Patrick McKendry

Twitter has continually made headlines since Elon Musk took ownership of the company, with events ranging from shocking to comical as Musk brings about his new vision for the company. One common theme since the start has been Musk’s - and other’s - belief that Twitter was overstaffed prior to the new Chief Twit’s takeover. Months before the acquisition, Musk suggested that as many as 1,000 employees may be laid off in order to slim the company’s operations, with expectations to expand to as many as 11,000 by 2025 as the company was re-oriented at its new vision.¹ Today, Musk as cut Twitter’s employee base from 7,500 to approximately 1,800 employees - a cut of just over 75%.²

The extreme and rapid staff reduction has caused problems. Technical experts both inside and outside of Twitter have warned from the start that limited staffing could cause system failures and also increase the time to recovery as expertise and availability were lost. Those warnings have come true. Internet outage tracker NetBlocks shows that outages are on the rise with Twitter experiencing four to five outages per month, a rate equal to what they used to see over a year.² Alp Toker, director at NetBlocks, highlights that a meaningful factor is driven by the combination of closing data centers and limited staffing to support maintenance and follow robust testing protocols.³ Not only are outages on the rise, but performance is declining as public latency data shows that standard app activity is taking longer to run.⁴

Musk’s strategy with Twitter in the short-term is based on lean staffing. He hopes to unlock the benefits a smaller organization can provide on cost efficiency, impact prioritization, and context sharing. Lean staffing (as I mean it) is not an inherently good or bad strategy. Largely, its impacts will be contextual on the use case. Here, we will talk about how those benefits are realized. And we will cover why it was likely not the right decision for Twitter right away.

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What it Means to be a Lean Team

The traditional form of lean staffing is described as intentional and severe understaffing.⁵ Companies, as we are seeing with Twitter, start to fall apart when lean staffing is taken to the extreme. This is not what I mean with lean staffing. Traditionally, lean staffing is used as part of a cost reduction strategy. As a result, employees are underpaid and given few to no benefits as an extension of this strategy.⁵ In addition to being unethical and immoral, this is bad strategy regardless of your staffing operations. I hope it goes without saying, but this is certainly not what I mean by lean staffing. This is the wrong way to do lean staffing.

In my opinion, there is a right way to do lean staffing. When done well, the resourcing strategy can make sense. To do it right, do not plan for severe understaffing. Rather, aim for growing your team to roughly 80% of what you would need to deliver all of the tasks and projects on your overarching priority list. Note, that effective lean staffing looks at only growing your team to a certain point and does not talk about making team cuts to shrink down to a lean environment. I have strong opinions on the negative value of layoffs and would not recommend a staff reduction to right-size towards a lean team structure. It is also worth noting that layoffs generally enable a short-term business focus, but the philosophy underlying staffing strategy should be defined for the long term and insulated from most business fluctuations.

However, getting lean staffing right involves more than just staffing to a slight deficit instead of a severe one. Proper lean staffing also requires an investment in support technologies, proper distribution of decision-making authority, opportunities for advancement and growth, and a consistent company strategy.

1. Investment in Support Technologies

Lean staffing will not work if your team is not able to improve their productivity over time. Too often, teams stick with tedious, manual processes that are important to business operations but require time to get done. Given that individual capacity is finite, the only option those teams have to unlock growth is to add staff to do new work. This snowballs as the needs for managers increases and quickly leads to a team that is no longer lean.

Rather, invest in tools that boost individual productivity and replace existing work either entirely or in parts.

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2. Proper Distribution of Decision-making Authority

Lean staffing will not work if your team is not able to make their own decisions on projects. Too often, managers or project owners need to have final sign-off on any work. This slows down delivery while deliverables await approval, creates bottlenecks at decision-makers, and creates more non-critical work as team members find ways to fill gaps of unknown length. Quickly, that 20% staff deficit can grow to something much larger.

Rather, demand team leads to set a vision for where the team is going and operating principles for how decisions should be made while on the path forward. Then, trust the team to act more or less correctly on their own.

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3. Opportunities for Advancement & Growth

Lean staffing will not work if your team is not able to make career progression. Too often, teams are too busy delivering their current work that they do not get to step up into stretch opportunities. This creates a stale, non-rewarding environment that hurts motivation, leading to team members who do not put in their full effort or who look for opportunities with other companies.

Rather, when staffing the team, include L&D time as a part of the expectations so that individuals have the chance to learn and grow. Additionally, work to establish an expectation of promotion from within while building a pipeline of new junior talent into the organization that can backfill those who are promoted.

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4. Consistent Company Strategy

Lean staffing will not work if your company is constantly adjusting its strategic course. Too often, companies react to short-term pressures and cut investment from long-pole activities to redirect resources towards new initiatives that align with the latest industry trends. This essentially throws away existing investment in those forgotten projects and wastes individual expertise.

Rather, when staffing a company, build in a way that enables existing work to continue unimpeded through its resolution and minimizes context loss from moving strong operators.

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Less is More? Exploring the Trade-Offs of Running a Lean Team

The Good

When organizations adopt lean staffing principles, there are a few key benefits which they hope to find. The first, and most obvious, is improvements to their cost structure. For many organizations, wages are among the largest ongoing expenses. Larger teams are naturally more expensive. Still, this should not necessarily be the primary focus of lean staffing because direct optimization towards wage cost tends to ignore the indirect costs of running lean teams - additional software investment, less consistent communication with external clients, and difficulty absorbing new work quickly to name a few. This is yet another reminder why cost should not be a primary factor in defining staffing strategy and making staff size decisions.

