WeWork, once one of Silicon Valley’s prized unicorns, now seems headed for the glue factory. The company was (supposedly) worth $47 billion and slotted to go public last September, but has since been in a death spiral after papers filed for their IPO revealed behavior by its founder that could be described as erratic at best, if not fraudulent—from trademarking the name and selling it back to the company for $6 million to allegedly buying real estate in his own name and leasing it to the company, as well as personally cashing out of the still-profitless company to the tune of about a billion dollars.
Silicon Valley god, Larry Ellison, went so far as to say WeWork is basically worthless, and many speculate if the company will ever IPO at all. That remains to be seen, but the WeWork board was quick to hand the reins to not one, but two new co-CEOs to guide the company through the crisis and salvage the IPO, only for the controlling investor, SoftBank, to take over a month later amid rumors the co-CEOs would resign. Many have said Adam Neumann wasn’t the only problem, so I wouldn’t bet on a spectacular turnaround. Either way, it is a shocking fall from grace for a company once on such a meteoric rise.
So how the f*#$ does this happen?
The problems being played out in WeWork are problems that I see, to one degree or another, in the work I do all the time, and it’s clear to me that WeWork’s crisis is one of Identity. Identity can be described as an individual’s concept of self and working with companies innovating on brand, I’m never surprised anymore when companies like WeWork and Uber ultimately show just how much one’s personal sense of self influences outcomes at all levels of a company.
I’m not the first person to link this situation to Uber, and for good reason. In both situations, you have founders whose personal identity crises played out on the national stage, with tens if not hundreds of billions of dollars on the line. Had the founders in either situation had a better understanding of self, they would have likely resolved a lot of the issues, or at least had enough awareness to be able to mitigate their impact on the business.
Barry Brown is a mentor and friend of mine that works in identity and leadership development for startups and enterprise businesses in Silicon Valley. He’s a cofounder of human(Ethos), on faculty at Singularity University, and runs be/do labs, a part of Runway Innovation Hub in Silicon Valley. I asked him what his take on all of this was, and it really made me think. It’s not just the value the shareholders lose on the IPO, there are a ton of hidden externalities that result from situations like these.
When you can’t be honest with yourself about it, the further you build out that product or go down that exterior journey, the more apt you‘re going to meet a collision course. Because the inside isn’t matching the outside and, in time, you’re going to experience the missed leadership of not only yourself but the team. And the money, and the funding, and the market will come back and accuse you for not having done your inner work. It’s a curse on a founder to get too big too fast if they don’t have the interior part of their life at least in the conversation. It finally showed itself for what it is: a great idea, with a leader who wasn’t ready for it. And now, everyone’s hurt — the idea, the market, the team that did it with him, and all of his funders.
What does it mean for you?
It’s tempting to point at Adam Neumann right now and say that it’s just a problem with him. If we’re more honest with ourselves, then the truth is it could be any of us. We all have our vices and the only things which separate any of us from Adam right now are our level of awareness of how those vices are playing out in our lives, and the spectacular scale at which it’s happening.
But keep in mind that while all of this was happening I highly doubt Adam was imagining himself as some sinister villain. Our vices live in our blindspots. We obscure them and justify them until we can slide down the slippery slope with a smile. Adam is now painfully aware of his own self-delusions and rationalizations and I imagine somewhere he is suffering an awful emotional hangover as they are so publicly stripped away.
What does this mean for brand?
Your brand is the identity of your company, yes, but more specifically it is the collective identity of the company. It is the combined sum of the identities that make it up as they relate to each other. Think about what it means to be American, and how that is subject to each expression of that American identity. It’s the farmer on a tractor in the heartland, but it’s the obnoxious tourist as well. It’s the innovative technologist and it’s the imperialist occupation force.
But that sum of identities is also weighted according to influence so, while it pervades every aspect of culture throughout a company, it is heavily influenced by the personalities at the top. As those identities at the top influence the formation of the culture, they become the cultural foundation and relational infrastructure of the organization. Uber’s recent round of layoffs seems to confirm that even if you replace a dysfunctional founder, there is only ever so much you can do to redirect the entrenched culture that developed around them. The job that lay before the new leadership of WeWork and Uber alike isn’t just to control the damage, but they will have to repair the culture.
These extreme examples help to shine a light on usually subtle nuances of business strategy, making them obvious to see for people that don’t spend their lives obsessing over these things. It’s easy to look from the outside with disdain, but how many companies do you imagine close up shop every day because some flawed aspect of their identity drives people away, makes sales elusive, or causes personal dysfunction to impact professional efficacy.
The only protection one can levy against these types of circumstances is to have a deep and comprehensive awareness of ourselves, and how the mental model of our world is influencing the way we lead.
