Executive coach & consultant, Richmond Associates; Stanford U. leadership instructor; international speaker & author on leadership & MBTI®.
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Many companies in the US, and around the globe, have taken up the challenge of improving diversity, equity and inclusion (DE&I) in their organizations. Some are having their first-ever internal conversations about these weighty topics and how their employees are affected. Challenging conversations, certainly, but important first steps toward building understanding and eventually more effective, people-centered workplaces.
So we can thank Basecamp's leaders, Jason Fried and David Heinemeier Hansson (aka DHH), for giving us front-row seats to their recent public stumble — and an opportunity to learn from their experiences. First, let me say that I have tremendous empathy for these founder-CEOs. I generally give C-level executives the benefit of the doubt — at least to start — because I know from my work as an executive coach that being CEO is a hard job, and it's easy to make missteps. It's what you do after the missteps that matters.
So, What Happened At Basecamp?
On April 26, Jason posted a public announcement (not yet shared with employees) barring "societal and political discussions on [their] company Basecamp account" and eliminating committees. Nowhere did he mention that these decisions followed several months of increasingly charged (and apparently uncomfortable) internal conversations raised by employees on a volunteer "DE&I council," which was looking at Basecamp's internal practices in service of becoming more inclusive and equitable. The leaders were involved in the ongoing dialogue, but eventually became frustrated and soundly dressed down an employee in an embarrassing manner.
After Jason's post, DHH further posted that he and Jason were establishing a "new etiquette" at work. The leaders held a company-wide meeting four days later, and apologized for how they made their announcement, but not for the new policies. In a meeting that ran more than two hours, emotions flared and some inflammatory statements were made — at least according to articles posted by current and former employees of the company. And within just a few hours of this meeting, 20 of Basecamp's 57 employees accepted buyout packages and resigned.
A Costly Choice
These leaders clearly made a costly choice in how they handled this situation. Think of the costs they've incurred already, based on their choices — costs to themselves, their employees and their company morale. Costs in lost productivity, in bad will and the costs to replace the talent that has left, and to rebuild that lost knowledge. And perhaps a lasting reputational cost.
Here's what I think happened. These two smart, confident leaders failed to exercise their emotional intelligence. Emotional intelligence comprises four measurable abilities:
• Perceiving emotions in self and others.
• Using emotions in how you think.
• Knowing and appreciating what emotions mean.
• Managing emotions in choosing behavior that promotes understanding and growth.
Better skills in these areas might have kept this from turning into a public debacle and avoided pain for many people. Imagine how this situation could have gone if these leaders had better recognized and interpreted the strong feelings of their employees (and themselves), had seen how everyone's emotions were shaping their heated discussions and had chosen actions based on more accurate foresight into how others' might react emotionally, along with an appreciation for those reactions.
Instead, Basecampers report feeling disappointed that their leaders abruptly changed their social contract with employees. The leaders have quashed what had been an extraordinarily "open" culture, seemingly because emotions got too hot as the personal issues surrounding DE&I were being discussed and debated. Fried and Hansson are seen as showing little interest in correcting internal behaviors that made some employees uncomfortable. And now they have a messy period of recovery, all of which distracts from their business priorities.
What Leaders Can Learn
This Basecamp story raises a number of complex issues, which will surely be dissected in the coming weeks. But as leaders, what can we learn today? As a start, leaders must activate their emotional intelligence, especially when topics surface where widely disparate views are held.
Here are five takeaways you can start using today:
• Examine honestly the power differentials in your organization. Note how they might affect progress toward a more inclusive and equitable organization.
• People in the typical "high-power, dominant" groups (e.g., executive, white, male, heterosexual, etc.) set "the rules" based on what they see and experience.
• People in "historically underrepresented groups" (typically lower-power) have different experiences; expressing these can be exhausting, and having to defend them even more so.
• Display humility and empathy. Appreciate the courage it takes for employees (all of whom have less power than executives) to speak up, especially about their experience of being marginalized.
• Listen, understand and manage your own emotions. Slow down and anticipate how others might interpret your actions and words. You may well avoid an inadvertently tone-deaf response.
• Understand how your employees see your implicit contract with them. You need to appreciate how their experiences and beliefs may differ from yours, so you can anticipate your impact better.
• If you want to help employees return to productive action, do not ignore or discount their emotional reactions. This works for teenagers, too.
Shaping company culture is hard, and executives only have so much power over it. Careful thoughts and actions are necessary when you wield the power of leadership. You can't control everything, but you can be intentional and mindful about what kind of culture will keep your company vital.
And as every leader knows, trust is built slowly and destroyed quickly. And nothing breaks trust faster than perceiving leaders have broken their promise.
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