Dear leaders, are you prepared for a sixth business moat?
Here is the list of the traditional economic moats – including network effects that we all rushed towards over the last decade
Community.
The chances are you haven’t heard a definition of community that has even got you thinking about how you can turn your business into a community-driven ecosystem.
Let’s change that. Here’s a quick teaser on why community has to be included:
I recently spoke at the Love Inbound Conference. It was a great conference and organised really well and had a number of brilliant speakers, one of whom Luke Staton you will hear from in a couple of weeks (below is a short video to give you a teaser).
Here’s me presenting the risks and benefits of community and why it’s not going to be everyone!
My concept and talk were centred around you guessed it… community, it is doing business differently (you can decide whether it is worth the long-term work and if you can make it effective in your space) and why connecting at a deeper level (community done right) is more important and actually scaleable.
Community is how the smartest brands are going to be building “connected customers” not just a broadcast channel on WhatsApp or Instagram (move over Facebook Groups, Circle and Telegram groups) but a fully engaging community platform for existing customers (aka members) and new customers can feel safe, share their insights, tips and give feedback directly to the brand, while saving other community members money (think about sharing discount codes/coupons and being rewarded for it) and having a direct 1-2-1 relationship with their brand of choice.
Sound too good to be true?
NO!
Not with hard work following the rules and cheat codes provided you will win.
I have broken down the full presentation into an exec summary below or view the full community deck below
The Exec Summary Of ‘Community As A Moat?’:
Network Effects Table Stakes Now: Moving on and building on top of network effects,
Trust: Customers and potential customers don’t trust brands – more trust = more business and more recommendations to friends, family and colleagues
Improved Acquisition: the only way to kill one-and-done customers is to build deeper connections with your customers and provide better service (quicker payback period, lower CAC, better LTV)
Less Reliance On Platforms: Remove your business reliance on algorithmic updates and zero-click results
Closed To Competitors: We can see every competitor’s Marketing moves, from their emails, to their push notifications to seeing every one of their ads
Better Retention: Retention comes from trust and offering great products we need (and sometimes want) – retention will be higher, it will engage customers who are advocates and those who want long-term trusted relationships
Brands have created ask fatigue: Always asking for more (this can be removed)
Whether you’re a startup, challenger brand or have aspirations to become a super brand, community will be hard work but will build a moat around your products, your people (yes builds connection deeper than CS tickets and complaints) and its performance
Everyone craves PLG (aka product-led growth) and referrals (and move away from SLG) but these are extremely hard. Why not grow with community-led growth think of a bigger & better flywheel, more feedback, and shared results
Superfans & Superspending: Be inspired by Taylor Swift’s lead, from her deep connections to building a community flywheel
Reddit is a precautionary tale of community but that’s a whole different community culture & that Reddit brought it on themselves
Dear leaders, are you one of the 100m users who flocked to threads over the last couple of weeks?
I am and I must confess, I am not so convinced about the product and its lacklustre product features…yet.
I suspect you have heard it at least mentioned within your business, from the employees using it and as likely from your Marketing or Growth team with the race to get the account and find if you are relevant within the evolving app culture.
This week I am going to breakdown one of Focus’ core offerings strategy and break down Treads, what it is, why it launched and why it is different, how Meta has thought about the landscape and how they’ve used this launch (smartly or not I’ll let you decide) to misdirect some of its recent failures.
The Threads TLDR
App only (threads.net prompts you to download the app)
Threads is an extension of Instagram – it connects to your Instagram account and supplies you with an @ with a specific number you joined
Threads are built into the Instagram platform enabling micro-updates (500 characters)
Updates can be shared publicly or privately (you set when you sign up)
It has limited features and is by all accounts an MVP
A curated feed that does not allow users to select just those they followed (a lesson from their previous growth days that the feed has to be incredibly valuable)
As a platform, it wants to sit away from news and not be known as a news outlet like Twitter (this will be harder for Threads as this is what people use microblogging platforms for)
There were no ads for a week (Hulu were exclusively the first)
Think of a really lightweight Twitter
Mark Zuckerberg’s tweet poking fun at Elon Musk on Threads launch
Strategy Smarts
Record Breaking – Leveraging the user numbers across the Meta portfolio (Facebook 2.9b MAUs, WhatsApp 2.2b, Instagram 2b MAUs) is driving record user creation and download numbers was incredibly smart and knowing how difficult being an audience can be this was strategic smart and savvy.
