Uber CEO Dara Khosrowshahi pulled off a dramatic culture change that led to profitability. Here’s how it’s done

The following is an excerpt from Terence Mauri’s book The Upside of Disruption: The Path to Leading and Thriving in the Unknown.

Culture has a collective action problem: Culture is everyone’s and no one’s problem. What don’t we know about our organizational cultures, and why don’t we know it? Agnotology studies cultural or ethical blind spots, deceit, ignorance, and why knowing sometimes does not come to be or becomes invisible, which is central to our final story of unlearning. Uber is a ride-hailing firm with a market cap of more than $120 billion and around 23,000 employees worldwide. I remember the first time I requested an Uber ride on my app in 2011. I was in New York on my way to a meeting in Chelsea on 75 Ninth Avenue and stood on a street corner holding out my hand, hoping the iconic yellow cab would see me and stop. I suddenly realized that I had no dollar notes on me and that I would have to go to an ATM to get money to pay for the cab fare. And then it started raining. Uber changed everything with an ambitious mission to reimagine the future of mobility, logistics, and delivery services. First, it increased demand for the sharing economy, such as companies like Airbnb or DoorDash, Inc., as an alternative to traditional channels. It showed how competitive lines and customer behaviors are redefined and how quickly asset-light, tech-enabled strategies disrupt industries. Uber would become known as the number one disruptor of its time, but at what price?

The difficulty in finding a cab on a snowy night in Paris inspired the original idea for Uber, and following a beta launch in May 2010, the Uber mobile app launched publicly in San Francisco in 2011 to much fanfare. As Uber scaled at breakneck speed, a manager sent colleagues a message highlighting Silicon Valley’s rogue spirit of “move fast and break things”: “Embrace the chaos. It means you’re doing something meaningful.” Uber quickly became the poster child for unprofitable tech companies during record low-interest rates and more than $20 billion of funding from investors, including Softbank Group Corp., Benchmark Capital, and Microsoft co-founder Bill Gates. Uber’s culture, during its years of explosive growth, would constantly come under the spotlight with allegations of wasteful spending, bullying, and a toxic “bro culture.” By 2019, “the embrace the chaos” mantra of playing loose with the rules had resulted in an operating loss of $8.5 billion (£6.8 billion) on revenue of just $14.1 billion and a series of whistleblower scandals and regulatory investigations that led to a change at the top.

Changing the Uber company culture

Under the leadership of CEO Dara Khosrowshahi, Uber has evolved from a culture of “move fast and break things” to “move fast and do the right thing” and is prioritizing the needs of its customers and employees alongside growth, scale, and profit. Through deliberate unlearning of a toxic culture over time, and despite operating at a loss for nearly 14 years, Uber 2.0 has led a significant overhaul of its culture and helped it reach its first operating profit. Uber’s story underlines the need for steep learning curves, difficult choices, and ethical leadership at every turn. Here are three leadership lessons to unlearn a toxic culture and shape a better one where trust, equity, and integrity are our North Star.

• Silence breakers: When’s the last time you wanted to speak up about an idea, concern, or question but stayed quiet because of fear? Or worked in a corrosive culture where challenging the status quo was too risky? Hack Future Lab’s research shows that one-third of the global workforce chooses silence over speaking up in a meeting or one-to-one every month. Cultures differ when confronting issues, but the takeaway is that silence is always less risky than speaking up, and cultures of “SEP” (somebody else’s problem) are the norm rather than the exception. A culture of conformity deters people from speaking up and is a “courage to unlearn” wrecker. It demands compliance and deference and is better suited to command and coerce leadership styles during General Napoleon’s reign. Leaders’ alarm bells should be ringing if they have a culture of avoidance. Your organization’s return on intelligence, psychological safety capital, and trust are low, and opportunities and talent are wasted. Every organization needs courageous “silence breakers” at every level, including the boardroom, to answer the question, “What needs to be said that is not being said?” At Uber, asking this question has led to the unlearning of its brash cultural values, ditching ones like “toe-stepping” and “Always be hustling” to “Do the right thing” and “We celebrate difference.” The new set of human-led values is for a responsible firm that doesn’t just focus ruthlessly on “growth at any costs” but is more reflective of a future-fit, purpose-driven, and values-led leadership. Nothing is easy when unlearning a toxic culture. However, paying attention to the correct values and tone at the top is an excellent way to get started, and silence breakers across the organization are essential.

• It takes a village: Missteps and a series of cultural shortcomings set the tone for Uber at the beginning of its heady growth, and, more recently, regulators are investigating the Big Four consulting and accounting firms to rethink governance, strengthening oversight, and holding management to account. Too much leadership today is the same old things in the same way, and too many people are disengaged at work. Unlearning a toxic culture allows everyone to break out of their echo chambers and challenge established beliefs and assumptions about why and how leaders operate. It’s the difference between creating an environment where truth, trust, and transparency exist, not a toxic and complacent one.

First, when everyone is working on behalf of the culture and strategy daily, leadership should work more closely as one unified team with a laser-like focus on strengthening who we are, how we work, and how we grow. Too many one-to-one relationships can erode collective trust and undermine commitment and alignment around the must-win priorities. Machiavellian principles where “the end justifies the means” become the leadership code for making decisions. Formal training, especially for first-time managers, can help build an honest, not feared culture. For example, both Uber and Disney have introduced Corporate Universities to get all the employees on the same wavelength when it comes to mission, culture, and values but also make the programs sustainable by avoiding knee-jerk reactions to doing an “event” rather than creating a journey that encourages reflection, action, and personal empowerment for the long term.

• Make time to unlearn a culture: If culture is important, why don’t leaders make enough time for it? It takes discipline to build a healthy, trust-based culture rather than a fear-based one, and it should prompt leaders to rethink how best to hold themselves accountable in the boardroom. The challenge is that when firms scale up fast, the leadership team becomes increasingly detached from the rest of the organization. This misalignment can cause the leaders to overestimate what’s going well and underestimate what isn’t. Hubris becomes an existential risk, and values can lose their meaning. Independent non-executive directors and externally appointed chairs are essential for scrutinizing decisions, but that’s not enough, and many firms have yet to accept how much involvement the non-execs need to have to make a visible difference. It is far better to acknowledge a gap and listen and inspire others to own their part of the unlearning agenda and feel set up for success without the exercise becoming a tick-boxing one. To make a turnaround at Uber, internal cheerleaders such as Harvard Professor Frances Frei showed a willingness to call out problems, engage in constructive debate, and connect people to deeply personalized unlearning initiatives that made it crystal clear that every individual has a right to own their part of the culture because in the end “who we are is what we say and do.”

Excerpted with permission from the publisher, Wiley, from The Upside of Disruption: The Path to Leading and Thriving in the Unknown by Terence Mauri. Copyright © 2024 by John Wiley & Sons, Inc. All rights reserved.

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