Leadership1 publisher3 min readPublished
Codie Sanchez enforces a two-strike no-gossip rule: warn once, then fire
Contrarian Thinking's founder says gossip earns a warning and then a firing. The case she describes in her new book began with an employee telling coworkers, every week, that the company worked them too hard.
The Board Room · Leadership desk
What happened
- Codie Sanchez told Business Insider her company runs a no-gossip culture, and that anyone with something to say should say it to the person instead of going around them.
- Someone caught spreading dirt gets a warning, Sanchez said, and a second instance ends the employment.
- In her new book she writes that she had just ended remote work at Contrarian Thinking, and that quits, firings and fights on Slack followed.
- She asked one employee whether they had raised their issues with their manager, and the employee answered that the manager would not listen anyway.
- Business Insider places the policy alongside other candor regimes, including Bridgewater Associates under Ray Dalio, whose approach has been described as contributing to a culture of fear and intimidation.
Compiled by The Board RoomSomething wrong?How this is made
Why it matters
- constraint The only sanctioned route for a grievance runs through the person it concerns, so an employee who expects no hearing from a manager chooses between silence and a strike.
- decision Any founder copying the two-strike count has to settle in advance which talk is dirt and which is staff comparing notes on workload, because the second finding ends a job.
- precedent A code against whispering, published in a bestselling business book, works as a hiring filter as well as a firing rule: candidates read it before they apply.
- cost The burden lands hardest on new hires who know the founder mainly from her feed, because the upward channel the rule depends on is the one she says her online presence distorts.
A two-strike rule is an enforcement schedule, and a schedule needs someone to keep the count. Sanchez keeps it. In the book, the employee she dismissed had been at it for weeks: "Every week they'd find a new audience to tell, 'We work too hard, this place is crazy, everything else is the problem,'" she wrote [9].
That quoted complaint carries two different things at once. "We work too hard" is a statement about workload, made to coworkers. "Everything else is the problem" is a disposition. A no-gossip rule can be aimed at the second without catching the first only if somebody draws the line between them, and the Business Insider account does not say how Contrarian Thinking draws it [9].
"Say it to the person" also assumes the person listens [2]. A rule that closes the sideways route depends on the upward one working, and Sanchez's own testimony is that hers leaks. People have called her "aggressive" and told her that her Slack messages are unclear [21]. "I think clarity is kindness. So one of the worst things you can do as a leader is be unclear," she said [22]. She has also said new employees arrive with a version of her formed online: "Everybody gets a parasocial relationship with you when they see you online," she said [23]. Her Instagram following is 3.3 million [5].
A skeptic will say this is a performance problem with a policy bolted onto it. Part of Sanchez's own writing supports that reading: she concluded that people who "live on gossip and victimhood" both underperform and spread a bad culture through the rest of the company [10]. But at the all-hands she told staff she had let someone go not because they were bad at their job, but because they "broke our code" [12]. The two framings ask the company to believe different things about why the seat is empty.
Candor regimes tend to get trimmed after contact with people. Bridgewater Associates under Ray Dalio recorded meetings and had employees rate one another constantly [16]. Netflix used to send coworkers a "post mortem" email explaining why someone had been fired, a practice the company has said it ended [18], and it shared salary information among senior employees until that produced distracting rivalries [19]. Business Insider also points to research finding that lying for benevolent reasons can improve trust [20].
The rule is cheap to write. One warning, then out, which is exactly one documented chance [24]. Administering it is the part that costs, because each count is a judgment call, and at Contrarian Thinking it belongs to a founder who claims wide latitude for her own speech. "I like people being direct, and I don't think you should ever get in trouble for saying something that's not, maybe politically correct, because I'm the CEO," she said [14].
What to watch
- Whether Contrarian Thinking publishes a written definition of gossip and an escalation route that does not pass through the manager being complained about.
- Whether a former employee contests a gossip dismissal and puts the rule in front of someone other than the CEO.
- Whether Sanchez discloses how many people have been warned versus fired under the two-strike count since it was adopted.