Integration of an acquired company. The playbook is pretty standard:
-Make them feel wanted...
-Mock the talent level of the acquired team in all-hands meetings...
-Lightly celebrate their history even as you wipe it from the annuals of time...
OK, so two of those are from the playbook and two are not. You can tell the difference. Nest CEO Tony Fadell? Let's just say it's hard for him. From a recent article on the paid source The Information:
"At a November all-hands meeting for engineers at Nest’s Palo Alto, Calif., headquarters, co-founder Matt Rogers said he was “losing sleep” over an exodus of staffers—roughly 70 in about six to 12 months, out of its workforce of roughly 1,000.
Tony Fadell, the company’s CEO, interrupted, pointing out that many of those departing employees had come from either Google, which acquired Nest in early 2014, or from Dropcam, maker of connected security cameras that Nest bought in mid-2014. Mr. Fadell went on to urge employees who have a problem with the way Nest is run to step up, rather than take on a “victim mentality.” Victims are “not long for the world,” he added, according to a recording of the meeting made available to The Information."
But wait! There's more. Then he dropped this gem:
“a lot of the [Dropcam] employees were not as good as we’d hoped…” and “unfortunately it wasn’t a very experienced team.”
To recap, Google acquired smart home devices company Nest for more than $3 billion back in early 2014, and six months later Nest itself acquired video camera company Dropcam for north of $550 million. But all, it seems, has not been well at Nest, with reports circulating of significant unrest among employees that was leading to a mass exodus.
First of all, who calls 7% turnover a mass exodus? I know HR leaders who might trade their grandma (on the in-law side, but still) for turnover under 10%!
But the bigger play here is to never talk about the talent level of a tribe from an acquired company in negative terms.
BTW - keep in mind that Nest is now a Google company - the source of so much Human Capital research, etc and let's be fair - a great place to work on many levels.
As you might expect, the former CEO of the acquired company/Dropcam, Greg Duffy (who left next in 2015) stewed for a day or two and then went public:
“I would almost find such blatant scapegoating amusing if it weren’t so insulting to the team. Given that, I feel compelled to set the record straight.”
Duffy doesn’t pull any punches in his retort today, taking the opportunity not only to tout Dropcam’s success prior to Nest acquiring it, but also his team’s output afterwards. “I can’t publish Dropcam’s revenue, but if you knew what percentage of all of Alphabet’s ‘other bets’ revenue was brought in by the relatively tiny 100-person Dropcam team that Fadell derides, Nest itself would not look good in comparison,” he said. “So, if Fadell wants to stick by his statement, I challenge him to release full financials (easy prediction: he won’t).”
But back to Next CEO Tony Fadell. What did we learn from his callout of the Dropcam team's talent level? Surprisingly, he was on track until the end:
- He didn't quiver at 7% turnover. Check.
- He told people in the all-hands that a victim mentality wouldn't work. Check.
- He said that a significant group in the audience wasn't as good as Nest thought they would be. Houston - we have a problem.
My take? That's where the jerk/@@@hole theory comes into play. You were being a tough leader and not being soft, then you couldn't help yourself - you had to throw stones at the acquired company.
Doesn't matter if it's true or not - you don't say it. And that says more about you than it does about that group of employees.
And how long this CEO stays leading a Google company will tell you a lot about Google as well.