When and How to Slow Down or Scale Back

A leader I worked with several years ago observed I was like a race car. I am built to move fast, and it was hard to watch me try to slow down to accommodate a slower-paced organization. Over my career, speed and following my conviction has served me well. In early-stage companies there is often no playbook for where you are going, and you have to make some bets to build or adjust fast enough to achieve impact. But there are moments to leverage a strategic slow-down. And in this macroeconomic season many must also scale back. There are different types of leaders for different seasons, but we will often find ourselves in seasons where we need to lead even if it's not our 'sweet spot.' As a builder and transformer, sometimes I must support a season of slowing down or going lean. Here's several insights on how to manage both.

Drive with Data: Make your regular dashboard or OKR meeting your best friend

• Know your business. Is revenue on-track? Are you growing? Do you need to expand X product? Are you seeing Y product contract? What is churn looking like, and burn? What's runway? What is the word from your customers - detractors and champions? The sentiment and counsel of your board and advisors??
• If there is a shift toward yellow and red on your key metrics; a canary in the coal mine on churn or sentiment; a slowdown in growth - that's your signal to slow down and strategically assess your own initiatives vs. press them along.?
• Hitting OKRs that should no longer be OKRs based on how the business is changing is not a strategic win. Your board will not be impressed, you may drag the company in the wrong direction, and everyone will suffer from the distraction.
• Over-communicate this data to your functional team. Help them understand what is changing, and that it's okay, healthy, and strategic to re-assess and ask them to join you in that work.

Your regular KPI / OKR review (sync or async) should be one of your favorite rhythms. It underpins everything you do.

Strategically Assess: Revisit your core work (KPIs/Run the Business) and strategic work (OKRs/Shift the Business)

• Map it. Hopefully you have a map of both your team's regular workstreams to run the business, as well as their strategic projects to shift the business. If you don't, get those into a spreadsheet, canvas, whiteboard, or whatever you use for documentation.?
• Assess. What does the company need right now? Is the hiring forecast aligned to the skills and work the company will need in 6-12 mo or is it last December's unrevised forecast? Is there going to be a period of crunch to push V2 of the product a month sooner, making it an inept time to launch a DEI learning journey that would land more effectively next quarter? Have you scaled a lot over the last year, and could your communications and change management norms benefit from an overhaul to help everyone work more efficiently?
• Cut and add/re-deploy. Where are you going to gain team capacity from cutting or doing less of the things not needed? Where can you redeploy or add that capacity to the things you have uncovered the team does need?

Slow Down - Consider Spiral Hiring and Onboarding/L&D Investment

• Spiral hire. If you've been rapidly scaling X team and they've just come into fresh capacity, even if they were underwater beforehand, consider letting it breathe for a quarter before hiring further capacity. I've nicknamed this Spiral Hiring because of the visual - you hire a bunch of capacity - spin with it for a while - and then go deeper on the spiral with another round of capacity-adding if needed, and then spin with that new capacity level. Often teams will gain efficiencies from staying leaner and ruthlessly prioritizing, and as new hires ramp, they will be more productive.
• Ruthlessly assess the business impact of each hire when posting, and again before extending an offer. Only hire if you are sure you truly need the capacity in an enduring way, and the business will grow in that area/need for a significant duration, or you may find yourself cutting the capacity you just added six months later.
• Invest in onboarding. Get as much feedback as possible from the folks you have hired, including conducting rigorous onboarding surveys that help uncover what did and didn't help folks ramp.?Make sure each new hire has a clear mandate, 30/60/90 plan, and checkpoints along the journey.
• Invest in internal learning & development. Deploy extra capacity from your seasoned team toward critical company challenges. Encourage and empower lateral transfers, temporary loans/bungees, and tiger/two-pizza-team efforts.

When Necessary, Scale Back

• Slow downs are appropriate before you need a reduction in force (RIF), not once you have clear signal one is needed. If churn is accelerating, market data indicates your customers' revenues are struggling, releasing V5 of your product is going to take an extra quarter because X didn't work, or Y offering did not take off and the people working on it are not easily redeployed across the company. If a shock event or broader material change will substantively impact your runway, and jeopardize the health and longevity of the company, a change is necessary, and quickly.
• You, People Leader, should suggest the reduction. Too many People leaders wait for finance, the board, or the CEO to tell them a RIF is required. Headcount is a shared executive responsibility, but you as the Head of People are the accountable executive for a right-sized, skilled, and priced workforce. You should be pacing hiring, tightly managing performance, and ultimately recommending a reduction as soon as you see the business data that demands this.

It will go faster, and ultimately reduce the odds of a second RIF or a deeper reduction, if you, as the expert on headcount, are strategically guiding your leadership to undertaking a RIF as soon as you identify it is necessary.

Do the Scale Back Strategically and Quickly

• Don't try to minimize the pain of doing a RIF by doing a Sloppy RIF. Sloppy RIFs are the ones where the company only releases the does-not-meet-expectations performers, cuts the early career talent pipeline, releases the remote workers, trims one head off every sub-team, or only cuts enough to make it work as long as everything goes right moving forward.

"The-financials-work-for-now" does not mean you did it right. If you Sloppy RIF, odds are you will be doing another layoff within two quarters unless there is a miraculous improvement to your business.

