Karen Scarpetta shares her learnings on decision making in times of crisis and how to refocus leadership on people.
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Karen Scarpetta is a creative, curious, and passionate business leader. She loves creating impact through the sustainable growth of the organizations and teams she leads, aiming to make a difference in the lives of those around her. She was formerly the CEO of WeWork Latam and is currently a board member at Dunna and an advisor and speaker.
Karen: It's astarting point.A change of direction that takes you somewhere new, with more experience, more lessons, and probably better results. It's something we try to avoid, but when we understand that it helps us embrace the process instead of just focusing on the outcome, it becomes the factor that builds the courage to throw ourselves into the world.
Karen: Pandemic1a. Second half of 2020. I was General Manager in Colombia right after leading one of the most complex restructurings of my career. Changes in the team, the processes, the roles… everything. We were trying to figure out how to keep the business going amidst the numbers, external uncertainty, and my conviction to make it sustainable. I was always clear that our mission was to bring our partners real value in optimization and growth.
I dreamed of growing again, of hiring—not closing. A few months later, in 2021, a purchase came through with new investment and capital.
For a moment, I let go of the pressure of seeing how the time to survive was running out each day and that daily urgency in decision-making to stay afloat.
Then, in the second half of 2021, I began leading the entire Spanish-speaking Southern Latin American region with greater responsibility to cut operating expenses as much as possible.
Yes, cutting, not necessarily optimizing.
It was a drastic process; we even questioned whether some key services should continue. Whether the services of the past should remain part of the present or even have a place in the future.
It made sense. After an initial period of abundance, we were entering a time of great austerity, of adapting and learning to operate under a new reality.
Karen: We went to the extreme without realizing we were compromising the brand's true value and what that was going to mean to some of our customers.
While plenty of opportunities existed to improve our supplier selection process, we fell into a black-and-white dynamic. And life doesn't work that way.
We cut what was most delicate: quality. (One of my non-negotiables in life.)
We significantly reduce several cost lines that (initially) positively impacted the business's income statement margins. But as with everything, there are always consequences, and soon, our clients started to push back. And like in any "top-line" business, if cutting operating costs also ends up hurting revenue, we're screwed.
At first, when we saw the reductions had exceeded expectations, it all sounded great; everything looked in order. That money bought us time, especially when sales were still on a natural post-pandem1c recovery curve.
The real problem came when satisfaction metrics began to drop, and conversations with clients shifted from building long-term relationships to simply containing issues.
The first ones (internally) to raise their voices and express their discomfort were the frontline customer service teams; the frustration was palpable.
Our message from leadership was: "We're surviving. It's time to tighten the belt. We're reviewing eviewing every line and detail to mitigate all kinds of risks. We are reviewing every line, every detail to mitigate all kinds of risks." When you live through something like this, you focus on the present because, without a present, there's no future. But the truth is, we weren't fully aware of the real cost of some of those decisions.
Karen: The critical moment came when, after months, our client renewal rate began to drop. They felt they weren't receiving the value they were investing in.
Our first retention strategy? "Let's talk about pricing."
Big mistake. Value and price are two entirely different conversations. Still, we wouldn't let our clients walk away without taking responsibility and action.
In the meantime, churn rates spiked. Many clients intended to try the service for a few months but were gone by month six.
Breaking point. It was time to understand that more savings don't always mean greater or better business impact. We needed to go back—line by line, service by service, provider by provider—and refocus entirely on quality.
Most importantly, we had to understand that costs and spending are very different from INVESTING, porque es justamente eso lo que necesita cualquier negocio. Entender cuánto invierte para que su estructura funcione, siempre con el cliente en el centro, desarrollando una visión “human centric” con proveedores, clientes y colaboradores en balance.
Karen: The first thought was simple: shit, we messed up.
Luckily, I'm an extremely practical person and entirely action-oriented. So, I gathered my entire leadership team and finance and said, we're going to restructure this because we went too far, and it's time for a D-Tour.
Can you change your mind? YES.
While months ago, the entire conversation was about cutting at any cost, today, with real business data, we could see that wasn't the smart path. The reality was still about survival, but not in the drastic way we had approached it before.
Karen: With recognition and context. Adjusting every aspect based on results and sharing data openly with all team stakeholders. We created many collaborative spaces involving people from every team and every level. Sessions we called "Talks with Ka," in addition to All Hands meetings, focused on goals and actionable steps that gave visibility to the implemented changes.
Ultimately, that's the leader's responsibility: to see all the paths, analyze the one with the highest chance of success, equip the teams to execute, and then identify whether it's working, and if it's not, adjust the course and keep moving forward.
I call that humility. Because no human likes to admit they were wrong. But that's what we all are: humans, not perfect beings.
So, embracing the process with the team was essential to quickly set up corrective actions based on feedback from our clients and teams and keep moving forward.
Karen: As a leader, there was a lot of emotional containment with the team, spaces for listening, acknowledging the lessons, and taking ownership. We must accept and embrace our mistakes while still holding on to why we got to that point—and explain that if we hadn't taken that path, we simply wouldn't have arrived where we were, nor would we have had the information we needed to move forward.
Most of the team understood that making mistakes is often the best way to determine whether something works or how it could improve. The worst mistake is staying still, doing nothing, or, even worse, KEEPING THINGS THE SAME. If we hadn't gone through that process, we would've had to shut down the business. The key was in the follow-through. There was damage, but we reevaluated in time to turn things around.
I live in duality. I'm very demanding, starting with myself. I always set the bar high because I believe anything is possible. So, do I get frustrated when things don't go as expected? Absolutely.
However, in this particular situation, I had a special drive to fulfill my purpose of impact. Beyond a goal, beyond profit and loss, beyond just the business, it was a commitment to myself and my entire team. That helped me see the big picture WITHOUT fear.
And I'll tell you this: asking, "What's the best that could happen?" is a far better mantra than obsessing over the worst-case scenario and staying frozen.
Karen: Nothing. I'd make the same mistake again, and with careful tracking, I'd aim to make adjustments and course corrections more quickly. When you already know the outcome, it's easy to say what should've been done. But life doesn't work like that.
It was a great lesson in avoiding polarized decisions and eliminating extremes. Yes, take a stance, but going from black to white is not necessary. I would make the initial decision with the same determination but focus more on the follow-up to identify clear signals and quickly act on changes.
Edited by
Ricardo Guerrero
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