The most disappointing part of the WeWork saga is not that the recent events happened, but as always it just ends up as chit-chat fodder about Adam Neumann’s flaws, while the most important lessons are lost. Why is there no collective responsibility? The 4000 We Company employees that are about to be laid off (most likely without picking up any relevant professional skills) will expect a deeper assessment.
Disappointment 1: Recent hysteria feels fake
It should have been obvious to everyone for a long time that the We Company has a lot less intrinsic value based on the way it has operated until this point. How much common sense does it take to know that We Company’s recent $47B value [there were significantly larger numbers floated] is completely meaningless? For heaven’s sake, 100-year old Marriott International is valued at $41B as of today!
The single most important data point that told me what was about to happen: I tried out a WeWork space over 4 years ago. The lack of any customer-focused behaviors by inexperienced staff told me that it was a poorly run company. Hyperscale that! If you can’t do the small things right, you are unlikely to be able to do the big things right.
Disappointment 2: Scapegoat syndrome
It is cliche to put the CEO of ONE company in the crosshairs as a scapegoat so that everyone else can wash their hands. WeWork had over 10,000 employees (soon to be 30% smaller) and a lot of “accomplished” investors until 2 days ago. Are we saying that Mr. Neumann (who has no credible work history prior to WeWork) was able to control all the investors and bankers and 10,000 employees into the situation that it is in?
One could argue that it is everyone else, including the biggest investors, that is at fault for not doing their part and only focusing on selfish short-term gains. Everyone just hoped they could pass on the hot-potato to pension funds and retail investors via an IPO and cash out. We will save the discussion about the IPO-process-is-broken movement for another time.
Before Adam Neumann, the whole sector went after Travis Kalanick (Uber). Before that Andrew Mason (Groupon) got a lot of flack. I can only imagine how hard a job it really is, especially when the leader was never been groomed slowly to lead a company. Additionally, these companies are built from the ground. So, unless someone actually stuck their neck out to better the situation and got fired for it, they don’t get a stone to throw.
Disappointment 3: An exception story
The We Company is just the 2019 fall flavor. Truth is that there are many other companies that could use careful inspection and help. It is a shame that lessons that could be learned from this will be pinned on this company and CEO, while the general message about a broad-based need for improvement in growth tactics gets lost.
Taking help as a company, especially a fast-growing one, is a necessary part of success. Often rapid-growth company senior leaders have not had the luxury of being groomed through a variety of experiences over time to take on senior-level roles. A good lesson here could be insistence from all stakeholders, particularly investors, that inexperienced senior leaders are taking help and getting experts involved.
In sum, anyone working with entrepreneurial companies in any capacity has a responsibility for what happens in the ecosystem. There are many strategic and operational lessons to be learned here. Shifting blame to one person and company is a questionable choice that indicates self-preservation and indifference about fundamentals that drive sustainable growth.