Devastating scandals revealed an agressive, sexist culture behind Uber’s explosive growth. Here’s the story of how it’s trying to turn the negativity around.
In early 2017, transportation company Uber had its diversity problem revealed in a sensational way. A former employee, software engineer Susan Fowler, posted a 3,000-word blog documenting the sexual harassment, sexism and professional intimidation she had been subjected to during her year with the San Francisco-based multinational. The post went viral, and her story was picked up by media around the world (including HRM).
It was bad timing, as Uber’s initial image as an innovative, efficient and cheaper taxi service was being called into question. Were its drivers being paid enough, how should it be regulated, and could competitors offer something better?
A few days after Fowler’s blog, The New York Times followed up with an exposé of the company’s “aggressive” culture. Then a whole flock of chickens came home to roost. In quick succession, self-driving car company Waymo sued Uber, alleging intellectual property theft; the media learned that the company had run afoul of Apple by breaching iPhone privacy policies; and there was a US federal inquiry into its software tool that enabled drivers to sidestep law enforcement. In June 2017, major investors revolted and Uber co-founder Travis Kalanick was forced to resign from his position as CEO.
Uber’s first-ever chief diversity and inclusion (D&I) officer, Bo Young Lee, who was hired in January 2018, has an interesting perspective on Kalanick’s leadership. She saw its after-effects on the staff she met when she walked through the doors of the company’s HQ.
“My expectation was that I’d come in and I’d find an organisation that was semi-filled with a bunch of jerks, a lot of people who were acting inappropriately and doing inappropriate things,” Lee told HRM.
Instead, she encountered a lot of what she describes as “wonderful people” who were eager to do good work. And she says that’s what other incoming executives have experienced too. They come in expecting to be confronted with ‘always be hustlin’ staff and instead find, well, regular employees.
“It almost creates this cognitive dissonance around how could a company filled with so many really wonderful human beings… [be] doing things where they may be pushing the boundaries of legality and/or engaging behaviour that would be considered bullying and/or harassing.”
Lee’s conclusion was that leaders role-model the behaviour everyone else follows. Kalanick, she says, was an incredibly brilliant entrepreneur and founder. “[But] he was also a very authoritarian leader, and he led in a very archetypal top-down, vertical, very hierarchical and, to a certain extent, fear-based manner.”
She says there are many examples throughout history of otherwise ethical people engaging in acts that go against their own conscience. “It’s all about those expectations the leaders set, as well as the way they lead.”
But removing the leader doesn’t fix everything. One of Uber’s core values was “always be hustlin” and every scandal – PR, legal and cultural – could be traced back to this way of thinking. The media would be more than ready to pounce on any news indicating that the company still typified the mostly male, white, boys’ club ‘tech bro’ subculture long associated with Silicon Valley.
This cultural problem was the diversity problem. Fowler blamed “organisational chaos” and “sexism” for an exodus of female engineers in her part of the organisation. In her year, she claimed, the percentage went from 25 per cent to six.
In fact, her post had the effect of amplifying the problem by transforming it into a very public scandal. By mid-2017 it went beyond retention – the company’s lack of diversity had long-term implications for its relationship with its driver workers, its customers and its ability to hire new talent.
“My expectation was that I’d come in and I’d find an organisation that was semi-filled with a bunch of jerks.”
First things first
Before he resigned, Kalanick had ordered two investigations into the culture. The first quickly resulted in over 200 incident reports (including sexual harassment, bias and bulllying) and the initial termination of 20 employees.
The larger investigation, led by former Obama attorney-general Eric Holder, contained many recommendations, among them 11 “diversity and inclusion enhancements” such as an employee diversity advisory board and blind resume reviews. The board voted unanimously to implement all of Holder’s recommendations.
But plans are a far cry from implementation, and still further from real change. Blind recruitment, for example, can be depressingly ineffective. Diversity initiatives the world over are plagued by a tick-the-box approach.
The August 2017 arrival of new CEO Dara Khosrowshahi, former CEO of Expedia and an Iranian-American whose family fled the revolution when he was nine, was a promising start. New values were introduced, and further hires were made to the depleted senior team, including Bo Young Lee.
