. I stood there and answered the questions, and I apologized for making decisions that people thought fractured the trust we had built for so many years. I tried to explain that these decisions were made on the basis of preserving the whole, and that I understood there would be damage. I also explained that we felt incredible compassion for the people who had to leave. You have to be honest and authentic and not hide. I think the leader today has to demonstrate both transparency and vulnerability, and with that comes truthfulness and humility and obviously the ability to instill confidence in people, and not through some top-down hierarchical approach.
In a previous life I managed a sporting goods store. Like all retail business, unhappy customers were not uncommon. But nine times out of ten if you gave the unhappy customer an opportunity talk and tried to show they were being heard, the situation was resolved. People can take a lot of crap if they feel like someone’s listening.
Leadership Lesson #2 ~Don’t make it about you
It’s been a really, really challenging decision to make. I’ve, this is the second time in my career I’m doing this, and I do not, do not, want to do this. The last time I did it, I cried. Holy hell! The 900 people you’re about to axe don’t care that this “really, really” hard. Absolutely no one is feeling sorry for the tough time this billionaire is having. He seems to be looking for sympathy when the situation clearly calls for empathy.
Brene Browne defines empathy as “feeling with people.” She talks about how you show empathy by getting down into the hole and feeling what they feel.
One of the biggest sins when it comes to showing empathy is making the situation about you. “Oh, you broke your leg, let me tell you about the time I broke my leg.” “I heard your uncle died, that sucks, my dad died last year and it was so hard on me.” “You got fired. At least you still have your health. I have leprosy.”
When a leader must give unwelcome news, and this is inevitable, they need to get into the mind and heart of those who need to hear it. They need to know you are genuinely feeling their pain. Your pain is inconsequential.
Leadership Lesson #3 ~Understand the power of “the presentation”
When Steve Jobs would give one of his product introduction presentations, he would choreograph every detail. He was involved in writing the script, creating the visuals, organizing the sound/lighting, EVERYHTING. Then he would rehearse relentlessly.
To a casual observer it is just a guy in a black shirt and jeans talking about some new technology products. But it is in fact an incredibly complex and sophisticated blend of sales pitch, product demonstration and corporate cheerleading, with a dash of religious revival thrown in for good measure. It represents weeks of work, precise orchestration and intense pressure for the scores of people who collectively make up the “man behind the curtain.” -Mike Evangelist, 5 Jan 2006, The Guardian
Jobs knew that these moments were pivotal to Apple’s success. He knew that the presentation was just as important as the information. Vishal Garg may be a billionaire CEO, but he has a lot to learn about “the presentation.”
Garg’s mass firing was filled with um’s and ah’s, poor grammar, business jargon (“market, efficiency, and performances, and productivity”), and nonsensical ramblings. It genuinely appears as if this Zoom call was just one of a hundred things he had to get done that day.
A great leader knows that a well-planned presentation can amplify-good news and soften bad news.
Come on Vishal, you can do better. ~~ Friends, thank you for reading