Article critiqued in this episode:
NY Times July 17, 2020 by Erin Griffith, Airbnb Was Like a Family, Until The Layoffs Started
From this episode:
I see it as looking for anything better than the bad management styles and practices people have come to hate. 70% of people are unmotivated and unhappy at work and this has been true for five decades of surveys. People are desperate.
In this episode:
This episode is helping us think about how to build cultures and organizations that can thrive in troubled times including up and down markets. We look at different levels of energy which individuals and cultures can operate at, and how this impacts the people in a business, especially when external challenges arise.
Zac: WELCOME back to Business Second Opinion Podcast. We’re always excited to bring you another episode.
I want to take a minute to acknowledge our listeners and subscribers. We love getting your reflections, and the subjects you pose. But – not all are a fit for our format and purpose, while they are nonetheless still great ideas. We only do business topics, and not government or policy subjects, as we have to leave those for you to pursue. And we don’t give first opinions, only a second opinion on someone else’s ideas and opinion. We give you the source so you can think along with us. We don’t answer your questions or respond to your curiosities about what we think about a subject. We are exposing thinking gaps not idea gaps. And we want you to learn to have a second opinion, not replace your current opinion with our opinion. If that happens, we have failed in our work.
So as a reminder, what we need are publicly available articles so we can have everyone read it and learn to question others thoughtfully and form your own opinion. It is not our ideas that matter. It is HOW we think. Our purpose is to teach the world how to be more discriminating about what they read and how to think about that content. To be rigorous in what we all accept and consider. To stop our susceptibility to lower order unexamined thinking. And to stop passing on offerings that divide us and dumb down our thinking about important subjects.
Business Second Opinion Podcast digs deep to explore questions about business and business practice. In the process of examining them, we give you a second opinion, usually a contrarian opinion, but one that is well tested and proven to give the outcomes you really want without the side effects. And by the way, if you want to learn more about how to work more closely with us, stay tuned at the end of the show.
I am Zac Swartout, and always with me is Carol Sanford, our inhouse positive contrarian. Who responds to big and hard questions with a radically different take.
Carol: Hi Zac, speaking of discernment in what we read. We got an article from John Paul Maxfield, founder of Waste Farmers, with a request to have a second opinion on it. I am interpreting it as questioning cultures built on emotional connections in the company or maybe about people first cultures. Zac, tell people to reference to find it and what the NY Times article was offering and opinion on.
Zac: Yes so you all can find this from the July 17, 2020 issue of the New York Times. The article is entitled AirBnB Was Like a Family, Until the Layoffs Started – by Erin Griffith.
Carol: What did you see the point of the article and the message that the journalist, Erin Griffith, was pointing us to?
Zac: My read was that she was illuminating the culture of AirBnB and what she saw as inconsistencies between espoused values and practiced values at the company. For example – while they espoused values like belonging to their employees, they simultaneously had to fire 1900 of them due to the crunch the travel industry experienced during the COVID-19 pandemic. In other words, she was aiming to examine the culture of AirBnB and what she perceived as conflicts between the business’ need to survive versus its culture of wanting people to feel like they were in a family.
Carol: Why do we pursue such cultures, do you think? This is a popular idea among people who are selling org dev now days. What makes us seek that?
Zac: My sense is that it all comes down to motivation. The technology and startup sectors in general perceive themselves to be in a constant war for talent. And so they need to innovate ways to keep folks happy and motivated to grow their companies in highly competitive spaces. These companies differentiate themselves not only through their offerings, but most loudly seem to do it through the cultures they espouse inside. These cultures, whether about belonging or strong mission statements – as pointed out in the article – are organized to keep people happy and excited to work there – almost in like an organic way. These cultures are often contrasted against older, more industrial driven models.
Carol: I see it as looking for anything better than the bad management styles and practices people have come to hate. 70% of people are unmotivated and unhappy at work and this has been true for five decades of surveys. People are desperate
Zac, I know this has felt personal to you, causing you to leave corporate America. What is missing from your experience?
