Shortly after Rob Chesnut took over as general counsel of Airbnb in 2016, he was looking at the company’s website when he saw a number of poorly rated hosts featured on it. He reached out to the team responsible for that part of the business and asked why the bad hosts hadn’t been removed. “These people are going to kill our business,” he said.
The answer he got helped illustrate how the structure of performance goals can incentivize the wrong thing, said Chesnut, a former federal prosecutor and veteran in-house legal leader who was senior vice president of trust and safety at eBay in the early 2000s and general counsel of Chegg, an educational technology company.
Airbnb had a goal of achieving 200 million overnight stays for the year – a big stretch – so staff were keeping bad hosts on the site to help the company hit the goal. “The [function leader] looks at me and says, ‘Even a bad night is still a night and we need to hit 200 million,’” Chesnut said in a podcast hosted by Tim Parilla, chief legal officer of legal tech company LinkSquares.
With the support of the leadership team, Chesnut had the goal changed to 200 million good nights, so only overnight stays that generated a 5-star rating would count toward the goal.
“There’s nothing wrong with goals,” said Chesnut, who published a book in 2021 on what he calls intentional integrity, the idea that it’s integral for business leaders to be proactive about doing the right thing. “Obviously it’s very important to align people with goals. But you have to be careful when you set them because they can be powerful motivators for people.”
He pointed to the crisis that has wracked Wells Fargo since 2016, when the bank gave staff the goal of expanding the number of accounts for each customer to eight. To meet it, sales staff opened accounts in customers’ names without their consent.
“The sales team was told if you don’t hit your targets, you’ll be [fired],” he said. “That will incent people to do really just about anything, and that’s what happened.”
Integrity has to start at the top because employees take their cues from their leaders. “Everyone looks up to the person who’s been successful in business, in their career, so if a leader acts with integrity, that permeates the culture.”
He likened leaders to thermostats; they set the temperature in the room. That’s unlike a thermometer, which simply reflects what the temperature in the room is. “The way a leader talks and behaves creates a climate that everybody in the company is living in and is affected by,” he said. “So, it’s not just about you; it’s also about the people around you.”
When the MeToo movement started, Chesnut said, he tried to get out in front of it by getting the executive team at eBay to commit in front of one another not to jeopardize the company by acting in a way that could be construed as harassment.
“We had a discussion about it and I said, perhaps in light of all that is happening, why don’t we agree we’re just not going to go there?” he said. “We went around the room and everybody said, ‘I’m in.’ The significance of that is, if no one ever talks about it, it’s easy to rationalize and fall into it. Everybody in that room understood that if they went that way now, they were violating their word to the rest of the team, which means they were probably going to have to leave the company.”
Business leaders are uniquely susceptible to integrity lapses because of the success they’ve had in getting where they are.
“It turns out that, scientifically, if you’ve been successful in business, in your career, it lulls you into a sense of security, even a little bit of arrogance,” he said. “‘I’ve always been able to manage every situation.’ So, simply talking to other leaders about this and saying, ‘Look, you are more susceptible than the average employee to this type of problem – unless you’re on guard against it.’”
At Airbnb, Chesnut made it a practice to meet with each executive committee member twice a year for 30 minutes in a one-on-one for what he calls an integrity check-in.
“I might have a couple of headlines about other companies,” he said. “It could be financial irregularities or sexual misconduct, because these kinds of matters can be career altering and potentially brand altering. As a lawyer, I saw it as my responsibility to protect against that risk.”
For leaders, it’s a matter of keeping it top of mind. “We’ve all made mistakes, done things that are wrong,” he said. “It’s just having an honest conversation about the temptations to do things that are wrong. If it takes 30 minutes here and there, or takes a conversation at an executive committee meeting, you can insulate your company a little bit.”
