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Airbnb’s bold call averts crisis

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in Leaders & Managers,Leadership Skills

In 2011, Brian Chesky’s luck ran out. For nearly three years, the company he had co-founded, Airbnb, had grown into a global giant.

Then crisis struck.

After a woman in San Francisco rented her home on Airbnb, the tenant burglarized it. Chesky, 34, issued an apology that did not reassure the alarmed host who returned to find a ransacked home.

The host blogged about her nightmarish experience dealing with Airbnb, and it went viral. But Chesky, Airbnb’s CEO, kept quiet for weeks while debating the best response with his management team.

“I finally had this really dark moment and I got to the point where I wouldn’t say I stopped caring, but my priorities completely changed,” Chesky recalls. “And I basically said I should stop managing for the outcome and just manage to the principle.”

He decided to write a more sincere apology letter, accepting responsibility and admitting, “We have really screwed things up.” He detailed what he should have done and acknowledged that “we weren’t prepared for the crisis and we dropped the ball.”

Moreover, he said the company would provide $50,000 to protect hosts in the future. With this guarantee, such a disaster couldn’t leave homeowners in a financial hole.

Chesky rejected everyone’s advice inside his firm by issuing such a blunt apology and coupling it with the new $50,000 policy. Other executives fretted that the move was too drastic and he should test it out first.

Unwilling to continue the internal debate, Chesky realized he had to make a bold call as Airbnb’s leader.

“A consensus decision in a moment of crisis is very often going to be the middle of the road, and they’re usually the worst decisions,” he says. “Usually in a crisis you have to go left or right.”

— Adapted from “The Education of Airbnb’s Brian Chesky,” Leigh Gallagher, www.fortune.com.

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