19. The Wartime COO

Brandon 0:06

Hello everyone and welcome to another episode of the operations room a podcast for CEOs I am Brandon Mensing. I'm joined by my lovely co host, Bethany Ayers, how're things going, Bethany?

Bethany 0:16

Yeah, they're going fine, Brandon, thanks. I have this new super big monitor. And I can see myself really clearly and the light is shining in a way of every single wrinkle under my eye. And I know I have to stop smiling.

Brandon 0:30

Right? What do you mean? It causes more wrinkles, though,

Bethany 0:32

you're saying it totally causes more wrinkles? I guess their smile lines, right? I should embrace them. Embrace them and the age is

Brandon 0:38

a smile line and actual thing or is that made up? Because like, just because you smile more doesn't mean you're gonna get more wrinkles. It seems ludicrous to me.

Bethany 0:44

Well, because I guess you either get wrinkles from smiling or you get like gels from frowning. So you just have to pick your poison. I'll go for the smile lines.

Brandon 0:52

Nice. What do I have that? I don't know if I don't smile? A tremendous amount, but I don't gel Gralla? What's the the reverse of that?

Bethany 0:59

Yeah, I guess like what you just saw down? And everything kind of follows. Yeah.

Brandon 1:04

I think I got neutral face problem is what I have. Yeah, but you also

Bethany 1:07

have like a portrait of Dorian Grey in your attic. You just don't age at all. You look exactly the same. It's really ugly first. Yeah,

Brandon 1:15

one president of the Corvette: 1980

Bethany 2:40

do that one first. So everybody is totally shocked when they don't get a present. Like that's life. And then you do the other one of like, and this is the fun life.

Brandon 2:48

Exactly, exactly. This is the bluey episode because every kid was crying because they got nothing than that. It was like it was a big blow up for the party. It didn't it didn't go particularly well. I

Bethany 2:59

miss bluey because mine are a bit older. So this is I've never actually I don't

Brandon 3:04

know, the greatest TV show on earth.

Bethany 3:08

I have heard this from parents but like passed us by we have Peppa Pig and Ben and Holly's Little Kingdom.

Brandon 3:14

Sounds pretty secondary to me. I don't know. All right. So this is the second moderated session from the operations nation conference that we did several weeks back to last week's episode was Philip lakyn. Talking about no code ops, no code, no problem, I think was the title of that talk. This talk for this week is the war time CO which was moderated by myself. And the guests in my case was Hugh Slater, who Slater is the co founder and CEO of Olivia Health, and the former CEO of travel perk. And we had Bella Davis reamer, the head of HR operations from job lift, join us as well for that conversation. And I guess what I wanted to do, Bethany, before we flip over to that moderated session, was to throw some stuff back and forth between ourselves in terms of this so called war time CIO, and see what we think. And the definition of the wartime CEO was the organisation having a imminent existential threat to the business in some form. And obviously, a lot of companies right now that threat is really a finance threat in a lot of respects in terms of their future funding in this case. So I guess the first thing I wanted to ask you was, Do you think there is a practical difference today, in terms of how you operate an organisation based on being in a wartime scenario?

Bethany 4:32

I think that oftentimes, being a war time CFO is about doing the things you're supposed to do all the time, but you have to, rather than have the luxury of doing it when you feel like it. So being super focused and not trying to do everything. Looking at the business case for every investment watching your pennies, just apps loosely achieving the very next most important thing before moving on to the next one, but you just don't when you have a lot of money in the bank, and things are going well, and you're making hay, and then you suddenly become very expensive, and often probably don't progress as well as you could have had you stayed more focused. What do you think? Yeah,

Brandon 5:21

I mean, it's interesting, I actually agreed with Hugh Slater's comment, which the listeners will listen to shortly. His point of view is that in scaleups, you're always in a existential threat mode, because the fact of the matter is, you get cash, and the cash is meant to burn, and you can burn it for roughly eight and 24 months, depending on how much revenue you bring in. So that timeline is very finite, and the cash is very finite. So there is a real sense of urgency and that the stakes are high from the outset, given the fact that you have a timeline that you need to be hitting, there is no wartime CEO per se, what there is, is you have funding, you have a timeline. And that timeline is your, your lifeline, I guess to get to the next round, I

Bethany 5:59

can see that I guess it's the difference between creating urgency and actually facing a true existential dilemma, which does focus the mind in a way that you've just raised a bunch of money, you need to spend it to reach the next goal. There's urgency, but there's also like a level of construct to it?

