6 ms·

This is one of the worst management announcements I have ever read. While on the one hand, I can appreciate the forward-looking nature of making the company bet

by speby 11y ago

This is one of the worst management announcements I have ever read. While on the one hand, I can appreciate the forward-looking nature of making the company better in the future and an acknowledgement of some of its shortcomings (which every company has). But the worst crime of all is announcing Conrad's resignation and providing zero credit, thanks, or goodwill towards him for being the birther of the company which wouldn't exist in the first place if not for him. Even if he had recently run into trouble setting the company straight or other problems, it's outright shameful to simply skip right over his contribution to making the company what it is and for being responsible for making it happen from day 1. This crime wouldn't be so awful if it had come from someone who wasn't already a previous entrepreneur himself. This is pretty sad... Parker probably would have gotten a nicer goodbye announcement had he died.

justin_vanw 11y ago
Well, of course you should get a nicer announcement if you die than if you are fired for incompetent decision making which has a good chance of having the company shut down as part of your 'compete by being willing to commit felonies that other companies won't commit' business model.
bigtones 11y ago
Also, employees under the guidance of their former CEO could face multiple years in prison for crimes committed while they were at the company and under instruction from the CEO. If your employees are now facing significant jail time because of how you trained them to do their job, you should get zero credit or goodwill.
tomasien 11y ago
You are massively underestimating the magnitude of this screw up. You seem to be implying that this was a mistake and changes had to be made, but it's time to move on. Non-compliance can put everyone under you at risk of going to jail. "Compliance" is short for "compliance with the law" and "non-compliance" is short for "breaking the law". I'm not exaggerating here, Sacks is making a deliberate decision not to mention Conrad and act as if he's taking this as seriously as possible. It seems that nobody was hurt by this non-compliance so I hope deeply that nobody goes to jail for this - but that is what is on the line, make no mistake.
- tedmiston 11y ago
  From the earlier post about unlicensed deals in Washington state: > Washington law is particularly severe when it comes to the unlicensed sale of insurance. Under the law, anyone who knowingly sells, solicits, or negotiates insurance without the proper state license can be punished with a prison sentence of up to 10 years, as well as a civil penalty of up to $25,000 for each violation. http://www.buzzfeed.com/williamalden/80-of-zenefits-deals-in-washington-state-done-by-unlicensed#.qwk7J5MMz http://www.buzzfeed.com/williamalden/80-of-zenefits-deals-in...
  - pedalpete 11y ago
    Important consideration here may be that zenefits employees would possibly be liable. Does anybody know if they were made aware of the issues before Nov 2015?
  - arethuza 11y ago
    Out of interest, do Credit Default Swaps fall into that category of "insurance"?
    - leroy_masochist 11y ago
      No
- flylib 11y ago
  technically Sacks could be under the hook also for non-compliance...
  - tomasien 11y ago
    Depends but it's possible. Given the decision though it was important to distance themselves, both culturally and legally. Anybody who is seen to contribute to non-compliance WILL NOT be celebrated. What the regulators want to see, what the employees need to see. In fintech/regtech, if you contribute to making others in the company non-compliant you should be dead to the company - not because they necessarily did anything "evil" or anything like that, just because that's how it HAS to be treated.
chermanowicz 11y ago
