Just when we thought the WeWork saga was over, the company is back in the news again: although admittedly, not through any fault of its own.
With losses of over £263 million in two years from 2022-3, a very overblown market valuation of £34.5 billion that turned to ‘doubts we can continue’ overnight, toxic leadership and sexual abuse allegations so prevalent they caused CEO Adam Neumann to step down, and a slowdown in customer retention for long-term office rentals triggered by the pandemic, WeWork, as a corporation, has truly been through the wringer.
And yet in 2024, WeWork and Neumann are back in the news again as the former CEO attempts to make a comeback promising a new leadership style to save his reputation and his former company.
I can rescue WeWork, Neumann states
Neumann’s assertion that he can rescue WeWork raises pertinent questions about his suitability for the task.
While his confidence is evident, the slew of past mismanagement and controversies looms large. Critics point to his significant role in the company’s downfall, citing his unchecked ego and controversial leadership style as contributing factors. Neumann’s initial departure and contributions to the current issues at WeWork continues to raise concerns about his ability to navigate the company’s rehabilitation.
Shortly before WeWork filed for bankruptcy, Neumann said in a statement, “I believe that, with the right strategy and team, a reorganisation will enable WeWork to emerge successfully.”
But as the spotlight shifts to his latest efforts, the question remains: is he the right person to do it?
With over 15 years experience analysing successful small busnisesses for the Startups 100), we’ve determined 5 ways ways to transform a toxic leader an workplace.
- Emphasising transparency: for small business owners facing a situation akin to Neumann’s, transparency will be the cornerstone of his redemption. Open lines of communication will be vital, as well as honest discussions about past setbacks and future strategies. This transparency not only rebuilds trust in leadership style again with employees, investors, and the community, but it would also foster a more positive perception of the company’s integrity and would be a commitment to rectifying past shortcomings.
- Acknowledging accountability: implementing accountability measures that specifically highlight Neumann’s past actions would ensure that accountability is not just a buzzword, but a key aspect of the company’s new foundational culture. Holding Neumann and other key figures responsible for their actions would allow WeWork to manage stakeholders’ expectations and concerns fostering trust and credibility in its leadership. For small business owners facing similar challenges to Neumann’s, accountability is non-negotiable and can be implemented by employing performance management techniques.
- Resetting company culture; reflecting on WeWork’s challenges, David Soffer, founder and Editor-in-Chief of TechRound, commented on the company’s frat-boy culture and its impact on professionalism. Small business owners experiencing or allowing toxic workplace behaviours must consider restructuring and fostering a culture that values professionalism, inclusivity, and meaningful work immediately to retain key talent and support long-term success.
- Building employee engagement: in light of WeWork’s tumultuous past, empowering employees holds newfound significance in the company’s journey towards redemption. By involving WeWorkers more in decision-making processes and providing avenues for professional growth, the company can cultivate a sense of ownership and commitment among its workforce. This should help rebuild trust and drive organisational success.
- Ethical leadership: For Neumann, the imperative of ethical leadership is particularly crucial. Upholding ethical standards and values not only serves to rebuild WeWork’s tarnished reputation but also to restore confidence in Neumann’s leadership. Demonstrating a commitment to integrity and ethical business practices from this point forward would be paramount for regaining the trust of stakeholders and reshaping perceptions of Neumann as a reliable and reputable leader.
Neumann’s negotiations, and WeWork hesitations
Lawyers acting for Neumann sent a letter to WeWork on Monday saying he was partnering with Daniel Loeb’s hedge fund, Third Point.
WeWork advisers have appeared hesitant to go to the negotiating table with the company’s former CEO. Neumann’s lawyers said that WeWork had had a “lack of engagement” with him and had not given the information he needed to make an offer to purchase the company or finance its debt. Third Point told the Financial Times it had held “only preliminary conversations with Flow (Neumann’s property company) and Adam Neumann about their ideas for WeWork, and has not made a commitment to participate in any transaction.”
Let’s watch this WeWork space…