In the days following the dramatic ouster of WeWork’s flamboyant cofounder Adam Neumann last fall, the entire company was plunged into chaos. There were reports of employees skipping work in hopes of nabbing a severance package, all-hands meetings at which sweeping changes were announced, and mass layoffs that resulted in more than 2,000 people losing their jobs.
But one WeWork employee was head-down at his desk. Working out of a glass office at WeWork’s Chelsea location, sources say he continued coming in every day. “From the moment that Adam stepped down through that whole period of leadership change, the only executive who was present in the office was Miguel,” says a senior employee who worked on the executive floor. “He wasn’t talking to the public and the press…but at least he was showing his face.”
The executive was Miguel McKelvey, also known as WeWork’s other founder. From the time McKelvey and Neumann met in 2007 and together developed the idea for a world-changing workspace that would spread across the globe, Neumann was the face of the company, and McKelvey was a quiet, behind-the-scenes presence. He was helping open new WeWork locations, design the look and feel of the workspaces, and serve as a sounding board for employees inside the company.
But with Neumann out of the picture, Fortune has learned, McKelvey has spent the past several months helping devise a plan that couldn’t be more different from Neumann’s growth-at-all-costs big ideas. McKelvey’s plan to save WeWork? Slow down.
“Growth was one of our biggest focuses in the past, and I don’t think we were as focused as we should’ve been on making our product as great as it can be,” McKelvey said in an interview with Fortune. “A big benefit to slowing down a little bit is that we’re going to focus on [the product] more.”
For a company whose IPO prospectus stressed fast growth, aggressive spending, and spiraling losses, this is a particularly surprising turn. Even more unusual is that McKelvey, who has kept a low profile for more than a decade, is suddenly quite involved in the company’s financial future.
“Just being honest, I was not deeply involved in the financial modeling,” McKelvey said. “There are things I didn’t understand in the past because it wasn’t my role, and I have jumped in a lot more recently.”
In October, WeWork released a 50-page presentation outlining some of the changes it planned to make in the next 90 days. One of the key principles says the company will focus on “the core WeWork desk business, prioritize disciplined growth with profitability, and right-size our operations.” It has since divested several businesses and dramatically reduced its workforce. It appears that WeWork wants to return to its roots and areas of focus that were important before 2017, the year that SoftBank agreed to pump $4.4 billion into the business. (SoftBank declined to comment for this story.)
As a trained architect, McKelvey had previously taken on more of a creative director role and focused on carrying out architecture, design, and construction activities on behalf of WeWork. But people who knew him struggled to define what his official job as “WeWork’s chief culture officer” encompassed.
Worse, the culture McKelvey was in charge of cultivating came under scrutiny when allegations surfaced that Neumann was “flying high” after he brought marijuana on a private jet across international borders. Once Neumann’s troubling behavior and general lifestyle of excess came to light, he was ousted from the chief executive role, and the company’s valuation plummeted to $8 billion.
In some ways, that now seems a distant memory. But today the question for McKelvey is, can he save what was right about WeWork’s culture?
Being ‘next to’ the center of attention
McKelvey undoubtedly understands the meaning of “community” more than your average corporate dweller: He grew up with a single mother on a commune in Eugene, Ore. He was a talented basketball player in high school, where on the court he found something that was missing from his home life: a sense of accountability.
In a 2016 Fortune interview, the WeWork cofounder described himself as “a wild kid” who was bumbling around the basketball court. “I remember Coach Stepp as the most strict disciplinarian I’ve ever come across,” he said. “I didn’t grow up with my father, so I never had someone telling me to keep in line.”
He went on to play basketball and study architecture at the University of Oregon. After college, he started his own company called “English, baby!”—a social network for people learning English as a second language. But he decided he wanted to change directions. After five years, he moved to New York to take a job at a small architecture firm. His experience there led him to meet Neumann at a coworker’s apartment where the duo hit it off and McKelvey persuaded him to share an office space together in Brooklyn.
That’s how WeWork was born: The duo figured out there was a need to create a shared workspace for freelancers and other entrepreneurially minded folks who were looking for an inspiring space to work.
McKelvey could see immediately that he and Neumann were “completely different people,” he said in a 2017 How I Built This podcast episode. “[He has] more of a brashness that I don’t think I have,” he said. “Well, I like to be next to the center of attention. I like the idea of it, I just don’t want to be it.”
Lacking discipline
Interestingly that theme of discipline, or lack thereof, that permeated McKelvey’s high school basketball career would appear again—this time in his professional life.
