Leadership vacuum could hold back Uber turnaround
With 14 managers in charge, will planned changes happen?
Uber now has
SAN FRANCISCO 47 detailed recommendations from an exhaustive internal investigation on how to overhaul its company culture, from making its board more independent to keeping records of human resources complaints. Now comes the hard part. Most change management experts agree that a corporate makeover is impossible without an impassioned chief executive who lives and breathes the values the company wants to embody. But Uber must implement sweeping changes with a CEO, Travis Kalanick, who not only is taking an indefinite leave of absence, but also embodied the company’s sharpelbowed ethos.
Adding to that big hurdle, Uber now will be run by a leadership team that is an alphabet soup of 14 different corporate titles — from U.S. general manager Rachel Holt to CTO Thuan Pham — who occasionally will take direction from their boss. Kalanick said Monday he would step back from day-to-day duties to grieve his recently deceased mother and “to reflect, to work on myself, and to focus on building out a world-class leadership team.”
That team includes many chairs that are collecting dust.
Those include the roles of president (former Target exec Jeff Jones quit in March, citing values differences), chief financial officer (that position has been vacant for two years), chief operating officer (Kalanick has been searching since March) and vice president of engineering (Amit Singhal resigned in February after failing to disclose a sexual harassment complaint against him during his time at Google).
A porous and multiheaded leadership team that reports to a CEO on leave does not sound like a recipe for a credible cultural about-face, especially for a company that may have mere months to enact change or risk market share losses, says Micah Alpern, who consults on culture strategy for A.T. Kearney.
“You can change your company’s policies, but without new leadership your culture won’t change because the policies and the people won’t be aligned,” Alpern says. Uber has 100 days to prove it’s getting back on track, in his view. “At the very least, they need a new COO, a CFO and some sort of acting CEO, fast.”
An Uber spokesperson declined comment for this report.
Once employees believe the shift is real, the invaluable ripple effect should help the ride-hailing company attract top talent and lure loyal consumers, both of which remain in jeopardy following an explosive February blog post by former Uber engineer Susan Fowler that described sexual harassment by a boss that was ignored by human resources because the manager was deemed too valuable.
A number of surveys show that rival Lyft has made strong gains in the wake of Uber’s woes. A review of credit card receipts by TXN Solutions for USA TODAY shows Uber’s share of rides has dropped from 90% to 75% in the past two years.
The internal investigation Uber initiated in February, which was led by former U.S. Attorney General Eric Holder and whose findings were released Tuesday, also suggests Uber curtail Kalanick’s power as CEO, hold managers more accountable for employee morale and elevate the importance of having a diverse workforce.
For a global company valued at around $70 billion, those baseline recommendations are akin to making sure the car you’re buying has tires, says Justin Wasserman, managing director of Kotter International, a strategic execution and change management firm.
“All (the Holder report) recommendations do is make them come up to par with any reputable company. They’re the basic price of entry,” Wasserman says. “They make a company good, but they don’t move a company from good to great.”
For Uber, “they almost have to create a whole new face of leadership. If you want to even assume that Kalanick can change, that’s something that will happen over years, not months.”
Ultimately, Uber’s predicament is self-made, anchored to a start-up mind-set that didn’t mature as the company grew. But in its favor is something simple and invaluable: a service that, bad publicity aside, many riders around the world have come to depend on.
“Uber will be taught as a business case for so long as the company that had it all,” says Fern Mandelbaum, whose Vista Venture Partners firm invests in companies with a commitment to inclusivity. “If they come out of this, they’ll be the poster child for a turnaround.”
Marco della Cava @marcodellacava USA TODAY “Uber will be taught as a business case for so long as the company that had it all.”
Fern Mandelbaum, whose Vista Venture Partners firm invests in companies with a commitment to inclusivity