Tuesday, May 19, 2020

Brian Chesky goes behind the scenes of Airbnb's crisis management and his vision for the company's second founding

I've known Brian Chesky, Co-Founder, CEO and Head of Community at Airbnb for a long time. We’ve been allies and comrades-in-arms in trying to lay out what it means to be a 21st century company. What does it look like to truly share power and opportunity with multiple stakeholders? What can organizations do to remain true to their vision for generations to come? He has a unique business philosophy: broadly shared prosperity achieved by making promises that stakeholders can believe. He also has strongly held ideas about structuring a company to institutionalize these intentions to make sure the next leader, future employees, and the next board will be true to that philosophy.

This was supposed to be Airbnb's biggest year by many measures, including its IPO, which was one of the most anticipated since the 2008 financial crisis. Instead, the global pandemic has turned 2020 into its most harrowing year. I was lucky enough to be one of the first people to speak to Brian in-depth since the pandemic began. As we talked, I could really hear the impact these last nine weeks have had on him both personally and professionally. He shared his experiences in the eye of entrepreneurial storm, trying to put the pieces back together and not just survive but essentially found the company all over again.

Throughout, he's remained firmly grounded by these ideas: measure success by decades not quarters; consider all stakeholders not just short-term investors: think about people, not just metrics.

Principles can be abstract, though. So I asked Brian to take me on a moment-by-moment tour of what was going on behind the scenes as the company began navigating these uncertain waters. First came their early awareness of the virus as business in China began to plummet. They watched it dissolve further from there, market by market. Then the rolling waves of crisis management as the new reality hit every sector of Airbnb’s business. There was the process of raising money while simultaneously re-envisioning the new shape the company will need to take. And then the announcement of lay-offs as that vision emerged. 

As things unfolded, Brian began by writing down a series of clear principles that would guide each step of the company’s response. I want to share that list with you here, along with a little of his thinking about each one:

  1. Be decisive. The worst decision is no decision.
  2. Preserve cash. Raise money and cut costs.
  3. Act with all stakeholders in mind. When people do the wrong thing, it’s because they made a decision for one stakeholder at expense of another.
  4. Let’s emerge on the right side of history. People will remember this period for decades.
  5. Play to win the next travel season. Travel will come back, and when it does we need to be back first.
  6. Don't trade in the future. You need to think short-term and be more present than ever in a crisis. But on the other hand you have to think more long-term than ever, because you’re defining your legacy.

Being long term and having a multi-stakeholder approach doesn’t mean you won’t have to make hard choices. Those are the painful parts of taking a holistic view of the company’s responsibilities. Ultimately, these choices are not just about what you do but how you do it. Especially in crisis, actions speak louder than words. This is when it matters most.

Brian asked himself two questions as he prepared to help employees being laid off through their transition: “Did you do everything you could? And did you have compassion?” The result is this list of principles, which should be standard operating procedure not only in a pandemics but every situation:

  1. Map all reductions to our future business strategy and the capabilities we need.
  2. We are going to do as much as we can for those impacted.
  3. Be unwavering in our commitment to diversity.
  4. Optimize for one-on-one communication with those impacted.
  5. Wait to communicate any decisions until all are landed.

These are the kind of choices that define a company in a crisis, each of them born of the paradox of all crisis response: you must take action urgently, decisively and immediately, but the actions you take will resonate for a very long time. That’s also the challenge of running a 21st century company. Right now, some companies are showing us they're really committed to it, while others have gone on with business as usual.

Later in our conversation, Brian and I talked about company-building for the 21st century, including creating a board that shares your values, and how founders need to “design your company or it will be designed for you.” Another one of Brian’s guiding principles is to “Design your company so that the wrong person running your company doesn’t ruin your company.” He explained why he believes we all have opportunities to lead as we reset our country, and offered his thoughts on how the travel industry and society will be transformed.

If you’d like to hear my conversation with Brian, you can subscribe to Out of the Crisis on Apple, Google, Breaker, or wherever else you get your podcasts.

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