Zac: I definitely feel it as a small business owner of a start up myself. We recently had a conversation at work about our culture as well. How to recognize it, what culture means, how it works, and what its effects are. But more than that, I have a strong desire to consciously build a company who’s culture doesn’t fall into the morass that many others find themselves in. And I can tell you…it ain’t easy. I know for us I do my best to instill development as a core process and having us all reflect on the effects as culture – rather than trying to work on culture directly through perks, for example.
Carol: I think this may be another example of the Nobel Laurent Economist, Herb Simon’s caveat, building on Voltaire, which is that we settle for something better than the bad, any good idea, which blocks us from seeing the best way. Let’s offer a way to assess any so called improvement idea. That is to assess the quality of energy it evokes in an organization when implemented or executed.
Zac: Yeah, I see a lot of value in a framework we use called levels of energy. I think for today we use four levels of it to help people learn to assess different practices, programs and cultures. So visualize a ladder – if you consider the lowest rung or order of energy, that’s what we call vital energy which is all about survival or the most base energies that allow an entity to live. The next rung up from there is automatic, which is all about that which we do unconsciously. I would say we are in automatic most of the time – whether it’s how we brush our teeth, take a shower or drive. Habits live at the level of automatic. The next level up from there is sensitive, which considers our relationship to the external world and how we interact with it. And finally conscious is how we use our own mental capacity for reflection to be more connected to a larger purpose.
Carol: It is not something we consider often, that our mental energy is framing how we think, make decisions, design programs and interventions. Can you give an example from your old life and how it would look if you moved up a level or two or three.
Zac: Well I think during my days on Wall Street I considered most everything from a vital lens. I was consumed almost completely with whether or not I was going to make my sales draw that month. As they would say back then, every month we started back at zero dollars. This basically had me living in a constant state of fear and panic. I approached the automatic level to try to structure my work. So I would put my sales calls on automatic – tracking some number of them a day between 100-200. Not thinking very much and just executing. The next level up from there, which was the highest I ever got was being more sensitive to the needs of my clients. What were they asking for and how to I deliver on that? So I was in dialogue with them. This took more time than the regular sales process so I ended up with less clients and deeper relationships. But in the end I mostly use unconscious sensitive energy to drive the competitiveness inside our company. It was like the Thunderdome in there. And I didn’t really reflect on anything back then and was conscious of very little I’d say.
Carol: So let’s apply it to a culture now, like Airbnb in the article JP sent? When they are on vital, there is a tendency to keep people on edge and worried about the future, personally and for the business. Everyone is concerned about its capacity to remain alive and the internal energy speaks to its loss of hope and recovering what it once had.
Zac: At this level, the energy of people gets diverted from their normal tasks and instead focuses on whether or not they or anyone else will be considered vital to the organization. Work is really no longer of primary concern. Instead, energy is focused on who and what will be dropped and on who and what will be allowed to stay.
My experience of how that happens, works and feels is frankly incredibly detrimental. When I worked on Wall Street I was really unhealthy. I ate too much, drank too much, never slept, and was constantly trying to self medicate in order to not feel so anxious all the time. So I see the Airbnb story falling to vital here. With the pullback of the travel market, the founders fell into vital energy to try to survive. As Mr. Chesky, one of the founders stated in the article: “You’re in a house, it’s burning, you have to put out the fire while getting the furniture out of the house and also rebuilding the house.” This is an example of vital energy at work. Where one thinks one’s very existence is at stake.
Carol: Decisions, like the one here, fall into a different level. They had been a sensitive energy, paying attention to feelings and concerns for all. But the decisions which fall into vital energy where decision processes of the organization become polarized. Those things and people that deal with the indirect and the long term are devalued. Those things and people that relate to the short term and directly become increased in value. Polarized behavior results from this shifting value.
Zac: So to your point, they did things like set up “war room” calls with investors, changed their refund policies, and also cut their 490 full time freelancers. All seemingly based on this vital level of energy that was driving thinking. They also shelved ideas like stakeholder capitalism which was driving a larger purpose within the company. This is topped off by Mr. Chesky’s desire to end up “on the right side of history.” Another example of polarized thinking.
