Doing the Right Thing
We all want to do the right thing and when times are good, such as they’ve been during the previous boom, many of us have. When times are good and unemployment is low, when customers are plenty and the overall outlook is generally rosy, human nature tends to seek a higher and often altruistic purpose. During those times doing the right thing aligns with our goals and objectives and becomes a norm as humanity rejoices. However, the real measure of a person and most definitely of a leader is tested when the chips are down when the economy just went from 90 mph to 5 mph in a matter of weeks, and then suddenly doing the right thing isn’t only difficult, but is also being advised against by your investors, your board, and most of your senior leaders.

Such are our times today.

Whether you’re part of a startup team, a team in a large enterprise, or a non-for-profit, doing the right thing today is immensely more difficult. Fortunately, there are some who understand the true nature of their leadership responsibilities and are living up to them on a daily basis. I’ve been so inspired to speak to some of these leaders and would like to share some of their thoughts.

People first — I hope it doesn’t come as a surprise that the most important responsibility of a leader isn’t the shareholder value, instead, it’s the person who has entrusted their time-for sure the most valuable asset any of us have-to that leader. When the times are good, like an admiral, the leader is responsible for stirring the ship toward a “True North”-toward the vision, the reason that the organization exists. They are also responsible for helping their people to grow, for treating them with respect and fairness, and for representing the collective values of the whole organization.

But in a time of crisis, the main responsibility of a leader is her employees and their families, her customers, and even her partners and service providers. Her people have to come first. This could mean anything from simply being completely honest about the risks and the available runway to covering virtual homeschooling for employee’s kids, to offering equity instead of salary or collective salary cuts over layoffs. I believe it’s important to make every effort of preserving your people’s employment, this includes closing additional funding at a potentially lower valuation, since your public comps have likely taken a significant hit, to considering completely new sources of revenue.

One silver lining of a crisis is its ability to harden our resolve and with constraints in time and resources to create a laser focus on a do or die objective. Consider how productive something like hackathons held over a single weekend can be. Many have been able to pivot e.g. YouTube, Twitter, Instagram, and your company could too.

While ultimately you may not be able to keep all of your people employed, before laying off anyone you owe it to them to consider all options. Consider Toyota, who has famously paid their people working in the factories to come to work even when there was no work to be done, instead of laying them off. During those times they asked these people to instead figure out a way to improve their factories and processes, to make them more efficient. As a result, when the downturn ends, as it always does, Toyota was able to come out of those periods much faster and stronger than their competitors.

The specific way in which you can respond will of course depend on your organization and the impact from this crisis, but doing the right thing will be remembered and will create trust and real prosperity for your organization. While not doing the right thing will also never be forgotten and will undoubtedly lead to significant damage to the organization’s values and irreparable hit to the reputation of its leaders.
['Dan Richter']
['Startup Lessons', 'Leadership', 'People Management', 'Economic Downturn', 'Startup']