Brandon 6:16

Well, it's a good point, because I remember back at one of my previous companies sitting in a room with the VP of Finance and the CEO, and looking at the forecast together. And I think we had a realisation between the three of us that we were in quite significant Jeopardy in terms of our financial forecast and the revenues that had flatlined at that point. So the second question was, how do you surface existential threats to the organisation, and inject a sense of focus without scaring people,

Bethany 6:44

I think this is a really hard one, and comes down to maybe the size of the organisation, the level of experience in the organisation as well. And oversharing. At peak, what we used to do, as people were on boarded was have at least one if not two sessions on SAS, economics and SAS metrics. And what does it mean, and also talk about what being a VC backed business means and why we're looking at it so that everybody had a level of understanding. That meant that when you shared results on a monthly basis, everybody could understand what was going on. And we also spent a lot of time upskilling and supporting our managers so that they could really answer all of those questions, regardless of what part of the business they were in. I think it's all about providing as much context as possible before you then go in for the current state of affairs. Yep,

Brandon 7:43

I think you're exactly right here, which is, the transparency around the state of the business is important, but it has to be framed up correctly. Here's the reality of the business. Here's the context around that reality, to ensure that people don't freak out. We need to think back to like, why we joined this company in the first place, you could have joined any number of scale of companies, you joined us. And the question is why? And really getting the leaders of the business to really articulate. Here's our purpose. Here's our mission. This is why we're getting up in the morning. This is the whole point of the exercise here. And going back to basics, is I think both a galvanising message, but also a message of optimism. Yeah, I

Bethany 8:18

completely agree. I was always surprised the number of people who would ask in interviews, whether or not we were profitable, or like, how can we be a business that isn't profitable, and like just having to explain venture and startups to them? Like, generally, it would be somebody who was technical, who just hadn't really ever thought about it before, the level of understanding is pretty low for a lot of people coming into the business, and it's just about making sure they understand. So

Brandon 8:45

Ben Horowitz he wrote this book was the book called again, I was gonna say, making hard things,

Bethany 8:50

harder things, the heart of hearts and the hard thing about hard things, Pam,

Brandon 8:54

I'm gonna say. So, at the end of the book, he talks about this concept of the war time not see all but CEO in this case, huge list is about 25 things that he lists there. One that he listed was that a wartime CEO swears and doesn't speak in a normal tone. And I remember reading that and like, what, what does that mean? It doesn't speak in a normal tone.

Bethany 9:21

What do you make of the freakout? Yeah, I think it's like a point of observation rather than maybe directionally what you're supposed to do. But it's a way to figure out whether or not it is a wartime moment. There's like a diagnostic toolkit, like Oh, swearing all the time check. We must be an existential crisis.

Brandon 9:41

It reminded me of a former VP of sales that he used to work with, and he was an expert at landing the F bomb in a very effective way. He used a very judiciously and used it to great effect when he was talking about something and always had a certain level of admiration for him to be able to pull it off in a way where he didn't offend the oddity. ends. But he got his point across in a very pointed way, I guess. Yeah. I mean, there's something there. All right. So let's move on to our conversation with myself and Hugh Slater. And Bella Davis remember talking about the war time co

Brandon: 10:19

love lovely. So I guess what I wanted to start with was Ben Horowitz, the co founder of Andreessen Horowitz, he coined this phrase, the the war time CEO, and maybe just a short bounce here in the past 12 months for your organisation. Have you had budget cuts? Have you had hiring freezes? Or have you had layoffs in your company? If you just raise your hand? Okay, wow. So a good three quarters of the audience has had economic uncertainty applied to their company in some sense. So I think we're all feeling this pain tremendously right now. And this kind of war type scenarios is very, ever present, I think, for companies and he defined war time as an imminent existential threat to the business. Can you maybe give us a definition from your perspective here in terms of what is a wartime CEO? When you think about implications for your organisation right now, what are those implications in terms of how you operate the company?

