Just one day after Airbnb announced it is laying off a
quarter of its staff and cutting back investments outside of its core business, one
of the company’s strategic advisors shared his advice for startups navigating
the COVID-19 crisis.
Chip Conley was head of global hospitality and strategy at
Airbnb from 2013 until 2017 when he transitioned into an advisory role. He’s
also the founder of Joie de Vivre Hospitality, the second largest operator of
boutique hotels in the United States, and in 2018 he founded Modern Elder Academy, which he describes as a “mid-life wisdom school.”
On Wednesday, Conley gave the keynote address for Plug and
Play Tech Center’s online Spring Summit for its Travel and Hospitality program. Conley drew
from his more than 30 years of experience in hospitality to share advice for
startup founders – including examples from his Airbnb experience - and thoughts
about the future of the travel industry. Below are his remarks, edited slightly
for length.
Lessons for leadership in difficult times
Leaders are the emotional thermostats of those they lead. ... You
set the climate control. And one of the things that a lot of leaders don't
recognize is that the more senior you are in leadership, the more your actions
or inactions - the grimaces on your face - show up. People notice things.
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One of the things I want people to recognize is that if
you are anxious as a leader, your anxiety will be a contagion for everyone
else. It doesn't mean you shouldn't be transparent. It just means that if
you're going to be transparent and vulnerable about what you're going through,
including if you need to shed some tears, which is perfectly fine ... the thing
to know is that you better match that vulnerability with some vision.
Because what people are looking for is for you to actually
be transparent ... but they're also looking for you to actually remind them
of the North Star of the company - where you're going, why you all joined this
company in the first place.
Just remember that anxiety equals uncertainty times
powerlessness ... and there is a lot of anxiety, it’s probably the predominant
emotion right now in most companies and especially in travel and hospitality
companies. ... How do you create a little more certainty for your team? Usually
that has a lot to do with transparency. And how do you create the sense that
people have some powerfulness in what they do.
One of the things a lot of
employees need to hear is that the work that they're doing is important.
Otherwise, if you don't think the work’s important, you’ll have a tendency to
not give much attention to the work you're doing.
Another learning under this category of learning to lead in
a downturn is make sure everybody's clear about the metric that defines
success. There was a metric that defined success before COVID - that metric no
longer exists. If you're still focused on the pre-COVID goals you have, you are
going to have a very depressed team. So for us, in the downturns, what I really
liked using as our primary metric was market share, because market share
allowed us to see how we're doing relative to our competitors.
And the reason that this is important is ... you’ve got to
get people aligned around what defines success, and then once you’ve done that,
you need to help people create what I call the momentum of victory. Nobody
wants to be on the losing team. And if you're in this industry, everybody feels
like they're on the losing team, but the truth is, the pain is relative and some
companies are more in pain and suffering than others.
Leaders are the emotional thermostats of those they lead.
Chip Conley
You want your company in a difficult industry to feel like
it is the company that is going to survive. The momentum of victory means the
following: you identify on a regular basis, preferably weekly, what progress is
happening in the company. Some of that may be procedural things you've gotten accomplished, but often it is the data you're getting around this new most important metric.
In our case, it was market share. And in our downturns, we showed that 80% of
our hotels were gaining market share ... so that was something we just kept
coming back to over and over again. So to create the momentum of victory, what
you end up doing is creating an environment where people feel like we're making
progress.
The last thing around just what to learn from a
downturn is, we did an exercise at both Joie de Vivre and at Airbnb ... and I
think it's actually not a bad one for you to do to your company right now. It's
called the “what business are you in” exercise.
We learned this from Peter
Drucker, the management theorist. He said that the most important question any
organizational leader can ever ask is, what business are you in? We did this
in the bottom of a downturn. We had our top 12 executives, our leadership team in
a room ... and two people would face each other. The first would ask the
question to the other person, what business are we in? And the second person
would then have to answer that question.
