Leading a Team Through Crisis
Radical transparency plus generosity-first equity keeps your best people through the storm that needs them most
- Difficulty
- Moderate
- Time to result
- ~ongoing to results
- Steps
- 4
- Confidence
- 92%
In a crisis the team is what pulls you out, so retaining and motivating them is the priority. Levine's approach pairs radical transparency (everyone already knows there's a crisis; hiding data destroys trust and drives people out) with proactive generosity — increasing equity BEFORE you're forced to, so loyalty is banked before you need to call on it.
Origin
Uri Levine's crisis-leadership practice across his portfolio of startups, including the FairFly/Oversee 'nine lives' story and Waze's management-only pay cut.
Core principles
- 01During a crisis the team, not the founder, is what takes the company out of it — you need them more than ever and they need you
- 02Transparency is what people value most in a crisis; hiding information means they stop trusting you and leave
- 03Don't sugarcoat — share the essence of the bad news, not every investor email
- 04Demonstrate generosity out of choice, not obligation, and do it early
- 05Leadership is built before the crisis through transparency, recognition, and putting the team first — not invented during it
How to run it
- 1
Make key metrics permanently visible
Display the company's key metrics openly (e.g. in the office lobby) at all times so that when numbers drop in a crisis the team already understands them — no shock, no hidden agenda.
- 2
Share the essence without sugarcoating
Communicate the headline reality plainly — 'I met thousands of investors and they all said no,' or 'the signed term sheet disappeared' — without dumping every detail. If it's ugly, saying it's ugly doesn't make it uglier.
Pro tip If people ask for specifics ('how many investors said no?'), answer precisely — start counting and be specific.
Watch out Hiding a lost customer, a vanished investor, or a dead term sheet is the fastest way to lose the team's trust.
- 3
Offer more equity proactively (the first grant)
Before you're forced to, increase the team's equity — even dilute all shareholders to give employees several times more equity — as a preventive act of generosity that dramatically raises loyalty and commitment.
Pro tip Frame it as shared upside: 'If we don't recover, everyone loses; if we do, everyone wins big.'
- 4
Ask people to stay through the hard part (the second ask)
If you must cut or defer salary, make a second move: honestly tell the team you may miss some payroll, restate belief in the cause and in them, and ask them to stay. Project at least six months of belief even when you can't be certain.
Pro tip Alternatives to layoffs exist — an across-the-board salary cut (or management giving up salary first) can hit the same number while signaling leadership; committed teams often prefer shared sacrifice.
Watch out Layoffs vs. salary cuts have the same balance-sheet effect but very different organizational effects; choose based on how bonded the team is.
In the wild
After Google launched free turn-by-turn navigation in 2010 and investors turned away, Waze cut only management salaries — decided quietly in a management meeting, with 'push comes to shove' next steps ready — while continuing to iterate toward PMF.
→ Rank-and-file barely noticed; the company preserved morale, raised capital just in time, and never actually ran out of cash.
In startups that nearly ran out of cash, Levine diluted all shareholders to grant employees five times their prior equity, asking them to trust the leadership and believe in recovery.
→ In most cases people stayed, re-engaged around shared upside when regular pay wasn't possible.
Common mistakes
Hiding information to protect the team
Concealing metrics or bad news backfires — people sense the crisis anyway, lose trust, and the top performers leave first.
Cutting perks to signal savings
Stopping the office coffee doesn't move the budget (people are 70%+ of it) and breeds dissatisfaction; people leave over perceived inability to make hard decisions, not over coffee.
Is it for you?
Best for
Founders who must keep a team motivated and intact while navigating layoffs, pay cuts, or fundraising uncertainty
Not ideal for
Situations calling for confidential legal or M&A information that genuinely cannot be shared with all staff
From the transcript
“during crisis people will appreciate more than anything else, transparency”
“number one, don't sugarcoat”
“we diluted all shareholders in order to give employees way more equity, right? So five times more equity than they had before”
“during crisis the team is the one that is going to take you out of the crisis. And you need them more than more than…”
“you don't build leadership during crisis”
From the episode
A founder’s guide to crisis management
Uri Levine (Waze co-founder, serial entrepreneur)