WeWork: Adam Neumann and the Trait Theory of Leadership

Stacy Dreyer

Background

WeWork was once considered one of the most valuable startups in the United States. At its peak, the company, which rents coworking spaces and offices to freelancers and remote workers, was valued at $47 billion. Founded in New York City in 2010, by 2019, the company had more than 400 locations around the world. WeWork’s rapid rise and success was attributed to CEO Adam Neumann, who gained a reputation as a charismatic and visionary leader. WeWork was attractive to a young workforce in part because it offered an alternative to a typical office, from standard amenities like coffee and beer on every floor to site-specific amenities like valet parking and swimming pools.1 Newmann was noted as fostering “a culture that celebrated risk-taking and disruption, often blurring the lines between personal and professional, fostering a familial atmosphere that endeared him to many employees and investors.”2

Neumann attracted investors with ease, but his leadership style also carried some risks. A profile for Business Insider described him thus: “His intensity, passion, and power of persuasion were driving forces that were always on display—as were a supersize ego, a free-spending attitude, and a stunning disregard for traditional boundaries between personal projects and company business.”3 In 2019, WeWork filed for an IPO, and it was revealed that the company had vastly overprojected the size of the market and was losing large sums of money, raising questions about Neumann’s leadership style. Roughly one month later, Neumann was forced to step down as the company’s value was reduced by nearly $40 billion.

Discussion Questions

What traits did Neumann display that would be highly valued in a leadership role at a startup? What traits might he have been lacking?

In your opinion, can the traits theory of leadership be applied equally to the government and private sectors, or to different industries? For example, are the leadership traits that might be valuable for leading a tech startup the same as those that might be valuable for leading a government agency? Why or why not?

References

1. Papandrea, D. (2021). 10 unexpected amenities at WeWork locations around the world. https://www.wework.com/ideas/workspace-solutions/flexible-products/office-amenities
2. From we to me: The fall of Adam Neumann and WeWork: Lessons for the next-gen entrepreneurs. (2023). Markedium. https://markedium.com/from-we-to-me-the-fall-of-adam-neumann-and-wework-lessons-for-the-next-gen-entrepreneurs/ 
3. Adam Neumann's life as startup investor revealed his best, worst traits. Business Insider. https://www.businessinsider.com/adam-neumann-startup-investor-role-revealed-best-and-worst-tendencies-2019-11 

License

This case study is licensed CC BY-NC 4.0.