EP 106: Navigating layoffs and post-layoff transformations. Maintaining company culture and encouraging strategic growth.

Join host James Mackey on this episode as he sits down with David Hanrahan, Chief People Officer at Flare. Together, they discuss the difficult challenges executives face when recovering from layoffs and reorganizations in today's market conditions.

David shares valuable insights from his experience at Eventbrite, explaining how the company navigated through tough times, handled plummeting morale, and emerged stronger. They also delve into the importance of setting clear goals and aligning operational structures with strategic shifts.

Employee attrition after layoffs is another critical topic they explore, shedding light on how to tackle this issue by considering talent management systems and talent reallocation. The conversation also covers the delicate balance between transparency and sharing long-term strategies while managing uncertainty.

The episode concludes with a focus on employee engagement and the challenges companies face when transitioning back into growth mode.

0:36 David Hanrahan’s background
3:01 Navigating layoffs and post-layoff transformation
10:23 Navigating business objectives and principles
21:26 Workforce changes and setting goals
27:54 Company communication and navigating uncertainty
35:19 Managing growth and culture transitions

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Our host James Mackey

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Transcript

Speaker 1: 0:27

Hello, welcome to the Breakthrough hiring show. I'm your host, James Mackey, very excited for today's episode. We are joined by David Hanaran. David, thank you for joining me today.

Speaker 2: 0:36

James, thanks for having me.

Speaker 1: 0:38

Yeah, let's jump into it. So we have a lot of exciting topics today, actually some of which we haven't discussed on the show. So everybody tuning in this is going to be a good one for you. Before we get started, david, could you please share a little bit about yourself and your background?

Speaker 2: 0:51

Yeah, so I'm David. I'm Chief People Officer at a company called Flair, which is a legal tech company. I can share more about them and I've been there since January, but I've been in this line of work for over 20 years. I started in a very different industry but for the vast majority of that 20 plus years have been in tech. So Electronic Arts is one of the bigger such companies I was at earlier in my career, but really I would say that most of my time has been in what I'll call growth stage tech companies places like Twitter, zendesk, eventbrite, more recently as some recognizable companies.

Speaker 2: 1:29

Maybe there were a few hundred employees going to a few thousand. Maybe they were just pre-IPO and then they were going through some liquidity event or going public, or they were just public as of a year or two prior to me joining them. So there's a stage there of a few hundred going to a few thousand employees. I've really enjoyed because it's like we've got product market fit. Maybe we're Series B or later. We see this growth potential for us and the co-founder, the CEO, the co-founders. They desire a lot from their people team to sort of up level in all sorts of people practices. They see the connection between culture and their ability to deliver on the business and deliver to their customers, and so that's where a lot of my impact has been is helping people teams up level, helping to bridge sort of ideas of the co-founders and the exec team to the people team and creating alignment there and ultimately just creating high performance, highly engaged, like really best in class workplaces that are delivering high performance.

Speaker 1: 2:27

I love it. We're going to have such a good conversation. A quick question so you were at electronics arts, were you there? I think you were there the same time as Steve Cadigan, right?

Speaker 2: 2:38

Yeah, steve is one of my favorites. So when I was there he left to go to this company we never heard of called LinkedIn. He's like I'm going to go be their first VP of people and we're like okay, wow, never heard of them and had a great career and I think that was it for him. Then he moved into his kind of consulting and influencer career, but Steve's great.

Speaker 1: 2:59

Yeah, he's on my board for secure vision. I've worked with him for several years and I've always had a really great experience. So that's a small world. That's pretty cool yeah for sure.

Speaker 1: 3:10

Well, hey look, the first topic to dive in today we wanted to talk about the current market conditions. A lot of organizations are, over the past nine months, have gone through reorganizations, layoffs and really, at its core, it's like a true transformation in terms of how businesses are operating and thinking about doing the best they can in this market, conditioning and conditioning and positioning themselves for the future. I think it's. It could be quite challenging, right it's how do companies recover from going through a reorg and layoffs? I think it's hard because our focus seems to be like we have to be really dialed into revenue retention, these types of things, and it's at the same time, we have the employee experience and we have a team that we need to heal and make sure that employee engagement is strong. So what are you seeing out there? Like how do you think about how executives can help their company kind of overcome some of the challenges of post layoffs and making sure that folks stay engaged?

