17 Jan 2015
On Friday the Internet learned what many at the renowned Toronto-based design firm Teehan+Lax had likely known for weeks, that the team would be going to Facebook. Again, sort of. The predictable see-saw of reaction followed as everyone parsed what had occurred. First there was the “Boooooo, Facebook is snatching up another renowned design firm,” followed by “Yaaaaaay, Teehan+Lax, hooray for them, they’re some of the good guys!” Then the “Another classic money-grab.” Next came the “Wait, they’re not all going to Facebook? That’s messed up.” It was at that point that we were left with little more than the obvious question, “why?”
Admittedly, there are and likely will always be more questions than answers. But there are two large assumptions that most people are making. The first is that T+L made a butt-load of money in this move. The second is that the world was T+L’s oyster and the financial and business options at their feet were limitless.
Quite plainly, you don’t blow up your company after the most successfully financial year in it’s history, you ride that wave. Unless of course someone offers you some serious coin. However, if you do get that “big enough that you just can’t say no” offer you’re in an excellent negotiating position. Instead, the reason you detonate the company you built yourself is because you’re short on options. And when you’re backed into a corner, no one is offer you “fuck-you money”.
The Friday prior to the closure of Teehan+Lax one of my former employers closed their doors, on the heels of the company’s 50th anniversary. The owner had grown weary of the daily slog of running the company and the pressures associated with being responsible for the livelihood of the employees. Completely understandable. After efforts to find a suitable acquirer proved unsuccessful they were faced with the choice of continue on with the status quo or shut it down. An arrangement was made with a larger competitor for a few members of the staff, including the owner, to begin working there. The rest of the small staff was cut loose.
I have no idea if this is what happened at Teehan+Lax. Ultimately only Jon, Geoff, and David know. But there appear to be some similarities. The one conclusion that can be drawn is that this decision wasn’t taken lightly, and made because a few at the top of Teehan+Lax were ready to cash out and float off in their golden Facebook parachute. As their letter alluded to, this was likely the result of a long and arduous process where the sale of the entire company was not a viable option. They way their letter is framed, as if it’s the partners writing a case study about a recently completely project comes off rather callously. In the letter they often refer to Teehan+Lax, the company, when they should really be saying Jon, Geoff and David. The letter was written by them, about them, outlining the version of this process that they want the design community to see. I don’t believe they’re selfish are careless enough to have not considered all of their co-workers and employees best interests. But this is the kind of result you get when you’re short on options.
Add this to the list of things we as an industry rarely talk about but should, behind rates/sales/money and contracts. There comes a time for any company/religion/government when the leader has run their course. Some organizations are better prepared than others. Governments typically have built-in succession plans. Public corporations have boards that are charged with leadership transitions. But when was the last time you heard about a small or medium-sized business with a succession plan? When there isn’t one, this is what happens. What if just one of the partners wanted to leave? Would T+L still have to be demolished, or could the other two carry on? If all three partners were leaving was there enough senior staff willing to remain and carry on? There are both operational and financial decisions to be made when transitioning leadership within a company that’s structured the way T+L was. But if the parties are willing, it’s not an impossible task. In this instance though, the partners appeared to view Teehan+Lax as less of a company unto itself, and more as an extension of themselves. If that’s the case it doesn’t matter how hard the discarded employees wanted to carry on together. It was never an option.
At the end of the day, the partners at Teehan+Lax made the decision they believed was best for everyone involved. By all accounts they’ve been stand-up guys and deserve the benefit of the doubt. It’s a sad day anytime we witness the death of a leading firm in our industry. But hopefully the displaced members of Teehan+Lax will find soft places to land.