S1E16 / Good and Bad Bosses / Adam Grant, William Kassler, Katie McGrath

I'm Dr. Celine Gounder, and this is Epidemic. Today is Friday, May 1st. On this episode of the podcast, we're looking at work in the time of coronavirus. These are unprecedented times for workers and their bosses. And so we thought, who better to help us talk through the good and the bad of work during the pandemic than Adam Grant? Welcome back to the podcast, Adam.

Thank you. It's great to be back.

Adam is a professor at the Wharton School at the University of Pennsylvania. He spoke with us back in March about how organizational psychology could help convince people to follow social distancing and other health guidelines. Adam and I were talking a while back about which companies were really rising to the occasion and doing a good job of taking care of their employees in the time of COVID And which weren't. So Adam, what do you think makes for a good leader in a crisis like this?

I think every leader, unfortunately, is having to make some tough choices right now. And so when I think about how companies can handle this kind of crisis well, I think about a question of justice. When we study justice, it actually turns out there are 3 kinds of justice that really matter in a hard situation like the pandemic crisis. The first one is distributive justice, which is basically trying trying to make choices that lead to fair outcomes for people. And so that would be avoiding downsizing, trying to minimize or eliminate layoffs altogether, not furloughing people, right? And I think that would be ideally the best response. The second kind of justice is procedural justice, which is a question of, regardless of what the outcomes were, was the process fair? So were the decision makers neutral? Did they consider all the relevant stakeholders? Did they go about making the choices in an unbiased manner? And there's a wealth of evidence that people are more willing to accept negative outcomes if they feel like the process was just in some way. And then the third kind of justice is interpersonal justice, which is, are people treated with respect and dignity and compassion when they're told the news? And again, we've seen the full spectrum of that over the past month or so.

Yeah, that's really interesting to think about, these different kinds of justice, and even when horrible things might happen, that there might be a way to think of those as fair or not fair. So in this episode, we're going to hear about some of the better actors, companies who've been models for supporting their staff. We'll break down some of that with Adam, and we'll hear about companies that maybe have been more of a mixed bag. Before we continue our conversation with Adam, I want to focus on some of the better examples out there. Specifically companies that are doing a great job caring for the mental health of their employees. So I reached out to Dr. William Kassler. He's chief medical officer for IBM.

I would say that historically, mental health, like for the rest of society, business has not paid as much attention to mental health as they could or should have.

Williams says there's a strong business case for making sure employees are healthy.

Mental health affects physical health. Mental health and physical health together affect the work environment. People bring their problems from home into work. People are less productive. And so part of it is just simply an economic argument that employers will get more from their employees if they attend to their physical and mental health.

Work can be stressful even without a pandemic. Things like working from home, something that used to be touted as a perk, is now a source of stress and anxiety.

Well, first of all, we're not working from home because we want to. Many of us are working from home because we have to. We are all thrust into this social distancing as a result of the pandemic. And in very short time, we've had to adapt to some very unusual circumstances. First and foremost, it's not just working from home, but our entire lives are disrupted by social distancing.

Williams says there's a mental health concept that's especially important right now: resilience.

Resilience is the ability of an individual to bounce back from trauma or to adapt to adverse circumstances. This is not an inherited or an innate trait that you're born with. Resilience is a skill that you can learn, and you can build it like a muscle.

There's resilience in a business sense. Say, what do you do if there's an interruption to your supply chain or all your stores are closed because of a virus? But resilience is also about making sure employees can continue to thrive in this era of coronavirus.

It's focusing on the individuals. It's creating a culture of health. It is referring individuals to evidence-based programs. It's having the policies and practices in place. It's making sure that you purchase insurance that has mental health benefits, robust set of mental health benefits. It's about creating personal and family leave, and generally making a less toxic workplace.

A great example of this is Bad Robot Productions. They're the team behind the latest Star Wars and Star Trek movies and the hit TV show Lost. Katie McGrath is the co-CEO and chief strategy officer at Bad Robot Productions. She says they invested heavily in things like mental health benefits for their employees before the pandemic.

One of the things we really did stress from the beginning, and we have done consistently in all of our communications, is a real emphasis on our employees taking advantage of, you know, mental health resources. We have a very robust healthcare plan at our company, so there were resources there that they could avail themselves of. And then, you know, we communicate company-wide 3 times a week and sidebar conversations that our HR department has with everyone, We're really reinforcing the resources that are available across, not just purely mental health issues, but around sobriety support and parent support, things that are a little bit more acute in a time like this.

