Cloudflare CEO Matthew Prince Just Said Something No Leader Ever Should

Cloudflare CEO Matthew Prince shocked many listeners and invited the wrong kind of social media attention last week with some disparaging remarks about members of the company’s sales team. His comments came during a quarterly earnings call with analysts, the sort of event where CEO comments are typically yawn-inducing. Not this time. After noting that the company had sold its infrastructure and security services to a third of Fortune 500 companies, he went on to say this: 

... if we’re honest with ourselves, we saw a lot of our success with our enterprise customers because our products were so good and solved real problems that every big company faces. That allowed many on our sales team to succeed largely by just taking orders. When the fish are jumping right in the boat, you don’t need to be a very good fisherman. But at the risk of mixing water metaphors, as the tide goes out, you get a clear view who’s not wearing shorts.

Cute, folksy, and of course a Warren Buffett quote–except that Buffett used it as a comment on investment strategies, not to publicly disparage how his employees were doing their jobs. He’s much too thoughtful and empathetic a leader to ever do anything like that. 

As for Prince, he doubled down on the disparagement. He went on:

The macroeconomic environment has gotten harder, and we’re seeing that some on our team aren’t dressed for work. Digging in with Marc [Marc Boroditsky, head of sales] we’ve identified more than 100 people on our sales team who have consistently missed expectations.

He added that Cloudflare was “rotating out” these disappointing employees and replacing them with new talent, noting that now was a “uniquely good time” to do this, as the labor market, once very tight, was currently filled with (presumably laid-off) people who were eager to work at Cloudflare. And, he concluded:

We have an incredibly long line of other proven talented people looking to step to fill the position where some of our current team aren’t living up to expectations.

Wait a sec–his current team? So some or maybe all of these 100 people being publicly blamed for all of Cloudflare’s problems are still working there? Just imagine for a moment being a Cloudflare sales rep and listening to your CEO say these things to the whole investor community. 

On social media, it didn’t go over well.

Other Twitter users called it a “public execution,” or said that they never would work at a company that talked about its employees this way. One suggested that, since the company itself was underperforming expectations and its stock price was down 20 percent, the same logic should be used to fire Prince.

There are two questions here. One is whether it’s reasonable to fire salespeople who aren’t meeting their quotas, and most people with experience in sales will tell you that this is a common and widely accepted aspect of that profession. 

The other, more potent question is how a good leader should discuss these matters in a public forum. Cloudflare has a culture of radical transparency, as Prince explained on an episode of Inc.’s What I Know podcast. The company also ranked number seven on Inc.’s 2021 best companies to work for. It’s an incredibly successful company, and one big reason for that is Prince’s staunch commitment to tackling the hard questions head-on, being open about Cloudflare’s failures as well as its successes, and never sugarcoating anything.

Underperformers still deserve empathy and respect

In this case, though, he was talking about human beings who work for him and may well have been putting in their best effort at a time when–as Prince himself noted–many large companies were hoarding cash and reducing purchases to prepare for a possible recession. These salespeople may have missed their quotas, but they still deserved to be treated with empathy and respect. Prince’s comments were a stark failure on both counts.

Those comments were also unnecessary. Prince could have said something like: “In this more challenging market, we are making some changes to our sales team and bringing in some exciting new talent.” Same information minus the gratuitous insults. And why use the phrase “rotating out”? That’s quite a euphemism coming from someone who just metaphorically described these employees as naked from the waist down. 

Even though Prince seems unafraid to burn bridges, he may come to regret his words as Cloudflare sets about hiring the high-performing salespeople he expects will solve its problems. His comments are getting widely circulated by salespeople on LinkedIn and other platforms. One Reddit member who claimed to be speaking for an unnamed Cloudflare sales rep said that “it’s common knowledge that the CEO does not respect salespeople.” Even in today’s job market, top-notch salespeople have choices about where they work. They may not choose a company whose CEO is known to disdain their entire profession.

Radical transparency is a great thing. It’s worked well for Cloudflare, and for many other companies too. But it needs to be matched with empathy, respect, and emotional intelligence–especially when it comes to the people who work for you. Prince is now famous across social media for having none of those qualities. Don’t make the same mistake.

Here’s a complete transcript of the Cloudflare earnings call.