Commentary

Why Travis Kalanick’s Apology At Uber Is Not Enough

Feb 24, 2017

Uber is the latest of many companies to run the gauntlet of public outrage after a former employee, Susan Fowler, published a blog last Sunday detailing allegations of sexual harassment. According to Fowler, her reports of inappropriate and suggestive texts sent over the company’s “chat” system were dealt with questionably by HR.

As details of the blog emerged in mainstream media, the comment sections filled predictably with outraged threats to delete the app and move to competitor Lyft.

The Uber problem is one in a long line of company “scandals” that have surfaced recently that threaten to erode the trust that consumers and employees have placed in major companies and their brands. VW’s emission scandal and GM’s ignition switch, both of which emerged in 2015, are two that come to mind.

In an interconnected and hyperactive social media environment, customers and employees react quickly to any perceived negative event or “scandal.” In such an event, intervening quickly to admit mistakes or misdoings is critical. It is also necessary to be transparent about what the company is going to do to correct the problems. Actions have to match stated goals. Finally, one of the most critical skills turns out to be listening.

In Uber’s case, CEO Travis Kalanick moved swiftly. He issued a public response stating that “What she describes is abhorrent and against everything Uber stands for and believes in.” He also issued a statement to employees that said in part, “I believe in creating a workplace where a deep sense of justice underpins everything we do.” He hired former Attorney General Eric Holder to investigate and brought in board member Arianna Huffington for “listening sessions.”

These are laudable steps but be forewarned — his words must be followed up by reinforcing actions in the next few weeks. Consumers and employees have to see better behavior to believe that this change is real.

Companies can recover when they have lost the trust of customers and/or employees. In the case of GM, for example, CEO Mary Barra looked at the issues immediately and certain individuals associated with the faulty ignition switch problem were fired. It was clear through Congressional testimony that she was working diligently and paying extreme attention.

The lesson or the take-away for all sorts of companies is that high trust organizations outperform others in many ways. Companies should seek to create high-trust organizations from their earliest days. They create cultures where employees tend to be engaged with the company and where it is ok to voice a dissenting view. Uber’s CEO has to consider the culture of the company – both the current culture and the culture he envisions – as well as the role of HR in shaping and maintaining that culture.

The best way to avoid this kind of problem, after all, is not to have it in the first place.


Neal Hartman is a Senior Lecturer in Managerial Communication at the MIT Sloan School of Management

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html. S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions