The recent events around Uber founder Travis Kalanick have once again opened up the conversation about organisational culture and leadership. A successful entrepreneur, he has taken Uber from a tech start-up to one of the world’s most innovative companies completely turning the taxi market on its head. However, Kalanick departs under a cloud of controversy and is resigning after 8 years at the helm of the firm that he co-founded in 2009. So, where did it all go so badly wrong for the serial tech entrepreneur?
I work with a number of founder businesses. Founders are visionaries, they are able to see a gap, a business model that others cannot. However, it takes a lot more than a vision and a business model to build a successful organisation.
One of my clients, a successful entrepreneur who has built a strong financial services business that survived the crash, attributes his firm’s success to its strong culture. I remember facilitating a strategy session for his top team many years ago. His executives had prepared complex financial models and projections to chart the future trajectory of the business. However, his first question was ‘What sort of business do we want to build for our people and our customers? What will it look like and what will it feel like?’. This was an important starting point in building an environment, a culture with strong non-negotiable boundaries within which they would do business.
Leaders play a very important role in managing and perpetuating the culture. Kalanick has found out to his cost that all the commercial success in the world can’t protect you from the devastating consequences of negligent leadership. In pursuing a ‘win at all costs’ mentality, Kalanick has presided over a company that has neglected employees, deceived regulators, allegedly stole trade secrets from a rival and got embroiled in sexual harassment charges.
The report by former attorney general Eric H Holder Jr. into Uber’s culture suggests that Uber flouted rules and regulations and turned a blind eye to corporate misconduct. A firm’s culture determines how employees behave in a business. Leaders play a pivotal role in building and managing the culture. Kalanick’s behaviour set the tone from the top on what was acceptable and what was not. It set strong expectations around what was valued in the organisation and what was not.
Like in the dashboard of a car, there were a number of flashing lights, incidents that emerged that pointed to Uber’s toxic culture. For example, in Uber engineer Susan Fowler’s blog post about her experiences of sexism and sexual harassment she alleges that, instead of launching disciplinary proceedings against the alleged culprits, Uber hired a law firm to dig up dirt on her. In effect, Kalanick and subsequently his leadership team condoned the misbehaviour by not putting down strong boundaries. They were complicit in the misconduct by failing to respond quickly and unequivocally to issues that were raised by customers and their employees.
When the integrity of Uber’s business was questioned, Kalanick failed to set the tone for a healthy corporate culture. As Uber’s most senior executive, it was incumbent on Kalanick to lead by example and mount a robust response to any allegation of inappropriate behaviour. Uber’s rapid worldwide success probably created a sense of invincibility in Kalanick. One can see this in his abusive response to an Uber driver that was circulated around social media. Instead of acknowledging the problems and vulnerabilities, he probably saw them as a potential threat to his success. He therefore responded unconsciously in a way to prove his superiority doing irreparable damage to Uber’s corporate image. He stepped on the gas without checking his mirrors and without looking out for the warning signs that were in front of him.
This case is far from unique, sadly. As a consultant specialising in organisational culture, I have encountered countless examples of business ‘leaders’ failing to be good role models in their business. I have come across leaders turning a blind eye to misconduct in the pursuit of commercial success. This is dangerous as it does two things; firstly, it condones bad behaviour and normalises it. Secondly it causes dissonance in the system when the organisation says one thing but the leaders demonstrate different behaviours. It leaves employees confused and anxious as there is no clarity on which behavioural rules to follow; those espoused by the company or the behaviours displayed by leaders.
Along with a clear vision and strategy leaders must also build and uphold a narrative around the culture and values of an organisation. Whilst the competition may quite easily be able to replicate your products or services, they will find it hard to replicate your culture, what it means to work at and with your organisation. Your culture can become your competitive advantage. Customers will come back to you based not only on how good your product is but also how they feel when they interact with you. You will attract the best talent because your employees want to work for you, are committed to your vision and feel they have a shared set of values. Ignore culture and like Kalanick you will find that your balance sheet will only take you so far down the road.
As Travis Kalanick found out to his cost this month, business leaders who fail to set the right example risk losing everything. From SMEs to conglomerates, leaders play an enormous role setting the direction of the organisation both strategically and culturally. Make your culture a key differentiator and a significant factor for commercial success.
How to build a healthy organisational culture?
- Be clear about the non-negotiables:
Create absolute clarity around what behaviours are acceptable and which ones are not. Build your own ‘highway code’, a set of norms and values that will guide behaviour. Think long and hard about what kind of organisation you want to build for yourself, your people and your customers.
- Open up the boardroom:
Too many values programmes are driven top-down and employees never see the point of them. Build this narrative with the organisation not with your executives isolated in a boardroom. You must engage your employees in creating a shared set of values that they want to live. Your people need to understand how this is important for them in their roles.
- Hold yourself and your people to account:
It’s not enough to create a set of behavioural principles. You need to live it and you need to pull people up who are not living it. There is no point in publishing a set of values but acting contrary to them. You have to be dogmatic about sanctioning those whose behaviours are counter cultural.
- Empower your champions:
Whilst leaders are role models in organisations, identify other key influencers. A lot of influencing happens around the water coolers and corridors. Legitimise these influencers by giving them a voice and engaging them in the process of building your culture.
- Listen! Listen! Listen!
Take every opportunity to listen to your employees and your customers. One of my clients regularly brings together panels of clients, employees and alumni to give feedback to the organisation on their experiences. Do not be afraid to hear the difficult messages.
Ajit Menon is a partner at organisational change consultancy Blacklight Advisory