Organic – TikTok spent over $2b to gain a record number of downloads, user accounts and drive retention through advertising efforts, this has been largely organic channels and knowing they gain mass attention from the tech press and mainstream media
New & Alternative – An alternative method to always posting videos and the perfect picture on your native Instagram feed and threads allows users to have something to say and create a new space to be different or be more you. Twitter usage has dropped and it was prime time to release new. We might see Meta allow this to fly too close to the sun and crash quickly after the engagement levels drop. If you follow a number of friends, not media outlets and personalities the updates have already dropped (falling foul of the deliberate full feed of random content)
Creating FOMO – creating FOMO around a new product to remove time spent on other apps is intelligent in a market full of attention and time-based apps (while many were enjoying JOMO (joy of missing out) was happening on Twitter)
Algorithmic Driven Feeds – Something that Meta got right with Instagram and Facebook was flipping the feed from chronological feed to algorithmic-driven feeds with affinity signals and then learning from a superior product in TikTok. TikTok took algorithmic-driven content to another level and then evolved into an entertainment engine from anyone showing in a feed created for you versus just from people you were connected to. This shows how the internet went from and where it is now, with numerous apps driving entertainment for “free” with us as the product aka being sold to by advertising and subscription models. Meta has tweaked their approach to offer similar features and has helped to drive engagement and usage.
Acquire Or Copy – When you hit Meta’s size and scale you cannot easily acquire a competitor or new entrance in the market due to anti-competitive laws and measures. Meta is famous for using Snap, iMessage, Telegram (chat and group platform) and TikTok features in its brand’s umbrella and roll directly into their apps. This is another example of Meta and their leadership team embracing the Microsoft approach to strategy, copying key features and killing others with distribution within their own ecosystem (think recently with Teams fighting with Slack and Teams winning the professional chat app battle)
Meta Huge Scale = Controllable Narratives – By releasing a new product it starts to remove narratives away from other platforms and helps to control mass narratives and then how they communicate (we will see exec and media companies exclusively updating and using threads)
Big Army Big Battles – Fighting for time and attention from Twitter and importantly against TikTok – this isn’t widely discussed but new products reduce the usage of other platforms while users work out the new platform, the etiquette and the culture of the new app/platform
Hitting Other Apps That Have Potentially Run Their Course – Twitter is struggling to stay relevant (other platforms in the same category as Twitter such as newer players Mastodon and Bluesky), and BeReal was effectively killed off by Instagram and TikTok being inspired by their USP and rolling in a product feature and then usage dies off. This is a smart tactical move(s) for these big platforms horrible for BeReal and similar apps and services that are easily copied
Data Collection – This is the most controversial piece here, Facebook, Instagram and WhatsApp all collect a large number of data points on their users and use it to inform their next series of decisions. This is well known and although this has caused a large number of headlines, court cases and investigations, it hasn’t stopped Meta from releasing a new app with a new set of data collection and a way to connect users into cohorts
Threads announcing record-breaking weekend, no more official numbers since
Meta Misses & Misdirections
The Metaverse – Meta invested multiple billions in a new metaverse (the company re-branded around) and it hit its stock price and confidence in Mark Zuckerberg’s leadership
AI Struggles – Meta has struggled to have any breakout with their AI tools and while rivals are making bigger steps in the perceived AI battle – we should never count out Meta but their very slow approach it’s likely hindering them from an investor’s perspective
App Store – Facebook wants to become a marketplace for others and an app store alternative, allowing users to download apps directly from their potential version of an app store. This is the play Mark Zuckerberg has wanted to lead on since his earnings call back in 2018 — “Our biggest competitor by far is iMessage,” “In important countries like the U.S. where the iPhone is strong, Apple bundles iMessage as a default texting app and it’s still ahead,”
Hits & Misses – Despite the Meta brand’s dominance, Instagram and Facebook apps have had a number of product feature misses, including audio and creator funds. Can Threads be a hit or will it be a miss and popularity nose dive like a clubhouse or more recently BeReal.
