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In the News

Trouble at the top of Uber

Penny Brooks

18th June 2017

The decision of Travis Kalanick, founder and Chief Executive of Uber, to take leave from the business has brought many articles about leadership and corporate culture. Broadly, the theme is that the personal qualities that enabled him to bring Uber from disruptive tech-based start up to a global business operating in 662 cities and worth just short of $70bn are not suitable for running a major business. The Economist, in a very clear article "Why Uber's boss must go" adds that stakeholders should be "wary of the power handed to founders. The right person to lead a young company may not be the best one to oversee it when it has grown up."

From its launch, Uber has been constantly in the news - until recently, mostly because of the impact it was having on the taxi business in city after city, as the 'ride sharing' app and gig economy took off, and gave customers needing a taxi a cheaper alternative. However, the stories have changed in nature in the last year or so, with more and more concerning the flawed management and laddish culture of the business. This culminated in Uber's board commissioning a report by former US attorney-general Eric Holder and his colleague Tammy Albarran into its own management and culture. 

The investigation included interviews with 200 employees, and it's report was published on Tuesday; it was widely reported to recommend greater board independence, mandatory management training, and banning intimate relations between employees in a reporting relationship. In the words of The Economist, " far, so bleeding obvious". The cause of Uber's management problems are deemed to stem from the culture set by Travis Kalanick, who has taken 'indefinite' leave from the company to allow it to set up 'Uber 2' - and meanwhile he has handed over control to 14 managers who still report directly to him, rather than to an independent board chairman.

Nonetheless, the board has accepted all recommendations of the report. Reported in the FT, "Uber will rewrite its 14 cultural values (which include “stepping on toes” and “always be hustlin’”) to eliminate those that can justify poor behaviour. Some of those changes are already starting to take effect. The company said its central conference room, “The War Room”, would now be called “The Peace Room”." So the focus of the corporate culture needs to change from Handy's Power culture, with all focus on the central leading character, which may suit a small, fast-moving start-up, to a Role or Task culture, which facilitates more involvement and expertise from other managers and staff, and better suits a large, wide-spread organisation

Richard Branson has said that this comes down to the leadership of an entrepreneur: "An entrepreneur is not a good manager of people, and Travis Kalanick is definitely not a good manager of people," Branson said. "He should have realised that long ago, and done what he was good at."

Penny Brooks

Formerly Head of Business and Economics and now Economics teacher, Business and Economics blogger and presenter for Tutor2u, and private tutor

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