Snap, parent corporation of social network Snapchat, has faced a number of recent leaks about the business, including a new round of layoffs. But the company's reaction, a threat to sue or imprison employees who might talk to the press, was the second time in a week the company showed a disturbing lack of emotional intelligence.
Snap has made some bad moves in the past, like the initial fight among the co-founders. Turning down $3 billion for an acquisition by Facebook and the fall stock plunge. But the biggest problem of late has been the attitudes toward employees that management clumsily communicated.
Patience is understandably running thing. Over the last six months, Snap has faced the following:
- Expenses raced ahead of income, increasing fiscal pressures as user growth has not kept pace with expectations. (When Fortune writes, "Its first trick was making selfies disappear. Its latest is sending gargantuan piles of cash into the ether," you know the coverage will be ugly.)
- The company saw two big stock drops immediately after earnings announcements in August and November.
- The current stock price of about $14 remains far below the $17 IPO figure.
- Layoffs this week and October after a September restructuring suggest the level of problem and money pressures Snap faces.
Snap has been like a sieve for insider news getting out to the press, which has made the company irate, as reported by Cheddar's Alex Heath. This resulted in a harsh memo that in part said the following:
As a result, all employees must keep our information strictly confidential until disclosed by Snap. We have a zero-tolerance policy for those who leak Snap Inc. confidential information. This applies to outright leaks and any informal "off the record" conversations with reporters, as well as any confidential information you let slip to people who are not authorized to know that information.
If you leak Snap Inc. information, you will lose your job and we will pursue any and all legal remedies against you. And that's just the start. You can face personal financial liability even if you yourself did not benefit from the leaked information. The government, our investors, and other third parties can also seek their own remedies against you for what you disclosed. The government can even put you in jail.
Not that anyone should minimize the need for a basic level of confidentiality. Leaking information from a public company, particularly if some people have a chance to trade on the insights before others do, can be a significant legal risk. But there are different ways to communicate, and Snap management opted for as heavy-handed a one as might be imagined. If they wished an effective deterrent, internal training and emphasis would have been far more effective.
Instead, this move is almost guaranteed to scare employees not into knowing compliance with right actions but further into psychological bunkers and out of the company as soon as possible.
What can you expect when a culture of secrecy reportedly makes many employees feel isolated and in danger? This is like entrepreneurs who are so intent on protecting their "brilliant" ideas that they never learn how limited or flawed the concepts are because they won't listen. If you regularly divide employees, you miss the communication and collaboration necessary for innovation and solving problems.
And speaking of innovation, as the hammer comes down in this way, it also strikes in another. In the memo released at the time of the most recent layoffs, via Cheddar, CEO Evan Spiegel discussed the need to create a "highly scalable business model" and an "organization that scales internally." He wrote, "This means that we must become exponentially more productive as we add additional resources and team members."
To many, that translates as "your life should be ours." There is only so productive people can be. They aren't machines, and if you continually expect more and more, even with additional tools and resources (but likely not), you burn people out. That may work if you think everyone but yourself is replaceable and you want to use individuals as tools to make money -- but, on second thought, no, it probably won't. Some have pulled it off, but far more often these attitudes have limited success at most.
Then that memo ended as follows:
Lastly, I'd like to make it very clear that our team is not here to win 2nd place. The journey is long, the work is hard, but we have and we will consistently, systematically, out-innovate our competitors with substantially few resources and in far less time. And we will have a blast doing it.
Put differently: You won't have the resources you need but you will succeed and work faster and harder because you are order to, and you will enjoy the process whether you want to or not.
The communications style of Snap in these two instances betrays a remarkable degree of emotional tone deafness. Even though the people responsible are likely sure they are motivating employees while helping select for the types of people who will do well by them, they transmit subtexts that are off-putting to many who could be of immense help but are unwilling to submerge themselves into the drive to enhance the financial well being of a tiny group.
The people at Snap could have avoided the problem with a few steps:
- Clarify and be honest with yourself about what you really want to achieve. Have someone from the outside look at materials, interview people, and offer a disinterested observation of the situation.
- Look at things from an employee's viewpoint and put yourself in their shoes. Given the general atmosphere, if you heard this as an employee, how might you react?
- Recognize that how you feel personally and what you want to accomplish may not work well together. Focus on approaches most likely to produce the needed results, not something that makes you feel vindicated.
- Get expert help. If you pride yourself on an engineering culture, as Snap seems to, don't assume you're also a master of psychology and motivation. Chances are that you aren't.