Creators Only? Instagram threw itself into the creator economy and has struggled with making its shop feature and shopping experiences work – Facebook has also struggled with shopping away from ads – for now, that works, however, in the near future Meta brands will struggle with stuffing more ad units
WhatsApp Controvisal Usage – WhatsApp is a behemoth, it has however struggled with governments (and Taliban) using its platform and having their messages leaked or released – despite its e2e encryption this will have a negative impact (despite all of the convenience and free use via data packages)
80:20 rule: Apart from on WhatsApp Meta’s properties have a 20% creator role and 80% viewer role (consume content but don’t create) – this will likely also become the norm on Threads. Will their growth teams be able to break this and can their feed be important enough to fill the boredom slots that other apps do already?
Mark Zuckerberg vs Elon Musk – A supposed MMA fight and spat really has taken a leaf out of the music beef (between rappers) playbook to pull attendance away and be part of multiple conversations. This may have seen fun but is a waste of time and effort
Step Out – With many elections coming up, Meta has now built a new (currently) mostly completely organic product that shouldn’t influence the election
Having worked in a space where Facebook entered with a bang, you prepare for their growth engine and its huge breadth of users and ability to cross-sell to hurt you, interestingly, in two businesses I was in or across this didn’t materially hinder or hurt us. With the right prep for the teams and a reminder of why we were different and to focus on our journey, we drove the business forward. I am not sure Elon and Twitter have the same sort of defence.
Whatever you think of Meta, there are always numerous lessons we can and should take away, from their aggressive tactics to their ability to engage and retain users and drive more ads into their ecosystem while glueing the user data together. It is the modern-day company that has navigated numerous issues and continues to be stronger for users and advertisers.
This week’s focus item is to: learn from how Meta leveraged its own ecosystem and a weakening market to drive a record-breaking app that may or may not keep its mass appeal…
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Dear leaders, this week marks the third year anniversary of Leaders Letters. Thanks for being a part of it by reading the newsletters weekly, sharing across social and replying and even challenging my leadership advice.
I look forward to landing in your inbox every week and love debating with readers if they like the post, dislike the newsletter or feel you could add more to that week’s topic.
I have a dedicated newsletter coming soon to break down my learnings and share some of the insights from the last 3 years. With a focus on those who I have collaborated with and worked with through this leadership newsletter.
The Q3 Questions To Tackle
With Q3 starting in just a couple of weeks, here are the most pressing questions to ask internally to help with people (aka company culture) and performance (aka the company-wide strategy) and drive change for the future months.
The hints below are there to help you think slightly differently or position the points internally
How are we scoring with company performance and our people’s performance? Hint >> Score out of 10 and where do we need to improve the score by 1 or 2 points?
If we were to change 3 things to improve our working environment, what would they be and how would they improve performance? Hint >> Don’t just think office environment, think of all working environments (remote, hybrid, etc), look at reviewing meetings, look at how you are encouraging cross-functional collaboration, look at reviewing how your skip meetings went, and look at reviewing the exit interviews and onboarding flows.
What three themes (bigger than trends) have we seen this quarter we need to address and build for the future? Hint >> AI is definitely in there already, but what else is happening within your space or with your customer spending / customers new habits that you need to address and refactor
Are we in the place to accelerate growth? Hint >> Find where you have some seeds planted with small bits of traction and question how much water we might need to get it to grow or where we might place more resources to really take this to the next level. Anything with say 6/10 traction is already in plan and in flight and often causes confusion if you push too hard on what people are already aware of.