The first person to ask the question
would ask the question, again, what business are we in? And the second person
would have to answer ,but they can't answer the same way twice. You do it five
times, so by the fifth question, you’ve done an archeological dig to really get
clear on what's your differentiator: What's the thing that's the essence of
your organization?
This was what got us to at Joie de Vivre of knowing we
were in the identity refreshment business. ... Similarly, at Airbnb ... we came to
the conclusion, using the same exercise, that we were in the business of
helping people belong anywhere, and “belong anywhere” ultimately became the
marketing phrase that defined Airbnb and had a lot to do with what the
company's organizing principle was.
Startup advice
Number one is stay liquid ... it’s all about just your cash
flow, your burn rate, just knowing that.
As Brian Chesky just showed yesterday ... Brian had to get to
the place that was really painful for him to say some of his pet projects, some
of the things that he thought really defined the company's long-term strategy
and goals, he had to make some tough decisions and get back to the clarity of
what is the core business of Airbnb.
There's a lot of projects like, for
example, transportation. Brian hired Fred Reid, a friend of mine who was the founding
CEO of Virgin America. ... He was going to come in and help create a whole
transportation component, mostly air transportation ... but that, in this shrinking
of the staff by 25%, that's an initiative that had to go away, at least for
now.
Number two is focus on solving your customers' problems. It's
really easy in a downtown like this to get incredibly focused on your own problems
like cash flow, and actually move away from the bigger question, which is, what
is the customer problem I'm trying to solve here?
Number three is ... focus on your evangelists. The Airbnb
founders in their early days of 2009, when they were accepted into Y Combinator ...
they basically spent all their time in New York, with their evangelists from
New York. New York was the place that they knew they needed to learn
from. So they literally went door to door learning from the hosts in New
York and then also spending time with the guests and actually going and being a
guest with the hosts in New York and giving feedback to them.
Travel’s comeback
Anything that has a really savvy digital component to it –
I’m a big believer in it. But just recognize that your digital product better
be solving a customer problem, not something that feels like it's frosting on
the cake. Because right now most of the hotel industry is going to get back
down to basics.
If you're still focused on the pre-COVID goals you have, you are going to have a very depressed team.
Chip Conley
So if you can actually solve something that's a basic
problem that actually saves money, that'll be a really high priority, or if it creates
a better relationship with the customers or employees. If you're actually
providing something that was more appropriate for a different time, when people
had bigger budgets to work with, I would say it's time for a pivot.
You're going to see really quick comeback in certain parts
of travel, anything related to family travel or special occasion travel ... someone
only has a 75th birthday once. Zoom or virtual-reality weddings just don't cut
it. In fact ... because so many weddings got canceled or postponed this spring,
there's going to be an overflow of people trying to actually have fall
weddings. So there's some real opportunity there.
Another opportunity is transformational travel. ... Transformational
travel is when you go on an experience not to sit in a in a lounge chair and
drink a colorful cocktail with an umbrella on it; it's actually when you go to
learn or go to make a difference or go to experience a deeper connection with
others. Our Modern Elder Academy is an example of transformational travel, and
we're just getting the phones ringing off the hook right now. We're actually
closed till October because of the pandemic.
Staycations will come back quickly, so drive destinations
will come back. I think leisure will come back faster than corporate, and it's
probably because corporate is getting very used to Zoom calls now. I do think
in the fall, there will be a lot of corporate retreats, small offsites, to
talk about 2021. I think the business planning for 2021 is going to be more in-depth than it's probably ever been in terms of an annual cycle of looking at
where things are going.
I think that overall corporate travel makes a comeback
in the fall, as will international travel, depending upon public health, and
depending upon how much we've controlled this virus. I don't think people are
going to exclusively wait ... until there's a vaccine to travel, to get a plane.
I think that's a small percentage of the regular traveling public.
Who’s going to get hurt the worst, it's pretty obvious. The
cruise industry is going to be in a rough place for a long time. And major
conventions and meetings. I think major conventions are going to completely
have to rethink themselves.