Once again, Adam Neumann is swirling around the headlines, and no, it’s not just because the TV series “WeCrashed” based on his chaotic time at the helm of the company is set to premiere this week. Though Hollywood seems to be betting big on Neumann’s infamous antics that nearly drove the company he founded into financial ruin, Bloomberg just churned out a piece speculating on Neumann’s return to WeWork. “WeWork is effectively without a chairman,” writes Ellen Huet and Sarah McBride. Plus, Neumann “can legally request his return to the board as an observer” since his year-long ban from WeWork’s boardroom is quickly coming to an end. But, let’s step away from the clickbait and snap back into reality.
The idea that SoftBank would ever reappoint Neumann to any position with any decision-making capabilities for WeWork is comical, if not downright ludicrous. Neumann’s return to the board requires SoftBank’s approval, which, according to Bloomberg, Neumann has not requested. Plus, there’s an elephant in the room.
“SoftBank will only want to bring Neumann back after he forks over a check for the billions of dollars of their money he lost,” says Fraser P. Seitel. “If it were me, I would never ever rehire Adam Neumann.” Seitel, who according to Larry King “practically wrote the book on PR,” is the president of Emerald Partners, a communications consultancy that he and his associates founded in 1992. Seitel has also served as an adjunct professor of public relations for the School of Continuing and Professional Development at New York University since 2005. He’s penned university textbooks such as The Practice of Public Relations and Public Relations and Promotional Writing. Suffice to say, if you’re trying to determine whether or not something would result in a PR nightmare, he’s the guy to call.
Which is exactly why I reached out to him.
Despite the torrent of news articles, books, podcasts, a Hulu documentary, and a star-studded drama series on AppleTV about Neumann’s antics, WeWork suspiciously never underwent a full rebrand after his exit. It seemed that WeWork was comfortable with the idea that all press is good press, even though that adage is largely regarded as a PR myth. “The fact of the matter is,” continued Seitel, “that WeWork is forever associated with Adam Neumann, just as Theranos will be forever associated with Elizabeth Holmes.” While it’s true that both Neumann and Holmes had mangled the reputation of their respective companies, comparing the two highlights a glaring issue.
Seitel is hardly the only one to lump WeWork and Theranos together, type “scandalous startup founder” into Google and scroll through the thousands of news articles and blog posts that make the same correlation. But Elizabeth Holmes’ fraud did more than swindle investors, it endangered the lives of the people who used the blood-testing device, and the public blowback seriously lowered investor confidence in future medical startups. The consequences of the WeWork scandal are minute in comparison to Theranos’. Holmes allegedly outright lied about the efficacy of her company’s tests. Neumann might have had delusions of grandeur, but he did actually build a useful product. The result: Theranos is defunct, WeWork is still up and running.
Even with their wounded credibility from Neumann, there is equity in the WeWork brand, so it’s not totally necessary for WeWork to up and change their name. After all, “WeWork” is a descriptive name for what it does, and it’s fairly well-known for the people who have used it. But, there still needs to be a major image overhaul in order for WeWork to become the investor darling it once was.
Not only does Seitel think that letting Neumann back onto the board would have disastrous results for WeWork, he thinks that Neumann’s lasting image as WeWork’s CEO needs to be replaced altogether. “The way I would do it,” began Seitel, “is to get a new, strong leader to run the organization who has no ties to Neumann. I would do it the way Peloton did it.”
Peloton, the cultish stationary bike startup, is gunning for a turnaround after its CEO and co-founder John Foley stepped down. Like Neumann, Foley has come under fire for a series of management blunders, including hiring his wife to a senior-level position (Neumann’s wife was appointed to the CEO of WeWork’s now-defunct educational branch “WeGrow”, Foley’s wife was appointed to VP of Apparel, neither had any prior work experience relevant to their roles) and, of course, misleading investors. Eventually, Foley resigned and the reigns were handed off to Barry McCarthy. McCarthy, who was the CFO of Netflix for nearly twelve years and the CFO of Spotify for eight, has the unenviable task of stepping into a leadership role while Peloton is slashing one-fifth of their workforce. But McCarthy is a seasoned leader with decades of experience in financial management, and, as Seitel said, has no ties to John Foley.
Though he’s only been on the job for about a month, McCarthy has already shifted literal gears in Peloton’s business model. Instead of paying $2,000 for a stationary bike and a monthly $39 fee to access Peloton’s workout classes, Peloton appears to be moving to a more wallet-friendly rental model. This shift will appear to a wider consumer base, ultimately changing the public’s perception of Peloton.
Now WeWork’s current CEO is Sandeep Lakhmi Mathrani, a real estate executive whose personality is muted in comparison to Neumann’s. “Mathrani is exactly the kind of unpretentious and insightful executive who gives PR teeth with his applied thought leadership, backed by balance-sheet accomplishment,” wrote Racquel Yerbury of Bospar. But even though Mathrani is a “strong” leader with no ties to Neumann, like Seitel said, Mathrani’s PR teeth are tiny compared to Neumann’s influential jaws.
“You reach a point with some people,” Seitel surmised, “that no matter how smart or influential a person they are, you have to sever ties with them.” WeWork undoubtedly owes its inception to Neumann, but Neumann’s social capital hinges on his past failures with the company, which only make WeWork look worse. While WeWork’s current CEO doesn’t need replacing, the vacant seat on WeWork’s board demands a figurehead who can finally yank WeWork away from Neumann’s shadow and redefine what the brand means in the eyes of its market.