The troubles at WeWork — from poorly conceived layoff announcementsOpens a new window to the chief executive’s ill-timed rewards packageOpens a new window — have reached such a crescendo that the real estate and co-working space start-up has quickly become a case study in what not to do when building and running a business.
Last week, ousted chief executive Adam Neumann’s former chief of staff accused the companyOpens a new window of hiring someone to replace her when she went on maternity leave. The former employee said she was discriminated against after she divulged that she was pregnant.
The saddest thing about the WeWork case is that the company is being dragged through the mud due to poor internal choices at a time when it should be taking advantage of the market optimism and investor enthusiasmOpens a new window that characterized the first months of its growth.
Neumann came up with an innovative business model that had a real chance of runaway success but the string of allegations of poor leadership have caused the company’s valuation to plummet. It’s another iteration of the tech industry’s founder problemOpens a new window , in which company founders struggle to transition to the kind of even-handed management that does justice to the employees who make the business run.
Discrimination means poor management
I’m not the first personOpens a new window to make the observation, but it’s generally the case that companies with a discrimination problem generally have broader management issues overall. If managers aren’t able to recognize the value of some of their employees based on systematic discrimination then they aren’t doing a good job of recognizing true value. Running off real talent because you’re not able to empower people across the board is a real liability for the future growth of a business.
Management takes work
Just because a founder came up with a brilliant idea doesn’t mean she or he is prepared to do the hard work of building management models that ensure the structures for success. Articulating goals and creating accountability processes, recognizing when there is growth potential and empowering employees based on their talents and creating the kind of collaborative work culture that lends itself to resilience are all skills that managers have to cultivate.
The moral of this story: Don’t leave it up to chance.
Bad choices snowball
Whatever happens with WeWork, whether it manages to rebuild investor confidence and build back the excitement around its business model, it will face serious problems recruiting new talent. Stories such as the latest discrimination case can dissuade up-and-coming talent from joining a team even if it’s under new management because reputations are difficult to shake once they’re established.
By recognizing the need for a mature management plan from the beginning, start-ups can avoid walking into situations like these.
Toss the pregnancy paradigm
Lingering associations of reduced productivity with pregnancy are stifling business and it’s time to jettison them.
No modern manager can have any doubts that supporting parents is not only the right thing to do, it also encourages long-term loyalty and sends a strong message about a company’s relationship to its employees. As with so many other aspects of work that are being re-examined, real support for employees invariably leads to greater overall long-term workplace productivity.
By revealing outdated biases, WeWork showed itself to be even less relevant than its other missteps seemed to indicate.