Ethics and Leadership

I recently spoke to Rob Chesnut, a consultant to Airbnb who formerly served as Airbnb’s Chief Ethics Officer and General Counsel. Rob is also the author of the new book Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution. Rob worked for 14 years with the U.S. Justice Department, where he prosecuted bank robberies, kidnappings, murder, and espionage cases, including the prosecution of CIA employee Aldrich Ames. He then joined eBay in 1999 as its third lawyer, where he led eBay’s North America legal team and later founded its Trust and Safety team.  Rob subsequently spent six years as the General Counsel and first attorney at digital education leader Chegg, where he helped take the company public in 2013. He joined Airbnb as General Counsel in 2016, where he grew the legal team from 30 to over 150 legal professionals in 20 offices around the world. Rob’s team led initiatives to promote home-sharing and address regulatory issues with local governments and landlords around the world.

Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks or challenges have been most instrumental to your growth?

Rob: I was a federal prosecutor in Northern Virginia, and in that world I was a success – I was running the major crimes unit, I had just prosecuted a string of highly publicized espionage cases…but being a prosecutor can feel negative, like you’re cleaning up after something awful has happened. I wanted to do something positive, get involved with a team and have an impact on the world. So I started applying for jobs with a number of companies, and it was humbling to send out your resume and get rejected over and over again – I had a great academic background, great career as a prosecutor, but companies looked at me and said “we don’t prosecute people, not sure that you’d fit.” If they responded at all. But I think curiosity and a learning mindset helped me…I was an early Internet user, and one of the sites I liked was eBay. One night I thought, you know, eBay probably has issues with fraud, illegal items, counterfeits, regulations…I could help them.” No jobs on their site, but I wrote a nice cover letter and sent it to jobs@ebay.com. I didn’t even know where they were located. 2 weeks later, I’m having dinner with their CEO, and a month after that, I’m moving to California to start my new career as an Internet lawyer.

Adam: What are your best lessons from your time working for eBay? 

Rob: Be open to new things. Five years in, the CEO came to me and asked me to start the first Trust and Safety department in the valley. It was a big job. I said “I’m a lawyer, I don’t know how to do that.” She said “you’ll figure it out, you’re a leader not just a lawyer.” I ended up building the team from nothing to nearly 2000 people scattered all around the world. It was the best professional experience of my life, it forced me to accept that I didn’t have to know everything or do everything myself, and that success depended on my ability to hire really smart, capable people and create an environment where they could do their best work.

Adam: What are your best lessons from building Chegg’s legal department and taking the company public? 

Rob: I learned how to do a little bit of everything. I was the company’s first lawyer, which meant that I had to do contracts, IP, litigation, corporate, M&A. And be a strategic advisor to the CEO. It pushed me and forced me to think not just as a lawyer, but as someone responsible for the business as a whole. 

Adam: What does a Chief Ethics Officer actually do? What does your job as Chief Ethics Officer of Airbnb entail?

I’m responsible for driving integrity into the culture of the company. That means working to set up a clear code of ethics, making sure that employees know and really appreciate the code, and feel comfortable reporting potential violations. I can’t be everywhere, and can’t look over everyone’s shoulder. But I can help create an environment where people feel comfortable raising ethical questions, and where people understand that integrity is an important business value that will serve us well over the long run. 

Adam: How can leaders best instill a culture that values ethical behavior? And why should they?

Rob: I think there might have been a time when someone could debate whether ethics was a help or a hindrance to business. No more. The lessons of the last few years, #metoo, privacy issue, financial fraud…they show us that brands need to build trust to be effective. Integrity is a critical part of that. In the Internet age, ethical problems aren’t swept under the rug…one employee, one blog post can rip a brand apart, like what Susan Fowler’s blog post did to expose the problems at Uber. The world is demanding that companies step up and do right…employees may walk out (Wayfair, Google, Amazon), customers may leave, and the government may target you if your actions aren’t aligned with their values. The data shows that companies who act ethically actually outperform companies that don’t behave ethically…so it’s just good business. 

What can leaders do? 

They need to lead, both with words and actions. They need to stop thinking that ethics is something they can outsource to a third party video company or compliance poster. They need to own it themselves, talk about it with their employees in an authentic, human way, and they need to follow their words with actions. They don’t have to be perfect…some ethical dilemmas are tough and they won’t always get it right. But they need to replace “hit this number or else” with “we need to do this the right way.” 

