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- Is Elon Musk's Layoff of 50% of Twitter's Staff Failed Leadership?
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September 18, 2022
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Visiting Twitter for news about Twitter’s news has never been a spectacle like now. All of this hype continues to be motivated by his impending disruptive changes whether it is about laying off staff or charging users $8 monthly for account verification (blue tick). But what the internet is raving about is his decision to fire half of the company’s employees.
Various media publications and even top professors from Columbia University have deemed this move as failed leadership and unfair. I believe it is NOT failed leadership. And here is why.
Having coached executives who went through job terminations I can understand that a 50% reduction in a company’s workforce is not only unpleasant but is also shocking. That said when a company is losing over $4M per day, then it is time to look at strategy, people execution, and processes side of the business.
Chances are, Elon knew for a while that it was a people problem. From this front, his logical process might sound like this: “If the people in certain seats are not driving the company to the future, why are they still there?”
And from there, the decision was made as a way to take charge, protect the company, and begin a big U-turn process into growth.
Despite Musk clarifying that the reason behind those layoffs is revenue challenges, the public reaction remains negative even after he stated that laid-off professionals would receive 3 months’ pay.
The frustration and dissatisfaction were so high that Jack Dorsey, Twitter’s co-founder and former CEO, had to issue a public apology taking responsibility for what happened.
What did he blame it on? The rapid growth in company size!
And so, regardless of what Elon built over time with SpaceX, PayPal, and Tesla, his efforts with Twitter are being questioned, doubted, and ridiculed.
But is it true that he is a failed leader? Does this mean he is making wrong moves as a CEO? Is it safe to say that he’s not fit for his role? It’s not that simple. There are factors to consider.
Every decision a leader makes results in an intended impact and an unintended impact. i.e. desired and unexpected aftermath. Recognizing both sides of impact offers data that helps leaders (or anyone for that matter) deal with situations better.
With this mentioned, I’d like you to meet Yash Agarwal, a recently laid-off Twitter professional who used to be part of the Public Policy team at Twitter. And he just happens to celebrate his transition. To me, this Yash is an anomaly resulting from the lay-offs.
How so?
Well, while the world loathes Musk’s move, this person chose to see it as a positive and meaningful experience. Which makes me wonder “How many of Yash Agarwals are out there that we are not aware of? And why?”
I doubt that Musk accounted for positivity when signing off on those layoffs. Deciding that this was a bad move on Twitter’s new CEO will mean that we’re looking at the impact we like only. And that’s not the best way to measure a leader’s effectiveness.
To better evaluate him we could ask the following questions about his impact:
These questions put us in the seat of the observer where we effectively examine the milestone, journey, and evolving needs of Twitter through Elon’s tactics.
Before the Elon Musk regime, Twitter’s culture did not prove beneficial to the financial growth of the company. Meanwhile, one of Elon’s views about Twitter’s successful future meant a better financially viable business model was needed, and it had to start with culture and people. Keeping certain people in place would stifle his desired transformation. That’s the context.
Based on this, he made his first move, a rash and risky decision that displayed a risky, highly controlling, and aggressive Elon, all while being visionary and high achieving. It was the best way he saw to deal with elephant in the room, and it wasn’t going to be pleasant.
The reason the public viewed his first step as a leader so negatively is that it was a reactive approach that did not take into account any form of cohesion or alignment.
Reactive Tendencies are leadership styles emphasizing caution over creating results, self-protection over productive engagement, and aggression over building alignment. These self-limiting styles over emphasize the focus on gaining the approval of others, protecting yourself, and getting results through high control tactics.
Leadership Circle
The reality is he had to terminate their contracts so that he could usher in his principles and culture that would build Twitter from the inside out even if it meant that he won’t be liked. Plus, “Bad Elon” isn’t new anyway. There’s a liked Elon and a disliked Elon as a leader and this is part of how his leadership style.
But if we look deeper, Elon Musk took a big risk driven by high achievement, purpose, vision, taking responsibility (with the 3 months’ pay), and kept the growth of Twitter his main focus. This makes him an integrated kind of leader where he uses context to fuel his next move by blending his reactive and creative leadership styles.
Creative Competencies are wellresearched competencies measuring how you achieve results, bring out the best in others, lead with vision, enhance your own development, act with integrity and courage, and improve organizational systems.
Leadership Circle
What we see here is a snapshot in time of how he is steering the ship. It’s too early for anyone to decide whether he is a failed leader or not. But we could make some observations about his style for sure.
Elon Musk needed to put out a fire that would yield a quick win necessary for long-term change for Twitter’s success. If he didn’t do so, it would cost the whole company money and keep it where it was before he walked in. This is what he is doing.
Let’s not judge the Tweeter by his bio (pun intended.)