Speaker 2: 4:18

If you zoom out to this and think back to I don't know 2020, 2021, great resignation. The shift to remote work pandemic induced lots of venture capital out in the market, lots of e-commerce companies and companies that were growing because of a lot of consumer shifts from. Covid created this, I think, a very different challenge for CEOs and chief people officers, which is how do I retain all this talent, how do I compete with these thing companies to retain my talent, to hire people that I need? And just the massive shift that has happened just in the span of a year or two to now. It is how do we do more with less? There's no more venture capital out there or it's very little. It's much more competitive and it's less of the employees market, more than the employers market. That can feel like really disorienting around, sort of having a coherent view as a chief people officer or CEO what are our sensibilities, what do we believe, what do we believe about our culture? And then how does that change in terms of how we manage it? But just if I was to look up at some of the stats here at a website called trueupio slash layoffs, I think it looks like early in the year was some of the peak activity for layoffs. So it looks as if, potentially, I'm an optimist, but it looks as if, at least in tech, layoffs have lessened a little bit as we've gone from January to the middle of summer. But my company's not immune to it, my prior company's not immune to it.

Speaker 2: 5:50

And back to your question I found that what has happened just when I've been in the mode of having to assist a team or a company to navigate that navigate. We have a reduction here we need to manage through in order to continue to be viable. There's a lot of energy that's placed into getting through that day of getting through. We know we need to cut. Now let's go back and forth. What are our assumptions on that? How do we approach this? What all is factored in here? Is it just headcount? Is it non-headcount optics? You place a lot of energy into that and it can be draining and it can lead you to believe that once we get through it and once we communicate on the day of our work is really done. But just thinking about my event-brite example, the work in terms of that is a change management exercise. We're going to transform the company. We're letting go of 20% of the company of 50% of the company. That is suddenly a new chapter. You're opening as a company and it's essentially starting with a very bad story. The first few paragraphs of this chapter are bad. It is morale plummets. We're having to let go of people who are beloved and by many others, and that's the start of the chapter. The rest of the chapter is the transformation.

Speaker 2: 7:08

When I was at Eventbrite, I remember this moment and so the Eventbrite riff in April 2020, it was really born out of the fact that live experiences were suddenly going to come to a standstill. Eventbrite as a company pre-pandemic, going well. There was about a year and a half post-IPO. I joined them in November 2019, q1 rolls around, we're kicking off, we're having worldwide kickoffs and gosh, this is going to be a great year. There's this little news thing. We keep seeing everyone something out of China that feels a little bit concerning, and it was so swift how it suddenly just changed the live experiences industry.

Speaker 2: 7:46

Smaller competitors were going out of business and we went through a series of really white-knuckled decisions to figure out how are we going to navigate this. One important principle that Julia the CEO and I credit her for rallying us around this is we're going to emerge from the stronger. If you can think about it back to that time, emerging stronger from a pandemic that's going to wipe out live experiences for the foreseeable future was really hard to buy, and yet that was her perspective. We were able to do that because I think we saw a number of decisions that we could do that. Okay, if we do this, if we're going to build this company all over again, if we could start over, tear it down to the studs and build this all over again, what decisions would we choose? Now that we couldn't, if not for this massive sea change in our industry, we made a conscious decision we're going to emerge from the stronger.

Speaker 2: 8:42

I think some companies don't do that. When they're navigating, hey, we're talking to the board, the board is telling us we're going to have to cut by 20%, or they're giving us that feedback and now we've aligned a cut. What they orient around is let's get through the cut instead of let's do this and emerge stronger. I think that's one big principle that companies that, if they're facing this now, should consider.

Speaker 1: 9:07

I love that. I think that that's a really powerful insight let's talk about from a operational structure. How do you even start thinking about that? So you have the kind of the mission of, okay, we're going to come out this stronger, we're going to make a lot of core changes that maybe we couldn't before. What places do you really look to? And then, how do you actually get the buy-in from the organization? I mean, is it really just like presenting the mission of like, hey, we're going to come out of this stronger, or are there other things that you're doing for employee engagement? So I just more specifically like where your focus is going and what high leverage things can you do?

Speaker 2: 9:45

Yeah, so kind of start the initial planning stage, which is there's probably some conversation and then the chief people officers is pulled in, ideally very early, but it's. We're looking at this number, we're all eyes on this number of like okay, there's no way around it, we need to cut somehow. And so we've gone back and forth with the board on an overall optics cut that we have to navigate. And now it's how do we get there? And all sort of credit. Colleen McCreary is someone who when she was at Credit Karma she said she pushed on the idea of does it have to be a layoff? Can we just do? Can we do salary reductions for all employees? Can we do something here other than cutting jobs? Because if we need all these jobs, then we're just going to. You know, we're going to hurt ourselves ultimately by cutting jobs that we need.

