For Uber To Change, Kalanick Must Go- Valutrics

Uber’s corporate culture is toxic, rife with sexual harassment, drug abuse, and bullying so severe that one manager “threatened to beat an underperforming employee’s head in with a baseball bat,” according to the New York Times.

In response to months of bad publicity about its personnel practices, Uber has now hired Frances Frei, a Harvard Business School professor, to help them fix their obviously broken culture.

I’ll get to professor Frei in a second, but first I have an observation: Uber’s personnel scandals are simply the internal manifestation of a culture that manifests itself externally in the form of highly questionable business practices. These practices allegedly include:

• Using a secret tool to avoid authorities in cities where Uber is restricted.
• Having male managers pretend to be female to get drivers to work more.
• Stealing intellectual property (according to a Google lawsuit).
• Breaking its agreement with Apple by digitally fingerprinting iPhone users.
• Insufficiently vetting drivers thus putting female riders at risk.
• Underpaying drivers and misleading them (according to drivers)
• Raising prices during the recent London Bridge terror attack.

Question: what kind of company gouges and profiteers during a terror attack? (And it’s not the first time.)

Answer: the same kind of company where a manager thinks its OK to grab women’s breasts during a corporate retreat.

As I pointed out a few years back, a recent study conducted by one of the world’s most acclaimed business scholars, Robert Cialdini, showed that unethical bosses inevitably surround themselves with unethical employees.

At Uber, success results from breaking rules and exploiting people. Any company that pursues that business strategy will be filled with managers who break rules and exploit people. Same culture, different symptoms.

Which brings us to Frances Frei, recently of the Harvard Business School and now SVP of Leadership Strategy, reporting to Uber CEO Travis Kalanick. According to the Uber blog post announcing the hire, Frei

“will act as a partner to our Chief Human Resources Officer Liane Hornsey, and to the executive leadership team at large, in some critical areas including: company strategy and planning; organizational transformation and design; management and leadership; coaching, supporting and developing a world-class leadership team; and articulating and helping to architect and adapt our cultural philosophy.”

Yeah, right.

The idea that some random academic without any staff or actual organization power–other than “act as a partner” (whatever that means)–could change ANY corporate culture–let alone one as entrenched and toxic as Uber’s–is beyond ludicrous.

Look, I’ve been writing about corporate culture in books and articles for over 20 years and if there’s one thing I’ve learned it that corporate cultures are amazingly resilient. Once a corporate culture has formed, it’s almost impossible to change.

(This, BTW, is why entrepreneurs must pay attention to corporate culture from the very start. You only get one chance to create it.)

Can a corporate culture change once it’s been established? Yes, indeed. But based upon my observation and experience, a corporate culture only changes as the result of either:

1. Financial failure that results in mass layoffs of upper and middle management.
2. Acquisition by a company large enough to overwhelm and absorb the existing culture.

In both situations, the CEO/founder who created the culture must go. If the founder remains in place, the culture (even as a division inside a large company) will continue to reflect the founder’s personality.

There is, to my knowledge, no example where a founder-run company has changed its culture. Uber can hire all the professors they can find, but the company will continue to reflect Kalanick’s personality and moral values.

The simple truth is that if Kalanick remains at the helm, Uber won’t change. The most it will do is make cosmetic changes, like hiring an HBS professor and pretending that it will make a difference.