Peloton’s New CEO Sent Employees a List of 10 Leadership Principles. This Is the 1 That Matters Most

I can imagine it was a challenging week for Barry McCarthy, the new CEO of Peloton who took over on Wednesday after co-founder John Foley resigned amid disappointing results. Taking over for a founder is difficult enough. Doing so at a company that has had less than stellar performance over the last year–and just laid off 2,800 employees–doesn’t make it any easier.

Then, there’s the reception McCarthy received at his first all-hands meeting. According to CNBC, the meeting was cut short as existing and former employees shared their thoughts in messages criticizing the company.

McCarthy, for his part, seems committed to turning the company around. In an email sent to employees on Tuesday, McCarthy wrote that he’s “here for the comeback story.” 

That’s an inspiring way of looking at the future of a company with major challenges ahead. Then again, considering McCarthy’s experience with subscription services (he previously served as CFO for Spotify and Netflix before that), he might just have some insight into Peloton’s best next move. 

McCarthy wasted no time trying to motivate the employees who weren’t laid off last week. In an email, he detailed 10 values that employees will find “reflected in my day-to-day interactions.” 

1) Be stubborn on vision, flexible on details
2) Fast is as slow as we go
3) Intuition drives testing. Data drives decision making
4) Your comfort zone is your own worst enemy
5) Talent density is foundational
6) Stress context not control, freedom and responsibility
7) Understand in order to be understood
8) Get real
9) Think from first principles
10) Put first things first

It’s not a bad list. Those are all good “values,” though they’re more like leadership principles. Nothing on that list is particularly new, but that doesn’t mean they aren’t useful. For that matter, they’re all relatively good guiding principles, but one of them stood out to me as not like the others.

Number six: “Your comfort zone is your own worst enemy.” 

Here’s why this is such an important lesson at Peloton: Success has a funny way of making you comfortable. Sometimes, too comfortable. If the thing you’re doing appears to be working, your natural inclination is to do more of if.

The problem is, when you’re comfortable, you have no motivation to look around and think about what might need to change. Who wants to be less comfortable? Especially if you’ve worked hard to get to that point. 

The thing is, what if the reason you were successful was temporary. Say, a pandemic shut down all of the gyms in an entire country and you sell fitness equipment. Suddenly you have more customers than you can possibly serve. So, you increase production to keep up with demand. Things look really good for the bottom line because you’re selling all of the hardware you’re able to make. You have a very successful year.

Then, things change. You grew incredibly comfortable with your success, and you assume it will continue forever. You assume it was because of your brilliant leadership and execution of some sort of strategy–never mind that the circumstances of your success were almost entirely out of your control. 

As a result, you somehow fail to notice that the gyms have reopened. People start to go outside and ride real bikes instead of buying a stationary bike. You didn’t see it because that would be uncomfortable. So, instead of changing, you lose your job. That is, if you’re the former guy in charge at Peloton, anyway.