What two areas of the business are struggling most and what is the next quarter plan to address these or remove these? Hint >> This could be from a hiring perspective, this could be from a retention POV or could be performance related and if you might need to: keep (the activities that are doing well but could do with some extra attention), kill (stop the work on it, it won’t work again), cure (optimise or tweak elements of existing tactics or plans) or copy (copy features or styling) from others.
If you cannot answer these questions easily, consider building management pods for ownership and tackle these together with their teams.
This week’s focus action is to add these five points to your next management or leadership meeting and help to progress the company forward.
Thanks and have a great week and I’ll see you with one of my favourite newsletters to date, titled 3-3-3.
Dear Leaders, every year I write a dedicated newsletter from lessons to take the year closing. This year is no different, with 22 lessons and lessons to learn from.
The 22 are from conversations with company leaders, department leads struggling or parts of AMA or talks I have given to companies through 2022.
Where there are free frameworks or supporting guides I have linked, so do click through, download and apply internally.
Bad Practises
PR Not Leadership: Leadership PR became a political tool both externally and internally, with very few coming out looking good. Especially helping their internal teams with mass layoffs. > Lesson to learn: If you have been told to use spin and PR, learn how to use and when to use otherwise it will blow up in your face.
Bad Leadership 101:Elon Musk highlighted what is wrong with outdated management ideas and approaches. Elon might have numerous fanboys, however, he really isn’t helping his or big tech cause(s). >Lesson to learn: Understand what is really needed within your business and provide updates directly to the company and the teams. Any big changes needed to be communicated internally, especially with firing and hiring.
Professional Ghosting:Ghosting is a real issue within business and many defaults to ghosting because they are not trained to deliver bad news. > Lesson to learn: People do not forget bad behaviours, especially from brands they interact with. Deliver bad news or if you have no update you should keep people updated.
Leadership training or development is not happening: Many are finding leadership is getting harder and without coaching and support it is going to become harder and you will then have more reliance on HR. > Lesson to learn: Invest in yourself and spent dedicated time slots where you develop and train. Hire a coach (either yourself or through the business) and develop as a professional and as a manager.
Over-communication is not smart: Most are not using templates and frameworks to help others improve and keep communication flowing in the right direction. > Lesson to learn: Help everyone be smarter, help the teams to develop frameworks and share across the business, stop bad meetings early and have detailed agendas to help everyone align. Request my group meeting template here
Lack Of Effective Planning: Many business leaders this year have fed back that their planning has not been and is not effective and often is ignored by April. Effective planning and understanding of what strategy is and is not, is imperative. Strategy is understanding what you are not going to do and packaging strategy so everyone understands and uses as the compass is the difference between a list of tactics and tick box exercises and a strategy that departments (and the teams) can build their annual plans into. > Lesson to learn: Whatever your planning cycle is truly understand your beliefs, the bets you will make from your informed beliefs and build into pillars so these act as important navigation points when people feel like they need to challenge these.
Hybrid Working
Same Office Same Bad Environment: The office is a place where most didn’t redesign, change or make a place for collaboration – this has led to default to bad behaviours and many not wanting to go into the office. > Lesson to learn: Improve your office environment to produce the best environment to work in for everyone, tailor your office design for library rules, collaboration stations or areas and remove the friction of meeting rooms create.
“Proximity Is Power”:Proximity bias is still a real issue for many, particularly for middle managers and untrained managers who did not enjoy forced working from home. > Lesson to learn: Embrace hybrid work, understand the cadence you need to check in with your team members and ensure you fully commit to the 1:2:1’s and look to book in sessions where you as the leader can meet up in person. An organised or arranged coffee together or grab a lunch together in person will help rather than forcing people into the office.
Old Habits Don’t Die: Conditioning runs deep, old habits beat out new habits as it was easier to conform than inform and improve work > Lesson to learn: Create a list of old habits and new habits and review them as a leadership team and say which are rewarded behaviours and that are bad behaviours. Call these out and create leadership principles to take ownership and hold the leadership team accountable.
