My Three Cents
Ken MakovskyThursday, March 30, 2017
Can Uber Really Change its Culture?
On March 3rd, USA Today described Uber as having had a “terrible, horrible, no good, very bad week,” which followed a week that “was already one of the worst in the ride-hailing company’s history.” But the worst, it seems, had yet to come. Since then:
- A former female engineer at the company alleged Uber’s HR department ignored her complaints about sexual harassment and discrimination.
- A New York Times exposé on Uber described an “aggressive and unrestrained” work environment.
- Uber was caught red-handed using a program called Greyball that allowed the company to evade law enforcement authorities investigating its business practices.
- Uber CEO Travis Kalanick berated an Uber driver who then posted a video about it that went viral. In his apology, Kalanick admitted “…the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and group.”
On the positive side of the ledger are the beginnings of fixing a culture that many are declaring broken. Uber retained Obama’s U.S. Attorney General Eric Holder and appointed board member Arianna Huffington to lead an internal investigation of sexual harassment and discrimination allegations. It also hired a prominent executive search firm to find a new Chief Operating Officer – hoping that, like Facebook’s Mark Zuckerberg, a COO could help redeem the company’s culture and help the founder-CEO to mature.
But since then, the drama has continued. Jeff Jones, an executive recruited recently from Target to be Uber’s second-in-command, has departed after six months – one of six executives to leave since December, stating that “the beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber.”
Which leads me to some interesting questions: Can you really change a culture when, it can be argued, the culture – however flawed – is a good part of what’s made the company succeed? Can Kalanick, who is 40 years old, learn to change his style as Mark Zuckerberg did when he was just 23 years old? And if not, does the board of directors have the courage to fire the founder, as Groupon, Jet Blue, Tesla, Twitter, Apple (with Steve Jobs) and others have done?
I am a strong believer in the power of effective crisis management. In my career our firm has led some difficult and amazing company reputation turnarounds. I am not confident that CEO Kalanick is the person to successfully right the Uber ship or inspire the necessary changes in the organization to correct the course. I believe it may take a change in the person at the helm to make it happen or, at the very least, moving the CEO to a different position where he is out of the crossfire. But this alone may not do it either.
Research should be done among the various sections and factions within the company to determine what the issues are, so a bottom up cultural strategy rather than a top down one is designed and takes effect.
The solution in every corporate culture is mutual respect; without it the company doesn’t function effectively. My observation is that mutual respect was not pervasive, although I do not have data that proves that, but it appears that way. Despite its $60 billion+ in revenues, it has not yet turned a profit. And its service is not unique anymore, despite its technology. However, I feel Uber has no other choice but to try to change. As I’ve previously written, evidence abounds that workplace culture is one of the most critical elements of business success. If a company’s culture isn’t working, you can forget implementing the strategies you have planned.