Carol: When we are on or in vital mental energy the behavior of people becomes more assertive and often divisive. People are increasingly ordered or directed in regard to what functions they must engage in, bounded by their functional sense of themselves and how they must carry them out their function. The will of the organization is much more excitable than it is under less taxing circumstances. Accountability is seen as externally driven and managed.
Zac: I recognize that in my own life as well. When COVID hit our company the emails stopped, phones stopped…the whole thing. There was a week there where every day was battlestations ready. I was reading the John’s Hopkins infection dashboard and every news outlet I could for answers. After 3 migraines and a panic attack, I stopped doing that because I was actually able to see the effect my own thinking had on me.
Carol: Leadership from this level of energy often sounds like exhortation, pep talks or even threats and castigation depending on the state of the person offering leadership, at that moment.
Zac: In my new start up, with new employees and relationships, I definitely felt the need to do this as well. Many pep talks to myself and my crew. But again, realizing that pep talks don’t do very much and don’t get me or anyone else very far beyond getting to the starting line.
Carol: If we look at an organization stuck on automatic energy, we notice an organization expects that everything is in place and things should automatically be done. In such an organization, procedure prevails over people. In experiencing the energy of the organization, one gains a sense of a machine-like state with a lack of personality.
Zac, How does this play out in your life? Guess about Airbnb?
Zac: I see that playing out here with a core assumption that affects not only AirBnB but many other companies and people. Once you get repeated processes in place they begin to calcify – just like habits. This works well to take the thinking out of repeatable tasks but it disables the capacity for complex thinking when the market shifts or things deviate. In AirBnB’s case they had expanded other business lines and put them on automatic without considering the implications of that growth during a pullback. The effects of this were the need to automatically cut drastically across the company seemingly more across financial and structural boundaries.
Carol: The decision processes of the organization are focused on variances and their correction. Behaviorally people in the organization are very responsive to any functional requirement. They largely seem to have left their being or concern about their state of being behind. Being is kept out of being a part of “business interactions” of the organization. Leadership from an automatic state is often generic rather than specific. Using traditional means of incentives and rewards, role modeling and punishment on a selective basis to set the tone.
Zac, how is this different than a family oriented culture spoken about in this article.
Zac: We can see this as exemplified in the issue with cutting the safety team internally at AirBnB. This team was intended to support issues with rentals that include shootings and assaults. This team was hit during the cuts and AirBnB had to end up re-hiring some of those folks in order to work through the cases. This also happened with their regulatory response and payment teams as well.
Carol: I see the Airbnb culture as seeking to create a sensitive energy culture where an organization operates at a level of energy where relationships become a central focus. There is an expectation that people, their origins, and their gender will be paid attention to. There is a level of awareness and caring in such an organization that does not exist in an organization operating at the level of automatic energy. But there is also often a focus on feedback, openness of inner unexamined, undeveloped, thoughts in regard to behavior of others.
Zac: That seems to be what they aspired to. That showed up with their slogans on the walls about belonging, to the executive team giving a standing ovation to the people they let go. In my experience this level of energy is predominantly where most of their ideas for how to shape the culture are sourced from. The issue with sensitive energy is it can often turn internally focused instead of maintaining an external one.
Carol: The decision processes of a company operating at a sensitive level of energy are expected to be carried out while maintaining identified standards of behavior and conduct. Each decision is made against a clear articulation of the goals involved in making the decision. Generally speaking the members of the organization are carefully schooled in the guidelines expected of members of the organization in the decision-making process. And there are conversations designed to course correct when needed.
Zac: It seems that Airbnb spoke to this level with the family metaphor but was missing some of the practices needed to make it work. You can see this showing up in the examples from the article about AirBnBs treatment of firing contractors and the sexual harassment claims that emerged from within the company at that time.
Carol: It seems that perhaps their language was sensitive for relationships but the operations was more on automatic. The procedures were still proscribed from a hierarchy but a benevolent one.