Hybrid Work For Most: Hybrid is a work in progress and most did not drive change when embracing hybrid work, many reporting it doesn’t work for them. Whereas the real issue is when there is a divide between those who go into the office and those who don’t regularly, you create a tiered system, this has to be removed and difficult choices will have to be made by the leader to embrace hybrid work or look to place in the structure. > Lesson to learn: Remove the “them vs us” with hybrid work, you either have to embrace it and create structure and guidelines or you reduce it down and have firmer companywide guidelines. Those who decide you are 3 in +2 or 4 in +1 you will likely see this impact you when hiring and especially in core areas like Engineering, Product and Marketing.
Real Time Everything: Real-time work and meetings are default hindering time to get work done. This has created busy as a badge of honour and stolen hours of time and working time from colleagues. Especially those with pressing deadlines. > Lesson to learn: Remove the demand for attention to every meeting, remove having to work in real-time and in person and move to async work that enables more thoughtful work and collaboration across schedules and time zones.
Async Is Not Happening: Asynchronous work has been ignored by the majority of companies. For years many companies have struggled to invest in training to help move people towards writing documentation to help those around them, aysnc work and creating documentation is often a very different operating system. Many have become so accustomed to having working meetings they struggle to work more effectively within documents and canvasses. > Lesson to learn: Really audit your time in meetings and work out how much time you are wasting in real-time status updates and trying to force working sessions into meetings, this can be done async and have documentation to improve future campaigns and refer back to. They also will have the opportunity to run before-action review and after-action reviews, constantly improving work and approach to work.
Playbookless: There is no template or playbook for many companies to copy-and-paste with hybrid or remote first work so it became the wild west for many companies. Companies need to own hybrid to make it work for them. Assign an owner and build into company culture. > Lesson to learn: Build out playbooks and templates for your people and teams to roll out and introduce cross-functionally, without this many will see essential work streams take longer and negatively impact the business
Coaching
Confidence Low: Throughout my coaching, confidence is at an all-time low and many do not know what is going to work – this is something we can work on and have small wins to help rebuild. If you are a confidence low or dropped lately, find out what you can do to improve performance or ask for feedback on something you and your team have delivered that had a true impact > Lesson to learn: Confidence changes throughout the year, especially towards the end of the year, work on positively influencing your own confidence and teams around you, and build up collective confidence with small wins and micro moments
No Actual Strategy: Many Department leads do not know how to build a plan and connect it to the company goals. Many leads struggle to build a plan that sparks inspiration throughout the team, especially when pushed on why are we doing this. Build out your beliefs, bets and pillars, this will help your team to buy in and see a why when they are told performance is falling behind > Lesson to learn: Not everything can be a strategy, not every department should have their own strategy, they should have their departmental and team plans that roll up into strategy not just a list of tactics
Repeat, Repeat, Repeat: Many CEOs struggle with repeating the same x pillars to keep the teams on track, and many struggle to be confident in their plan that flows through the organisation > Lesson to learn: Each year and every quarter create a schedule to replay and repeat your strategic pillars and why they are important. Don’t wait for quarterly events, be a little ad-hoc, vary the channel of comms to enforce the message. When you are bored of being bored about repeating these, know you have to change the words to make this stick. If the teams cannot repeat it and make a little joke about it you aren’t doing it enough.
Culture
Bad Behaviours = Culture: Bad behaviours have crept back into the office and hybrid work, especially in working sessions that are disguised as meetings; with no or bad agendas, no explanation of why this is a meeting, what success looks like etc > Lesson to learn: Remove bad behaviours and roll out change with meeting agendas, tell people why they are part of meetings and what type of session or meeting this is. Request access to my personal guide
Remember Culture Never Stops Evolving: Many are finding out that Culture is always on, always evolving, not a workstream that has to be managed, understood regularly and checked in on > Lesson to learn: Have a culture community manager, ideally away from HR that is trusted and can feel the change happening and helps to shape and reshape culture.
