Uber CEO Travis Kalanick’s apparent surprise about the toxic culture at the ride-sharing company, amid allegations of sexual harassment and troubling reports that HR did not sufficiently intervene, sends up a glaring red flag about his leadership and potentially imperils his future at the company.
Kalanick has admittedly led a strong response, including an investigation to be led by former U.S. Attorney General Eric Holder, after sexual harassment claims were made public by a former employee, Susan Fowler, one of Uber’s site reliability engineers, in her personal blog. And in what appears to be a separate development, Kalanick asked his senior vice president of engineering, Amit Singhal, to resign on Monday after Singhal reportedly did not disclose that he left Google a year earlier after an allegation of sexual harassment at that company. Singhal has denied the allegation.
While Kalanick faces no claims of misconduct, Fowler blogged about a culture in which sexual harassment allegedly occurred and claims that the incident was not the manager’s first offense. Every CEO of a public or private company is expected to define and articulate the culture and act as the standard-bearer for its values.
If Uber turns a blind eye to sexual harassment under Kalanick’s leadership, he’s ultimately responsible for it.
For Uber’s board, the burning issues right now should be how this culture developed and what was allowed, implicitly or explicitly, especially with regard to HR’s apparent lack of intervention on the harassment claims. Whether a company is privately or publicly held, its board of directors has obligations to oversee leadership, especially the CEO.
Large investors, which include Google and Benchmark, also should ask pointed questions, given that this prominent startup reportedly raised almost $16 billion and has been valued at $69 billion. The answers to these questions could determine Kalanick’s future leadership and whether he can establish the values-based culture needed to create a team environment that will take the company to the next level as a publicly traded firm.
Kalanick said the right things in his statement following Fowler’s claims: “There can be absolutely no place for this kind of behavior at Uber—and anyone who behaves this way or thinks this is OK will be fired.” Yet questions still remain as to why such events allegedly happened in the first place, what actions HR did or did not take, and why.
No matter what a company says about its values, these are just words unless actions and behaviors prove them to be true. This starts at the top with the CEO, where values are established and articulated. Very clear expectations must be set, with nothing left to assumption, about how people will act, interact, and treat each other. Values and expectations must be communicated throughout the company so that there is no question about what is non-negotiable.
With those values in place, everyone needs to be held accountable, with consequences for those who commit offenses—without exception. When someone is fired for violating the values, no one, especially the person being terminated, should be surprised, because the expectations and the consequences were clearly communicated.
If what Fowler says is true—that HR didn’t intervene and that her manager was given a pass because of his strong performance—then Uber is not a values-based company. When an exception is made, no matter how stellar a performer someone is, the message communicated loudly is that values don’t really matter—the rules don’t apply to those who are “rock star” performers or know the right people in high places. Any organization that allows such exceptions to exist is creating and reinforcing a toxic culture that is highly corrosive.
At Uber—and at any company—these are serious allegations that need to be addressed, and not only because a blog post went viral. Kalanick, along with his senior leadership team and the board of directors, must establish and reinforce a values-based culture that is woven into the company’s fabric. No matter how promising or scalable a company’s business model is, it’s the people who execute strategy and make the organization successful. A culture that allows discrimination or harassment, erodes trust, and creates unhealthy working conditions will ultimately fail.
Harry Kraemer is the former CEO of Baxter and a professor at the Kellogg School of Management at Northwestern University. He is the author of Becoming the Best: Build a World-Class Organization Through Values-Based Leadership.