Beyond formal mental health resources, Katie says improvised social activities have been a big part of keeping employees connected during the pandemic.

Everyone, I think, is just on the verge of getting over all the Zoom cocktail hours to some degree, and yet they do continue I think it will continue to be an important way that people are connecting. I just saw this week that there's a happy hour for Bad Robot employees who live alone, and I think there was an addendum to it, or those who wished that they did.

But they're getting more creative than just a remote lunch hour.

We have a once-a-week, what we call a tea time at Bad Robot. Afternoon at 4:30, we always have like an afternoon baked snack and everybody gathers in the kitchen and gets a coffee for the second part of the day. And so we're still holding a tea time and that's now been kind of programmed with a virtual game of bingo. And then we had a scavenger hunt one week. So it's just trying to allow for spaces that people can opt into, they're not mandatory, but where they know they're not alone in this.

One of the most popular tools during the pandemic has actually been an email newsletter.

I started writing kind of like an open letter to our team that then became more of a newsletter. We get lots of submissions during the course of the week for, you know, whether it's funny memes or if it's a dance class online or it's an announcement of, you know, a happy hour that they're setting up. There's music in it as well. There's, you know, every Friday we include a poem in it. You know, it's a way to kind of have a one-stop shopping for the culture piece that I think when you work apart, you can miss out on.

Katie says the newsletter is about creating a space where management and employees can express how they're feeling during the pandemic. It also has a lot of resources for people if they want help.

We have a part of our company called Good Robot, which is basically the social impact arm of our company. And so they program a lot of the newsletter around, you know, ways to ways to volunteer from home, ways to support organizations that are doing work on the front line.

And this newsletter has really struck a chord with the staff.

This has the highest open rate of anything we've done in the last, you know, 10 years at the company. And I think that is a reflection of, of how people are feeling right now.

Katie's also been trying to figure out how Bad Robot can adapt to social distancing and other considerations during the pandemic.

It's important for company leadership to acknowledge that this is a different time so that the rules around the work should also be different. I just think we have to get really flexible and open and creative as to what adds value, not just what replicates an environment that we are no longer in and who knows when we'll be back to. And I think there's an opportunity for something great to come out of it, for us to discover some aspects of how we did work before and how we might do it better in the future. So just to be very open right now and to be, you know, comfortable experimenting for our company, I think has always worked, and we're digging into that even further now.

The coronavirus pandemic may also change the way people address their mental health, regardless of whether they work for a company like Bad Robot. Before the outbreak of COVID IBM had been working on an app to help veterans with post-traumatic stress disorder. It's called Grit. The app asks users a series of questions and then develops a personalized plan to help with stress and anxiety.

After the pandemic, the team that developed Grit realized that there are parts of Grit that could be applied more universally in this time of social distancing. So that team just took the module of mental fitness and assessment, and they released that as a single app targeted to anybody who felt stressful.

Another program IBM developed called Teatro blends artificial intelligence with a human counselor to provide remote mental health services.

There have been some field trials of this which have been very, very promising. It seems that people really like to do these anonymous online group counseling. We have 70% completion rate, which is dramatically greater than one-on-one counseling in a mental health program in the VA, for example. There are some preliminary results for both employees to build resilience and also veterans that Having, having completed this, there's about a 40% decrease in stress and anxiety, around a 30% decrease in depression and symptoms. There's decrease in fear and sadness. There's decrease in denial and increase in hope and joy and acceptance. And so we're on the early part of applying AI to mental health counseling, but these early efforts are proving very encouraging.

So Adam, I think the stories from Katie and William both really hit home how important it is to be flexible and adapt to a changing situation, like working through a pandemic. But I think it also shows how important it is to have things like a strong work culture and good health benefits in place before a crisis strikes. How do you think this COVID pandemic might change the kind of benefits that employers offer their employees understanding what some of the vulnerabilities might have been and how they might build more resilience into their workplaces?