Huw Slater: 11:06

I think the definition was quite good existential threats. But we're in startups. So unless you're profitable, which probably isn't many of us, we're always an existential crisis. So I think it's just a spectrum. For me, there are good times when capital is abundant. And for me, that means decision making, you can take more risk, you're allowed to get a bit chubby around the waist, you probably have a few table tennis tables in the office. And then there's real war time, the fat goes out the window, you lean down. And the risk is minimised, because it's about survival. Right. It's not about taking those big swings anymore, I think was that Keith Raboy, just today reminded us that we're still in survival mode, right? There should be no startup out there that thinks next year will be okay. It will not be okay. So when it comes to decision making, and literally I was writing a notion page before I came on stage, the leadership team is about that it's cut the fat right now we had a go at that just a month ago, we're going again, at the fat, then it's going to be into muscle, right? We're gonna have to cut some muscle for sure. And hopefully, we never get to the point where we have to cut some bone. Because if you cut bone coming out both sides really hard. Yeah, that

Brandon: 12:13

makes tremendous sense. And then getting back to your metaphor, what's your definition for those categories? When you think about Skeleton muscle, and in several ways, the other one, fat tissue? Yeah,

Huw Slater: 12:23

I think we all know, fats, it's the WeWork office, you might have in a remote place that nobody ever uses. I mean, that just goes through, in fact, quite a lot, offices should just go out the window. In my humble opinion, if you're hybrid, just get rid of it might just save the 10 grand a month or whatever you're spending. For the short term, I would not advocate that for the long term. But I think we know the fat, right? It's the nice to haves all around the office, it's all the projects that are just nice to have that you don't know we're gonna deliver anything. They just stop, right? Muscle is this thing is working. Right. But actually, it's for the short term. Back to Bill's point. It's capital intensive, and I don't see the ROI coming in the next six months. Sorry, you need to get into that at some point. And bone is just, you know, if you need to chop off your leg to survive, that's what you're going to do. But you're going to regret it basically. Okay,

Brandon: 13:11

perfect. And then Bella, from your side of things, can you give us maybe an example and one of those categories? In the past six months, where there was a very specific discussion and debate within your company around? What do we do? One experience

Bella: 13:22

that I've had in recent years, was to decide how we will be able to save money because of the pressure of the board. Of course, one of the first thing that you think of is cutting people, I'm a servant leader, I really care about my people, I really believe in building people up mentoring as well, trying to see how people can get to the next level. So for me, that was something that was very difficult to do, especially because I wasn't necessarily the person that took the decision, it was the CEO, but you are the one that have to go and give the bad news to the person. Especially in my case, where I had to do it, I had to cut about 50% of my team. And literally on Tuesday, I was talking with one of the girls and saying, Hey, tell me now that you know, you pass probation, everything is going well. How can I help you? Do you want to stay with me? Do you want to go to customer success? Do you want marketing? What interests you? And literally on Wednesday, the day after I had that conversation, my C level tells me Hey, you're gonna have to cut her. And on Thursday, I had to go and tell her that it definitely wasn't easy. But hey, it's something that you have to do if the company is completely squeezed out doesn't have any funding, and maybe the board doesn't necessarily believe anymore in the vision of the product. So you have to make the tough decisions.

Brandon: 14:44

Wow, that sounds very painful. So this is probably a good segue to the next question, which is, especially as a leadership team and as a CEO, you often have this circumstance where you have to surface an existential challenge to the business. For example, we've got six months of cash left in the company. and you need to communicate the company around this, we want to do so in a way that's galvanising inspiring and not freaking people out and having them run to LinkedIn to look for jobs, basically. So is there any kind of best practice or ways to approach that, that you find are more successful than other ways of doing it?

Huw Slater: 15:15

For me, it starts way before wartime, or the existential crisis of all time, in that we're quite a transparent organisation anyway. So we're very clear upfront, and it's part of the recruitment process, you are joining a startup, like a early stage startup, we are not profitable. And it's our job to get us to survive, right, that's the relay race ahead of us, we've got that sprint to get to survival. And that's the tone that you have to set. And we do kick off every Monday afternoon, we talk about it, I talk about burned multiple, you know, if we're not spending the money in the right place, we're not going to grow, we won't raise capital, we're not currently we are not in the game of turning profitable writers about achieving the growth, getting the right metrics, raising more capital to go again, we've been very clear about that. But if you shy away from it to begin with, and you hire people under the pretence that you're Google, but a smaller version, that's a very hard thing to come back from, and actually just hiring the wrong people. You want people who can sort of thrive in that somewhat chaotic environment? So short answer is do it from the get go.