Bad Tech = Bad Progress: Many are defaulting to old and bad technology and are force fitting to work in old ways not finding better software for hosting workshops etc > Lesson to learn: Stop blaming old tech and bad tech choices for force-fitting old behaviours into existing tools. It is time to review your tools and toolkits and either invest or remove bad use cases and bring in better tools for the jobs to be done.
Burnout Happening Everywhere: Burnout is a continuing theme many are not addressing and refuse to get to the root cause. Most leaders experience this more often than they realise and the negative impact is huge. Lesson to learn: Stop making burnout something people do not know exists and stop relying on mental health apps. Burnout is a much bigger theme within all businesses, be smarter and get ahead by building programs around the triggers. > Learn from Burnout Coach Anish Hallan on addressing why mental health cannot be a perk and ways to address it
Misselling Perks Business: “Perk-based culture” has died for almost all companies and many haven’t attempted to address this and actually reconsidered what company culture is and is not, > Lesson to learn: Although perks are an important part of differentiating many companies, perks = culture ideology has to stop and stop from being pushed from the HR and management teams. Learn to grow your company culture, look at how you can be different and better and grow up as a business as the perks as culture movement is going to limit companies progression and stop internal hiring referrals
Time Is Being Stolen: Time is precious, we are told this from a young age, yet many are struggling with time management and many leaders have influenced those around them that sitting in meetings is work and a good use of time. Meeting Recovery Syndrome (MRS) also impacts how time is spent or wasted post-meetings. The ripple effect is much bigger than people realise. Your time is your time, learn to time block or remove bad recurring meetings, poorly planned working sessions and over-emphasis in real-time status updates that only add value to one of the people joining the meeting. This also happens when people believe slack or teams chat is work > Lesson to learn: Remove your time being added into your calendar that doesn’t have agendas, remove recurring meetings that add no value to you and the business and reduce other people’s frustration when you are not caught up with performance as you have not prepared or looked at their updates. Hint: If you want a new years resolution, you should consider scoring every meeting and understand how useful it was for you and the attendees.
Thanks for reading again this year and I look forward to adding more value to your day every week.
Companywide Decision Document & Framework – how to explain decisions to the company and receive better questions on decisions made by leadership
Get To Know Each Other Framework – struggling to get to truly know your team or colleagues, this will help set a base of questions and understand others’ triggers
Dear leaders, you would be surprised how many businesses are struggling with who they are, what they should be offering and why they should be offering their product or services.
In recent weeks, I have spoken to a number of CEOs and Marketing leads and they are at a crossroads, unsure if they are in the right market, messaging the right way and actually adding value.
Something I recommend all businesses to go through is a super simple six-question process.
This is something I typically run through right at the beginning of workshops but in this current climate and the number of fears people have, here are the six questions you will want to visit and gain alignment over. This is particularly useful if you are due a long-range planning meeting or you have your annual operating plan meeting coming up.
You would have seen iterations of these questions in popular business canvas, something to keep in mind, canvas are completed and then forgotten about, this is why you should record the decision-making process and then summarise at the end of the session (importantly remember to add this to your decision document)
(And yes, these are deliberately simple to make you think and revisit your core fundamental beliefs and you have to answer these questions in order 1 down to 6)
Problems: What are the top 3 problems you are actually solving?
Needs Solving: Why are these problems solving your customer’s needs?
Customers: Who are the target customers?
Selling Problem Solves: How are you actually selling the problems you’re solving?
Unique: What are you uniquely offering?
Find: How are customers going to find or discover you?
Something to keep in mind, these questions are deliberately simple questions to focus business leads, the more simple the questions are, the better the answers tend to be, the trick with this exercise is to ensure it fits on one a3 piece of paper and the document to act as a compass moving forward.
So this week, youraction plan: plan this session with your leadership team and even give the 6 questions a go and see where you land, if you cannot answer these questions I would suggest you really drive this session forward as quickly as possible (if not everyone can answer this the same way you have a real alignment issue)
A dedicated list of free AOP and LRP resources from Focus.
