U for Uber U for Uncontrolled

Startup founders have lots of things on their agenda. They need to find the elusive product-market fit, get funding, find an office and yes, they need to attract great talent to build the product. While doing all this, suddenly the product needs to be tweaked. The government regulations change and that suddenly puts the future of the business at risk. Then there is the whole challenge of staying nimble. All this has to be done without breaking the bank. So any expense that is a nice-to-have is put aside for a later day. While startups have someone to manage payroll and hiring, investing in an HR leader to manage company culture seems a clearly avoidable expense.

"Blitzscaling" has its own challenges

Uber has been the quintessential unicorn every startup wants to be. Uber has become the catchphrase of investor pitches. “We are the Uber of <fill in the blanks>”. “I ubered it to the office” is well understood. Uber is this behemoth that started in 2009 and in seven years their valuation is at a staggering $70 billion. By the time they were five years old, they were in 300 cities and had a million drivers. They are currently in 600 cities and growing. They have battled protests from city regulators, traditional taxi services, city residents and even their own drivers.

Most startup founders have faced some version of this. These problems are logic problems. By nailing down the right set of variables, most business leaders will be able to find an acceptable set of solutions. Travis Kalanick, Uber’s CEO has repeatedly shown that he can handle these problems without breaking his stride.

Beyond product market fit

But the two issues that are currently rocking Uber are “soft” problems. They are problems of company culture. A case in point is Uber’s ex-employee Susan Fowler’s case of gender discrimination that went viral. When she requested to move teams to avoid sexual advances from her manager, she was prevented from moving teams and from being promoted, even though she kept HR informed at every step. The HR person even suggested that Fowler might consider that she herself might be the cause of it all.

Culture never just happens

So how is the CEO of Uber to blame for this? Is it not the HR person who needs to be fired instead for mishandling the sexual harassment case? The problem is much deeper. Company culture is as important for the CEO to think about and make conscious choices to shape the culture. Hiring leaders for competence alone while ignoring their values, interpersonal skills and personality is a common issue with startups. But this is the choice that shapes culture. A company may have beautiful posters that outline company values that encourage diversity and respect for the individual. But it is the day to day choices where leaders live these values.

Four days back, the CEO of Uber, Travis Kalanick was caught on tape getting into an altercation with an Uber driver. This time Travis responded in a blog post titled “A profound apology,” he said that he was ashamed of his actions, and that he had now accepted that he needed help in leading his company. Just because he is the CEO of a wildly successful company, does not mean that he automatically will be skilled as a leader. We wouldn’t flinch if he needed a coach to help him improve his golf swing. Why should we be alarmed if he seeks help with his leadership skills.

Hiring the right HR leader can help the organization craft the right culture. There is a need to design the right hiring system that places as much weightage on the candidate’s values and soft skills as his technical skills. Letting go of technical talent when that person violates the company’s code of conduct is the acid test of the CEO. Being able to hire a HR leader who can speak truth to power is the first task of a founder. It is as important as product-market fit.

It is easy to ignore intangible aspects like culture when the company is experiencing hyper-growth. But that is exactly the time to focus on building culture. Customers care about not only what you sell but HOW you made it happen. Do you believe that what Uber is going through is about culture? Have I got it all wrong and that linking it to culture is not correct. I would love to know. Do leave your comments.

Do read my take: 'posters do not shape culture, leaders do'

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First written for The Times of India dt March 8, 2017