Speaker 2: 10:33

So you first start with what is the number, what is the goal, what is ultimate? What are we trying to accomplish here? If it's just cutting, is that all we're trying to accomplish? Are we trying to accomplish something else? We're trying to accomplish a change. We're going to change how we manage customer service. There's a business change here. In the case of the temp right. We decided we're going to exit a bunch of markets and we're going to focus just on seven core markets. We're going to not be a vertical business but a horizontal business, and we're going to lean into self-serve instead of like a really heavy sales approach. So there was there's probably some overarching principles there on the business that we're trying to achieve, and the cut is going to be one way that we accomplish that. Then I think what's important early on is to think about your principles for how we're going to navigate this. Potentially, some of the values of the company help us determine how we're going to manage this painful situation, and so one example that I'll use is at my current company. My last company, when we had to go through this, part of the nature of the values was really about how much we valued each other and live interactions and the sort of the human interaction.

Speaker 2: 11:41

So the companies that have decided to lay people off over email and like, hey, it's just going to be a transaction, we're going to cut this person, they're just going to wake up and like they, no one talks to them, they just get an email is very different to you know. That's not how we operate as this business. These are tough decisions that involve humans. So I think you start with some. You start with, like, where are the business objectives? And then what are, sort of like, the human objectives, what are the principles, the values that we're going to navigate through this?

Speaker 2: 12:07

I think I've found it's important to have, like them, to create a structure around that who's part of the core team, who are the stakeholders whose project managing it, and then start to create the sort of timeline for ourselves.

Speaker 2: 12:21

I'll stop there and see what questions emerge for you, but those are kind of three things to sort of you know the business objectives, and it's not just about a number, but it's also about something else we're trying to achieve as part of this, which is back to like we're going to emerge stronger. We're going to achieve these business objectives and hopefully emerge as a stronger business. The second are principles for how we're going to navigate this. I'll credit two people in my prior team, tanya, and my current team, meredith, is like you know, that's where their heads go as well. And then, thirdly, is start to create a structure by which we're going to stay connected, communicate. These are private conversations or we're creating a Slack channel, we're creating cadence by which we're going to actually sort of manage the project team, project timeline, and then a host of things sort of emerge from those three.

Speaker 1: 13:04

Right, and I think what we in our prep call we actually wrote down several things that are mistakes that organizations make as well. Like so they might. I think one thing you mentioned is like they might make the strategic shift in terms of this is okay, this is, even if they get it right in terms of this is how a cut's going to play into a strategic shift right to come out stronger. Maybe they're not thinking about operationally building out the right processes that are aligned with that Right, so like I think the example you might have given is like, okay, you're going to be making this push in the enterprise, but the way that things are structured from a process perspective don't necessarily reflect that shift in strategy, right.

Speaker 2: 13:43

Yeah. So I've seen mistakes here in the past where we say the business, we're moving from a very sales driven business model to a tech driven model, so meaning we're going to create technology that is so easy to use and so appealing that we're not going to need as big a sales team and in fact some of the sales operations or some of the functions there, which is like they just there's not a place for them in this new model. So do we have the tech team to do it? Do we have the designers? Do we have the leadership there? Is there a structure there? Do we have retention hooks in the key talent that are going to like really deliver the plan? And so we realize at Eventbrite that once we navigate this, we're going to have a lot of flight risks, and so we put some special stock plans together for where we had risk, where we had concerns around key talent. That's not a panacea, though that doesn't solely solve for that. In some cases you might have big holes, so like we're actually going to need to recruit.

Speaker 2: 14:48

So at Eventbrite, you know we were leaning. We were basically saying we're going to have a self-serve product. That's the vision, and so it's going to change the makeup of the company. It's going to change where, like, the center of gravity goes. We didn't have a CTO at the time, so we were going out with this message to the company of, like, this is what we're going to do, and one of the first questions is how we're going to do that without a CTO. So you know, we need to recruit a CTO. But this is again, if you don't have sight of what the longer term business objectives are and what are the assumptions, what must be true for us to accomplish this. I think a guy, huggy Rao maybe coined the term pre-mortem, like let's pre-mortem if this fails. Like what's going to cause this transformation, this reorganization, to fail? That would be. One such example is if we just don't have the tech team to achieve this big pivot.