Site data is a great indicator of what is happening in the market and how management teams are operating. From the focus data, it is clear to see what phase many companies are operating at and what activities they are undertaking.
It is clear many businesses are in long-range planning or revisiting their annual company-wide strategy.
Below are the most popular and most useful free resources to help you with your AOP’s (annual operating plan) and LRP’s (long-range planning).
Resource Link (Click below to jump to the free resource)
The explainer behind why you need to understand the difference between mission, vision, strategy and tactics (and why you should concentrate on the flow of information)
Lessons from Coinbase’s deliberate move to remove external political factors and focus on work. Great to understand if you want a top-down company culture or flowing culture
A resource to help you understand if you removing instant messengers and chat apps like Teams and Slack will drive positive change within your business and remove the busy badge of honour.
How to improve communication within your organisation with an asynchronous document explaining key decisions and how the decisions were made and importantly why.
An exercise to understand the different dynamics and a way to rethink if you need more managers or actually need to look for more coaches and external mentors
Something all businesses struggle with is getting to know colleagues and ways to formalise getting to know each other. This template is popular for new and promoted managers
Says exactly what it does on the tin, a guide on how to fix toxic and bad company culture
If you are looking to receive the best frameworks and insights on leadership, company performance and company culture, sign up below:
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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:
The failure of the Coinbase NFT platform
The over-prioritization of certain products, which has led to a lack of focus on other important issues like infrastructure
Initiatives like the Dot Collector and the Performance review system that has led to a toxic workplace culture
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
Not being able to output any higher or better quality products and services despite aggressively hiring more employees
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
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
A generally apathetic and sometimes condescending attitude from the CPO, COO, and Chief People Officer
** **
Their actions have hurt multiple parties:
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
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
The company itself, whose plummeting stock value and bad workplace management led to low morale and the threats of losing top talent
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.
Want more?
If you want to understand the coinbase founders’ beliefs on culture and woke culture this is an interesting interview with Lex Fridman.
Dear Leaders, this week a lesson and an exercise from one of the names you should know but might not.
I recently read a long profile of Tobi (Tobias) Lütke and it really made me consider what makes a great leader within mature businesses making a difference.
Tobi is the CEO and founder of Shopify, he is widely recognised as one of the most influential and important CEO’s of modern-day business.
Tobi is famous for asking the five whys and wanting to understand each component of the engine to truly understand the topic and help to shape his business future.
Tobi is well known for having a saying “if I were to take over the company tomorrow, what would I do?”
Simple but effective right.
Remember — sometimes the most simple question and comments are the most impactful.
Exercise To Try: I often say to founders and management teams, go up a level and ask themselves if we had to restart what we would change tomorrow, next week and next month.
I like to consider this question as a quickfire question to ask leaders within your business and then a deep pondering to address in asynchronous work. A working document (slides in my typical use case) and ensure everyone has a chance to think, draft and create an action plan they would take forward.
What would you change within your company if you took over tomorrow?
What elements are truly broken and need instant attention. Prioritisation will be the hardest part of this, nonetheless, it is an essential exercise.
Sketch / Design Over Tables: Something I drive forward in sessions like this is imagery, whether hand sketched or created within your favourite editing tool because you put in more effect and more thought into making it understandable for colleagues.
Yes, a table is often the easiest (and you will rarely hear me tell you not to create a simple as possible table with the right columns and rows), however, a table doesn’t enable you and your colleagues to demonstrate the connective element of pen on paper or really thinking about the steps and flow.
Make It A Priority: I recommend you take this question quarterly, if you have quarterly business reviews (QBR’s) and in long-range planning (LRP’s).
Moving forward into Q3 and H2, make this a question you have to ask yourself and then those around you.
Thanks and best of luck in answering this simple but driving question.
Every business has a variation of creating strategy and creating a vision for the company, everyone does this slightly differently, particularly in the hybrid work era.