His contribution may also be its destruction (had things continued). I can't imagine any reasonable company wanting to do business with Zenefits right now or even some time from now even if there is evidence they've improved and corrected things. Its too risky for a company to entrust them with their HR & insurance needs, and I wouldn't even want to be remotely associated with them. Any company with a smart CEO or General Counsel would advise to wait a while, and I think that'd be best case scenario. There goes your "growth"
TheLogothete 11y ago
Nono, crime is what the previous guy was doing.
dragonwriter 11y ago
The announcement is not a crime. The problems which forced the situation which produced the announcement were the crimes. Which explains the tone of the announcement.
suhail 11y ago
I think, like most situations, that the public has very little information and context. For all you know, the situation is exceedingly complex for the board and Parker. Sacks is smart. Parker is too and he wouldn't take it lying down but clearly wants to do the right thing: preserve the integrity of the company and its employees over himself. You can see that in his actions as he resigned from the board and is being really quiet -- that's tough as a founder. I wouldn't overly judge the memo. The audience isn't you or me, it's the employees of Zenefits. It's their message to interpret and internalize. And they already know who their founder is and what he contributed to Zenefits.
david_mitchell 11y ago
The new guy publicly throwing the old guy under the bus is actually a a step in a recommended strategy for turning a company around. See this blog post from Marc Andreessen's archive: http://pmarchive.com/guide_to_big_companies_part1.html http://pmarchive.com/guide_to_big_companies_part1.html
- arethuza 11y ago
  "Lay off a third of the workforce." I remember a book amount management consulting and it mentioned one firm (only referred to as the "Butchers") who only ever recommended this one action regardless of the actual state of the company. Of course they spent vast amounts of chargeable time analysing operations to produce data that supported the conclusion they had already made. http://www.amazon.com/Rip-Off-Scandalous-Management-Consulting-Machine/dp/1872188060 http://www.amazon.com/Rip-Off-Scandalous-Management-Consulti...
  - chiph 11y ago
    Thanks for the link - just bought it. I've seen some of those techniques used during my time working. P.T. Barnum was right - "There's a sucker born every minute", especially in management.
forgetsusername 11y ago
Is this comment for real? The company was flouting law, and he's the CEO. When it's some dirty banker, HackerNews wants the CEO in jail. When it's an SV darling, we are upset that his send-off didn't give him enough credit?
- pc86 11y ago
  Don't forget the banker doesn't even need to have broken a law. By virtue of their profession, they should be in jail. At least according to most of HN.
- Zigurd 11y ago
  You are overlooking the tiny detail that selling derivatives that act like insurance was a multi-trillion dollar financial WMD that could have reduced the global economy to ashes, while there appear to be no victims materially affected in this case, and the people running this company are easy-to-jail small fry. People were complaining more about too-big-to-jail. Had the bankers actually have been prosecuted, you might have a point.
  - USNetizen 11y ago
    There were most certainly victims in this Zenefits case. My employees count amongst them. We were wronged by Zenefits and people with medical problems found themselves out of insurance because of this company, then Parker tried to shift blame to us but the issue all along was him using unlicensed, inexperienced brokers in the states we have employees in.
manigandham 11y ago
This is silly. The "worst crime" is the crime he actually committed.
mathattack 11y ago
The insurance commissions are much tougher than the taxi commissions. Given the Glassdoor reviews of Zenefits, I found it interesting that Sacks also tackled making it a place people want to work.

