Kalanick’s departure is the fare for Uber’s car crash of a toxic culture

SUMMARY:

Travis Kalanick has quit as CEO of Uber, an enforced decision that is the result of the firm’s toxic culture. It’s time for the firm to grow up and fast.

It’s surely one of the most predicted resignations of them all, but Travis Kalanick’s departure as Uber CEO may finally provide a much needed opportunity for the company to detoxify its increasingly poisoned brand. That just wouldn’t be possible with the Alpha Male architect of the ‘Bro’ corporate culture in the driving seat.

I’m not an Uber user. I should perhaps make that declaration now. Although I recognise the digitally disruptive nature of its operating model – it may have been mentioned one or two times at tech industry keynotes over the past few years! – I’ve just never tapped into its services.

It’s a position that’s hardened in my mind after reports of naked sexism, racism and homophobia from Uber drivers, reports which have been magnified and disseminated all the wider by the digital delivery platforms of social media. There’s no keeping the lid on appalling behaviour by drivers in this day and age and that’s something that Uber has struggled with.

But of course the problems at Uber run far deeper than just an inability by the PR team to crisis manage effectively and it all comes back to Kalanick in the end.

While, as noted above, no keynote has been complete without breathless reference to Uber’s disruptive success story, I only saw Kalanick talking once in a public forum. That was at Dreamforce a couple of years ago, where he was interviewed in a fireside chat by Salesforce CEO Marc Benioff.

The discussion that ensued was wide-ranging in nature and not entirely comfortable in places. At one point, Kalanick apologised to Benioff for a jokey comment that he clearly quickly realised wasn’t appropriate. But it was the moment when the latter asked the former a simple question that sticks in the mind. That question was:

How do you know your company has a heart?

From the perspective of someone like Benioff, that’s a question that every CEO should be able to answer off the top of his or her head. For Kalanick, it seemed to come as something that had never occured to him as he fell conspicuously silent for what seemed a long moment.

Perhaps that wasn’t really that surprising. Other parts of the interview had consisted of some statements that seem ironic in retrospect, such as:

We’re on the road, we’re driving, it’s a bit foggy, we don’t know where we’re going.

But as Benioff gently chided him:

Life is like an Uber ride – you have to decide what your destination is.

Destination unknown?

What struck me the most about Kalanick on that day was that this was someone who’d been caught up in the whirlwind of success of the company he co-founded and hadn’t stopped to think through some core fundamentals. Maybe Uber just grew too quickly for that to happen? Kalanick did allude to some awareness of the issue here when he said:

Learning what it’s like to be a bigger company is the biggest thing in my personal growth. I’m still that same guy. It’s how I grew up, my parents always told me, ‘Actions speak louder than words.’

That being so, his action now in stepping down after months of chaos descending on Uber needs to be considered. It’s not a voluntary departure, however it’s being couched from a PR perspective. He was given a stiff whisky and a pearl-handled pistol by five of the firm’s major investors who realised that the game was up. Kalanick’s planned ‘leave of absence’ wasn’t going to be enough to de-toxify the Uber brand.

After years of controversy, the final straw was certainly the report from former US attorney general Eric Holder into Uber’s workplace culture, the results of which were released last week. One of the recommendations therein was a reconsideration of Kalanick’s role.

As for the rest of Holder’s suggestions, what immediately strikes is how basic they are. They are things that an eight year old global company with a valuation of $70 billion ought to have been doing as a matter of course. Increasing diversity profiles and providing more support for HR as the firm expands is hardly rocket science, is it?

But then that has to be placed in the context of a corporate culture that had a CEO who apparently thought it good pratice to send out a memo in 2013 basically advising staff not to rape one another:

Do not have sex with another employee UNLESS . . . you have asked that person for that privilege and they have responded with an emphatic YES!

All of the 47 recommendations in the Holder report have been accepted and are being implemented, according to the company’s board. That left board member Arianna Huffington to declare in a triumph of optimism over reality:

This chapter comes to an end today.

Except of course it doesn’t. There are no magic beans on offer here, no ‘get out of jail free’ card. The toxic culture exposed within Uber needs deep cleansing from top to bottom and that’s going to take time to achieve – always assuming that there’s the corporate will to do so.

Whatever happens, the firm needs a new CEO and one who’s a ‘grown-up’ who can help Uber to get past puberty. There will be lots of names thrown into the ring in the coming days and weeks. Already there’s a social media buzz around Jeff Immelt, departing CEO of General Electric, but that’s most likely driven by coincidental timing. (That said, it’s not that bad an idea…).

Cosmetic changes have already begun. The main conference room at Uber is apparently no longer “the war room’, but ‘the peace room’. That’s all very nice and PR-friendly, but the harsh reality is that Uber finds itself in search of a new CEO, CFO, COO, head of comms, general counsel and head of engineering, all at the same time.

And there’s another problem. Even though Kalanick has gone as CEO, he does retain a huge stake in Uber and will continue to sit on the company’s board. Managing that relationship is going to be a particular challenge for anyone tempted to take over in the driving seat.

My take

It’s not an original observation, but a fish rots from the head down.

That interview back at Dreamforce did nothing to convince me that Kalanick had the credentials to run Uber successful. That’s not necessarily a bad thing. The person who founds a start-up isn’t necessarily the best person to run it and grow it. What matters is that that founder recognises his or her limitations. Kalanick has finally been forced to make that admission. So now the question becomes, what happens next?

Image credit - World Economic Forum/YouTube

Disclosure - At time of writing, Salesforce is a premier partner of diginomica.