What Australian startups can learn from Uber’s crisis of culture
Friday, June 16, 2017/
Uber chief executive Travis Kalanick told employees on Tuesday that he will take an undetermined leave of absence from the company, after a tumultuous period for the ride-sharing company that’s been marked by allegations of sexual harassment and misconduct, and Kalanick’s own realisation that he needed to change his leadership style.
“The ultimate responsibility, for where we’ve gotten and how we’ve gotten here rests on my shoulders,” Kalanick said in the statement, adding that he will be taking time off to grieve for his mother who recently died.
Meanwhile, Uber director David Bonderman has resigned from the company this week, after making controversial comments during an Uber staff meeting that were widely seen as offensive to women.
Between February and March this year a number of Uber’s senior team quit. Uber president Jeff Jones left in March, citing differences over beliefs and approach to leadership, while the senior vice president of engineering, Amit Singhal, left Uber after previous sexual harassment allegations emerged. Uber’s vice president of product and growth Ed Backer also left the company in March in light of alleged complaints about his behaviour.
Uber’s leadership meltdown serves as a reminder to all startup founders that it’s not just about raising revenue or gaining market share — a poor company culture can unravel even the largest Silicon Valley giants.
So what can Australian startups learn from Uber’s leadership woes?
Culture is king
2017 was a tumultuous year for Uber. Two investigations into the company’s practices were commissioned after former Uber engineer Sarah Fowler published a blog post in February detailing how she was sexually harassed by her manager, and claiming Uber’s HR department was continually unwilling to take action on the matter.
One of these investigations, conducted by ex- US Attorney General Eric Holder, made the key recommendation that Uber redefine its key values, removing “toxic” values such as “Always Be Hustlin’” and “Meritocracy”, which were “used to justify poor behaviour”.
The Holder review reportedly involved interviews with more than 200 current and former Uber employees, and recommended Kalanick’s responsibilities at Uber be reviewed and reallocated. It said Uber needs to put greater emphasis on performance reviews across the entire company and give an independent chair and oversight committee the ability to handle ethical concerns.
At the heart of this investigation one finding shines through: Uber’s company culture encouraged an environment where communication between employees, HR and management was opaque, and where high performance influenced accountability and justified bad behaviour.
Abbie Burgess is the diversity and inclusion advisor at Melbourne-based digital marketplace startup Envato. She says “meaningful company culture starts top-down” and is based on “trust, autonomy and flexibility.”
Burgess believes that the key to establishing a solid company culture is listening to your employees.
“Receiving feedback from employees is a crucial part of a healthy company culture. We regularly survey our people and look to implement changes according to these results,” she says.
Diversity is a must-have
Another key finding of Holder’s report was a need for greater diversity within the Uber workforce.
Suggestions included adding an employee diversity advisory board, publishing diversity statistics regularly, and using performance reviews to hold senior leaders accountable. These reviews would “include metrics tied to improving diversity” and “responsiveness to employee complaints”.
Burgess suggests having clear diversity goals in crucial for startups to to achieve a well-represented workforce.
“With organisational growth, there’s a real opportunity for a more diversified workforce. The key to that is creating a robust plan that has clear goals set in place,” she says.
Envato is spearheading a push for greater diversity in its workforce and the Victorian tech sector through a partnership with Code Like a Girl, and has announced that LGBTQI, diversity and mental health will form the three pillars of its new inclusion strategy.
Communication is key
The Holder report also found Uber needs to “encourage a culture in which everyone gets heard in a manner in which they are comfortable”.
Burgess suggested having “multiple communication platforms open and available” as an effective way of ensuring employee’s voices are heard.
“At Envato we use Slack — it allows people to engage in conversations irrespective of where they are in the world,” she says.
“It’s crucial to ensure everyone has a direct line to others in the organisation.”
StartupSmart contacted Uber Australia for comment and was directed to the following statement on their website, which expresses Uber’s approval of the Holder report’s findings.
“Implementing these recommendations will improve our culture, promote fairness and accountability, and establish processes and systems to ensure the mistakes of the past will not be repeated. While change does not happen overnight, we’re committed to rebuilding trust with our employees, riders and drivers,” said Uber.
From the frontlines
Five critical questions: Are you listing your startup too soon? Lisa Schutz Verifier founder
Sex appeal, runways and mature markets: Everything Guy Pearson learnt during his $26 million Series B raise Guy Pearson Practice Ignition CEO
Barriers from the outset: Why the government’s Boosting Female Founders Initiative is unlikely to succeed Laura Keily Immediation founder