Speaker 1: 15:41

Right Just to dial in on attrition, right, like folks that might be leaving after you go through a layoff, that theory kind of come to pass where you've seen that? I mean because, like, one of my initial thoughts is, well, sure, like you're going through layoffs but other companies are as well. So are you actually seeing increased attrition? I mean, my experience is limited in that my company, securevision it's embedded recruiting an RPO. Like when we do layoffs, everyone else in our industry is like kind of tied at the hip Like everybody's doing them and like internal companies are laying off recruiters, so we don't see additional attrition from the remaining staff. But I'm sure there's of course many different situations of companies in different industries within tech, right that maybe that's more of the case. So just curious, like, has that really come to pass into what extent?

Speaker 2: 16:34

Yeah, I can call it a few different examples or few experiences, and maybe it's different right now with the very changing tech market. So if I'm an employee and I've seen my company go through a rift, am I in the same mental spot as I was during the Great Resignation, when I've got recruiters sort of barging down my door, I think even in cases of other functions and dev functions I think it's maybe a little different than it was at the height of the craziness during the Great Resignation. However, in general my experience is yes, as soon as you go through a rift, you have this morale plumbit which then has a connection to ultimate regretted attrition or voluntary attrition out the door. And there's a bit of a lag there in terms of like okay, wow, news here, and then in the ensuing 60 days then you might start to see something pick up because people are suddenly answering the phone calls, but it takes about 60 days to get through an interview process or so to decide what you want to do next. So you are at risk as a company to attrition or at least disengagement, morale plummeting in the period right after your rift, somewhat commensurate, according to the research I've seen, somewhat commensurate to the size of your rift and how well you managed it.

Speaker 2: 17:46

So when I was at EA many, many years ago it's probably a very different company than it is now, but the gaming industry at that time would do like successive rifts, so meaning they would just like a game would close and they would riff that team or a portion of the team and then reassign them elsewhere. Or at EA we just kind of struggled with like every year there was a rift, and so it just became a bit of a running joke of like when's the rift for this year? And that exacerbates attrition. When you like someone once told me you want to like cut once and deep, as opposed to we've had to sort of cut three times in a row this year. That just erodes trust. To build trust back, you have to have a plan that is going to work and like hey, if we execute on this plan, watch and see what happens, parts say that's true if six months later we're doing it again. And so I think that puts a challenge on the people, teams and the leaders to sort of to build confidence back if you're cutting multiple times, which we did at EA.

Speaker 2: 18:49

At Eventbrite we had a very large rift. It was almost half the company and, yeah, the morale just plummeted. We put retention hooks and a lot of our staff in terms of in forms of equity, we did what we could around sort of culture initiatives, but that first few months afterwards it was like whoa, it's heightened but then it started to drop off when on both the people plans what we're going to do culturally to sort of rebound, as well as the business Once we could show wins in the quarters down the road, then you start to see this lessening of the attrition and an uptick in the engagement. And so by the time I was leaving Eventbrite, engagement was higher than it was before the riff and attrition was down. But that takes time. I think it takes time to really rebuild the engagement and it takes consistency and being able to point to wins and not leaving people with the impression that something here's not working if we're riffing again six months later, nine months later.

Speaker 1: 19:48

That's oddly interesting and something that just kind of I was thinking about as you were talking was I think I initially thought of it when you were talking about electronic arts but the concept of talent management systems and being able to reallocate folks onto different teams. I think that that's like theoretically it seems pretty straightforward, but for a lot of companies that's really difficult to do and the companies you worked for. Have you seen any companies do that really well? Like would companies start to get to a few hundred employees plus? Maybe that's when they start thinking about this. But it seems that a lot of companies almost would prefer to just cut deep and rehire versus like they don't necessarily have really built out talent management programs or systems to where they can try to plug people into different roles.

Speaker 1: 20:40

And of course you have differences of skill sets. That could be an issue, and then the organization behind it can be really difficult. It takes a lot of time and energy resources. You could start wherever you want philosophically specific examples, but I would love to learn from you here on this one.

Speaker 2: 20:55

Yeah, I think there is probably a difference. If you're like small series A we've got a hundred employees and like making payroll each month, the amount of money we have in the bank is very different than an EA or just a larger company where we can try something out for a bit to see what works here, and we're so large where we're finding pockets of talent that have somewhat overlapping skill sets. So could recruiters move into customer roles? Could customer roles move into sourcing roles? Could we put some folks into SDR roles as a trial for a period of time?

