Ask a Founder: How do I bring my team together after a reduction in forces?

The challenge is that there’s no finish line

March 11, 2024
Things are tough. We've had to do a reduction in forces—RIFs—to reduce burn in order to push out fundraising by a year. And my leadership team just points fingers at each other when something isn't working instead of figuring it out together. How do I manage this team?

One summer at my last company, I was struggling big time. So was everyone else. We had a financing pulled three days before the close, new business was flatlining, and the team was exhausted. I was grousing to one of my cofounders about how it couldn’t possibly get any worse. He replied, “There’s no rule in life that says each valley must be followed by a peak. You can have 17 valleys in a row before the next peak.” He was, and is, right. It was some number of moons after that conversation until we got out of the doldrums, and did it with a bang: our first six-figure deal, and a giant enterprise at that. 

The challenge in situations like yours and mine is that there’s no finish line. We have no idea when it’s going to end. It may never end, or it may end in misery, or something good could happen, or something amazing! In any case, the only thing we can control is our behavior: how we react to the circumstances and treat each other. This starts with you, the CEO. 

The challenge in situations like yours and mine is that there’s no finish line. We have no idea when it’s going to end.

First, get your ducks in a row. You’re most likely looking for a functional team. What’s their problem?, you wonder. They’ll never tell you, but it’s most likely fear: fear of running out of cash, fear of losing a job, fear of failure, fear of external perception, fear that they can’t keep their own team in line, fear that they shouldn’t ignore the recruiter banging on their door. Just plain fear. If they were strong enough to lead a company, they would be a founder. But they’re not; they’re your VPs and they need reassurance and guidance.

Bring them into the fold. Tell them you’re just as scared and tired, that things suck and that you’re worried too. Be pragmatic. If you’re human, they can soften and relax into the fear. Tell them what’s on your mind. Tell them that if they don’t step up, the company will fail. Tell them that WE have to figure it out or the company will fail. Tell them that if we don’t hold a unified line in front of the team, the company will fail. And tell them you’ll lead the way out of the morass: you don’t know how, you don’t know when, but you know you’ll get out of there. Be kind, be empathic, be firm. Be a leader.

Now, with respect to the rest of the team: they are going to believe whatever they want to believe no matter what you tell them. My father once said to me in the middle of an argument, “People’s perceptions are their realities.” I hung up on him, but he had a point. In my own situation, when a fundraise disappeared right at the finish line, our team believed we were in a money crunch: because if you’re fundraising, you need money, right? We weren’t. We had years of cash. We had decided to raise opportunistically because sales momentum and market timing were as close to perfect as one can hope for. There was nothing I could say or do to assure them otherwise, and believe me, I tried: I screenshotted the bank account, shared what we were burning a month, and did the simple math on time-to-zero taking into account revenue. They still thought something was up. 

Be kind, be empathic, be firm. Be a leader.

At a certain point, you the CEO have to let go. Employees will believe what they want. Is there harm in letting them? Ofttimes saying the same thing over and over again makes folks even more suspicious, and so unless it poisons the rest of the company, (and if it does, you can proactively terminate), I make peace with it. They’ll forget just as soon as the next really great thing happens anyway and then you’ll be the heroine that delivered them from the depths of hell. 

One more note: once when things were going poorly, I gave each team member a day off and $250. They could do whatever they wanted with it, but they had to spend it entirely on an experience that weekend and then share what it was with the rest of the group. The co-founders were not exempt. One family went to dinner, one went out for a night on the town, someone else donated and volunteered, and so on. The sharing session was an hour long and, at the end, everyone felt lighter.

Do something to break up the monotony as a way to kickstart things. Everyone likes to smile, and who doesn’t want free life experience? 😊

This is the end mark. You have reached the end!

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