Experts: Uber must make changes at top to fix culture woes


Highlights

Uber’s board has adopted the recommendations of former Attorney General Eric Holder.

Experts interviewed by The Associated Press say CEO Travis Kalanick should step aside.

Uber must get rid of leaders who tolerate bad behavior and hire people who don’t, experts say, as the ride-hailing company gets ready to announce significant changes to its culture and management.

Uber’s board has adopted the recommendations of former Attorney General Eric Holder, who investigated its toxic culture of harassment and bullying. Those will be revealed to employees and made public on Tuesday.

Experts interviewed by The Associated Press say CEO Travis Kalanick should step aside or at minimum change his behavior for the company to make progress. Uber’s board is discussing a leave of absence for Kalanick, the combative co-founder who has already acknowledged he needs to grow up and get management help. No decision has yet been made, according to a person briefed on the matter who didn’t want to be identified because board discussions aren’t normally made public.

A CEO’s behavior sets the tone for the rest of the company, says Cindy Schipani, a business law professor at the University of Michigan who has taken part in investigations of corporate conduct. She says Kalanick should resign and save the board from having to oust him. “That’s where the culture comes from. It has to change at the top and he has to recognize what he does, his actions, speak louder than anything put on paper,” she said. It’s unlikely the board could remove Kalanick because of Uber’s stock ownership structure.

Jennifer Chatman, a business professor at the University of California Berkeley who also does corporate investigations, says if a leave is granted, she would be surprised if Kalanick came back in the top spot.

“He lacks the ability to set an appropriate tone for this organization,” she said. “He lacks the kind of presence that’s needed for a larger organization.”

Chatman predicts that Kalanick will be granted a leave and return as a strategist under a new CEO or possibly a board member who runs the company.

It is common, Chatman says, for company founders to be ill-equipped to lead an organization as it matures. “This may be the moment for Uber where it needs to go to the next stage,” she said.

Last week, based on a report from a different law firm that investigated employee harassment, bullying and retaliation complaints, Uber fired 20 people and sent another 31 to counseling. Experts say it’s an unprecedented number of firings that shows a pervasive problem, but also is a strong step toward rehabilitation. Who the company hires as replacements will make or break the effort, they say.

Uber must hire people who “don’t have the harassment state of mind,” Schipani said.

On Monday, Uber said its chief business officer, Emil Michael, is leaving the company. No reason was given for his departure.

Uber Technologies Inc. has been rocked by accusations that it has fostered a workplace environment that condones harassment, discrimination and bullying. A female engineer who left the company has alleged she was propositioned by her manager on her first day of work and her complaints were ignored. In addition, Uber is the target of lawsuits, boycott threats and a federal investigation into claims that it has used a fake version of its app to thwart authorities. It has also been accused of corporate espionage by Waymo, formerly Google’s autonomous vehicle arm.

Kalanick has contributed to Uber’s recent woes, acknowledging that he needed a strong No. 2 after losing his temper earlier this year in a profanity-laced argument with an Uber driver over pay. The website Recode.net reported that Kalanick put out a memo in 2013 advising employees attending a company party about having sex with each other. Kalanick also has been facing personal difficulties. His mother was killed and his father hurt last month in a boating accident near Los Angeles.

Experts say Uber’s renegade culture of fighting regulators and skirting laws may have contributed to its problems.

“Companies need to evolve and grow through different stages,” said Lisa Klerman, a USC law professor and employment law mediator. “We do see sometimes a startup mentality in the early years of a company’s growth where they have difficulty sometimes adjusting to being a huge enterprise.”



Reader Comments ...


Next Up in Business

Ex-Googler turns mom's money into a billion dollars
Ex-Googler turns mom's money into a billion dollars

After Steven Yang left his coveted job at Google, he asked his mother whether he should take venture-capital money to fund his business idea. » RELATED: Do you have the new Gmail? Google’s email gets massive redesign If his online consumer-electronics enterprise was a risky bet, she told him, go with the venture capitalists. But if...
Top Local Business Stories of the Week
Top Local Business Stories of the Week

CANNABIS DEBATE State backs off cannabis oil ban, seeks ‘big picture’ plan: A state health agency has tapped the brakes on its drive to strip food and supplements infused with CBD oil — a non-psychoactive extract of marijuana — from Texas retail store shelves. But it’s unclear how long the reprieve will last for over-the-counter...
Up the Ladder

Medical Triumvira Immunologics has named Sabine Chlosta chief medical officer and Jon Irvin vice president of finance. Insurance Texas Mutual Insurance Company has named Jeanette Ward chief operating officer. Technology ESO has named Christopher Raps vice president of sales. Aurea Software has named Tej Redkar chief product officer. Venture capital...
This is the most dangerous day of the week to drive
This is the most dangerous day of the week to drive

Despite several years of steady declines, deadly vehicle crashes are on the rise, according to the most recent data from the National Highway Traffic Safety Administration.           » RELATED: Metro Atlanta drivers pay some of nation's highest costs The safest day to be on the road: Tuesday....
Starbucks’ racial-bias training will be costly, but could pay off in the long run
Starbucks’ racial-bias training will be costly, but could pay off in the long run

As Starbucks prepares to close stores for racial-bias training next week, the coffee giant will not only be confronting a difficult and emotional issue, but will incur some hefty expenses in the process.           » RELATED: Black men arrested at Starbucks settle for...
More Stories