The Case of UBER: to disrupt a space, do you have to have a disruptive culture?

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Sexual harassment scandals. Accused of stealing intellectual property. Flaunting regulations.  Billions in value but zero profit. The story of UBER would make any Hollywood screen writer envious of the myriad of plot twists and double dealing that are real life to the ultimate unicorn start up.  But the past few months have revealed what happens when a company gets too big too fast and starts to believe it might be able to get away with anything.

 UBER is a fantastic case study on company culture and its effect on an organization.UBER is a fantastic case study on company culture and its effect on an organization. A lot happened for UBER in the 8 years since they began as an idea in Paris. Going from a scrappy startup disrupting the taxi industry to a global transportation giant UBER was valued at $70B in early 2017 and they’re widely considered to be an unrivaled success.  But when huge valuations of Unicorns like UBER are coupled with behavior that borders on criminality, it calls into question what defines “success”.  Travis Kalanick’s leadership brought the company to a unique and rarefied place in the world of Silicon Valley start-ups.  But the culture he fostered may lead to its undoing.

So the question becomes to disrupt a space, do you have to have a disruptive culture?

Greg Lamboy, Head of Talent Acquisition and Partner at Hager Executive Search was recently interviewed by The Guardian on the subject of UBER’s current troubles and the resignation of CEO Travis Kalanick.  As Lamboy is quoted in the article, “You can have a disruptive technology without having a disruptive, chaotic culture.”

At this point in the company’s maturity, combining a great technical model with a great management model is key to success. UBER now has an opportunity to change its management model to one that exhibits a healthier corporate culture both internally and externally.  Will they overcome the challenges they face with their culture and negative brand recognition both internally and externally, and in so doing bring the company to profitability?

That remains to be seen.  But it looks like they are headed in the right direction with the hiring of Harvard Business School professor Frances Frei as their new SVP of Leadership and Strategy.  Frei will lead their effort to heal the fractured company culture and the crises that have arisen may represent a tipping point for positive change. Frei’s belief that Uber “can afford to dial back the aggressive and rebellious attitude that led to its global expansion but in many cases angered regulators” is an excellent example of her thought process.

If we throw out our super-driving corporate personality that’s willing to explore limits because no one has ever gone there before, will we lose our secret sauce? I don’t think so. I think our secret sauce is in the intelligence and desire to change the world, and the collective work ethic of the organization. I don’t think it’s in the ability to push boundaries that no one has pushed before. . . . As a 14,000-person organization, you absolutely need to do that differently than as a 30-person organization.”Frances Frei

UBER needs to become an advocate for both their employees as well as their customers, not an abusive adversary.  They have taken a small step in the right direction in allowing users to tip drivers for good service.  While UBER is a SaaS technology company, the “Service” is delivered by the drivers.  And as the primary touch point for their brand (as much as if not more than the technology/app itself) it’s an acknowledgement that without the drivers the company cannot be successful.

And UBER continuing to put their customers in the driver seat (or rather in the passenger seat 😉 will be a crucial piece of their future success. UBER has the opportunity to be an important force for positive change in an industry that badly needs it and its Board will be crucial to making the right decisions to move forward positively and working to establish new corporate values.

One thing is for sure.  Whether they’re valued at $70B or not, they tapped into an unmet need and will not be going anywhere for the time being.  But time will tell if they go forward or in reverse.