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Company Culture

Operation Revive COIN – Coinbase Top Down Culture Issues

Over the last two weeks, Coinbase has been on a mission to address the well-publicised Coinbase cultural issues.

Most recently Coinbase CEO and founder Brian Armstrong’s appeared on the Good Time Show (with backers a16z appearing), where he attempted to address the coinbase culture, suggesting they were focusing on a work-driven mission.

Top Down Culture In Action Or Challenge Culture? ⚠️

Over the past week, (June 10th) Brian attempted to address a long thread on YCombinator News (aka Hacker News) with his thoughts on why Operation Revive COIN is a dumb idea.

Operation Revive COIN is a vote of no confidence in the COO Emilie Choi, Chief Product Officer Surojit Chatterjee, and Chief People Officer LJ Brock by the Coinbase teams.

The Complaint Filed

Petition to Remove COO Emilie Choi, Chief Product Officer Surojit Chatterjee, and Chief People Officer LJ Brock in a Vote of No Confidence

Summary: We the employees at Coinbase believe that the executive team has recently been making decisions that are not in the best interests of the Company, its employees, and its shareholders. COO Emilie Choi, CPO Surojit Chatterjee, and Chief People Officer LJ Brock have been the most prominent executives who have been executing plans and ideas that have led to questionable results and negative value. Some of these include the following: 

  1. The failure of the Coinbase NFT platform
  2. The over-prioritization of certain products, which has led to a lack of focus on other important issues like infrastructure
  3. Initiatives like the Dot Collector and the Performance review system that has led to a toxic workplace culture
  4. Aggressively hiring for thousands of roles, despite the fact that it is an unsustainable plan and is contrary to the wisdom of the crypto industry 
  5. Not being able to output any higher or better quality products and services despite aggressively hiring more employees
  6. Rescinding offers to new employees despite promising them that their offers would not be rescinded two weeks earlier, leading to a massive negative reception from the public and the industry at-large
  7. The failure to communicate important ideas and plans to the rest of the company, such as the possibility of lay-offs and the plan to fix many technical debts 
  8. A generally apathetic and sometimes condescending attitude from the CPO, COO, and Chief People Officer

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Their actions have hurt multiple parties: 

  1. The employees, who have to deal with the unrealistic demands from said executives and the damage they have caused on a day-to-day basis
  2. The shareholders, who have seen their stock price continually fall, especially from the high of $420 at the beginning of the IPO and the middle range of $250 throughout the summer of 2021
  3. The company itself, whose plummeting stock value and bad workplace management led to low morale and the threats of losing top talent 
  4. The company’s reputation to the public, where people are less likely to view Coinbase as a trustworthy and reliable crypto exchange to do business with

Because of these factors, we believe that Coinbase should immediately find replacements for LJ Brock, Surojit Chatterjee, and Emilie Choi. We hope to find people who have had experience in the crypto space and can run such a company more responsibly. 

Signed,

Aired In Public, Addressed On Twitter

Brian rightly points out it is on him as the CEO and many other valid points on his twitter thread.

Leaders Lead is always what you are trained but is this time for the management team to own collectively? Yes!

The biggest issue here: the three of the most powerful and influential leaders to ask to be removed publically identifies a huge distrust problem.

The issue here is his leadership is obviously creating fractions for his management team and then disconnecting with the middle managers and causing issues that are not being reported back in management meetings.

These issues are highlighting a real disconnect between the managers and the “leaders” within Coinbase.

In addition, the agreement of mission-focused work and delivering on cultural promises is obviously not being translated well from the c-suite to VP to team level.

Question To Ask Externally

This does raise the question when you and many others believe in the promoted performance-based culture and work-focused culture, where do you go to voice these concerns especially when you have likely raised these internally and have been dismissed.

Can ‘challenge culture‘ work in an environment like this?

When issues go unaddressed it creates internal and departmental conflicts and creates combative them vs us environments.

Many company cultures and subcultures are overly reliant on the business leader to acknowledge, discuss internally and then share their approach externally as a listed company.

Pattern sends alarm bells and signals there is potentially a leadership issue. When having to address in public and address open internal issues.

Will The Headcount Reduction Going To Highlight The Biggest Issue?

On the 14th of June, Coinbase announced 18% reduction in headcount, with three main factors referenced in the shared email on the coinbase blog:

(1) Economic conditions are changing rapidly
(2) Managing our costs is critical in down markets
(3) We grew too quickly (suggestions of over 5000 employees).

It is unclear which exact areas of coinbase were impacted, it is likely the COO, CPO and Chief People Officer were not included despite the ongoing issues.

Will this headcount reduction reduce fractions or highlight the issues more clearly? Most likely highlighting the ongoing issues and potentially increasing the bad company culture bubbling up to the top of the external news cycle.

Any PR Is Not Good PR

In the previous podcast discussions and addressing external factors coming into the workplace, Brian mentioned how well that it played out after a month or so with top-quality talent wanting to join.

Right now this is coming back to bite Brian and his business performance. Externally pointing fingers by teams rarely works, however, this really does demonstrate a need for critical discussions.

With company culture being recognised as an essential factor of successful businesses, will this count against Coinbase leadership? The quick answer for sure, especially with crypto’s recent performance, the volatility within the web3 space.

This fight in public opens Coinbase and the business up to showing the bigger and ongoing issues internally, namely the trust of the leadership team and those who have joined and delivered weaker products leading to poor performance.

The CEO in any business has to live and die by the sword especially ones with continued rumblings and continued people-related issues.

In the coming weeks, we will likely hear less about the internal issues with Coinbase, listed companies often have a way to reduce the external reporting, however, with so many stories and known issues this is unlikely to go away and it could be another story where business “leaders” on the c-suite exit the business to plaster over these issues.

Social media will be a hard place for the Coinbase leadership team as many will air their truths, especially after the large headcount reduction.

Is this unique in the business world in 2022? – no, however, this is a theme Coinbase is setting for others – yes. It is going to be a case study in years to come on how to or how not to handle internal issues when you are lorded as a leading light by some powerful figures and identified for what leadership is not anymore.

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