The latest round of controversy at Uber erupted Friday night as Travis Kalanick unexpectedly appointed two new members to the Uber board as part of an earlier agreement, albeit without the knowledge or approval of either the existing board members or new CEO Dara Khosrowshahi. This is best seen as further evidence, if it were needed, that Kalanick’s main objectives continue to be serving his own self-interest rather than Uber’s best interests, and that if he’s using these appointments to bolster his power on the board, the rest of the board should resist that effort. The Recode piece I’m linking to below has a great overview of what all this means at this point and how it might play out, and importantly says that the board members don’t object to those nominated as much as the process. The context is that the board has been working on governance changes that would formally limit both Kalanick’s voting power and his ability to come back in a management role, changes he naturally opposes. At this point, I can’t imagine Kalanick actually thinks he’s doing what’s best for Uber, and in the meantime he continues to do the company substantial damage and distract it from the real changes which need to be made, including governance changes recommended in the Holder report. It’s ever clearer that Kalanick hasn’t changed and and indeed hasn’t taken any of what’s happened over the last ten months or so to heart.
Former GE CEO Jeff Immelt is Front-Runner for Uber CEO Job (Aug 21, 2017)
Another week, another story about erstwhile Uber CEO refusing to go gently into that good night. The Information is reporting that Travis Kalanick has been quietly building up a bloc of shareholders who will back him in a potential fight over the course of several years, while also sounding out employees recently on whether they would support him in that eventuality. Though the details here are new, the broad thrust is similar to the reporting last week that Kalanick was hoping to be able to get back into an operational role at Uber sooner rather than later, something many in leadership at Uber don’t want, and also a situation that’s likely to put off potential new CEOs, which is presumably part of Kalanick’s motivation here. That he still doesn’t see how central his behavior has been to Uber’s struggles, and how badly it needs to operate for at least some time without him, is the biggest possible sign that Kalanick hasn’t actually changed and isn’t actually sorry for any of what he’s done, which is in turn the best possible signal that he shouldn’t come back. But it seems he has enough supporters left at Uber that he’s convinced himself it’s worth trying anyway. Update: later in the day, an internal email from Uber co-founder and board member Garrett Camp was leaked, in which he said Kalanick would not be returning as CEO, apparently attempting to defuse some of this speculation and even the push to get him back.
via The Information
This article dropped on Friday evening as I was logging off for the week, so I’m only getting to it now. But this article was something of a bombshell, detailing not just the scale of harassment, assault, and other misbehavior by men against women in venture capital, but also naming specific names including some who hadn’t been accused previously. There really seems to have been a tipping point in the last few weeks on this topic, where far more women are now willing to speak out about their bad experiences and name their abusers and harassers. That, in turn, has suddenly exposed many man within venture capital and their past bad actions. This was a much needed change, and although the venture capital world and companies like Uber remain single small pockets in which the real state of things is finally being revealed, I can easily see this movement spreading and penetrating much of the rest of the tech industry. Justice Brandeis’ famous quote about sunlight (publicity) being the best disinfectant seems apt here: the more of these cases come to light, the more some of the perpetrators (like Justin Caldbeck and Dave McClure) will be moved out of roles or dumped by their employers altogether. None of this represents an overnight change, but it does feel like things are finally moving in the right direction, and those who have been protected out of a combination of fear on the part of would-be accusers and collusion on the part of colleagues are finally being exposed to some real consequences. There’s clearly a long way still to go, but breaking the wall of silence feels like a big step forward. Increasing diversity still feels like one of the most obvious ways to prevent this issue in future – at many companies, the overwhelming gender dominance of men is clearly a big part of the cultural problem, even though women seem to have protected some of those accused as well, either covering up bad behavior or dealing with it too quietly (as in the case of 500 Startups). Update: on Monday, per Axios, Dave McClure was asked to resign completely from 500 Startups, and did so, a step which should arguably have taken rather sooner.
Weekly Narrative Video – Uber’s Culture is Toxic (Jun 23, 2017)
This week’s narrative video is on the Uber’s Culture is Toxic narrative, which has very much been in the news the last couple of weeks as the results of the Eric Holder investigation were released, and Travis Kalanick first took a leave of absence from Uber and then resigned as CEO. The last six months have brought long-simmering accusations and perceptions about Uber’s toxic culture to a head, and the investigations which concluded in recent weeks provided ample evidence of just how bad things had become. There is now, though, finally some hope that Uber can begin to change in earnest with Kalanick out of his role as CEO. Subscribers can watch the video on the narrative page here as always, and if you’re not yet a subscriber you can sign up for a 30-day free trial here and get access too.
