Strategy & Operations » Leadership & Management » Uber: A leadership failure that consumed a whole business

In the wake of the resignation of Uber’s high-profile CEO, John Williams, Director of Digital Strategy at ILM looks at how a toxic work culture can consume a whole business

 

Uber’s model is disruptive and divisive and the company has had more column space than almost any other business since they burst on the scene.

For a long time, media attention centred on Uber’s impact on its industry, and the regulatory minefield it presented. Whilst slip-ups from its senior executives occasionally made headlines, with a distressing number of these implicating a culture of sexism or sexual harassment, only this year has the focus turned to its leadership; the force underpinning these transgressions.

CEO Travis Kalanick’s resignation is the culmination of a three-month independent investigation, commissioned after a damning blog post from a former employee, that exposes a work culture described as toxic, misogynistic, and with a widespread lack of accountability.

With people apparently complicit at all levels, and indeed across countries, of the organisation, it is clear just how pervasive this problematic culture at Uber is.

How did this happen?

In today’s organisations, every employee has leadership responsibilities. But consciously or unconsciously, for all the flexibility and flattening of the modern workplace, the tone and culture are still set from the very top.

Any CEO, MD or FD has a huge impact on how the wider team operates and behaves. By his own admission as well as from an outsider’s perspective, Kalanick set the tone for Uber – and this has, ultimately, cost him his position.

So why Uber?

Uber is a classic case of the problems that come with lightning quick growth.

Establishing positive cultures is complex for fast-growing and disruptive businesses like start-ups. Highly talented, entrepreneurial people can quickly find themselves at the helm of a multinational organisation with more employees than they could have possibly planned for.

Whether founder, owner or board level leader, they will be more used to the familiarity that comes with working in small, intimate organisations, and may embody an aggressive approach to growing and building their business.

Whilst technically proficient, their expertise may stop short of ‘softer’ skills – teamwork, communication, decision-making.

The reality is that without the most fundamental of leadership skills they will be ill-equipped to achieve the most crucial of their responsibilities: motivating and inspiring those around them. And without dedicating the time or resource to cultivating an effective workplace structure that works for everyone, problematic gaps open up.

But when did leadership get so important?

In previous decades, the type of work culture cultivated by Kalanick and others at Uber would probably have been accepted. But the world has changed; organisations can’t get away with old style leadership; even extremely successful businesses cannot circumvent the need to create a positive work environment. Not only do positive cultures produce happy and engaged employees, but they improve productivity, retention, and revenue.

Whilst start-ups are more likely to offer the kind of freedom, flexibility and creativity employees desire, these can’t come at the cost of the kind of values people place importance on at work – fairness, inclusivity, accountability and respect.

Employees no longer stay in a job for life. People will move roles more frequently, so if they don’t like one leadership style; they may go elsewhere.

The role of ego

Founders are more invested in the idea or product than anyone else and often feel more personally involved. They may also enjoy success in part because of the very fact they do not have backgrounds in typical corporate businesses.

But this kind of unerring attention to profit had serious consequences at Uber, from the failure to gain proper permissions for the rollout of self-driving cars, to potentially illegitimate use of spyware technology and sexism.

The same may be true for any leaders present in a fast-growing organisation from its early days; coming up through the ranks – undoubtedly learning a lot – but also inheriting some of the behaviours that businesses should have long ago shaken off.

Why wasn’t it stopped?

With such an experienced board in place at Uber, how was this behaviour allowed to get as far as it did?

Negative behaviours can seep into organisations unnoticed. Once established, it can be very hard to pinpoint and remove them until something goes wrong. Until then, a catalogue of incidents might occur without the realisation of their common theme: namely, a malfunctioning culture.

When recruiting, employers look for chemistry. This can mean employing executives in their shadow, or steering employees towards their own style through seniority and influence. A domineering leadership style will block the creation of trusted relationships, leaving others without the space to supply guidance – with those at the top resistant to any sort of learning.

With a male CEO, board, and predominantly male workforce, it is easier for some of the most extreme behaviours from sexism to sexual assault that flow through the organisation are first transferred, then amplified – even unchecked.

The collective failure to recognise the importance of diversity in preventing an adverse culture meant a very obvious and dangerous gap could be ignored.

Where now?

Uber’s investigation resulted in a number of recommendations to overhaul its leadership, including mandatory training for managers and new processes that will ensure executives answer for their actions.

None of this will result in change without a showing of humility, which is why Kalanick should be praised for taking responsibility for Uber’s situation and deciding to step down.

The firm must urgently define and communicate a clear set of positive values – a common code for a huge, growing and constantly changing workforce to abide by – which will help settle the murky waters.

Leaders must be properly equipped and fostering an effective culture must remain a top priority. Poor leadership is not just a problem for start-ups. Hierarchical structures can be equally problematic.

But probably the most important lesson all senior leaders should take from this is the indispensable need for continual, lifelong learning.

 

John Williams is Director of Digital Strategy at ILM.