A Couple of Ways to Fire a Bunch of People
...And the buck stops over there. Wayyyyyy over there.
Hello Gobbledeers,
My apologies for not sending the newsletter last week. More specifically, I apologize to reader Gary S., the only person who sent me a note asking where the hell the newsletter was. Actually, he asked it nicer than that. You can always ask me where the newsletter is. The answer is that either it’s in your email on Wednesday, or it’s not. Anyway I got swamped with actual work people are paying me to do and blah blah blah, no newsletter.
Longtime Gobbledy readers have likely long forgotten this column about the pizza that would be ready 3 weeks after you order it. But reader and ticket-slinger Ben K. did not forget and sent me this gem:
Nobody goes to that place anymore, it’s too crowded.
I’ve discussed here my love/appreciation for the I-thought-defunct-except-they-put-out-an-episode-this-week podcast The Content Mines. This week they put out an episode after a 4 month hiatus where they were discussing Substack’s Notes platform (it’s a Twitter-ish tool that allows Substack writers - like me! - to bore you to tears with Twitter-ish posts on the Notes platform).
One of the hosts described Substack Notes as a place where “it’s just everyone inhaling their own farts.”
I was thinking about self-flatulence inhalation (SFI) when reading through some materials from a number of ecommerce platform providers, as I would rather be partaking in SFI than actually reading this stuff. I particularly enjoyed the 3rd paragraph:
Nothing says “simple” like “we simplify the delivery of unified customer experiences that live at the intersection of multiple technologies without compromising technical freedom and flexibility.”
Simple!
So Many Ways to Handle Layoffs
We’re in the middle of a six (?) month run of CEOs doing a terrible job of communicating that they’re laying off people in a company. We’ve had a bunch of new subscribers here (welcome!), so you may not remember the story of the CEO of PagerDuty comparing herself to Martin Luther King after firing a bunch of people (“I am reminded in moments like this, of something Martin Luther King said, that “the ultimate measure of a [leader] is not where [they] stand in the moments of comfort and convenience, but where [they] stand in times of challenge and controversy.”)
There’s been a bunch of those.
I believe we’re seeing these types of gaffes (?) because firing people is hard, and it’s partly hard because the CEO (ultimately?) hired those people and now has to admit that maybe they hired too many people. And if my own life experience is any guide, CEOs aren’t generally great at “this ultimately is my decision” and are often great at “you don’t understand how hard this is for me!”
Won’t somebody think of the CEOs???????
The layoffs continued this week, and I thought it would be a useful exercise to go through how two public company CEOs explained their decisions (spoiler alert: one of them was actually good!).
Cloudflare CEO to Sales Team: You Suck
If you aren’t familiar with Cloudflare, they are a public company that does Internet security stuff. If you are familiar with Cloudflare, they are a public company that does Internet security stuff (your familiarity or lack thereof does not impact what Cloudflare does for a living).
On their recent quarterly earnings call with financial analysts, CEO Matthew Prince was walking them through some changes they’ve made in the organization, including how they’ve recently brought in a new head of sales and one of the first things they did after bringing him in was to fire 100 people on the sales team.
How did they have 100 terrible salespeople working there? Well, funny you asked. According to Prince:
Although we've won a third of the Fortune 500 customers, if we're honest with ourselves, we saw a lot of our success with our enterprise customers because our products were so good and solved real problems that every big company faces. That allowed many on our sales team to succeed largely by just taking orders.
“If we’re honest with ourselves” usually precedes something humble, like maybe “We didn’t prepare for a future downturn” or “I was too focused on inhaling my own farts” or whatever. But no - if he’s being honest, it’s that the product was SO good, it literally - literally! - sold itself. The sales team just answered the phone. Or I guess answered emails. I’m not sure, he didn’t say. But they took those orders, all right! One-third of the Fortune 500! “Our products were so good!”
Well then, everything must be hunky-dory, and you’ve got 2/3rds of the Fortune 500 to go (that’s like 333 or 334 companies, depending on the rounding!).
Because, he continued, “When the fish are jumping right in the boat, you don't need to be a very good fisherman.”
Ya sure don’t!