Even with new leaders it takes time for culture to transform, says Lee. Under Khosrowshahi, the company had gone from “16 norms designed by the previous leadership” to “eight, collectively designed by the organisation”. But Lee found cultural conversations were still more about what Uber didn’t want to be, rather than what it wanted to be. This was bad because it’s impossible to become a ‘negative’, and it meant everyone was focussing on a troubled past.
“You constantly had the history being repeated, and it was really hard to move beyond it.”
The story had to be told differently, but action was also required. Lee’s business philosophy is to avoid the latest fads and novel programs, and get stuck into the “boring but important work of diversity and inclusion and HR”. She looks at every HR function – from people management processes and competency models to succession planning and hiring – and makes them all align with the company’s cultural norms.
Australia’s CEOs have their own troubles seeing cultural problems in their organisations. Check out the research.
The company’s first D&I report was released in March 2017. Lee says it was “very superficial” and she heard broad frustration from executives and staff about how little data there was on what the workforce really looked like. She saw an opportunity for an “immediate” win.
Through multiple conversations with the leadership, legal and people teams, she found the right balance between transparency and risk for workforce data. “As you can imagine, after going through something like Susan Fowler, our legal team was going to clamp down really hard on access.”
The next stage was bringing this transparency to performance management. “We provided all of our leaders and managers with a list of everyone who was eligible for promotion in that cycle. We had never done that before.
“If you don’t have information about everybody who is eligible, the way that you’re going to make a decision about who to nominate is through recency bias. And recency bias favors in-group bias, which basically means you’re going to think about the person who reminds you most of yourself.”
The list also contained tenure, performance history, gender and, when it was available, race and ethnicity data. In lieu of targets (which Lee is “agnostic” about), Uber’s D&I team went for a soft lever. It created a scorecard that tracks in real time the impacts of people’s choices on representation.
Lee gives the example of a list where 40 per cent of all eligible individuals were female. If a leader’s nominations were 35 per cent female, the scorecard would let them know they were “under-indexed” in women.
“These aren’t huge wins. A single promotion cycle isn’t going to erase years of inequity depth, is it? But it’s a signal that we’re moving in the right direction.”
“I believe in designing for inclusion, so we gave it a colour code. If you were more than five per cent underrepresented in your nominations for gender, you would get a red. If you were around two per cent underrepresented, you got a yellow, and if you were at or above representation, you got a green.”
This is not a quota system. When the chief technology officer called Lee and said some of the women on the list were not ready for promotion, and he could say exactly why, her response was: “Have that conversation with your HR business partner, and if you can justify why those women shouldn’t be promoted, then I’m not going to force you. I just want you to know the implications of making choices.”
The system was effective when it came to gender. For the first time in a mid-year first cycle at Uber, women were promoted at parity, and in a few instances at higher rates than men. The same system was used for end-of-year promotions, and again, the gender gap in career advancement was closed across the board. “People were so shocked. And frankly, I was shocked. Because these are simple changes.”
Lee admits it didn’t have the same effect when it came to race and ethnicity, but she was encouraged that there was a slight improvement. “These aren’t huge wins. A single promotion cycle isn’t going to erase years of inequity depth, is it? But it’s a signal that we’re moving in the right direction.”
The reaction to the release of Uber’s second D&I report in April 2018 was mixed, but tended towards the cynical. Technology news website Recode and Fast Company went with headlines that emphasised how white and/or male the company still was. The former also emphasised a drop in the number of black employees.
This perspective is understandable given the company’s record, but it also seems a tad harsh. Less than a year after the company had fired its leader and tried to change course, it would have taken a miracle for its report to be impressive. Uber had just gone through the kind of scandals that make it more difficult to hire diverse employees and cause you to haemorrhage the ones you already have. Case in point, by July 2018 the company lost its somewhat recently hired senior vice-president of leadership and strategy, and its chief brand officer – two women who left for other roles. Some employees were concerned things were going backwards.