Speaker 2: 21:36

I know that some companies try and maybe consider furloughs or something like that, but in my last company, eventbrite, we had to let some of the recruiting team go, but we kept a sizable contingent that didn't have any recruiting to do for a few months and what we did was we had them help affected staff find new jobs.

Speaker 2: 21:56

So their goal for two or three months was not to recruit but to actually help folks find new jobs, and that was with a belief that ultimately we're going to need a team here. We don't know when we're going to need a team, and it happened because we were starting to lose some folks and there was an opportunity. We're going to recruit some new folks who buy into this vision, which then helps the engagement and helps like, hey, we're getting people who are mission aligned. Now with this new strategy, we have and thank goodness we have a recruiting team that we saved there, I think at the smaller levels I've seen some companies consider having an intact team, whether it's customer service, sales team, maybe even a dev team, that are outsourced to another company with with for a few months we don't have work. One of my colleagues I saw had his recruiting team actually assigned to helping other companies recruit talent for their companies, because he was just confident that he needed a recruiting team. He just didn't have the need for it now. So maybe some other.

Speaker 2: 22:59

maybe another company will pay me for my team as a loan so that they can be assigned to another company and I just get we get paid for that to navigate through this period. So harder, for I think it's harder for smaller companies, but there's there's definitely ideas and there's ways you can navigate that.

Speaker 1: 23:16

I think it's like gets back to what you're saying about how you handle the riff right, Like, if you can, what you're saying about reallocating recruiters time to helping folks on your team find their next role. It also gives people confidence, like, okay, that you really do care about people. And then, two, if there is another round of playoffs like they're not going, they're not going to be on the street, right, they have a severance package and they have help, right, People that are going to help them find the next role, which I think it's like one of the I don't know, maybe this was a Steve Categan line, but I can't remember. I just heard from someone. It was like you know, the way you handle riffs is just as much for the people that stay as for the people that leave. Like, when you're thinking about severance packages, you're also thinking about from no-transcript.

Speaker 2: 24:06

Yeah, yeah, I think I believe that for sure, and there's a there's a desire for the staying employees to know how the exiting employees were treated. So, you know, just to sort of say, hey, we're gonna have a private conversation with these individuals who are impacted is probably not sufficient. Like being more transparent around. This is the process we went through. This is the why. Here's here's okay, we're in all hands. The day after we we went through this event, there was an email about it. Now let's lean into over communicating because everyone's heightened attention to this worried.

Speaker 2: 24:39

There's a level of fear here for even the staying employees and concern for how we treated people. Let's lean into that because we're going to have to build trust back. That's what you're dealing with is is trust, respect, confidence has suddenly plummeted and you can't just say we're done and okay, yeah, we had a riff, but now we're moving on. You have to lean into the fact that people are going to be anxious and curious about information. So we would lean into sharing. Here's the why, here's what led us to that, here's what we considered around, that. Here was here's all it was affected and why. You end down to like teams and sort of impact and why. And then how do we treat the staff who are affected? And then what is the go forward? To a certain point, you guys start talking about the go forward and how we're going to measure this. What are the KPI? What are the metrics that were important for us? What is what? What's shift? What implications does this have on the next quarter and how we should be thinking about goals and how people should be really leaning into it.

Speaker 2: 25:35

I think that there's an example at see, at see how to riff, I think in 2018, where they've written case studies on this, but it was basically the CEO said we're going to radically focus, we're going to move away from some product areas and business opportunities have not panned out for us. We're going to go back to what's important for our, our creators and our and our customers. And that was part of it. But a big part of the success was the cultural urgency internally afterwards. So the culture, understanding the mission, like the sort of patterns of practices, going back to what the goals are and but ultimately just creating an urgency and a mission alignment to what we're doing, which takes time, but that that was one of the reasons why they're they're turnaround when you look at their stock price was so effective was just a sort of cultural rebound.