Adam: What are some of the most difficult ethical challenges you have observed first-hand and how did you create a framework to help the respective leaders come to their decisions? 

Rob: For business, it’s important to define who your stakeholders are right up front – for decades at most companies, only one stakeholder has mattered – shareholders. That’s changing. At Airbnb, we have 5 stakeholders: shareholders, employees, guests, hosts and the communities where we operate (effectively the world). And we have metrics to measure how each stakeholder is doing…in business, what you count is so important because it motivates behavior. When you have a major decision, think about how it affects each of your stakeholders…you won’t often find an easy answer that benefits all stakeholders, but it’s important to acknowledge the tradeoffs and understand that you have an obligation to all of them over the long run. 

Adam: Without naming names - unless you would like to - have you ever for or with highly unethical leaders? If so, can you elaborate upon those experiences and the key lessons you learned?

Rob: Ha! I won’t name names, but of course I’ve worked with unethical execs. They’re out there. They are so focused on something selfish like power, sex, money, that they usually self implode. I try to observe people, how they act in certain circumstances, to get a sense of their character. Over time, you get warning signs. I wish I had a magical interview question that I could use to identify leaders whose ethical compass was broken so I could avoid working with them in the first place, but I do see a general correlation between big egos and big ethical problems. 

One key for me is clarity around rules. For example, I like to propose that the top leadership in a company simply refrain from any romantic relationship with any employee or vendor. Sit the exec team in a room, have a discussion about it, and get everyone aligned…look each other in the eye and agree that it’s in the best interests of the company to make that rule. Once everyone has agreed to it, and it’s in writing in your code, then someone is a lot less likely to violate it…and if they do, it’s a lot easier to deal with it. 

Adam: In your experience, what are the defining qualities of an effective leader? How can leaders and aspiring leaders take their leadership skills to the next level? 

Rob: Authentic. Human. Low ego. Smart without the need to prove it to others. Inspiring. Hires smart people and lets them shine. Loves the mission of the company. High integrity. Creative, and open to new ideas. Gratitude. Listens more than they talk. Curious. I know that’s a lot, but being a great leader is a life journey and you never “arrive,” you just keep trying to get better. 

To get to the next level, be open to feedback. Welcome it as a gift. Understand how others perceive you, and then decide where the gaps are between how you are seen, and how you want to be seen. If you want to get better, read books and articles and blogs like this one, watch TED talks, and find mentors who can give you advice. The more you surround yourself with information and people who represent the qualities you want to improve on, the better you’ll get just by osmosis. 

Adam: What are your three best tips applicable to entrepreneurs, executives and civic leaders? 

Rob: Lean into feedback. Do something that inspires you. Be curious. 

Adam: What advice do you have for leaders in crisis mode? And how can leaders best navigate difficult ethical challenges posed by COVID-19?

First, do a stakeholder analysis. What has the impact of the crisis been on all your stakeholders, including investors, employees, customers, partners (suppliers and vendors, for example) and the broader community where you operate? Then think about how you can act to address the issues that each may face. Airbnb, for example, allowed a number of guests to cancel reservations, but then created a $250 million fund for hosts who lost money due to cancellations. 

Two, use honest, empathetic communication. The best leaders communicate often with stakeholders and are direct, authentic, and empathetic. They don’t make broad promises they can’t keep (i.e. "we’re all in this together," if an employee layoff might be necessary). Airbnb stepped up communication with employees (CEO Brian Chesky has done a weekly, company-wide employee Q&A each week).

Three, be alert for new opportunities. You may need to change direction and product offerings. Airbnb launched online experiences, for example. Uber pivoted to highlight food delivery, and many restaurants had to move to take out exclusively. Some companies like Brooks Brothers and LVMH were able to shift factory lines to manufacture badly needed protective equipment. 

Four, make hard decisions with integrity. Unfortunately, at Airbnb, cost cuts had to be implemented. Leaders took pay cuts first and, ultimately, nearly a quarter of the workforce had to be laid off. However, the laid-off employees were treated in a manner that demonstrated the company’s respect and gratitude for those workers, with generous severance, health care costs covered for a year, and they were allowed to keep their work laptop. This was not only the right thing to do for departing employees, but it sent a strong positive message to employees who remained.

Adam: What is the single best piece of advice you have ever received? 

Rob: Imagine the ideal outcome first, then believe in yourself that you can make that happen.