Brandon: 16:16

Right? That makes sense very early on setting the tone for really what kind of organisation they're joining the risk level that's associated to it and making sure that's really set as an expectation. So maybe you think question to you, Bella, is there a way of communicating this in a way that actually inspires?

Bella: 16:30

Yes, I agree with you, I think it's very important from the beginning to have that type of culture, of having transparency in your communication. Unfortunately, if the tone is already set, in my case, for example, a joint companies, I mean, series B's and hire have only worked for startups that were in later stage. So everything was already set. So all I could do was affect what I could. So within my ops department. And in my case, what I always did, I was always transparent with making always even the bad news. However, you have to do it in a way that they don't get freaked out. And they don't stop getting the Sunday jitters, oh, my God, I don't want to go to work, I made sure that I was transparent. But without sharing too much of the Big Bad decision that I've heard right when I was discussing with the executive. So I would say definitely transparency, and making sure that you have one on ones also with each of your team member to check on them. Also, because each person within the organisation has a relationship with somebody else, somebody might be friend with the head of marketing, they go out, I mean, in Berlin, everybody go drinking after work, beer and so on. Right? So people might have relationships. So it's very important to also for you, as a leader have a good relationship with your report. So then they can share the information that they hear. And then you can adapt a

Brandon: 17:48

different question to a broader nature. But as an ops professional, when you think about the risks that you should be vigilant about, in the context of the company, what are those things more broadly,

Huw Slater: 17:58

maybe it's because I came from a finance backgrounds, right, but I'm always looking to cash, the quote, to cash process in particular, and what are we selling up front? And how is that flowing through, you get super geeky about like DPO, DSO, right? But the things that actually matter, because it's cash, if you're not looking at cash, and you're only looking at LTVs, and CACs, and other important SAS metrics, but you take your eye off the cash thing. So anything that puts out a risk, and today, we are at risk, because everyone is going to start withholding payments, they're going to say, oh, yeah, your invoices, 15 days, but I'll pay it next month, that's when the payment when you're living on the edge, that's the difference between payroll and no payroll. So for me, it's anything that puts cash at risk. And that might be the same as you withholding payments, right? It might be the same as not signing up to the one year deal that gets you the 20%. So for me, it's just observing cash, seeing what's going on looking at every payment, it sounds really boring. But that's the thing. That's the leading indicator that will tell you if there's something bad coming down the line because anyone can manipulate a sales funnel, you know, pipeline and marketing or make the numbers look good. But what matters is our customers paying you.

Brandon: 19:04

Yeah, I'm sure your VP of Finance will appreciate that. So the the focus on the cash, you're welcome any fun. But that makes sense as an ops professional, which is partnering with the VP of Finance or the head of Finance to ensure that there's a real focus on the actual budget itself. I

Huw Slater: 19:19

think the mistake that I've seen some VP ops make actually is assuming finance is somehow separate. I think financial information is just another data set. It's just another operational data sets that you need to include. And if you look at it that way, but a bit more focused on that data being accurate, being timely, you shouldn't accept, you know, month end happening three weeks after the month, well, that means you're blind for three weeks. Would you accept that in any other operational data? No, but certainly not one. That means you can't make payroll. So that sort of mindset shift, it's just another operational data set, and then get your VP finance on it. Yeah,

Brandon: 19:56

that makes tremendous sense. So then Bella for yourself, same question. You think about them Rotter reset for an ops professional, what does not for you, in this case,

Bella: 20:03

I will say looking at the financial environment in the business that I'm in, we have been impacted a lot by the wind crane, for example, and also the economic downturn in the US. So observing that you just don't want somebody that comes into work does the day to day task and not look at what's going on outside in order to adopt the right strategy on time. And on top of that, looking at what your competitors are doing, if, for example, your competitor in the Netherlands, is able to do it within two days, but on your side is taking two weeks, then there is a problem. So really observing what your competitors are doing and adapt quickly as fast as possible. So

Brandon: 20:41

then, maybe just getting back to Mr. Ben Horowitz, the co founder of Andreessen Horowitz, he has a quote in his book where he talks about one tactical recommendation that he suggests is really creating an HR machine in terms of a very efficient system to both layoff individuals, but also hire new individuals, we have the rebound effect. And I guess my question to you is, is that a good recommendation?

