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Uber, the poster child for Silicon Valley bro culture that once seemed impervious to all manner of scandals, lawsuits and boycotts, now finds itself leaderless and in disarray: Chief executive Travis Kalanick has left the world’s most valuable startup in the hands of a committee while he takes an indefinite leave of absence.
The question is: is Kalanick sending himself into exile to “work on Travis 2.0” and “become the leader that this company needs” what’s best for Uber to succeed, as he told his staff? Granted, he’s also mourning the tragic death of his mother, but his primary goal appears to be one of self-reflection and self-improvement.
Related: Here’s What Travis Kalanick (or Anybody) Needs to Do to Take an Effective Leave of Absence
In my view, it’s an enormous misstep. The right move is to stay put and finish cleaning up the mess he created. There’s a very good reason why there is no precedent for the CEO of a big company in the midst of an existential crisis going on hiatus without appointing an interim chief: You can’t run a corporation that way. It’s a recipe for disaster.
By any measure, Uber has had a wild ride. Founded just eight years ago by Kalanick and Garrett Camp, the ride hailing company now has 12,000 employees, $6.5 billion in revenue, operates in 82 countries, has raised $12.9 billion in funding and is worth $68 billion. Nobody “cabs it” anymore; we all just “grab an Uber.”
But here’s the thing. In the wake of former engineer Susan Fowler’s explosive blog post alleging widespread gender bias, sexual harassment and management mayhem, the company has lost much of its top brass, including the heads of strategy, finance, engineering, ride sharing and marketing. All those CEO direct reports need to be replaced, and pronto.
Related: Uber Fires More Than 20 Employees for Harassment
In addition, the board of directors just unanimously voted to adopt a laundry list of recommendations from a 13-page report by former chief justice Eric Holder’s legal team, including the need to overhaul Kalanick’s 14 corporate values and recruit a chief operating officer to serve as a full partner helping him run the company.
None of that is going to happen, and none of it should happen, in the CEO’s absence. Which means that Uber is essentially in strategic and operating limbo. That would be problematic enough if everything was hunky dory, but everything is so not hunky dory it isn’t funny. The company is in the midst of an epic crisis, and its Yahoo-like brain drain may just be the tip of the iceberg.
Uber is among the fast-growing companies in tech history, which means that recruiting and retaining talent are among its most critical functions. That’s going to be tough with its company culture under siege and its reputation in tatters. And a leaked audio file has HR chief Liane Hornsey telling employees “I know that you’re polishing your resumes” and imploring them to stick around.
Related: Advice for Uber From Branson, Cuban and Others
It’s no secret that the San Francisco-based company burns enormous amounts of capital to fund its uber-growth. The company reported blew through $2.8 billion last year alone. While I’m sure it has plenty of money in the bank, Uber can’t go very long without raising funds, and that might be problematic with Kalanick twisting in the wind.
Even if it does raise capital, Uber might be pressured into a down round. While not a big deal for early stage VCs like Benchmark and Menlo Ventures, that could potentially hurt investors that came in late in the game at higher valuations, such as BlackRock, Citigroup, Fidelity, Goldman Sachs, Kleiner Perkins, Microsoft, New Enterprise Associates and Morgan Stanley. That would also affect employee morale, no doubt.
There is, however, another possible explanation for Kalanick’s leave. This is just conjecture, mind you, but I suppose it could all be staged – a demonstration of extreme contrition by a man who created what the media has portrayed and Holder’s report all-but-confirmed as a wayward, depraved culture that puts growth and meritocracy above human dignity and diversity. The goal, of course, would be to stem the bleeding and accelerate the heeling of Uber’s stricken brand.
Fowler sort of suggested as much in a Tweet last Friday night.
It’s all a show. It’s all optics. Whatever it takes to win back the riders from the competition, right?
— Susan J. Fowler (@susanthesquark) June 17, 2017
Don’t get me wrong. I don’t see Uber as the evil empire it’s been made out to be. Nor do I think it makes sense for a CEO to turn over his company’s culture to a team of lawyers, consultants and outside board directors, especially considering that Kalanick and Camp together control voting rights. And the notion of leaving a company in crisis in limbo is just as senseless. In my view, it’s either a big mistake or a calculated move. Take your pick.