by speby 11y ago

justin_vanw 11y ago

Well, of course you should get a nicer announcement if you die than if you are fired for incompetent decision making which has a good chance of having the company shut down as part of your 'compete by being willing to commit felonies that other companies won't commit' business model.

bigtones 11y ago

Also, employees under the guidance of their former CEO could face multiple years in prison for crimes committed while they were at the company and under instruction from the CEO. If your employees are now facing significant jail time because of how you trained them to do their job, you should get zero credit or goodwill.

tomasien 11y ago

You are massively underestimating the magnitude of this screw up. You seem to be implying that this was a mistake and changes had to be made, but it's time to move on. Non-compliance can put everyone under you at risk of going to jail. "Compliance" is short for "compliance with the law" and "non-compliance" is short for "breaking the law". I'm not exaggerating here, Sacks is making a deliberate decision not to mention Conrad and act as if he's taking this as seriously as possible. It seems that nobody was hurt by this non-compliance so I hope deeply that nobody goes to jail for this - but that is what is on the line, make no mistake.

tedmiston 11y ago
From the earlier post about unlicensed deals in Washington state: > Washington law is particularly severe when it comes to the unlicensed sale of insurance. Under the law, anyone who knowingly sells, solicits, or negotiates insurance without the proper state license can be punished with a prison sentence of up to 10 years, as well as a civil penalty of up to $25,000 for each violation. http://www.buzzfeed.com/williamalden/80-of-zenefits-deals-in-washington-state-done-by-unlicensed#.qwk7J5MMz http://www.buzzfeed.com/williamalden/80-of-zenefits-deals-in...
- pedalpete 11y ago
  Important consideration here may be that zenefits employees would possibly be liable. Does anybody know if they were made aware of the issues before Nov 2015?
- arethuza 11y ago
  Out of interest, do Credit Default Swaps fall into that category of "insurance"?
  - leroy_masochist 11y ago
    No
flylib 11y ago
technically Sacks could be under the hook also for non-compliance...
- tomasien 11y ago
  Depends but it's possible. Given the decision though it was important to distance themselves, both culturally and legally. Anybody who is seen to contribute to non-compliance WILL NOT be celebrated. What the regulators want to see, what the employees need to see. In fintech/regtech, if you contribute to making others in the company non-compliant you should be dead to the company - not because they necessarily did anything "evil" or anything like that, just because that's how it HAS to be treated.

chermanowicz 11y ago

His contribution may also be its destruction (had things continued). I can't imagine any reasonable company wanting to do business with Zenefits right now or even some time from now even if there is evidence they've improved and corrected things. Its too risky for a company to entrust them with their HR & insurance needs, and I wouldn't even want to be remotely associated with them. Any company with a smart CEO or General Counsel would advise to wait a while, and I think that'd be best case scenario. There goes your "growth"

TheLogothete 11y ago

Nono, crime is what the previous guy was doing.

dragonwriter 11y ago

The announcement is not a crime. The problems which forced the situation which produced the announcement were the crimes. Which explains the tone of the announcement.

suhail 11y ago

I think, like most situations, that the public has very little information and context. For all you know, the situation is exceedingly complex for the board and Parker. Sacks is smart. Parker is too and he wouldn't take it lying down but clearly wants to do the right thing: preserve the integrity of the company and its employees over himself. You can see that in his actions as he resigned from the board and is being really quiet -- that's tough as a founder. I wouldn't overly judge the memo. The audience isn't you or me, it's the employees of Zenefits. It's their message to interpret and internalize. And they already know who their founder is and what he contributed to Zenefits.

david_mitchell 11y ago

The new guy publicly throwing the old guy under the bus is actually a a step in a recommended strategy for turning a company around. See this blog post from Marc Andreessen's archive: http://pmarchive.com/guide_to_big_companies_part1.html http://pmarchive.com/guide_to_big_companies_part1.html

arethuza 11y ago
"Lay off a third of the workforce." I remember a book amount management consulting and it mentioned one firm (only referred to as the "Butchers") who only ever recommended this one action regardless of the actual state of the company. Of course they spent vast amounts of chargeable time analysing operations to produce data that supported the conclusion they had already made. http://www.amazon.com/Rip-Off-Scandalous-Management-Consulting-Machine/dp/1872188060 http://www.amazon.com/Rip-Off-Scandalous-Management-Consulti...
- chiph 11y ago
  Thanks for the link - just bought it. I've seen some of those techniques used during my time working. P.T. Barnum was right - "There's a sucker born every minute", especially in management.

forgetsusername 11y ago

Is this comment for real? The company was flouting law, and he's the CEO. When it's some dirty banker, HackerNews wants the CEO in jail. When it's an SV darling, we are upset that his send-off didn't give him enough credit?

pc86 11y ago
Don't forget the banker doesn't even need to have broken a law. By virtue of their profession, they should be in jail. At least according to most of HN.
Zigurd 11y ago
You are overlooking the tiny detail that selling derivatives that act like insurance was a multi-trillion dollar financial WMD that could have reduced the global economy to ashes, while there appear to be no victims materially affected in this case, and the people running this company are easy-to-jail small fry. People were complaining more about too-big-to-jail. Had the bankers actually have been prosecuted, you might have a point.
- USNetizen 11y ago
  There were most certainly victims in this Zenefits case. My employees count amongst them. We were wronged by Zenefits and people with medical problems found themselves out of insurance because of this company, then Parker tried to shift blame to us but the issue all along was him using unlicensed, inexperienced brokers in the states we have employees in.

manigandham 11y ago

This is silly. The "worst crime" is the crime he actually committed.

mathattack 11y ago

The insurance commissions are much tougher than the taxi commissions. Given the Glassdoor reviews of Zenefits, I found it interesting that Sacks also tackled making it a place people want to work.