Then he puts himself at deep, personal risk:
“But at the risk of mixing watering metaphors, as the tide goes out, you get a clear view who's not wearing shorts. The macroeconomic environment has gotten harder, and we're seeing that some on our team aren't dressed for work.” Who’s not dressed in work shorts, I assume.
I’m genuinely, truly curious - how long do you think he took to write that? Like he wrote something, and then came back to it. And then thought, “Oh, I’ve got a good one - they’re not dressed for work! Hilarious!” Also, “watering metaphors?”
But now I’m also confused - the product was so good (“so good!”) that it sold itself, with sales people only taking orders on their order pads. But now, the “macroeconomic environment has gotten harder.” Harder to write the orders down on a pad? But the product sells itself, because it’s so good.
Or maybe they ran out of pads. It’s not really clear.
Once they saw that the pads weren’t filled with orders, the CEO sat down with their new head of sales and they “identified more than 100 people on our sales team who have consistently missed expectations.”
“Simply put, a significant percentage of our sales force has been repeatedly underperforming based on measurable performance targets and critical KPIs. That’s obviously a problem.”
Indeed, it is a problem! Obviously! I thought the problem might be that they were taking so many orders that they ran out of pads! Alas, no. The problem was that they “saw a lot of success” but also the sales team was missing all their targets. Which is not a situation most companies find themselves in.
But companies that DO find themselves in that situation might say, “Well geez, shouldn’t the CEO have noticed that the majority of the sales team isn’t hitting targets?”
They might say that!
But Prince has a different solution, don’t worry. As a matter of fact, they have a “particularly available and actionable solution.” They’re going to fire 100 sales people.
I don’t know why that “particularly available and actionable solution” wasn’t “particularly available” before…but it’s available now!
And instead of hiring a bunch of losers who can’t even write down the fish that are jumping on their order pads, they’re going to hire people “who have a proven track record of success, grit and a strong cultural fit.”
Why didn’t someone think of that before????? That’s a great idea!
Of course, letting people go always hurts, and Prince addresses that head-on:
“While team upgrades are always hard, this is a uniquely good time for us to do this.”
Unless you’re getting fired, har har!
On the other hand…
Ecommerce platform company Shopify let go of 20% of their staff last week, and their announcement is about as good a “we fired a bunch of people” note as I’ve seen.
An excerpt:
We are changing the shape of Shopify significantly today to pay unshared attention to our mission. There are a number of consequences to this, and I don’t want to bury the lede: after today Shopify will be smaller by about 20% and Flexport will buy Shopify Logistics; this means some of you will leave Shopify today. I recognize the crushing impact this decision has on some of you, and did not make this decision lightly.
In the next 5 minutes you’ll get a follow up that tells you if you are affected. There’s no way to make this good news, but we designed a package that will attempt to make it the best possible version of a bad day. I've included details below on how we will support you.
That’s not so hard, is it? (It is, apparently.)
It wraps up:
This is a consequential and hard week. It’s the right thing for Shopify but it negatively affects many team members who we admire and love working with. This is one of those times where both right and hard are true at the same time. My belief is that any enduring company makes a habit of doing the right thing, even if easy outs present themselves. Yet it doesn’t get easier to make a decision like this, and I hope it never does.
Sure, it’s not as funny as some doofus writing about fish jumping into the hands of salespeople and how they suck at their jobs. Hilarious! But sadly it’s actually pretty surprising to see corporate communications that show empathy while acknowledging they’re running a business that requires difficult decisions. Really well done.
Tho, it just hit me that it’s a wee bit ironic that Shopify’s self-serve platform actually DOES sell itself. Huh.
As always, thank you for reading and sharing Gobbledy.
And I love chatting with all of you - If you want to talk about your website or positioning or how to make sure you fire people nicely, here’s my Calendly link.
So you aren't supposed to have a meeting today telling people if they can't login tomorrow then they were part of the RIF? This didn't happen to me directly (I heard this second hand) but if it did, I would have so many questions! Chief among them: what is "tomorrow"? 8am? what time zone? Can I check at 12:01 am? If I can't log into my computer, how I will I take the Zoom call with HR? So in the next few hours I should remove all of my personal files and basically wipe my computer clean, just in case I can't log in tomorrow? And do I get the rest of today off? because who could possible do work with the proverbial axe balancing just above their neck? And what does the survivors guilt look like if you were one of the ones to be "spared?"