Avoid These Leadership Mistakes: Lessons from WeWork’s Rise and Fall

In our latest podcast Episode, Thomas Ramstad and I discussed Corporate governance and ethical issues surrounding WeWork.

Here are some Leadership mistakes you can avoid as a leader in business.

Don't hire your own family or lease a building from yourself

Initially, Adam's wife acted as an advisor in the business. But after a while, he appointed her as their third CEO. And while she was passionate, she also created a third company(WeGrow). Rebecca, Adam's wife, introduced her 'new age' ideas, which were not aligned with the company's vision. Her passion led to a significant increase in spending, which, combined with Adam's known tendency for extravagant spending, created a chaotic work environment. During the summer camps, Adam and Rebecca would talk endlessly about their various businesses, leaving the employees feeling demotivated.

Adam bought a few properties, forced WeWork to lease these properties from him, and directly benefited from those transactions.

Have Corporate Governance policies in place

It's crucial to have robust Corporate Governance policies in place, especially regarding hiring family members or conducting business with your company. These policies should include clauses on bribery, corruption, and ethical practices, providing a secure and transparent framework for your business operations.

It's crucial to care about the 'Triple Bottom line' in business, which includes people, planet, and profit.

This means considering the social and environmental impacts of your business operations, not just the financial gains.

Care about the people.

What do your people say about you? What impact is working with you having on their finances, family, community, health and mental wellbeing?

Adam fostered a toxic culture at WeWork, where he would call his staff at 2 a.m. and expect them to work until the problem was resolved. This lack of work-life balance and the 'cult-like' environment, with most employees living at 'WeLive' and working at 'WeWork ', led to alienation from anyone not part of the company.

Care about the planet.

Everything in life is not just about profits. What impact does your product and service offering have on our planet? Is it damaging it? Is it contributing to recycling? Are you making a difference or adding to the drama?

Care about the profits, know your financials, and don't "cook the books."

Many business owners have learned the hard way about the importance of understanding their business's Balance sheet, truly grasping their profitability, and relying heavily on an accountant. This knowledge empowers you and keeps you in control of your business's financial health.

Understand what expenses can be claimed as personal and which can't. There is no reason to pretend that your business is operating at a profit if it isn't.

Stop yourself from going on crazy spending sprees or living a very lavish lifestyle while your business is cash-flush. That cash is not yours to spend.

Adam Neuman lost sight of reality when 4 billion was invested in their business. He started going on helicopter rides, buying properties in New York and various cities, and dressing the part. He was living the life while expecting his employees to live with smaller salaries and telling them that they needed to save money for the business.

For the full episode we discuss the following:

00:00 Introduction to WeWork's Rise and Fall 00:42 The Illusion of a Tech Company 03:38 Financial Realities and Investor Influence 09:15 Corporate Governance and Ethical Failures 16:49 Lessons Learned and Future Prospects 19:44 Preview of Next Episode: Psychological Safety

In this episode of 'Leadership Lyrics' with Yoke van Dam and Thomas Ramstad, the hosts delve into the rise and fall of WeWork under Adam Neumann's leadership. Initially a property rental service for startups, WeWork was rebranded as a tech company, although its primary function remained to rent office space. Despite ambitious plans, the tech platform needed to gain traction. The episode highlights WeWork's financial mismanagement, corporate governance failures, Neumann's controversial leadership, and conflicts of interest, leading to a failed IPO and plummeting valuation. The discussion draws lessons on ethical leadership, transparency, and sustainable business practices, emphasizing the importance of psychological safety in workplaces. Future episodes will explore related themes, starting with psychological safety in business settings.

Our next Podcast will be on Psychological safety,

have a lovely Tuesday, Yoke van Dam