As McKelvey and Neumann built WeWork into a global real estate behemoth, McKelvey focused on the architecture and design of each coworking space that opened its doors. Neumann was the money-raiser, and he focused his time on speaking with potential investors and securing billions of dollars in capital for the venture.
Inside the office, McKelvey, who is 6-foot-8, was well liked, and people referred to him as a “gentle giant.” “Adam got a lot of undue attention, but the things that people loved about WeWork—and still do—are because of Miguel,” says one former WeWork employee who worked closely with McKelvey for several years. “I think Adam completely took advantage of him and his kindness.”
As WeWork’s profile began to rise, so did Neumann’s. He spoke with journalists, participated in cover stories, and gave impassioned speeches to stir up excitement for WeWork’s upcoming initial public offering. If Neumann was too busy to attend a speaking engagement, McKelvey took his place.
In a way, McKelvey was Neumann’s perfect foil, says Brian O’Kelley, a serial tech entrepreneur who has known McKelvey since they played basketball together in high school. “[McKelvey] was sort of the mature, self-confident, stable partner.”
With an eye for designing communal creative spaces, McKelvey was instrumental in fostering a culture of inclusion and collaboration. He reportedly hosted bimonthly fireside chats during which he shared his views on topics like how to “build resilience” or “creating space to ask for and receive.”
But that culture of resilience began to unravel weeks before the company was meant to go public. “Partying has long been a feature of his work life, heavy on the tequila,” read a revealing September Wall Street Journal story about Neumann. It went on to outline Neumann’s “unusual exuberance and excess” in his leadership style.
Meanwhile, people raised eyebrows at the company’s business model, governance practices, and sky-high valuation. Postponing the IPO and promising governance changes, however, did not seem to be enough to assuage investors.
Which is why on Sept. 24, Neumann announced he would step down as CEO and continue as a nonexecutive chairman of the board. In a statement, he said: “While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive.”
Who’s to blame?
Quickly, WeWork’s Artie Minson and Sebastian Gunningham were named co-CEOs of the company, and they moved to call off the IPO. And suddenly, McKelvey resurfaced. He addressed WeWork’s employees with a “rally the troops”-type email. “I want to take a moment to thank all of you for your commitment, particularly these last few weeks,” he wrote. “It’s been a challenging period, and it takes fortitude to continue to believe.”
Sources tell Fortune that during the Neumann era, McKelvey did not address the staff about the general direction of the business nor the happenings behind closed doors, because that was very clearly Neumann’s job. Several former executives said they largely attribute the fault to Neumann, opining that even if McKelvey had spoken up, it’s unlikely Neumann would have listened.
As an industry observer, O’Kelley says it’s not fair to point the finger at an individual. What happened at WeWork, he says, was a system-wide cultural failure.
“Success is a moment,” he said. “WeWork was an incredibly successful company, until it wasn’t. I think all of Adam’s shenanigans were a huge mistake. It was a massive distraction for the entire company. If it was clean—just a well-run company with a CEO who wasn’t self-dealing—we would be much more forgiving.”
Today, Neumann is out with an exit package that could be worth more than $1 billion; a flurry of top executives have departed; and more than 2,400 employees have been laid off.
Yet McKelvey is still there. “I am here because I believe deeply that our work matters and that we will continue to be successful as long as we persist in moving forward with positivity,” McKelvey wrote in the staff-wide email. He doubled down in a LinkedIn post from Dec. 19, saying he’s “incredibly energized” and that WeWork is one of his “key priorities.”
Former employees believe that though SoftBank executive Marcelo Claure is now running the business, McKelvey could have an important role to play when it comes to rehabilitating employee morale. Another source is of the opinion that the new management — Claure and WeWork’s next CEO — will use McKelvey “as a transition totem to get people comfortable.”
“The leadership team has spent hours and hours and hours to ensure that we have a plan that we’ll be able to succeed with,” McKelvey said. “I’m here, I want to be involved, and I want to be part of our future.”
And then, he was off to his next meeting at WeWork’s headquarters. Ironically, the formerly free-spirited, jet-setting cofounder who traveled the world to help expand WeWork’s reach is now stuck in conference rooms, crunching the numbers to see what’s feasible, rather than world-changing.
More must-read stories from Fortune:
—Forget policymakers. Greta Thunberg and her allies are targeting CEOs
—Investors see a 2020 recession coming—but think they’ll make money
—The Carlos Ghosn affair: A look inside the motivations of a fugitive CEO
—What $1,000 in 10 top stocks a decade ago would be worth today
—Laws meant to close down tax havens and shut loopholes could have opposite effect
Subscribe to Fortune’s forthcoming Bull Sheet for no-nonsense finance news and analysis daily.