Zac: People operating at a sensitive level of energy have intentions which are not evident in this article. They were more relating to one another rather than to their customers and stakeholders which left them vulnerable since they were not to be serving the market and stakeholders, but one another.
Carol: With a sensitive culture, the design is for all members is to be of service, but externally, not focused internally. They had one aspect of sensitive it seems, which was accountability for managing with the intention of fairness across the system.
Leadership at this level concerns themselves with psychological safety and couching their behavior from a beneficial authority role and seeking to avoid introductions of negatives.
Zac: What is needed is a move away from role to role engagements (boss to subordinate) to self-to-self, where the work is the focus. So conversations become concerned with what is needed as a team, partner or collective to do about a given situation, guided by managing principles that are a guide to reflection as seen above. There is an avoidance of sharing personal feelings and expectations of others, and instead replaced by more self-reflection based on development principles rather than behavioral and humanistic principles.
Carol: Conscious energy is the real game changer. In an organization operating at a conscious level of energy there is a recognition that each entity and person has an “way of being in the world” and identity of their own which is consistent with their essence. There is a recognition that existence is a stratified phenomenon and the persons and organizations both seek to reach higher strata or higher orders of existence.
Zac: For example, the organization is in an ongoing development process where they regularly learn about their own behavior, and how to bring personal essence expression into the work. They learn to examine the history of business and the volatility of markets and world forces. They are stewards that watch and study restraining forces like world changing forces. They are in teams that have stewardship for the organization, not at the mercy of beneficent leaders who will take care of them as a loving father. The family metaphor is seen as fostering dependence and external locus of control.
Carol: No one is surprised by outside forces because the teams and work design is organized to draw everyone into the over management of the business and preparation of dealing with up and down markets as a result of global and local forces and volatility. They have decision processes that constantly account for and share responsibility on managing energies that result. The capability building has managed global forces as they affect the business but also the business’ customers which is where they first thought is when times change.
Zac, how are you aspiring to work this way as you grow? How are you building capability for this and why is that important?
Zac: I rely on my team members to be self-managing and conscious of the same external forces that I am focused on. We don’t silo information inside the organization and instead we think and work together on what is moving in the markets in which we are nested. This is all underpinned by development through conscious reflection.
Carol” The decision-making processes of the organization are based on providing or achieving new strata of existence including resilience and ability to move effort in a new direction. The strategizing process does not limit its direction to one source of income or one path. Intrinsically they see this requiring of themselves the seeking of higher order ableness and greater understanding of the working of reality. Extrinsically they see this as requiring the ability to generate operational images and patterns of operating toward what is better and to do things out of conscience and conscientiousness.
Zac: The behavior of conscious organizations is the sum total of all the work done to produce something of higher value, and to provide all members of the ecosystem with the ability to engage in meaningful work. They tend to the people and events with equanimity and acceptance. They have the character and will that seeks to redeem the earth and the life upon it for the future.
Carol: Kingsford layoffs, Colgate in New South Africa
Zac: Airbnb is a good case story for our times. Lessons I am taking away are, as always, our companies are edifices to greatness or competitive winner take all games. They are platforms for development. Everything is grist for the mill. The harder the shock, the more it invites us to engage and find a path forward to continue to stay in meaningful relationships with the world around us.
Carol: Check out our show notes, learn about the new parenting community starting this fall and the reopening of The Regnerative Life Project
Zac: We have several new learning communities to do this kind of thinking starting in 2021. If today’s show intrigued you, it was sparked by members in one of our regenerative business communities. The second year is about leadership including leadership of change in one business or organization and an industry. Check out our different business communities at CarolSanfordIntitute.com under Offerings.
Carol: We are launching a new community for parents in couples, family pods organized around the same children and community pods of multiple family pods who learn and grow together.
Zac: Your organization can set up a book club for The Regenerative Life, using an extensive workbook and video online Workshops for Free. 50% discounts on bulk buys through my publisher. More at carolsanford.com.
Zac: This has been Business Second Opinion
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Carol Sanford and Zac Swartout, co-hosts