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WeWork: Anatomy of a Crash



Sometimes the best way to understand what it means to develop a spy mindset is to analyze cases where it was lacking. WeWork is a perfect case study.


With WeCrashed, Apple TV+ has produced a gripping mini-series that makes us wonder, repeatedly, painfully, how such a thing could have happened. It was a story that had to be told, so that it may never happen again.


During eight episodes, there was one mention of spies as Adam Neuman (Jared Leto) was walking the streets of New York barefoot and making frantic phone calls. Although WeCrashed isn’t a spy story, we can ask whether Adam ever developed a spy mindset.


Working under the assumption that the characters are portrayed accurately, Adam embodied few spy mindset traits while building and running WeWork. His wife, Rebekah (Anna Hathaway), was even more painful to watch, a credit to both actors.


WeWork is in the business of leasing shared office space, nothing to get excited about, certainly nothing to elevate the world’s consciousness. Adam did a stellar job of motivating his employees for a long time, but WeWork was doomed to implode, for two reasons.


First, the inspiration for WeWork was Adam’s experience of being raised in Israel on a kibbutz, which are communes. Adam initially pitched the idea of communal real estate – for groups of strangers, mind you – which was rejected, before pitching WeWork, even though the idea wasn’t new or original.


Given that Adam’s goal was to grow and scale a multinational business, his inspiration was less than ideal. Communes are fine if your goal is simple living with subsistence agriculture, but communes aren’t designed for global growth and depend on the fact that everyone is on the same team. Most people satisfy this need with family and friends.


WeWork created a shared work experience for its customers, but the people sharing the office spaces were mostly strangers, weren’t on the same team, and weren’t working toward a common purpose. WeWork didn’t provide communal values or a place for people to elevate their consciousness. It provided a place for people save a few bucks on office space.


Adam desperately wanted his desire for a communal experience to trump the mathematics of running a business. He would have been better off creating a solid business and then inculcating a communal culture – not the other way.


Of interest, but not surprising, his vision of communal living in his own office was steeply hierarchical and devoid of economic equality. He leveraged his cult of personality to pay low salaries, for the honor of being part of something bigger – his paycheck.


In short, WeWork was doomed to fail because it was inspired by an idea (commune) that doesn’t lend itself to free market economics and wealth creation. Any growth that WeWork had over the years was either despite his vision or by not being true to his vision.


Second, Adam’s reliance on charisma and cult of personality over good business sense (the numbers) meant that the company was on borrowed time from day one.


Over and over, we see financial experts pleading with him to link his growth to numbers. As a rule, if you’re offering to pay more than the fair market value for a lease and for longer than normal, you’re not investing your money wisely. Clever talk won’t transform a series of tactical failures into a strategic success.


Adam was right about one thing: you need outside cash (debt, equity, line of credit, etc.) to facilitate growth beyond what organic cash flow will support. However, this must be part of a coherent plan with milestones. Adam apparently thought the business would magically absorb the growth by sheer act of will.


We all do what works best. Adam’s gift was his ability to inspire people, to speak to their hearts and to motivate them in ways that the average person could not. This is a valuable skill, which could have made him a great CEO, but for…he also insisted on running the numbers and the minutiae, where he failed.


Developing a spy mindset means understanding that there’s often a conflict between the core mission of the organization and what motivates people to go to work every day. You can tell people they’re elevating their consciousness by leasing shared office space, but how long can the lie last? Success is a grind that requires hard work.


Sensible people understand that the mission must come first – in bankruptcy, all get fired – but ignoring the human factor will end in failure as well. Capturing terrorists motivates soldiers and spies to go to work, until the bullets start flying and fear sets in. For many people, providing a good life for their family suffices to get the job done.


Taking your organization from point A to point B means understanding what you currently lack to achieve this and what your people will have to do differently to get there, which is step one of the Intelligence Cycle: Planning & Direction. You need a vision and plan.


It also means recognizing that while great leaders are transformative and push people to excel, they’re also humble, self-aware, and work within the realm of the possible. Many WeWork employees were sold a bill of false goods and got screwed by the botched IPO.


WeWork finally went public and might achieve profitability by 2023 or 2024, but only because Adam was removed and replace by someone who was willing to restore reality.


WeWork was a unicorn to the extent that unicorns don’t exist.

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