Huw Slater: 21:03

At the one level up, which is just resilience, right? I think it doesn't matter what department you're in, you should look at resilience. And for me, that means creating optionality, right? And the good times and the bad times, how are you going to scale quickly? And how can you close down costs when things aren't going as planned? Or there's a wartime situation? So I think he's absolutely right with the HR machine. It's amazing how often, I mean, recruitment teams always get it in the neck, right? You're too slow to recruit the sales team, or to sleep through quick tech team, finally, build a capacity in the recruiting machine. And that's it. Oh, shit, actually, we're freezing hiring. Okay, now you need to fire to a team that you just can't win. So, for me that comes down to the operating model, what is your operating model as a business? How are you building resilience into that team. So maybe you should only hire two permanent TAs and the rest? Yeah, you'll accept the cost of it being outsourced. But that's a good cost to pay for the flexibility of, you know, switching on and off. So, absolutely right in the HR, but I would expand it to beyond HR, I think you should look at resilience and optionality just as a core part of your operating model.

Bella: 22:10

And we'll see. So good recommendation, for sure. However, I think it's also very important to remember that at the end of the day, you have to lead with empathy. So in the sense that sometimes you will need to make very difficult decisions. So one example that I've experienced in recent years, where the whole HR team needed to be let go being made redundant. And now there was only one HR person, and you still have to deal with all the contracts that are coming in potential lawsuits from the ones that are being made redundant. How do you deal with that? And simply because your company decided to focus on the sales or the commercial part, you still have to deal with all the layoffs. But you also have to deal with the onboarding. How do one person handle all of this, if you're in a survival mode, and you're in a crisis, and you are forced to only have one HR person, it will be to implement cross trainings, for example, right? I tried to see, we can step in, if you have working student, for example, in the company, they can step in and help you but also implementing some type of automation. So then the automation can assist you with the oil a short process, it's

Huw Slater: 23:20

really good advice, by the way that I literally took my biz ops team away for the morning the other day, and we did a little two by two, I love a mental model. So we did a two by two on what is the part of the core value prop to our business and our product and what is not, and then what requires a specialist versus generalist, and then the idea is then you plot, not the people on that, you plot the jobs to be done on that. And the idea is there for us things like Labour Law commercial like that is not core to our business. And IT specialists that we will never hire those people for go IPO, maybe we'll have to hire a couple of them. But for now, we will never hire them. Whereas if it's core to your value prop and I'd actually argue in a lot of cases HR is core to value prop, if you don't hire the right people don't manage your culture, well, you're in big trouble, cause your value prop and a bit specialist. Okay. For Biz Ops, what we want to do is only hire internal capacity, where it's core to the business, and its generalist. Because when that's the resilience part, because then we can move if you're in HR, for example, and you're a generalist, we can move you somewhere else. So that's just the model we use to kind of create that resilience. And I did it with a team. So they got to plot everything on the map, and they understood the model rather than top down imposing it. So just a hopefully a useful tool for people to bring that to life.

Brandon: 24:41

Yeah, well, that's a good way to mental map it. So what is the biggest crisis in an organisation you've ever experienced? And maybe just walk us through that story of what happened, what you did, what the outcome was and what the lessons learned were afterwards like he's