Well, I think one of the benefits that's going to become increasingly popular is a work from anywhere benefit. I think, you know, a lot of employers have headquarters in cities where the cost of living is extraordinarily high. Right. So if you, if you think about a lot of the workplaces that people are drawn to, they have major offices in New York, San Francisco, LA. Chicago, Boston, right? And those are pricey places to live. I think we're going to see employers say, you know what, if you want to work from, from a location where you either have a strong sense of community or you, you know, you find the cost of living lower, we're happy to let you do that. And we're going to, you know, we're going to try to give you the resources you need to be successful there. So that will be a stipend to build your home office. To invest in, you know, in high bandwidth or high-speed Wi-Fi. I think that's, that's the kind of benefit that very few employers were thinking about 3 months ago and now is probably going to be table stakes for a lot of people. It also means for employers, they're going to be able to look much more widely for talent than they would have in the past because they're going to feel like they don't necessarily have to move people or relocate them or convince them that they should abandon, you know, the place they love to live. In order to join a new company. So I think that's, that's going to be the starting point. And then I think we're going to, we're going to see a pretty dramatic change in work travel. I think a lot of business travel that, that seemed essential before is now going to be recognized as not only optional, but probably unnecessary. And that means we're probably going to see more employers invest in really high-quality video conference capabilities, uh, where, you know, we really almost feel like we're in the same room with the people we're interacting with.. And I think that's going to create a lot of convenience. I think the downside of that for some people is travel budgets are going to go down, or rather they've already been slashed and they're not going to recover, I don't think, anytime soon to what they were pre-pandemic. And I don't know, I think beyond that, we're going to see some remarkable creativity on the part of employers to say, okay, what are the other problems that arise when people are working from home or when they're in a home office that we haven't really anticipated before? Are they gonna, are we gonna see some employers say, okay, we wanna invest in health as well as convenience, so we will buy you a home gym or a treadmill desk. I think that's gonna be a perk that more people are drawn to than they ever would've been in the past.

Before the pandemic, people really tried to keep tight boundaries between their work lives and their personal lives, and it's nearly impossible to do that now. Assuming these boundaries remain blurred after the pandemic, will this be a good development for work culture and work-life balance?

I think it'll be good in some ways and bad in others. Where do you want to start?

Why don't we start with the good?

Yeah, so I think the good is we all have a lot more personal knowledge about our colleagues than we did before. And I think that's good news in part because there's a researcher, Ashley Hardin, who studied what happens when we gain personal knowledge about our coworkers.. And it turns out that it improves our collaboration in part because it humanizes them. We're able to realize, you know, they're not just these achievement robots or, you know, they're more than just the job they do. And once we see what their life is like outside of work, we can begin to identify with them a little bit more. We can recognize similarities between us and them and say, oh yeah, I have the same exact pile of dirty dishes in my kitchen. We're not that different after all. And so I think that will in some ways bring people closer together. You know, it creates a sense of shared experience and maybe even common fate. And that seems like one of the good parts of this crisis.

Do you think that might translate into more flexibility? You know, and I'm thinking here in particular about maybe moms in the workplace, that sort of thing.

I hope so. You know, it's funny because back in 1993, the management guru Peter Drucker said that commuting to office work was obsolete. And if you fast forward to 2019, that still wasn't the reality for most people, right? Almost half of companies worldwide were banning remote work. I had argument after argument with CEOs who said, you know, I just can't trust my people to work whenever they want or wherever they want. And my reaction to that is, okay, if you couldn't trust them, who do you think is to blame for that? It's you, right? You either hired the wrong people or you did a very poor job motivating them, or you're projecting your own laziness and lack of focus onto them. Or maybe it's all of the above. But if you can't trust people to manage their own schedules and their own workspace and time, then you're not doing a good job as a manager or a leader. And I think that one of the effects of this crisis now is a lot of leaders were forced into a situation where, you know, where people are working remotely, whether they wanted them to or not. And they're learning that they can trust their people more than they realized. And I hope some of that learning sticks.

So we heard some specific examples from Katie about how Bad Robot was handling the pandemic. What are some things that others could do to improve their company's work-from-home culture?

Well, I think the first thing to do is to find out how the experience is going, right? I think this is an experiment that none of us opted into. We don't really know what other people's lives are like, as much as we might have a little bit of a visual window into them. And so, the first thing I would do as a leader is I would ask people, how's it going? I'd ask them directly, I'd open up some kind of pulse survey,. And I'd want to find out, okay, what are the, you know, what are the things that are working well? What are the biggest challenges? And one of the most consistent challenges that's coming up in the data I've seen so far is, is people are just experiencing extreme screen out from being, you know, burned out on Zoom all day, or pick your favorite platform. And if that's the case, I think there need to be some boundaries. You know, one of my favorite things that I've seen leaders do is to say, okay, We've got one meeting a day where it's really helpful for everyone to be on video. For those who want it, you know, you can gather for lunch and we can, you know, just have informal conversation over video. But if you're also feeling really drained by staring at a screen all day and these giant virtual heads that are showing up, you have the license to turn off your camera and just join in by audio. Or, you know, let's figure out how we can use email or Slack or whatever our, you know, our digital communication platform is that's more text-based., to try to stay in touch that way. And I think just giving people that flexibility is a huge step in the right direction.