Talking to Lee, it’s clear she knows that what Uber is attempting to do will take serious commitment. Crucially, she also understands the scepticism of people outside the organisation. Reading previous interviews she’s done, you can see her trying to walk the tightrope between acknowledging Uber’s shortcomings and being optimistic about its capacity for good.
For example, in mid-2018 several employees anonymously complained to The New York Times about insensitive comments around gender and race made by post-Kalanick COO Barney Hartford (he would eventually leave in June 2019, after the company’s initial public offering). Lee had the difficult task of trying to see the issue from all perspectives.
She defended Harford’s character even as she acknowledged his mistakes, highlighted that he had apologised, and framed the issue as a lesson. She told TechCrunch, “I was, more than anything, just really sad about this because what it told me was that we still have a culture where people aren’t sure they can trust that things are going to get fixed… And so they [the employees] felt that they needed to go outside to find remediation for some of that.”
Asked how she thinks about Uber’s current progress, Lee refers to a conversation she had with someone who had done a PhD on culture change. When asked for a few sentences to distil their massive body of research, according to Lee, they said, “I don’t need a couple of sentences. I need two words: Care longer.
“Culture change takes time, and culture change requires consistent messaging over a long period. It requires demonstrable examples of the ideal behaviour you’re looking for.”
A worthwhile struggle
In July this year, Uber released its third D&I report, announcing what it described as an “audacious” goal – though even that might be an understatement. It wants to one day be “the most diverse, equitable and inclusive workplace on the planet”.
Since its previous report, the global representation of women grew by 42.3 per cent, employment of black and African American people was up 44.5 per cent, and Hispanic/Latino people up by 73.5 per cent. Encouragingly, similar or better gains were seen in the normally white and Asian-male dominated tech roles.
Diversity in leadership was less impressive, but still had some growth (7.1 per cent increase for women). The same could not be said for leadership in tech roles where representation for all diverse groups remained steady or dropped.
Alongside the statistics, Uber announced executive compensation was being tied to “progress on measurable D&I goals”. It also promoted a sponsorship program to help diverse staff with career advancement, with the aim of getting more of them in leadership roles.
Overall, the report is the document of a company that wants to improve, but knows there is a long way to go. It’s not made any easier that the company is facing scrutiny regarding its long term viability. Just this month it announced it was cutting 435 staff in an effort to get leaner. It had already laid off a third of its marketing employees in July.
“It’s really hard to hear ‘no’ 10 times and ‘yes’ only once. But you have to persist.”
So what is the next step? How do you maintain through tough times? Lee says that once you’ve decided on your values and done the “boring but important work” she referred to earlier, you have to go further. That’s especially true if you want to go from a problematic culture to an enlightened one.
“I think a lot of people have these conversations that there are biases, but they don’t talk about such things as what does anti-black racism truly look like, and how does it manifest in the company? And what does sexism look like? Basically, you need to lead people to have courageous conversations because, until you get to that point, you’re never going to truly change behaviour. You might get a superficial change, but you don’t get a sustained one.”
Lee is under no illusions this will be easy, or without risks. Uber intends to be careful, structured and make use of trained facilitators. “One of the reasons I want to have this is because we need – and this is both in society as well as within Uber and tech – you need to equip people with really constructive skills, to lean into difficult conversations. If you look at Twitter, if you look at society, we suck at our ability to disagree with people constructively.”
Listening to Lee’s many references to the long timeframe in which she operates, you’re reminded that diversity and inclusion is a very worthwhile pursuit, but can also be a struggle. In our current age, it can certainly feel like the belief underlining diversity and inclsuion – that we should each strive to respect, live and work with people from all backgrounds and creeds – is under attack. Given that, it’s worth remembering Lee’s advice to the D&I professionals of Australia.
“Be prepared for a lot of no’s. I think when you manage your expectations around that, it makes things easier. Because there is a lot of burnout in the D&I profession. It’s really hard to hear ‘no’ 10 times and ‘yes’ only once. But you have to persist.”
A version of this article appeared in the September 2019 edition of HRM magazine.