Huw Slater: 24:54

cool, definitely travelperk So join travel book, that GMB but no, right revenues, zero revenue, we've got 20 million in ARR. And then march 16 2020, came around, all Travel Stops, right? So we're a tech company VC backed, doing very well, you know, in the hyper growth journey, burning at the time, but two and a half million a month, which was well spent, by the way, the bid multiple was fantastic, but burning nonetheless. So at the time, I was CFO, COO CHRO. And overnight revenue went to zero. In fact, people pre bought travel. So we were given refunds and to people. We did that because we think it was the right decision. But obviously, airlines weren't giving out refunds, right? They were given vouchers. So we were watching cash go out the door, but getting vouchers from airlines anyway, it was a total shit shit show. And literally, we had a board meeting that week. And we went from completely on premise business based in Barcelona, everyone came to the office every day 450 500 of us, everyone very happy to just complete unknown, right? How long is it going to last? How long can we survive? So that week, actually, just for the board meeting, we were seeing the travel data in China and then Italy, obviously grinding to a halt. So we knew it was coming. I got the leadership team into a war room on Sunday night, and basically ran through what I just said. So what's that what's muscle, what's bone, and then the lens of sort of long term, short term. And we built a plan, just the four of us in a room over some pizza, so that when we went to the board, it's like, this is what we're going to do. And we're going to do it in tranches. So back to the optionality, right? This is our first wave of cost cutting. And to Bella's point, everything was about op x, right? One of our values was about people, we're not going to give up that value of believing in our people at the first sign of trouble, so we did absolutely everything we could on topics, and then some and only, you know, eventually we got to following people and pay cuts and actually then just voluntary redundancy. We were lucky not to make anyone redundant, but it was a disaster. And it was sustained, as we all know, right. So it didn't just last a summer went on and on and on. So it was incredibly stressful. At the time I was living in Barcelona, two young kids, Barcelona was going to a hard lockdown, which I did not want to do with two kids in an apartment in central Barcelona 14 degrees. So overnights March 18, we left the house for the keys through the letterbox never went back, just move back to the UK, which was much better bad here, but we have a lot more freedom. So had the whole life situation going on as well as work. So that was the situation. What do we do about it? We prioritised? We built a very robust comms plan. Transparency was at the forefront. But transparency isn't all or nothing, right? You've got to be transparent about something. There's no point telling people everything if they can't do anything about it. So we were very clear about what was happening, how we were prioritising. First we were going to survive, right. So we'll do whatever it took to survive. And then we try and thrive was the mantra that we we went through. So when we took actions when we took pay cuts, when we felt like people understood the journey that we were going on. We ended up doing okay, through the process, we actually kept the sales team kept everyone in sales going. What turned out is COVID People weren't travelling, but travel managers realised the small bit of travelling they were doing was very complicated, and they needed a solution. So sales were bringing customers on board, but there was no revenue at the time, nothing was flowing through the books. So we had this potential revenue building up, which in the end, we managed to fundraise on, don't ask me how zero interest rates helps obviously at the time, so we managed to convince general catalysts to give us quite a lot of money. 80 million, I think back then, which kept us going, we then acquired another travel company because their valuation was depressed. So we raise 100 million in debt to acquire another travel company, all while burning three, by then about three and a half million a month. So we took some big swings about a year into COVID. And then we came out so what was it? End of 2020 Things are starting to look better than Omicron was Omicron 2022. I get mixed up my years. Anyway, omicron came and we will start crying again thinking what have we done like this is gonna be a disaster. Thankfully, that was very short lived. And then we went from zero revenue to 100 million in about nine months, we had very different challenges. I had to go and hire 1000 Customer Care people, which was not easy. We were lucky, right? There is definitely some luck in that. But we followed a our values, right? So we didn't go hard on people to begin with. We did everything we could to avoid laying people off. And we looked at sort of fat, muscle and bone. And those things just got us through that. And I'd have to say reminding people of the mission, creating this sense of belonging. I think it's really important because when everyone's at home on their own at that time or scared you're scared of your job. You're scared of life right? Escape for your family. We very intentionally built a community team actually. And their job was to talk about stories to talk about this narrative, where we're going, why we're all in it together. And it really helped sort of pull people together. So I do think, and I keep asking about communication, but that sense of mission team really mattered to us. And I feel like a waffle there. But hopefully that was helpful.

Brandon: 30:22

No, no, that sounds like a serious crisis that you went through.

Huw Slater: 30:25

Yeah.

Brandon: 30:26

I can't even imagine burning 3 million pounds per month, that is a ridiculous amount of money.

Huw Slater: 30:31

It was a lot of money. Well, okay, it's fine. When you're, I think five of revenue, right? So

Brandon: 30:36

you actually spoke with us quite eloquently in terms of the values and principles of the company really coming to the forefront in a crisis situation. But when the rubber hits the road, and there's problems, things start to fall away, I guess the purely as an example, if there's severance packages that need to be built out for individuals leaving the organisation, there's always a debate and a question of, what kind of severance do we give these people because the fact of the matter is, we have a cash burn, we're going to be out of cash and X amount of months. And you know, we've talked about having a culture of X and value of y, but we have a balance sheet that we're looking at. So when you have those rubber hits the road conversations, what's the best way to think about this,