So not every company has risen to the occasion in the time of COVID There's a startup by the name of Carta that manages employee equity for other startups. They laid off about 16% of their workforce, and they've gotten somewhat mixed reviews for how they went about this.

Adam, what happened with Carta? Well, I think Carta is a great example to learn from both what leaders are doing extremely well and where they're, I think, making mistakes. So, you know, I think the first reaction to Carta was, was high praise because the CEO wrote an open letter taking full responsibility for the layoffs. And that's pretty rare, right? It's pretty common for managers to pass the buck. And, you know, especially leaders at the top to say, okay, you know your people best. You know their performance. It's really up to you who has to go. And then, you know, even if CEOs at the top are making the decision about how many people, they don't necessarily call that out and say, hey, this is my decision here. And at Carta, the CEO did, I thought, an outstanding job writing in particular that he made the decision about how many people needed to go. And then he reviewed every single name. And if he basically said to his people, look, if you lost your job, it was not your manager's fault. I made that decision. In fact, for the vast majority of you, your manager was fighting to keep you, and I overrode that decision. And so if you want to blame someone, it's me. Don't blame your boss. And I thought that was amazing. I would love to see more leaders step up that way and say, look, you know, at some level, when, you know, when there's credit to be shared, it should be given by leaders. When there's blame to be taken, it should be claimed by leaders. And here we have a great example of that. But I think there were also some major errors in this note.

So why is Carta being criticized here if you had leaders that were really stepping up to the plate and taking responsibility and trying to be, you know, as compassionate as one can be in these kinds of situations?

Well, I think there are a few things that went wrong at Carta. The first one is they've just taken in hundreds of millions of dollars in funding. And so the idea that layoffs were necessary, I think, is at a minimum something we ought to be debating.

Right.

And I would go even further. My read of the research on, you know, on downsizing and layoffs is when companies end up making those decisions to let people go, they actually perform worse than companies that find other ways to cut costs, like pay cuts, for example. And that's holding constant how bad their financial situation is and what the state of the economy is. There are a bunch of unintended consequences of laying people off that I think a lot of leaders miss out on. So one is that you actually lose people you didn't realize you needed. I've seen in some data that companies often will have to rehire 40% or 50% of the people that they've laid off because They didn't realize how indispensable their work was until they were gone. And then a second risk is you create survivor guilt among the people who stay, and they end up distracted, they end up demotivated, they focus narrowly on protecting their jobs instead of trying to innovate and keep their companies alive, and that obviously is a big problem. And then there's a big long-term cost when it comes to the reputation of the company. So your most talented people are going to wonder, okay, is this the writing on the wall that this is not a company that cares about its people? And should I start looking elsewhere? And of course, the more talented people are, the more options they're going to have. So as you start to lose people, you lose your best people usually the fastest. And then it becomes increasingly difficult to attract and recruit and retain really, really excellent people over time. So I think it's a mistake to lay off people whenever you can avoid it. I think there are always ways to minimize the number of people that are laid off if it's truly inevitable. And I think Carta missed the mark there. And then, you know, when I think about how they made the decision, I also think there was, there was a misstep here, too. So in the CEO's letter, he basically says, look, I took I took him— he basically says I had a moral conflict. I had to think about what's best for shareholders, where we have to reduce costs and protect cash during a recession. And then I also have an employee perspective where, you know, I want to save jobs and help the people that I've hired. And he basically says, look, I've chosen the shareholder perspective when it comes to distributive justice. And so I've, you know, I've cut I've cut jobs because that saves money for shareholders. And then I'm trying to take the employee perspective when it comes to procedural and interpersonal justice. And I'm going to try to minimize the number of people. I'm going to try to get the right people, you know, and I'm going to try to do it with compassion and dignity. And I just look at that and say, this is a false dichotomy, right? You don't have to choose between shareholders and employees. Because if you do what's right for your employees, that actually serves shareholders in the long run. There's a rigorous study by Alex Edmonds that looked at company performance over about 3 decades, and he found that the Fortune 100 best companies to work for significantly outperformed the market. There's a huge competitive advantage that comes from building the kind of culture where people feel supported, taken care of, treated well. And, you know, we've already talked about what some of those benefits are: attraction, motivation, retention of people. And so I think any CEO who sits down and says, I've, I've got a choice between what shareholders want and employees want, that CEO is not looking at the long-term value of putting employees first.

Well, thanks for joining us on the podcast again, Adam. It's always great to hear your thoughts.

Take care of yourself and stay healthy.

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