I read a fascinating scoop by Insider on the people challenges that Intuit is facing following its takeover of Mailchimp. You can find a summary of the challenges being faced here, or the full scoop is for subscribers only and can be found here. But in essence, they’ve been hemorrhaging staff and sought to counter this by way of a more-or-less company-wide 10% pay raise.
This is a really interesting example of how acquisitions can unfold and the impact they can have on employee morale. There are some big lessons here. One thing I’ve said for years (call me jaded if you wish) is that companies will only be loyal to their employees insofar as it suits their needs and interests. Consequently, employees should only be loyal to companies insofar as it suits their needs and interests. Now, I am generalizing as there are companies that are truly working to become talent-centric. I believe by and large this is the case, especially with mammoth companies like Intuit.
However, there are a number of points in the article I’d like to address given my 30 years of experience working with companies from Seed-stage through to large publicly traded companies:
1. “Like many companies, we’ve seen some turnover as certain team members make decisions about their careers following the acquisition, based on a variety of personal and professional factors, “Mailchimp said in a statement. Mailchimp has somewhere in the neighborhood of 1,300 employees. Intuit has about 14,000. This is a big difference, especially from a cultural and alignment standpoint. People often ask why I only take on clients in the SMB space. Why? Because giant companies are not going to change how they do things. Even if they bring in McKinsey, Bain, BCG, or another firm charging them millions, they will not solve their talent-centric issues because of the time and commitment it would take. Additionally, I’m not convinced the executive teams at these large companies can be properly aligned. Companies would likely have to remove/replace many managers and executives, which is hard, even for the most committed.
2. “Basically, every staff engineer I can think of has left, bar one who said he can’t risk it because of a family situation,” an employee who left earlier this year said, adding that the reason they left was “mostly disgust with our founders and complete ambivalence from Intuit.”
“This employee was referring to lingering resentment toward Mailchimp’s cofounders, Ben Chestnut and Dan Kurzius, over employees not being awarded any equity as part of their previous pay packages because Chesnut and Kurzius vowed to never sell. But they did sell in September for $12 billion, instantly earning them each roughly $5 billion paydays.”This may not be a popular opinion, but the founders are not responsible for whether or not employees receive equity. If employees wanted equity, they should have asked for it. If the company declined they should have gone to work elsewhere or realized they made a decision they need to be accountable for. The big point here is that founders Chestnut and Kurzius made a commitment to their employees not to ever sell. Did anyone ever get this in writing? Did they ask? I bet if they did they were told to “trust us”. Unfortunately, this is not effective. Get it in writing or don’t complain. However, this does NOT absolve these two from the fact they now appear untrustworthy and lacking integrity. Clearly, their word is meaningless. It was announced recently that Twitter will sell to Elon Musk for $44B. Everyone has a price…
3. “Instead of equity, Mailchimp awarded generous benefits, including profit sharing, company-paid medical premiums, and work-from-home and cellphone stipends. At Intuit, they receive restricted stock options, which require several years of service and a strong stock performance to pay off. Intuit’s stock is down more than 25% this year.” Unfortunately, this is one of the unfortunate outcomes of an acquisition. Employees have the freedom to stay or leave if they don’t like working for a ginormous organization where they are nothing more than a cog in a wheel. Intuit is doing what it feels is best for Intuit. Clearly, they are not concerned that they are NOT a talent-centric organization.
4. “Instead of reacting to employees’ concerns with empathy, Intuit’s leadership responded with a consistently patronizing attitude, saying we just didn’t understand how equity worked,” the employee said.” This may be wholly true, BUT it is the employee’s responsibility to understand this.
5. Good for Alex Chriss for facilitating a 10% raise, but it’s never just about the money as Intuit has learned here. How your employees feel – and how your actions make your employees feel – is at least as important as the remuneration you give them.
Concluding Remarks
I’m not here to make employees feel bad or to prop up Intuit and make them feel proud of themselves. I’m only here to point out the facts as I see them. We all need to become more accountable for our actions and decisions. We all have circumstances. Stop letting your circumstances manage you. It’s time to manage your circumstances. You’ll find life to be much easier to deal with if you’re not always blaming and pointing the finger at someone else.