Huw Slater: 31:13

we will not compromise on values, we actually call them agreements in our lives, because I think it's very confusing to personal values and company values, we call them agreements, like, literally, you are committing to these agreements, and that's how you're going to behave. Obviously, nobody wants to fire people. But in the end, the prioritisation is company, Team self right, the company has to survive. So if it was going to get to the point where we needed to fire people, that was definitely an option, right? And we were very transparent with the company about that, like, if that's what it is, if that's what it takes for the company survive? We will do it. But to answer the specific question, honestly, it was spreadsheets, and it was different by team to a sales rep, if you're an enterprise sales rep, we knew that if we find you and then in six months needed to hire again, it was going to be six months of ramp, and then you know, three months of drawdown and you know, so you can just put a number to that. Whereas it's different in Customer Care, for good or for bad, right, it's just an easier, more sort of transient role. So we just built a model, it was like that, and then the values, obviously, then there's law, right? So you shouldn't do anything that would break the law in whatever jurisdiction you're in. And then we just put the line on that. So it was very mathematical. But that's how, in my opinion, that's how we had to do it. Otherwise, it becomes ego driven, is who's the latest exec ends up getting the most amount of money for their team? That's no way to run a business, particularly in crisis, right. So we just agreed on the model, we actually had a wall cabinet that we took outside of the executive team, because it was getting too noisy, and the executive team and they had a job to do, we had an executive day to day job. And then we had a wall cabinet team, which I chaired. So we came up with recommendations there and took it to the exec team. But it was for good or for bad, very mathematical.

Brandon: 32:52

Bella, last word goes to you values and culture, do they matter? Of

Bella: 32:57

course they do. But when you are trying to survive, I think unfortunately, some of it goes out of the window, you do your best to still follow the values that you have implemented for the company, however, in Germany is different. In Germany, there is a few laws that you have to follow. For example, your garden leave shall be the probation period, like when you tell the company that you will be leaving in X amount of months, so they have to pay you this. And the loophole, however, is that the law is so much on the employee side, that you can actually literally sue them and like get more. But I think most people don't want to go through this to try to get more money out of it. So most people end up signing one point also in Germany, we will have a spreadsheet look like have all the employees, but they look at who have children and we don't. And the ones that have children have prioritised even though maybe they are they might not be the best performers.

Huw Slater: 33:59

I word of advice, be very careful about where you hire even if it's through an employer of record, right, you end up still carrying that liability. So yeah, remote looks great until you need to find somebody in Germany or Amsterdam or France. Like it becomes incredibly so back to resilience, like looks good up front ruins resilience. Perfect. Any

Brandon: 34:21

questions?

Bethany: 34:22

What were the roles in the War Room? Because if it wasn't part of the exec team, we just really want to know who was there.

Huw Slater: 34:29

It was to the execs so myself, the chief revenue officer, and then our head of community who sort of brought the values made sure we didn't go rogue against our values. And that was it. So it was a subset of the exec plus a culture carrier if you like. So I was coming at it from a cost perspective. I was like we just need to get burned down. And JC the chief revenue officer was combative. Like this is what the markets telling us this is what customers are telling us and trying to balance those two things. And then arry who is amazing at running community He could use that information to help our comms afterwards, by the way, which was really powerful. He didn't need second hand information, he was there in a conversation. And then he would also contribute with a cultural or the employee perspective. So that's why it was a bit quite balanced.

: 35:14

Hi, my name is Carl. So we've identified financial is really where it comes down to at the end of the day. But we want to keep the culture side of things and Transparency is key to the team. Where do you guys sit on a sliding scale of kind of transparency of financials from not leaving the executive team, all the way down to kind of a Reed Hastings kind of financial literacy training and full exposure to the to the full sheets.

Bella: 35:38

So how we did at my company, we used to have all ends every month, and we had a section about the finances of the company. And we explain each of the definition what it means. So then people are not completely lost, right? Burnout rate, etc. So that's what we did. And we explain what's going on how much cash we might have left without I mean, sometimes we weren't saying completely the truth, just so they have an approximation. And yeah, so every week we had, like all hands and people were able to answer to ask their questions if they had any.

Huw Slater: 36:09

Also on the Reed Hastings side to give a very concrete answer. We had our off site. Two weeks ago, I ran a session on burned multiple to the whole team, like this is what beer multiple is this is how you should use it in your decision making. This is why it's important. And again, that doesn't work at scale, by the way, but I think when you're small, the more context people have better decisions. They're going to make any closing parting shots.

Brandon: 36:34

Thank you very much for joining us on this conversation. Thank you