Planning, Execution and Tracking – TechCrunch


Uncertain economic The landscape of 2022 has left businesses and their founders between a rock and a hard place.

Many CEOs cannot afford to simply exist within the status quo enjoyed as part of the rosy 2021. At the same time, they are also struggling to raise fresh capital, and those who are able to raise money and extend runways. navigating the cultural complexities of the lower stages.

The sad reality is that many companies are forced to cut staff to create more runway. This reduction in force (or RIF) is a more permanent type of downsizing where the budget changes that need to be made cannot be addressed by a temporary change in staffing levels.

A number of QED portfolio companies have been forced to implement RIFs. Many who haven’t yet are having deliberate discussions about whether they should, especially as they reduce marketing costs and cut back on both research and development programs and pet projects.

As seasoned ex-operators, we’ve experienced this dynamic before. Frankly, we’re in the slightly unenviable position of being able to help our founders navigate these troubled waters because we’ve been through it many times before.

Our best practice advice to CEOs is to cut deep enough that they are confident there won’t be a second round in the next few months.

Earlier this summer, we began sharing a five-page document outlining our guidance with some of our portfolio company CEOs based on our personal experiences and observations. The document was not meant to live in isolation, but instead was a foundation to build upon in collaboration with investors, board members and senior management teams. We have had extensive discussions with most of our companies about why, when and how to make layoffs.

We divided the process into three parts: planning, implementation and follow-up.

In parts, the guidelines seem almost sterile: references to legal counsel, laws specific to local jurisdictions, turning off access to email and Slack channels. The inescapable reality is that while you need to handle RIFs in an organized manner based on solid business rationale, there is always an overriding need to deliver the message with compassion and respect.

Not all companies that have implemented RIFs have done so without error, and even when the actual layoffs go as planned, avoidable mistakes can have lasting effects on remaining employees.

Planning

The planning element of a RIF cannot be overstated.

It begins with the assembly of the RIF leadership team and extends through risk assessment, scoping, budgeting, planning and communication.

In a small company, that team may consist solely of senior management. A larger company may require representatives from different geographies, units, and levels. We work with our portfolio companies to answer a series of critical questions to gain clarity on purpose, goals and narrative.

  • What triggers the need for a RIF?
  • Could it have been avoided? What other options are or were available? What other activities are or could be complementary? If the management made a mistake, take responsibility for the mistakes.



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