Uber is setting a crisis record. It has no less than five major fires burning all at the same time – a five-alarm crisis! Their brand is blazing and it appears the arsonists are members of Uber’s own management team that created a fighting, bad boy culture. The question is, “Can new leadership and thinking put out the fires, or will Uber be consumed by more negative media coverage, investor mistrust and growing stakeholder disdain?” The following is a recap of their crisis dilemma:
Uber’s 5-Alarm Crisis Recap:
In reading through the news headlines, here are the most repeated comments by journalists and others about the Uber crisis mess:
- Uber CEO Travis Kalanick is known as Silicon Valley’s “bad boy leader”.
- Lawsuits have been filed against Uber, alleging it stole self-driving car technology from Google.
- Uber has fought its way into more than 600 cities in dozens of countries. It is widely known for fighting and circumventing regulators by using underhanded tactics.
- Insiders say its corporate culture is sexist, aggressive and morally sketchy. This prompted Uber’s Board to call for an internal investigation into its corporate culture and governance. The result: 20 employees were fired following 200 claims of sexual harassment, bullying, cover-ups and other workplace violations. Some key leaders have left.
- An Uber executive mishandled medical records of a passenger raped by an Uber driver in India.
- Uber’s Board recently called for CEO Travis Kalanick to take a leave of absence, so the company can hit the “reset” button.
Crisis Leadership & the “Bad Boy” Fallout
1. If your high profile CEO is known as “the bad boy leader”, you can expect his identity / persona to permeate your culture. Bad boys may get away with things for a while, but time and circumstances tend to catch up with them. With a high profile leader like Travis Kalanick, the question is, “Will he really seek long term coaching and return to Uber as a changed leader?” Or, is this “reset” button just window dressing to try and quell public outrage, potential investor unrest and negative media attention? The bottom line is this: Kalanick must change, and in the meantime, a strong leader must emerge to lead Uber toward a healthy and ethical culture.
2. As an extension of Kalanick’s “bad boy” image, Uber is widely known for fighting and circumventing regulators. The problem is that fighters get bruised. This type of strategy and thinking attracts boxers – which leads to a vicious cycle of more boxing and bruising. This type of thinking corrupted Volkswagen’s culture and they have paid dearly. Enron also started out circumventing a few rules here and there, and over time, that cancerous thinking spread to Enron’s entire body – until the company finally flat lined. (Enron’s famous bad boy, Jeff Skilling, favored the motto, “If you want to eat steak, you have to be willing to kill!”) Uber’s new leadership must reform the bad boy approach and instill new values and ethical standards from the mail room to the board room.
3. Susan Fowler, the former Uber engineer whose blog post about sexual harassment at Uber sparked the internal investigation, reviewed a newly released report on changes that will now be implemented at Uber to “fix” its culture. Fowler says the report is “all optics” and she is skeptical about real change. Uber is bringing in culture change experts to implement new policies, such as no alcohol consumption during work hours and zero tolerance for sexual harassment, etc. (Some find it shocking that a company of Uber’s size is just now thinking about these basics.) Rebuilding a culture requires strong leadership, so the real question is who will step up and fill the leadership gap? New checks and balances must be put into place to ensure real change occurs.
4. The best crisis communicators cannot put lipstick on a pig and turn it into a handsome prince. Uber had a talented communications lead, but Rachel Whetstone recently walked away. It is well known that Kalanick does not listen to anyone and Whetstone could not repair the fabric of Uber’s foundational problems. Under the circumstances, recruiting a high caliber communications professional to take her place could be difficult, but the company must have a strong crisis communication leader. The company’s communicators will play a key role in helping internal stakeholders rebuild morale and trust. With time, they should share “new” stories of how cultural changes are transforming Uber into a “new and improved” version. Once these changes become a daily reality, the communicators can begin sharing these success stories with external stakeholders to reveal the new Uber.
Uber came into existence as a disruptor – its mandate was to disrupt the taxi industry. The company made hailing a ride as simple as a click on your mobile phone. But now, the disrupter has been disrupted. New, strong leadership with a fresh and ethical approach will write the next chapter of the Uber story.