Speaker 1: 26:25

And one of the things and I'll be honest, like I've struggled with a couple of the things that you're saying one for my company. Most of my employees are billable and so I wasn't able to do one riff because I it was based on market demand, which, for about a six month month period, was declining, so as we had more customer churn, I had to lay additional people off, which was a huge struggle from a morale perspective, because people felt like they were just getting beaten down and so we were trying to, like, maintain this culture, saying, hey guys, we're going to find a plateau, we don't know exactly where it's going to be. Fortunately, we found that for the past four or five, four months or so, where I think the market, like from a layoff perspective and from a hiring demand perspective, has leveled out. Yeah, but it wasn't, it wasn't clear cut, and this was, by the way, like every company in my industry, like a psycho CEOs. My competitors like this funny, it's like our competitors like all of us ended up talking a lot more. It's just smart because we were just trying to figure out what what each other was saying. So that was a struggle, I think, the other struggle that I've had and this is really where I want your love to hear your thoughts is putting together the goals like I we have put together, like this idea of a compelling market for the future and what like. When we come out of this, where we want to be right, like the, the types of engagements and customers we want to work with, the type of experiences we want to provide, the type of internal opportunities we want to provide to our team when we start growing again.

Speaker 1: 27:45

I think one of the challenges has been there's so much market uncertainty. We want to put together clear goals and we want to be able to track to those goals, to be able to show that progress. Sometimes it's like it can be difficult because it's like hard sometimes to put together goals in a specific timeframe when there's so much uncertainty. So do you have any advice in terms like when you're putting together goals or like when you're trying to get the team excited and they? You feel like you don't need to give them easy wins. But you also feel like you don't know exactly what's happening in the market and maybe some of the strategy you're trying to do is like new right, like you haven't necessarily done so it might shift right as you grow and you learn more. So how do you do that like that's? I know it's a tough question answer.

Speaker 2: 28:27

It's a good question and I think it kind of goes back to, in times of uncertainty, how and what do you communicate? And I think I've seen, I've seen a challenge in in certain companies where they try and get to Rosie. They try and they try and sell you on this. Is it like we've gotten through the tough part, now it's all? Now it's all easy as long as we sort of do X, y and Z, but behind the scenes maybe they don't really know that and I send like one code I remember from, I think it's Thomas Friedman said the job of a leader during times of uncertainty is to put more truth into the world.

Speaker 2: 29:00

And putting truth into the world is is part what you know, what you don't know. So if we don't know what the market's going to be later in the year, we can't really plan that far out. We can plan out next week, you know, like we can plan out. What do we know? We know. We know what's today, with what today is about. We know what our goals are today. We know, maybe we know, what the rest of the month is about. And team, this is it. This is going to be the mode for us for for the for as long as we can see. And so if you're here with us, it's just going to be kind of uncertain for a bit.

Speaker 2: 29:32

And so now, being transparent with you, and you can either sign up for that or not. But but I don't know, I can't commit to you that, like the pain isn't isn't done yet, I can't commit to you that, like you know that that were like in in the clear yet. But I can. Here's what I can tell you. I can tell you what we know. I can tell you what our clients are. I can tell you what our needs are. I can tell you what an opportunity is that we have right in front of us. And let's focus there. Because I think if you can focus the team on what you know, what you don't know, like the line of sight that you have, which is maybe just 30 yards out or it's 30 days out, and focus on that and we can do really well at that, then that gives us as good a chance that we can possibly hope for it.

Speaker 1: 30:10

Yeah, I think that. So that's one thing that I have been doing is is like we're just incredibly transparent on what we're seeing out there and where we are standing is as a company, and also just saying that like this could fluctuate, like I'm telling you this today, but when we have our next old hands it might be something different. So we just have to know to be clear, like in particularly if we have a win or thanks, to be moving in the right direction. I tried to like I'm qualifying that. I'm like guys, we're not out of the woods yet. Yeah, this is, this is good we've stabilized, or this is good we've got this customer on board or this customer came back. So, even if it's like genuinely good news, I try to put proper expectations because I don't want people to feel blindside down the next all hands If I have to give news that you know isn't positive. And so that's like one thing I've learned to. It's like, as you're thinking about, okay, what's going to go wrong, it's like what's the plan in the short term to try to overcome that, but when something goes right, also ensuring that people know it's like okay, but we're still not out of the woods yet. We have to deliver and execute on this.

Speaker 1: 31:10

Then the other thing that I've been doing is sharing a lot of our long-term strategy, because it's really interesting about this year is that we had actually a lot of incredible wins when it comes to our overarching strategy. We're putting together an incredible board, we're revamping our entire revenue strategy for how we're getting going out to market, we're redefining and honing in on a new ideal customer profile that we think is aligned with the company's North Star metrics, and we have the right advisory team in place to help us actually reach that. There's all this stuff happening, and then there's the reality of a P&L. Yeah, it's like and then trying to balance those things, like, hey, here's all the cool stuff that we're doing, here's the reality of our financial situation. It's an interesting balancing act If you want folks to see the future and be excited, and it's also being transparent about the reality of the P&L to some extent.