One of the best outcomes of lean staffing comes from “prioritization by default”. By this I mean, only the most important and most impactful work will be done. The system behind this is a simple one. If there is not enough time to complete everything, then teams will drop the least impactful work from their priorities. This is a healthy aspect of work management. Removing work from priorities helps limit clutter and loose-ends. It also prevents teams from feeling the need to add additional staff or technology in order to support new tasks that ought to be dropped entirely. However, managers have to do two things in order to get this exactly right. First, they need to stress that it is good to drop work from the projects list. Without this clarification, team members may burn themselves out trying to cover everything. Burnout leads to low motivation, lower performance, and higher attrition. Second, managers need to ensure that they are rewarding the right behaviors during the review cycle. Remember that people are incentivized by what is rewarded and will prioritize their work as such. Therefore, if managers are rewarding the wrong skills and inputs, the right work is at risk of being dropped.

The final major benefit of lean staffing is improved context of the work happening within a team. As teams grow, context loss happens as teams are split into specializations - a marketing team splits into brand and sales or into paid and organic acquisition. When work is split, it becomes siloed. Context and collaboration drops across the two groups. Within each team, the same also happens but less intentionally. As context loss happens, clarity drops as updates become a game of “telephone” and message fidelity drops with each additional connecting point. On the other hand, lean teams hold more context on each person which helps maintain higher coherence by reducing the number of context splits. Still, this can also put strain on a single person if they are receiving too many questions from various stakeholders and creates tremendous risk if this person chooses to leave.

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The Bad

Whether or not lean staffing is the right choice is highly contextual. Ultimately, leaders need to balance its benefits against what tends to get lost with lean staffing and then select a desired strategy. The first thing that you risk losing in a lean environment is the ability to build up a talent bench for your team. The mechanism here is self-explanatory but the long-run impacts are not so straightforward. Staffing up to build a bench affords teams the ability to pursue technical training and to teach what is important rather than what is on the priority list. Later on, a deep talent bench gives companies the ability to more easily absorb new business. This can be useful for agency models where a new client can hit at any time. It is particularly valuable to companies that grow through acquisition as that talent bench can be infused into the new business without thinning out talent on the core activity.

Innovation is also at risk in lean staffing environments. No, I am not saying that innovation cannot happen in lean teams. In fact, leaner teams have higher levels of general context which can be an important lever in creating innovation. The risk with lean staffing is that, when there is a limit to how much work can be delivered, teams tend to take the more guaranteed bets. Work that gets prioritized tends to look like work that was successful before. Innovative behaviors look like a bad bet when they start and are hard to prioritize when time is limited. Further, you cannot simply prioritize innovative projects alongside business-as-usual work. The two are very different activities with different working rhythms and time commitments, like two gears that do not mesh. If you try to do both, you end up with a little bit of neither. Interestingly then, it seems like most innovation comes from two sources - very very organizations or very very large ones. The “two-person garage-based start-up” has become the cultural trope for innovation - these micro organizations can innovate because of their small size, but the lack of existing commitment to current revenue-generating activity also plays a part. On the other end, large organizations are the antithesis of lean but have the ability to insulate R&D teams that can be free from existing business requirements and are afforded the ability to pursue low-probability / high-impact projects.

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The Ugly

Twitter 2.0 shows us what a bad staffing strategy looks like. First, it has been a low-context decision since the start of the acquisition. Elon Musk started with a 50% reduction in staff only a week after taking control of the company.⁶ There are multiple reasons for how rapidly these cuts came through, but to get the decision on staffing requirements right more time should have been taken. Further, Musk’s staffing strategy is too volatile. Twitter headcount has dropped from 7,500 to 1,800 and Musk has talked of plans to expand to nearly 11,000 as the app’s feature set grows in the next 2 years. Team staffing influences how teams operate. Being a lean team vs a bench-building team changes cultural norms. In this way, I would look at staffing philosophy as more akin to culture definition than anything else. Making these swings in such a short period is a low probability bet.

Finally, the strategy changeover happened much too quickly. This is what is at play in Twitter’s recent string of service failures. Staffing, processes, and technology solutions are intricately interwoven at most companies. It is more or less impossible to rip one piece out without impacting the rest. In Twitter’s case, the overnight reduction in staffing led to processes - like pre-production testing - being completely dropped due to time constraints. These tests are designed to catch code issues before they go into production. When staffing strategy changes happen gradually, teams have the ability to adjust alongside. Processes can be updated to replace manual tests with automated ones. Knowledge can be shared across team members so that key experts are no longer required to be available when things do go wrong. These are the types of behaviors that we discussed as being necessary for making lean teams successful. Behavior change takes time.

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Experts warned that limited staff at Twitter could cause system failures and increase the time to recovery. While they were right, the problems go deeper than simply reduced system maintenance and abandoned testing protocols. In the short-term, Musk looked to implement lean staffing at Twitter to capitalize mostly on cost efficiency. While lean staffing is not a universally good or bad strategy, I think it is safe to say that in this context it was not the right decision right now for Twitter. We have to remember that staffing strategy is so much more than just a number on a board. When going lean, companies have to focus on investing in support technologies, distributing decision-making authority out and down, defining opportunities for growth, and then stay consistent with their approach.

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References

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Twitter 2.0 - How to Do Lean Staffing Wrong (and How to do it Right)