The Clapback
I'm not sure I followed your last newsletter.
Which part?
Well, sort of the whole thing.
Hmm. Ok, well, let's see...
Our parents don't come from tech and they don't come from business. But some of them read our newsletters. And they are often the first folks to reach out when we've skipped a step in our writing.
The prediction felt pretty straightforward. Tech salaries have been going up and up and up. While perks have also gone up and up and up. All while the (often wildly inflated) valuations of tech companies have grown more conservative. At a time when rising interest rates offer investors less risky places to put their money. With more predictable returns.
We lived through the 2001 tech bubble. You'll have to forgive us for being suspicious when a narrative arc relies on "line goes up." In 2001, that was about slapping dot com on a business and expecting it to sell for millions.
The current flavour of "up and up and up" is about worker empowerment and the future of work. In the last 12 months, more words have been written about The Great Resignation and what it means when workers can quit toxic jobs. Or toxic bosses. We are on the record about many of these changes being good and important and overdue.
But the up and up version counts on positive inertia of a tight labour market driving salaries, perks, hours, flexibility, and balance. That inertia doesn't anticipate an opposing force. One with an inertia all its own.
People in power tend to design systems that help them stay in power. A future of work that puts more power in the hands of employees is not a future everyone wants.
The CEO will still fly business class
When we wrote about this two weeks ago, we hinted at some predictions. We said that concepts like "performance management" would start to get louder. And that there would be increased scrutiny around costs paid, and what the organization was getting for them.
Those things will happen, are already happening, and can be understood in terms of financial prudence. But if you understand them only in terms of prudence, you'll miss some of what's about to go down. In many orgs, prudence will be used as an umbrella term. Yes, for things that make the business more fiscally responsible. But also for things that alleviate executive discomfort.
Anywhere that your organization has adopted some future of work flexibility that makes your CEO uncomfortable. Anywhere that they've been sitting quietly as people tell them that the rules have changed in ways they don't like. Anywhere your senior leaders are not giving their full-throated support to a thing, you should be prepared for a clapback.
Here are a few concrete predictions for 2022:
1. Layoffs are coming in 2022, even in growing orgs. We said it two weeks ago and, in the time since, it feels like this one has gotten more obvious. Your CEO, your CFO, and your board are very uncomfortable with salary inflation right now (particularly in tech). While many labour markets protect employees from having their salaries slashed, those protections don't apply to layoffs. As salary costs grow, expect to see more organizations reaching for hatchet-not-scalpel-style reductions in force.
Layoffs to preserve runway, reduce burn, or answer a strategic shift? Generally prudent. Layoffs where the roles repost immediately but at a lower pay band? 🤔
2. Back to office won't be deferred any more. The experiments in hybrid and remote work are still vibrant and lively. Globally, we are learning so much about what tools can support better remote work, and how to maximize in-person time when it happens. These changes represent huge opportunity, and often cost savings as well.
And if your CEO doesn't like them, expect to see them boxed in, or shut down.
Many of the people in the most senior positions of power today are, by definition, people who succeeded in pre-pandemic office environments. They have a model of what success looks like, how collaboration happens, and what management means. And their model happens in downtown commercial real estate with a coffee maker and a whiteboard.
Some companies that have moved remote-first or hybrid will tell you that it has saved them money. Others say that once you factor in travel and flex office costs it's breakeven. But it's pretty clear that it's not more expensive. So wherever this clapback is coming from, it's hard to call it fiscal prudence.
3. Equity, Inclusion and Justice work will get even harder. Despite the ongoing trauma happening out in the world right now, organizations will move to defund or deprioritize their DEI initiatives. This one is maybe the clearest instance of comfort > prudence.
Inclusion work is chronically underfunded. Even outside experts rarely get paid what their expertise and emotional effort is worth. But what it is, is uncomfortable. Good work on equity and inclusion brings up hard questions. Questions about accountability, and power. Questions that some leaders will find unpleasant. If you try to understand the clapback in fiscal terms, inclusion work would be low on the list of potential areas to cut. If you understand it in terms of executive comfort, it'll be near the top.
4. And the CEO will still fly business class. In the areas of the business where financial restraint would be uncomfortable for those in power, things won't change. That's the tell. That's the difference between prudence and a clapback.
The translation layer
Your organization's version of it might be all, some, or none of the above. But you'll know the clapback when you see it. There will be a long all-staff email or meeting announcing changes. It will use a lot of "moving forward" language, even though it will feel very much like moving backward. And bosses, you'll have to decide what to do about that.
When an organization needs some fiscal restraint, your job as a boss is to manage your team to that reality. You talk with them about why the constraint makes sense. How to do more with less. Your orientation is down, on implementing the decision. Your people are adults. And if the changes make sense, they can handle it.
But clapbacks are different. The driving force behind those decisions is "because the CEO said so." Even if that change is poorly thought through, or misunderstands how much damage the clapback will do. Your job in that moment is not to stand in front of your team and talk about rising interest rates. Your orientation there needs to be up. When you can see that the coming changes are deeply destabilizing to a large portion of your team, we need you to feed that information, clearly and directly, to your own boss. Or their boss. Even when it means putting your own comfort on the line.
Not every boss of a boss wants to hear it. Not every exec team makes room for leaders who raise that kind of concern. Many will be quick to remind you that if you don't like it, you can quit. That's true, and we've talked before about how the place you choose to invest your labour is an important choice. One you can unmake when the situation changes.
But it's such an obnoxious thing to say, isn't it? To ask you to "show a strong sense of ownership" one minute, and then tell you to walk away if you don't like something the next? Your job as a manager is to communicate in both directions. Alignment flows down and predictability flows up and good leaders take ownership of those flows. Both of them. Pushing back is literally what they pay you for.
Anyway. We can't tell you what the clapback will look like in your specific company, or whether your exec team will be willing to listen. But what we can tell you is that for the next year, at least, this is going to be happening everywhere. Every workplace is going to feel this push and pull. Deciding which parts of the last two years are "new normal", and which parts are "something we did to get by."
Those opposing forces in your organization are going to need a translation layer, someone standing in the middle of all that push and pull. Not only to make sense of it. But to be the bridge to something better and more sustainable. Bosses, that's you.
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