Speaker 2: 32:10

Yeah, I think this is a hard thing, particularly for founders. It's like, hey, this is the company that I started and I look around a lot of people. I convince these people to join. A lot of founders are just like they haven't built a scar tissue on this. This could be the first time that they've like, hey, my first company I've ever started and the first rough patch we started.

Speaker 2: 32:31

There can be this psychological pull to try and paint a rosy picture because I'm looking around the Zoom and I see some grave faces here on Zoom. I'm going to try some raw stuff here. I'm going to amp people up with, I'm going to oversell this one win we just had. And because it's a natural human reaction to the team that I've got right now, I want them firing all cylinders and feeling good, but the reality is what they more need. That's maybe what they want or what you think they want, but what they need more is as much objectivity as possible. Objectivity is tempered in terms of like, okay, well, here's what's going on, here's what we don't know, here's what we got to do next. And here's a challenge I think we face as a company and I need your help in it.

Speaker 2: 33:16

So can we engage the team that we have in any way to sort of chew on something that we see as a problem? Maybe it's a customer retention issue that is keeping us all up at night, maybe it's. But can we engage them in a way where we're being transparent about the biggest challenge, biggest opportunity, the biggest challenge, and there's ways for them to engage on it if they want to? Because I think when there's a problem out there, I just have no control over it. I'm just going to be sleepless tonight on this problem. Then why do I really expose you to too much of that versus expose you to a little bit of it? That might be dependent upon the team that you've got. Maybe I expose the customer team to the customer retention issue, but not the whole company. But I think that that's being objective and, to extent that we can engage them on what we think are things that they can have an impact on, that also makes them feel a bit more comfortable, because I'm trusted to weigh in on these things.

Speaker 1: 34:14

Right? For sure, I've been very transparent in our situation as the situation in tech has progressed. It's positive feedback. People are like, hey, we really appreciate the transparency. It's not like, if anything, employee engagement is going up. People are rallying together, they're working hard. We've dialed in. We try to keep it really simple and focus on customer experience, just doing whatever filling in however we can to help.

Speaker 1: 34:50

For instance, thinking outside the box, like you were talking about with your recruiting team. You've seen a company reallocate or your friends recruiting team. It sounds like reallocating their recruiting staff to billing out to another company. One of the random stuff things that we did was we have a customer that has a couple of folks from us currently on their team embedded. Their recruiting needs have dropped not completely ended, but they've reallocated some of our recruiters' times into other functions. I think actually we have one of our recruiters is doing some SDR work about half of their time.

Speaker 1: 35:28

That comes down to our company thinking outside the box. It comes down to having a culture of people that don't see their job as a JD and are willing to do what it takes. It was centered around being transparent about. This is where we're at. We need to produce incredible customer experiences, whatever it takes, then the way that that's delivered upon, is the employees bought in to say I can make a real difference here and is willing to do things that are outside the normal scope? I don't know if I could have gotten that buy-in from my team to do those type of things without being transparent and say, hey, we got to figure this out.

Speaker 1: 36:06

On the other end of this jungle, with all this stuff in it that's trying to kill us, is a ton of opportunity. We're seeing a ton of consolidation in this space, a lot of competitors selling for pennies on the dollar Highways, just like it's getting less and less traffic. When we get to the other side of this thing, we're going to be able to go and crush it. It's been incredible to see the response from my team. Quite honestly, it all comes back to the transparency, just being creative. The example I gave could be 100 percent different, completely different, than what another company does, but maybe there is a way to get creative with how we're leveraging our team, either customer facing or not, to make sure that we can hopefully keep great people on board without having to make additional cuts.

Speaker 2: 36:55

Yeah, you have folks that are really highly engaged and it sounds like you're doing a great job to build the trust.

Speaker 2: 37:03

And so it goes back to engagement and or as what Steve will call. I think he thinks of emotional commitment as the sort of gold standard. And so, even in tough times, if we've got a good portion of the staff or highly engaged or they're committed, they're mission aligned, some of the best ideas for how we're going to navigate these tough times are going to come from them, and so that's why having a pulse on your engagement right after a tough time is really important. And what can we do to improve it? Because, again, I think you might have some sales process conversion flow fix that someone comes up with and because they're engaged in, they believe there's psychological safety for them to weigh in with this idea and someone trusts them and have a manager who's encouraging them, and so that comes from all of that, that engagement and emotional commitment, which is going to be at risk after a tough change. So that's when it becomes even more important to have a pulse on it.

