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Just a day after embattled office space company WeWork laid off 24,000 employees, WeWork Chairman Marcelo Claure used what some considered poor judgment.
The former Sprint CEO and current Softbank COO, who’s been leading WeWork through murky waters since the company’s botched IPO and fallout under former CEO and party boy co-founder Adam Neumann, went out for a night on the town in Greenwich Village, New York City. What appeared to be just another normal night for Claure turned into a discussion and a lesson on CEOs’ and executives’ ethics during trying company times.
The owner of Major League Soccer’s latest expansion team Inter Miami FC shared images and video of an expensive pasta tasting at Michelin-starred restaurant Babbo, founded by celebrity chef Mario Batali (who left the restaurant earlier this year amid miscount accusations) and celebrity personality Jose Bastianich in 1998.
In an image and video documented by The New York Times’ Amy Chozick, Claure’s Instagram story showcased a lavish meal that included a $110-per-person pasta tasting menu with the caption “pasta overdose.” Then, he posted a video soon after showing a table laid out with multiple deserts.
Babbo tasting menu on his Insta. pic.twitter.com/IlYm6ZEn4o
— Amy Chozick (@amychozick) November 23, 2019
What Claure did wasn’t exactly off-brand — his Instagram page, which has a following of more than 49,000 accounts, where he often posts pictures of his soccer ventures and photos of his family from around the world. But just a day after WeWork laid off thousands of workers, it sparked coverage by media outlets like The Daily Mail, Business Insider, and others as some questioned whether documenting extracurricular activities amid unstable times was the right choice.
“This entire company leadership is so tone-deaf,” said one Twitter user replying to Chozick’s tweet, referring to Neumann and his resignation in September.
Ronn Torossian, a crisis expert and the CEO of 5W PR, told Ladders Claure’s dinner venture wasn’t malicious in itself, but it doesn’t send the right message to a company that’s experiencing a facelift during uncertain times.
“As a CEO, you must always be aware of the ways your public actions can reflect not only on yourself but on the company you control,” Torossian said. “Going out to an expensive dinner is not malicious in itself, but doing so the day after hundreds of people have lost their jobs at your company sends the wrong message and is bound to leave a bad taste in people’s mouths.
“By becoming the face of a company – especially one in crisis – you have given up some of your expectation to privacy, and have a responsibility to take into account how your actions are perceived by your employees and others with a stake in the organization. Next time, I would advise Mr. Claure to put down the phone at dinner, or better yet to have a private chef in his home. It’s not the action that’s the issue, it’s the perception of the issue. ”
Before his Instagram post, WeWork in a press release outlined Claure’s message to employees with a “go-forward strategy,” which highlighted the company’s next steps as more layoffs are expected. To date, WeWork has laid off nearly 20% of its 12,500-employee workforce, which the company reported in its SEC filing earlier this year.
The New York Times reported in November that the number could soar to at least 4,000 jobs as the company is expected to announce an additional 1,000 terminations soon that affect both the company’s model and outside projects.
When a company navigates through layoffs, it must be mindful of its current employees. Past research has shown that layoffs and termination can cause stress-related illnesses such as burnout, which was more than twice as high to companies that had downsized compared to those who didn’t. For prospective workers, nearly half of workers said hearing about the company announcing layoffs would make them leave the recruiting process, according to one study.
Leaders are in a unique position during these dark times. They can easily set the tone for a company moving forward, and according to Executive Leadership Coach Dr. Andrea Goeglein, it’s important for Claure to move quickly.
“This is a mess he has to clean up rapidly. There is no way it could hit me anyway but poorly,” Goeglein told Ladders this week. “If I didn’t get laid off and I showed up at work today, one of my friends got laid off. Your empathy toward somebody else — you’re already dealing with survivor guilt, compounded by stupid leadership action — I mean, you have to address your employees rapidly.”
Goeglein, a workplace psychologist who works with executives and entrepreneurs, explained while the meal within the framework of his personal life means nothing, Claure failed to instill confidence and trust specifically, which needs to be nurtured moment by moment.
Part of Claure’s mistake comes from the pitfalls of social media and how our society has an appetite to scrutinize quickly, especially when it’s coming from someone in power.
“Right there, we are taking one of the key elements of leadership out of the equation — thoughtful consideration,” Goeglein said. “Strategic implication. You’re not doing that. You’re going straight to execution without ever having a strategy. That’s what social media does to leadership communication if the person is not careful.”
While Claure hasn’t addressed WeWork’s employees about his post (It remains unclear if he will), Goeglein said a simple apology or statement could immediately diffuse the narrative.
“Whenever you had made an error or you need to correct something, address every conversation with the framework of no shame, no blame, no rationalization,” she said.
“He could very easily make one statement that says, ‘I became aware that posting an outing was insensitive to where this great company is and the great people that we have worked with, all I could do at this point is apologize. I will be more thoughtful going forward.’ Done.
“What that does is reestablish his position as someone you can trust. It begins that process. He’s only human, he screwed up, and he’s willing to admit it. Those are the characteristics we have lost in our communications particular at leadership levels.”