Though I hesitate to write yet another Uber piece this week, this one is worth mentioning just because it illustrates how all the formal investigations and programs in the world can’t instantly change the individuals in a company or the culture they collectively embody. It appears that at the internal Uber meeting to announce the conclusion of the Holder investigation and how its recommendations would be rolled out, board member David Bonderman made what certainly came off as a highly sexist remark. Though he suggests the remark was misunderstood, it was almost impossibly tone deaf in the context, and he has subsequently resigned from the Uber board, which feels like the only way this could have ended once word got out. But it’s symbolic of both just how hard changing culture actually is when some biases and mindsets are so deeply ingrained, and also of how differently Uber is going to approach all these issues going forward, with much less tolerance for any missteps. That’s a good thing, and one of the few early and visible signs that things really are going to be different, though of course so far it’s only really been applied to those incidents high profile enough to capture attention from outside of Uber.
The long-awaited investigation by Eric Holder and Tammy Albarrán of law firm Covington & Burling into the workplace culture at Uber has concluded and its recommendations made public. The fact that the report contains twelve pages of recommendations is evidence in and of itself just how broken the corporate culture at Uber has become, and quite how much it needs to change. That change, the recommendations suggest, needs to start at the top with the composition, independence, and responsibilities of the board, and work its way down through the CEO, Travis Kalanick (some of whose responsibilities should be handed over to others), and on from there. The changes recommended are sweeping, which seems appropriate given just how badly things have gone, and importantly they include many layers of accountability with real consequences attached to both good and bad behavior from performance reviews to financial incentives. Travis Kalanick is apparently going to take a leave of absence, partly to grieve for his mother who was killed recently in a boating accident, but partly also to get some time away from his job and reflect on all that’s gone on, which seems very sensible too. But one of the most notable aspects of this whole thing is just how much of a role Kalanick and the culture he has personally created at Uber is responsible for so many of the issues, and one of the biggest questions remains whether he personally can change enough to fit in with all the other changes that will be made both immediately and over time. All that’s gone on at Uber should also serve as a cautionary tale for many other tech firms, some of which will be looking down at Uber at this time but many of which have many of the same cultural flaws, even if to a lesser degree (or merely less publicly). The recommendations in the Holder report would almost all be considered best practice in the fields they cover rather than merely remedies to be applied after a major failure. I suspect every company would be better off by following the majority or even all of them.
Rather than treat each of yet another set of Uber news as a separate item, I’m bundling three together into a single grab-bag item here. The most notable (and damaging) is the revelation that one of Uber’s senior execs in Asia led an effort to obtain the medical records of an Uber passenger who was raped by her driver and shared the records with CEO Travis Kalanick and others. He wasn’t fired as part of the 20 terminations that resulted from the first investigation which concluded this week, but has apparently been subsequently, allegedly as a result of the digging by Recode reporters. That’s somewhat absurd given how far-reaching and aggressive the investigation was said to have been, but may reflect a slightly higher bar for executive behavior being set as a result of recent arrivals in the management ranks. Secondly, board member Arianna Huffington, who has been acting more as apologist than change agent in this whole saga, both defended Uber’s culture and said management changes were coming in an appearance on CNBC. The latter is new, though not entirely unexpected, while the former is more evidence of a somewhat mystifying attempt to downplay what are obviously damaging signs of a sick corporate culture at Uber. Lastly, Uber lost the latest round in its court case with Waymo, and will now have to turn over documents relating to Uber’s acquisition of Otto, which could provide some more evidence Waymo needs to make its overall case stick. Overall, plenty more evidence here of both the nasty culture and the difficulty of turning it around, and also that Waymo is going to get at least some of what it’s looking for out of the court case.
The first of two concurrent investigations at Uber has resulted in the termination of over 20 employees over harassment and other inappropriate behavior, while 57 incidents are still under investigation, and some 100 of 215 HR claims have been dismissed without action. That such extensive action should be taken only as a result of an independent investigation by a law firm even though Uber’s own HR department took no such action on these issues is pretty shocking. But in some ways even more shocking is the fact that Uber’s head of HR played down harassment and other similar issues in comments as recently as last week, when she and other executives at Uber must have known this was coming soon. Her comments last week no longer seem merely disingenuous or tone deaf but downright misleading, which raises real questions about why she would make such claims just as they were about to be proven false. The only theory I can come up with to explain it is that Uber’s management disagreed with the action taken this week, and that was their way of saying so, but even that seems pretty far-fetched. Regardless, the other shoe is still to drop in the form of the more wide ranging second investigation and the recommended actions, which are likely to go well beyond action on individual cases.