Speaker 1: 38:00

All right. So I think for the final segment, what I want to get into is when the market actually rebounds. So you enter this growth phase again, which, in tech, can be pretty damn aggressive. Right, you go from kind of this like plateau or slow stage or this tough period to damn okay, we're having a really hard time keeping up with everything. What are some of the biggest challenges, you see, when the company is making that transition back into growth mode, back into everybody's struggling to fulfill demand and to grow fast enough and to make sure the right people are involved and you're hitting the right milestones to take advantage of the growth market? I would just be curious to learn where are the biggest traps for companies to fall into or mistakes that could be made? And then what are some high leverage things that leadership should be thinking about to actually take advantage of the growth when the market shifts?

Speaker 2: 38:57

I think one of the most obvious traps is, if you look back on every headline of every layoff, we hired too much and so during a growth phase, we hired too much and we realized we built this company the wrong way. So when and if that day, I mean it will, but when it arrives, when sort of VC capital is there and the stock market and sort of growth is just exploding, it is like forgetting that we just went through this period where we didn't really have guardrails. We didn't. There was not enough tough questions, and so suddenly the headcount planning process looks a lot looser. You know that there's a lot less questions being asked around why are you hiring all these people? What are they going to do? Like these all have these? All these people have the same job titles. What are they doing in this one office? Why do you need that many? The pull is going to go towards not asking those questions, because growth, if we're in high growth mode, it's like reduce the sort of the parking break, you know, and let everyone go. So I think that's the biggest trap is not growing sustainably and reducing the urge to just sort of you know, kind of slow roll headcount growth so that, like we can really make sure we've seen whether there's other people in this company or there's other ways to do this more efficiently or more effectively without, you know, throwing a new army at it. I think that's the big one.

Speaker 2: 40:22

I think potentially another one is this pendulum of culture shifts that you know great resignation. We're super progressive, we believe in all these things. We're going to give all employees all these things and then we're pulling them away and then we're growing again and now we're going to throw all these things out there. That creates this whiplash for people around. What culture do we think we have here and what's what's really important if we're going to start to do things that are suddenly progressive again because there's money there to do it, connecting it to fewer and higher impact initiatives.

Speaker 2: 41:01

So choose something, whether it's social impact, whether it's something mental health, it's something about the culture that is aligned to the consumers that we serve. Be focused. Be focused even in that, in the culture, as opposed to trying to bite off a lot more than you can chew. I think people teams get into this problem a lot. Where they're choosing too many goals, people team will get flooded with goals in high growth mode of doing all these things because of growth, that we need to have these systems and processes in order to fuel this growth, and the people team will just grind to a halt because they're biting off more they can chew.

Speaker 1: 41:36

That's a really interesting point, I think you're right. I think that there's this where you know people, teams, leaders are looking at okay, how do we attract the best talent? Other companies are offering all these things. You feel like, okay, in order to compete, we need to offer all these things. But maybe it's like let's pick two or the three highest leverage things that maybe we also know we can actually deliver on in a recession environment.

Speaker 1: 42:04

So like doing too much that we can't commit to on an ongoing basis. So, at least from a cultural perspective, it's like not only is there a riff, but like the people that are remaining are getting less, and it's like when they really need the mental health support is when they have to lease resources. Just not funny. It's just like there is. It's just like kind of insane when you think about it. It's just like that's when you really need this stuff and that's usually when it gets pulled. That's right. It's like picking fewer things, making it more mission driven. I mean you have to be competitive, like there's a balancing act, but you don't need like 10 different things. We got this, this, this, this, and that I mean it's more than people can even remember off the top of their head, right?

Speaker 2: 42:52

Yeah, that's. That, to me, is the biggest thing I'd be concerned about. It's just a lack of focus once growth returns and we go back to where we were with all these headlines.

Speaker 1: 43:01

So yeah, sure man, that's a. That's a really good point. Well, look I, david. This has been a really fun conversation. We're coming up on time here. I wanted to say thank you so much for coming on the show today. A lot of value and I know you're going to be guiding talent strategy for a lot of folks tuning in.

Speaker 2: 43:19

Thank you so much, james.

Speaker 1: 43:19

Thanks for having me for sure for everybody tuning in. Make sure to take this episode dropping in slack channels. Share with your network a lot of really good stuff here and we'll talk to you next time, take care.