Planning, Execution and Tracking – TechCrunch


Economic uncertainty landscape of 2022 has left companies and their founders between a rock and a hard place.

Many CEOs cannot afford to simply exist within the status quo frameworks they enjoyed under a rosy 2021 year. At the same time, they also struggle to raise fresh capital – and those able to raise funds and expand leads are navigating the cultural complexities of descents.

The sad reality is that many companies instead have to downsize to create more leads. This downsizing (or RIF) is a more permanent version of a layoff where the budgetary changes to be made cannot be solved by a temporary change in the workforce.

A number of QED portfolio companies had to execute RIFs. Many who haven’t already are having intentional discussions about whether they should, especially at a time when they’re cutting back on marketing spend and cutting back on both research and development plans and pet projects.

As seasoned former operators, we have experienced these dynamics in the past. Frankly, we’re in a somewhat unenviable position to be able to help our founders navigate these choppy waters because we’ve been through it so many times before.

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

Earlier this summer, we began sharing a five-page document that outlined our advice with some of our portfolio company CEOs, based on our personal experience and observations. The document was not meant to live in isolation – rather, it was a foundation to build upon in collaboration with investors, board members and management teams. We’ve had long discussions with most of our businesses about the why, when and how of the discounts.

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

In some parts, the guidelines seem almost sterile – references to legal counsel, laws specific to local jurisdictions, closing access to emails and Slack channels. The inevitable reality is that while you should conduct RIFs in an organized manner based on sound business logic, there is still an overriding need to deliver the message with empathy and respect.

Not all companies that have executed RIFs have done so without error – even when actual reductions occur as planned, avoidable errors can have a lasting effect on employees who remain.

Planning

The planning element of a FRR cannot be overstated.

This starts with building the team that drives the RIF and extends to risk assessments, scope, budget, planning and communications.

In a small company, this team may consist solely of senior managers. In a large company, representatives from different geographies, units, and levels may be needed. We work with our portfolio companies to answer a number of vital questions to clarify purpose, objectives and narrative.

  • What drives the need for a FRR?
  • Could this have been avoided? What other options are or were available? What other actions are or could be complementary? If the leadership made a mistake, take responsibility for the mistakes.

Tech

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