Uber’s evolving problems and why good HR is so important

uber
Girard Dorney

By

written on March 17, 2017

Last month, along with the rest of the world, we reported on the HR scandal at Uber. A former employee, engineer Susan Fowler, had written a blog post that condemned the corrupted HR department and deeply sexist culture at the organisation. Checking back in with the drive sharing company a month later offers lessons in why good HR needs to be central – not simply relegated to operations – and why ignoring a toxic culture results in problems that cannot be solved overnight.

A workplace incident or scandal will only snowball if you have a toxic culture. For Uber, Fowler’s post was just the beginning; once it was picked up by the global media it quickly became clear that her story was not unique.

Following the widespread condemnation, there was an executive promise to investigate Fowler’s claims (the decision not to make the investigating team more independent was criticised). Then there was confirmation of her claims by other former employees, suggesting a quick fix was impossible. Uber’s CEO Travis Kalanick publicly acknowledged the company’s problems were in part a personal failing and said he ‘needed help,’ (a COO hire) but only did so after being caught on camera engaged in a confrontation with a disgruntled Uber driver (should we call him an employee?). Yes, this was particularly bad timing for the beleaguered CEO, but it also undermined the company at a crucial moment and confirmed what HR professionals know: culture starts at the top.

A media narrative is a hard thing to shake– and now every small setback Uber experiences becomes newsworthy. For instance, recently five Hong Kong Uber drivers decided to appeal a conviction for driving without the appropriate permits, and the media jumped on it.

So what are the lessons that can be learnt from Uber’s situation?

HR can’t be simply transactional

Contrary to appearances, Uber actually valued HR a great deal. Nothing was more important to them than recruiting the best of the best (particularly in their engineering department) and HR led the way on this.

Their problem is/was a common one for startups; by only caring about a single HR function – recruiting – they maligned the profession in general and denied themselves its real benefits.

As Magdalena Yesil, an investor in over 30 tech companies, explains to Bloomberg, “You’re in a race to build your product and get to market, and anything that doesn’t directly contribute to that, including HR and even financial controls, is low priority when you’re first starting up.”

At Uber, HR handled other functions but they were not priorities, and it seems like they were viewed through the prism of recruitment. For instance, their approach to retention was overly simple. As detailed in Fowler’s initial post, if someone complained about a high performing employee the complainant was essentially told to be quiet, regardless of how toxic their harasser might be.

(For a different perspective on how to identify and manage toxic employees, read our guide.)

Culture isn’t built in a day, or transformed in a month

The truth is that Uber hasn’t been a startup for a while. It has over 11,000 employees (not including the drivers, who might be employees) and it’s value has been estimated to be as high as $68 billion. So the excuse that they didn’t pay proper attention to HR in the wild confusion of trying to bring a product to market doesn’t wash.

The problem, rather, is they felt their culture was acceptable, even enviable. According to the New York Times, “When new employees join Uber, they are asked to subscribe to 14 core company values, including making bold bets, being “obsessed” with the customer, and “always be hustlin’”.

And unlike some companies in Silicon Valley, Uber famously refused to release a diversity report. Before Fowler’s allegations, Uber’s head of HR went so far as to tell Fast Company, “I haven’t seen it [a diversity report] move the numbers. I haven’t seen anyone who’s done it say it’s made any difference for them.”

This lack of care for values such as respect, diversity and inclusion meant that employees were encouraged to seek individual career success above everything else. It worked for Uber in the short run but when Fowler’s post hit, the wheels came off pretty quickly.

How is the company planning to right itself? Well, they are now going to release diversity reports and they are going to be hiring more HR and a diversity and inclusion team. Which sounds like the beginning of the kind of cultural change the company needs but you’d have a right to be skeptical.

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Comment

One thought on “Uber’s evolving problems and why good HR is so important

  1. We need to be very clear that HR doesn’t (or shouldn’t) run any business – any findings of any investigation should/would go to the CEO. It is ultimately their responsibility to act on the matter/s – hopefully in accordance with the law, company values, and policies.

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