We didn't build *that* Better boss

Photo by Brett Sayles.

Many, many people reached out to make sure we'd seen the Better.com CEO thing. It's a strangeness of our jobs – and this newsletter – that folks really want to make sure we know when tech leaders are making a mess.

The mass layoff. Delivered via zoom. On the heels of a major funding announcement. The CEO. Reading. Reading from a piece of paper. The whole thing, recorded and immediately posted on YouTube. Because of course it would be.

Our middle schooler would sum it up with a single word: "cringe." Our middle schooler would be right.

People send us the links in part because, haha, you build better bosses. Here's the literal CEO of Better and seems like he could have used some management training. Hardy har har. But some of them also want to know, "Is this normal?" And if so, how often does this happen? And why?

Normal v Cringe

So, yes, it's common for venture-backed businesses to grow lumpily. It is part of the design where the cash front-runs growth. We hire a bunch of people where we anticipate growing. And sometimes our bet is correct about what will take off. But other times, we guess wrong. We are still growing, but it's not where we thought. And now we have the wrong team in place. With all the associated headcount costs.

That a business could have a thousand people working on the wrong stuff, and still raise outside investment, seems strange. But for venture-capitalists, this happens pretty regularly. Sometimes a condition of incoming funding is that you need to go "all in" on the part of the business that's growing. Which is how you get to layoffs on the heels of a major funding announcement. Or just ahead of one.

So while we weren't there for the discussion, we can easily imagine the CEO hearing from investors that this is normal stuff. And that yes, it's unpleasant but leaders sometimes have to deliver unfortunate news. But it's all in service of the next wave of growth. And try not to take it too hard. People might be grumpy but as CEO, your job is to make the tough calls. And the people who remain will be working for an organization with significantly more runway. Both because of the new funding, and because they won't have the salary drag of those other 900 people. Who wouldn't want to work for a more efficient business in a better cash position?

But also, visible from outer space, is the cringe. Laying off hundreds of employees in the run up to the holidays, and on the heels of significant funding. And then the gong-show of how the news was delivered. It's massively destabilizing. For the people leaving. For the people staying. For the business we're supposed to be running. For the PR team who would absolutely have known this would get messy. And for the HR team who also could have Cassandra'ed this one. Someone wrote up the talking points on that sheet of paper.

For people who think in terms of strategic investments and "blitzscaling", this is a story about the hard decisions every leader has to make. For people who care about humanity and respect at work, this is a story of unaccountable buffoonery. So extreme it's almost comical. Except that 900 people don't have their jobs anymore. Both takes agree on that piece, but they differ on everything else.

Which one is right?

We'll answer that, but it's gonna take a minute because there are two dimensions to consider. One is "was it the right decision?" And the other is, "was it well-executed?"

Many sports have this concept of an "unforced error." Growing up watching baseball, it seemed sort of arbitrary that someone could just decide that. These are world-class players. Ones that Teddy Roosevelt and Brené Brown would both call the men in the arena. Why does some critic up in the score-keeper's box get to assert that they made an error and forever besmirch their baseball card stats? How is that fair?

As you gain more depth in baseball, or tennis, or F1 racing, though, it becomes clearer. Yes, that was an error. You might be the best in the world, but we've seen enough games from enough athletes in the arena to know. When you throw to the wrong base, that's not you doing some galaxy brain thinking. That's you screwing up.

So was this layoff well-executed? No. Laying off hundreds of people in a 4-minute zoom call that mostly talks about your own feelings is very poor execution. The whole operation had unforced errors. Errors that hurt people who worked for the company he ran. Errors that whole teams probably tried to steer him away from. Errors bad enough to get a bombastic CEO to write a public apology for his blundered execution. Errors bad enough that he is on leave, effective immediately.

Okay, but which one is right?

Putting aside the errors in execution, it's still fair to ask. Are the people saying it was a hard business decision that had to be made correct? Or is it the people saying that it was unacceptably callous and shouldn't have happened?

Yep. It's both. They're both right. Or at least, either of them might be right for you, or us, or Better.com.

This is not a punt, this is a core fact about the job of management in an organization. Management only makes sense in terms what you're trying to get done. You can call a management decision good or bad, but only once you're clear on the scoreboard.

When you hear someone say, "look, fundamentally a business is about making money," they're telling you how they keep score. They'll probably comply with the law. They may even try to compete on benefits and perks because it's important to their talent strategy. But if their scoreboard advantages profit over everything else, they are likely to agree with the call that CEO made. They'll say things like "could have been handled better", "messed up the communication." But fundamentally it had to happen.

You may have noticed that these people like to give you advice about your own management that assumes the same scoreboard. You may have noticed that those people write most of the business books.

It's not the only scoreboard, though. You can say, "fundamentally, my business exists to create great jobs for people and positive impact in my community." You can say, "we use a triple bottom line." It's valid, even under capitalism, to choose a different scoreboard. And as soon as you do, the framing of the Better.com decision as "difficult but ultimately correct" starts to look very strange.

There isn't an objectively right-est scoreboard, because (ahem) fundamentally work is personal. Who we work with, and what we work on, and how work treats us, and how we treat each other -- those are personal things. We bring our own scoreboards to work, whether we acknowledge that or not.

Sometimes the bosses in our programs will ask us, "Okay we get it, but what should we do?" It's one of the only questions in a management program that we can't answer. All we can do is turn it around and say, "What's your scoreboard? How will you know if you chose right? And how happy are you with that answer?"

The dominant, profit-based scoreboard is right there for the taking. It insinuates itself in, not just as the default, but as though it's the only option. It's not the only option. If your org is treating it like the only option, that bears some thought, especially if you disagree.

But maybe the first question is: How do you want to keep score?

- Melissa and Johnathan