• Make finance your best friend. You will see exponential dividends from People and Finance becoming inseparable, strategic partners rather than sworn adversaries. Your finance team is not trying to reduce burn at all costs - they are trying to build a thriving company, and they recognize human capital is an essential element. You'd be surprised they are often actively capacity modeling adding heads in areas of competitive advantage or finding OpEx to cut to enable maintaining talent. Get access to your financial model. Learn to read and understand it. Have a weekly People/Finance 1:1. Ask how you can partner to launch the company into the next season together.
• Do good organizational design. You did it for growth - first principles apply here too. Start with a blank slate. Ask what you need to build and where the business is going. What collaborative lines and structures serve the season ahead. Make sure to indicate what is necessary vs. nice-to-have or "not yet." Then layer in skills, roles. Only then start adding names when they fit. You will likely find that you can and should cut deeper than you would have in a Sloppy RIF. This enables the long-term health of the company, and better secures the jobs of those who will remain.
• Recognize nothing is perfect and you'll make some tricky calls. You may want a fully co-located team but one of your best engineers is remote and removing them would break the product. You need a Director of X + Y in the new model but there's no internal fit and the CTO will temporarily have more directs than ideal. You expand or contract scope for some roles; make some lateral transfers. You ID that X is nice-to-have and you'll retain a specialized skillset via advising or contracting vs. full-time.
• Go only slow enough to get the process, change management, communications, packages, and legal paperwork right. Now that you've decided, each day is contributing to cash burn and increasing anxiety for your team. If you've hired smart and capable folks, they will be reading the metrics too, and know what's necessary. Keeping your team waiting an extra 4-8 weeks while you debate piecemeal elements of the mid and long-term strategy isn't healthy for anyone. It ultimately requires a deeper cut to offset a month of unnecessary burn, and leads to distraction, anxiety, and likely some regrettable 'proactive' attrition from essential team members. Stay focused and time-box taking action within 4 weeks of identifying you need to do so. (If you have a large-scale RIF and/or if you must follow local regulations (ex: WARN act) it may extend the timeline and/or garden leave period, of course.)
• I won't dig deep on how to recover from a RIF here. I will briefly say that's another opportunity to move a click slower to allow your remaining team time to process the change and lament the loss before getting excited about future possibilities and the season ahead. Your leadership had at least 4 weeks to go through process of digesting this big change, planning it, and getting excited about what's possible going forward. Your employees will also need time and support to come along this journey at a company, product, team, and individual level. Make sure you've built the resources, have intentional group and individual conversations, and deploy retention tools to do this well.

I hope this mini-guide for slowing down and scaling back is helpful. My virtual door is always open; connect or DM me if I can be a sounding board or a resource on this topic.

The?+1

Reminder: For those who are also seeking to catch more of what God has for them in this life, the +1 is where I'll share what I've gleaned from scripture and wise believers that underpins what I'm sharing in the general section above. These views are my own, not the views of the companies or corporate leaders with whom I've worked, and I encourage you to always spend time taking the big and small things to God and scripture to discern what the Spirit has for you. If the?+1?doesn't resonate based on your beliefs or journey, I hope you still gained some helpful wisdom from the sections above!

On Smallness?+ Scaling Back

I'm a big fan of the beautiful and God-honoring business that Hannah Weidmann and Jake Weidmann are building at Everyday Heirloom Co . In March as I was lamenting my first layoff, I was encouraged by Hannah's wise and wonderful missive on smallness while announcing they were scaling back their successful business. Hannah wrote:

"I'm reminded of Gideon's story in the Bible (Judges 7) – how God twice divided his army as a preparation for battle victory. Let me say that again: reduction was the method of VICTORY. Reduction was not a weakening but a strength. It wasn't strength in numbers (and in our case, not a strength of numbers in product or offerings or even in revenue). The Lord has been kind to remind us, to gently lift our head, and tell us that He rejoices in small beginnings (Zechariah 4:10). Smallness is the method of miracles. Of victory. He doesn't need much. And we don't have much to offer that is truly ours anyways. It's all His."?

I hope these words encourage you as they have me. They are a precious reminder of how God works in smallness and delights in new beginnings as he recommits to Plan A for the world through the people he has chosen and called. Less is so much more with the Lord. I'm also reminded of John's wise words in John 3:30 - "He must become greater; I must become less." If I'm trying to do it in my own power and hustle, I'm destined for ruin. I'm here to point back toward the bigger message, the bigger mission. The size of my company and scale of its revenue in this season does not limit God or the impact I can make as His ambassador. My delight and victory are being part of the bigger story.

On Slowness

No class broke me in graduate school quite like Personal Leadership. I thought I'd be getting a Christian take on HBR best practices. While we actually did read a few HBR classics, the core of this class was spiritual disciplines and rules of life. Many of these involve slowing down(!), practicing discernment(!!), and meditating(!!!). I am a woman who learns and grows on the move, and I was unmoored by the practice of daily sitting, reflecting, journaling, and praying. But I'm also stubborn as the day is long, and I was going to do the thing. Then I noticed something shifted outside my coursework. I started making better decisions at home and work. I had more strategic insights. And the perception of who I was changed - I was seen as someone strategic?+ human-centered, not just the woman who Gets-$#*!-Done. I slowed down a click when the waters got choppy to plot the right course. I sought to be a thermostat vs. a thermometer in the room. I started my days with a spiritual practice and a workout before I opened Slack. These things rippled through everything. Ruth Haley Barton is a thought-leader in this space, and I dog-earred my way through Strengthening the Soul of Your Leadership. In writing about rhythms of work and rest, Barton says:?

"When we keep pushing forward without taking adequate time for rest and replenishment, our way of life may seem heroic but there is frenetic quality to our work that lacks true effectiveness because we have lost the ability to be present to God, to be present to other people and to discern what is really needed in our situation. The result can be “sloppy desperation”: a mental and spiritual lethargy that prevents us from the quality of presence that delivers true insight and spiritual leadership."

May you slow down enough to be present, attentive to the Spirit, and strengthened to do the work to which you are called.