Entrepreneur and creator Codie Sanchez doesn’t tolerate gossip at her company — and will fire people for it.
“We have kind of a no-gossip culture here,” she said. “We have a belief that, if you have something you want to say, say it to the person. Don’t go around them.”
Sanchez said if a person gets caught spreading dirt, they’ll get a warning. The second time, they’ll be let go.
The ex-Wall Streeter established herself by buying “boring” businesses like laundromats. She founded the Austin, Texas-based company, Contrarian Thinking, which helps people buy and build businesses. Sanchez also has a big social media presence, with 3.3 million Instagram followers and a popular podcast called “BigDeal.”
Sanchez tells a story about gossip in her new book, “Own or Be Owned: Build a Business So Good It Doesn’t Need You.” It’s a follow-up to her New York Times bestseller “Main Street Millionaire.”
Sanchez wrote that she had just ended remote work, which led to people quitting, being fired, and fights on Slack.
One person, she wrote, “became the mascot for everything broken.”
“Every week they’d find a new audience to tell, ‘We work too hard, this place is crazy, everything else is the problem,'” she wrote. Her takeaway was that people who “live on gossip and victimhood” not only underperform but also spread a bad culture to the rest of the company.
Sanchez confronted the employee about whether they’d taken their issues up with their manager, to which they replied, “They wouldn’t listen anyway.” Sanchez let the employee go. Then she shared at an all-hands meeting that she’d let someone go, not because they were bad at their job, but because they “broke our code.”
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“If you want to whisper in hallways, this is the wrong company for you,” she wrote.
At times, she’s brought leaders together to air their grievances.
“I don’t like toxic cultures where people go back and forth behind the scenes,” she said. “I like people being direct, and I don’t think you should ever get in trouble for saying something that’s not, maybe politically correct, because I’m the CEO.”
The pros and cons of radical candor
Other CEOs have embraced various forms of radical candor.
Under Ray Dalio, the hedge fund Bridgewater Associates was known for such a culture, which included recorded meetings and employees constantly rating one another. Netflix used to send “post mortem” emails explaining its reasons for firing people to their coworkers, a practice the company has said it ended.
Some forms of candor have had mixed results.
Bridgewater’s approach has been described as contributing to a culture of “fear and intimidation.” Research has shown that lying for benevolent reasons can improve trust. Netflix used to share salary info among senior employees until it led to distracting rivalries.
Sanchez said she’s been on the receiving end of “lots” of direct feedback herself.
She said people have called her “aggressive” and told her she sends unclear messages on Slack.
“If I’m doing something else, I might voice-text a Slack — and I’m trying to get better at this — and it’s unclear,” she said. “I think clarity is kindness. So one of the worst things you can do as a leader is be unclear. Then people can be running around trying to get you something you don’t even want. So a team member will be like, ‘I literally can’t understand you. Please delete this, rewrite it.’ I’ll be like, ‘You’re totally right, thanks.'”
Sanchez said she’s also learned that her online presence can be “scary” to people who come to work for her.
“Everybody gets a parasocial relationship with you when they see you online,” she said. “I try to break that down when they come in right away, because it could be intimidating. So I try to be more aware of that these days.”
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