The Rules Of Vision
As previously written in the company vision cheatsheet, the vision is a ten-year top level achievable driver for the company, vision is what you will strive to become from successful strategic steps.
You can revisit your Vision every 3 years. More revisiting means it is not a vision it is a tactics based strategy.
Vision should be set by leadership and the supporting panel.
With the many options available in today’s work environment, there are a few steps to ensure you take to ensure the strategy or vision lands well.
A/ You have to make the presenter comfortable, they have to know their content and be able to feel like they have landed their message the best way they can
B/ Ask for specific feedback and questions in set time frames to ensure you have covered those who have attended and those who were absent.
C/ Set guidelines of what is negotiable and timelines to review and drive these steps forward.
A company vision is a great step and long term compass, however, the likelihood is the team needs to know they are co-pilots and there are steps they can drive forward with.
The Most Effective Way To Land The Presentation
Pre Record:
I recommend pre-recording the video of the presentation (that way stick to a time schedule – 10-30 minute max) and taking the Q&A in real-time.
Consider how you can add (cc) captions for those who may have disabilities
You can now embed videos within videos across PowerPoint, Keynote, Google Slides and Canva
Ensure all links or reference points are linked to and available (HBR articles, big reports and articles are often behind paywalled and inaccessible)
Allows team members to download the presentation deck to review after the presentation
You can also ensure the presentation is something people can watch back (for those who cannot attend or on annual leave etc)
Call To Actions:
Leverage the forms of tech available now and ensure you encourage engagement and CTA’s
Leverage QR codes and links to create an open discussion.
Connective Chairperson
Consider a chairperson to ensure it is a true Q&A format with the “leader” and the team and then people can ask follow up questions and is managed away from the founder or CEO presenting. This step is important as they chairperson will be the bridge between the founder and the staff members.
Tip: Something that works well is keeping a couple of pre-planned or “pre-approved” questions as many don’t want to be the first to ask a question and can spark conversation or create ideas in the team’s head.
Tools To Leverage:
Slido is easy to organise Q&A and can gain votes on questions. This covers introverts, extroverts and ambiverts.
Chat Apps – If you use slack or teams you can leverage the anonymous bot and settings to ask questions or give feedback.
Forms – Google forms can work but fails with threaded conversations. Microsoft forms are an option too however they can be
Spreadsheets – Some use Google Sheets or Excel to
Consider votes –
If you have a company wiki or internal knowledge centre ensure you record the event and post the presentation and Q&A to ensure it is accessible to all.
Ensure Clarity
Many smaller companies and startups enjoy the open approach and ability to add specific emojis to reach or show support, however, these emojis and reactions are hard to interrupt and very often any follow up is not anonymous leading to some frustrations.
Departments & Future Teamwork
Your company culture is a crucial element to consider and keep front of mind, especially when presenting a company strategy that many have not been involved in or if you have changed the company vision you will be painting a picture that could seem like a huge shift, businesses struggle with big change without a detailed plan they are can add into.
Remember Vision & Strategy Are Very Different
Vision and strategy are very different streams of work, it is imperative to ensure these two streams are clearly defined and the audience knows the difference and clearly shows how the strategy rolls up into a broader vision.
No connection will cause a disconnect and ripple through the business.
Timeframe
Always offer 24 hours for those who like to digest the information and then come back to ask questions, this often enables smarter discussions and follow up workstreams.
If you have not presented in this style before, expect it to land well quickly or be something many feel they will require time to digest and then come back with questions.
Best of luck presenting your company vision and supporting company-wide strategy and remember to ask for feedback and insights to improve for the follow-up sessions.
Dear leaders, it is the 100th leadership newsletter I am sending out, it is the 100-week streak, where I share lessons on company culture, ideas on leadership and frameworks to help improve your people and performance leadership.
Today I wanted to share 10 lessons your feedback, questions and requests to collaborate. Here are the ten most popular alongside supporting content to help you make a difference to your career and those around you.
