Business Transformation

Uber Hopes Holder Reform Will Stop Implosion

Uber CEO Travis Kalanick will take a leave of absence and return to work with diminished responsibilities and a COO to counterbalance him. He'll also return to a workplace that will look drastically different than the one he founded.

That is the hope at least.

Today the Uber board made public the findings of a months-long investigation into its culture and business practices by former US Attorney General Eric Holder's law firm, Covington & Burling. The board accepted all 47 of the report's recommendations, made after conducting more than 200 interviews and parsing millions of documents.

Given the founder-dominant structure of Uber's management, the choice over whether to take the recommended leave of absence was up to Kalanick alone, but it comes at a time when he's dealing with the death of his mother in a recent boating accident. No return date was released at this time.

The 12-page list of Holder's recommendations can be found here. They include changes ranging from the obvious to significant to nominal around the themes of "tone from the top, trust, transformation and accountability." A few include:

  • Appointing a COO and assigning him or her (most likely her) to "act as a full partner with the CEO but focus on day-to-day operations, culture and institutions within Uber"
  • Creating a board oversight committee
  • Limiting the alcohol budget for work events
  • Prohibiting intimate relationships between employees and their bosses
  • Raising the profile of Global Head of Diversity and Inclusion Bernard Coleman
  • Adjusting executive compensation to incentivize good behavior
  • Instituting mandatory leadership training and unconscious bias training
  • Establishing an employee diversity advisory board
  • Changing the name of the "War Room" conference room to the "Peace Room"
  • Doing away with stated cultural values like "let builders build; always be hustlin'; meritocracy and toe-stepping; and principled confrontation"

"Implementing these recommendations will improve our culture, promote fairness and accountability, and establish processes and systems to ensure the mistakes of the past will not be repeated," Uber's Head of HR Liane Hornsey said in a statement. "While change does not happen overnight, we're committed to rebuilding trust with our employees, riders and drivers.”

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Uber is climbing out of the large hole it's spent the last four-plus years digging. While there have always been reports of the company's backstabbing, sexist, growth-at-all-costs culture, it really came to light over four months ago when former Uber engineer Susan Fowler wrote a blog post detailing the sexual harassment and discrimination she experienced during her year at Uber, and the backlash from both HR and upper management she received over reporting it. (See Uber's HR Nightmare: Company Investigates Sexual Harassment Claims.)

Since then it's been a maelstrom of bad news for the ride-hailing company, including more reports of sexism, a culture of retaliation and poor behavior on the part of CEO Kalanick and his so-called "A-team" of top executives. Perhaps most shocking was the revelation that Uber's head of Asia Pacific, Eric Alexander, obtained and widely shared the medical records of a woman who was raped by an Uber driver in India in 2014, seeking to discredit her allegations and leading to his firing. Senior Vice President of Business Emil Michael, who was also involved, left the company yesterday, as confirmed by an email to the Uber staff. David Richter, current vice president of strategic initiatives, will be taking his place. (See Kalanick & Michael Out, Martello In at Uber? and Uber Drains the Swamp, but Is It Too Deep?)

Today's report didn't lead to any more dismissals, but the company has already let go of more than 20 employees, including some in the senior level, like Michael and SVP of Engineering Amit Singhal, and made some key new hires, including Hornsey, Coleman and new board member Wan Ling Martello. (See Uber Engineering SVP Out as Probe Continues.)

Shortly after Fowler's blog post kicked off internal investigations and reform at Uber, we -- like many in the industry -- posed the question of whether Uber could be turned around. The reports from within the company were troubling, but not altogether shocking for many in the industry who knew its reputation and the reputation of startups in the Valley, in general. Uber's rapid growth and success didn’t align with its mistreatment of its employees (and drivers), but it wasn't surprising. (See Culture in Crisis: What's Next for Uber & Tech?)

In a poll on Light Reading and Women in Comms, only 18% of you say Uber can be saved and that it is making a solid effort to help itself. Over half thought Uber either was beyond hope and fundamentally corrupt (32%) or doesn’t genuinely want to change (22%). (See Uber Upside.)

It's fair to say Uber's tipping point has already been reached, and if anything will serve as its turning point, this has to be it. Gender consultant and executive coach Bonnie Marcus says she thinks the recommendations are robust enough, but advises Uber to really listen to its employees if it wants to make a meaningful change.

"I would emphasize the necessity to have regular employee focus groups to evaluate the culture and progress on cultural values," she tells Light Reading. "The report recommends this be done online, but I think it would be helpful to have an independent third-party conduct employee focus groups so that issues can be discussed, clarified if necessary and thoroughly understood. Not ‘bitch’ sessions, but carefully organized to establish a safe environment for sharing information and ideas. The employees can be a great resource for suggestions going forward."

— Sarah Thomas, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Director, Women in Comms

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