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Uber CEO's exit puts spotlight on importance of company culture

Uber’s scandals underscore why corporate culture matters. Read about how CIOs can help their companies reinforce corporate values. Also: AI in 2020; job search by Google.

Culture matters, and that was the take-home message for companies -- behemoths and fledglings alike -- when the co-founder and CEO of Uber, Travis Kalanick, resigned under shareholder pressure earlier this week.

The ride-hailing giant, valued at $70 billion and one of Silicon Valley's favorite unicorns, had been mired in controversies in recent months, including revelations about the internal workings of Uber from former employee and software engineer Susan Fowler. In a blog post made public in February, she documented a company culture in chaos and polluted by sexism.

Earlier in February, a video surfaced on the internet showing a thin-skinned Kalanick in a discussion with his Uber driver for the night over the company's practices and losing his temper when the employee challenged Kalanick's business decisions. The incident prompted an apology of sorts from the boss.

"This is the first time I've been willing to admit that I need leadership help and I intend to get it," Kalanick wrote in an email sent to employees hours after the incident.

The insight by Kalanick -- who will go down in history as a game-changer -- came too late and, as this week's news confirms, was insufficient.

Mike Ramsey, research director in Gartner's CIO research group, said Uber's broken state of affairs was built on the mantra flaunted by many Silicon wunderkinds: "Ask for forgiveness, not for permission." When certain leadership actions get reinforced over time, that creates a culture, Ramsey said.

And at startup companies led by outsized personalities, culture tends to play an outsized role, said Isaac Sacolick, principal at New York-based consulting firm StarCIO and a former CIO. "In a fast-paced environment where there's a lot of pressure to grow quickly and to have a winning product or brand, it drives a lot of pressure internally. That pressure can lead a lot of very positive cultural experiences, and, in some cases, it can lead to a lot of negative culture experiences," he said.

The culture prevails until it can't. Fourteen executives have left Uber this year, including company President Jeff Jones, who said his personal approach to leadership was inconsistent with what he saw and experienced at Uber.

The why, what and how of building company culture

While the chief executive is often the most important player when it comes to setting the tone for a company's culture, the management team, the board, company executives and, to some extent, even shareholders have a role to play, experts said.

"It's the actions and leadership activities that really drive culture more so than words. Words are there to accent and to communicate certain things. At the end of the day, it's the leadership that matters, and how they interpret culture and what their actions are around it," said Sacolick, who was a CIO at Greenwich Associates, McGraw-Hill Construction and Businessweek.

Gartner research vice president Elise Olding suggested organizations should define what their desired state of culture is, and then look for unconscious biases and behaviors that may be in there.

An organization should also define its big transformative purpose -- the why an organization exists and why the individuals in that organization come to work each day, Matt Griffiths, vice president and CIO at Stanley Black and Decker Industrial, told SearchCIO in an email interview. "The purpose provides the anchor that grounds the organization."

Having a company vision and mission helps provide a clear direction on what a purpose-driven organization needs to achieve, and it is also important to have a set of how behaviors that are defined through a set of guiding principles, he added.

"The combination of a powerful and well-defined why, what and how are the foundations for a company culture," Griffiths said. The CEO owns this foundation, but it is important that it be deeply understood by the executive management, including the CIO.

"The CIO absolutely should be helping to shape this, particularly in a technology company, and then drive [that] throughout IT," he said.

CIO role in engendering company culture

The CIO position is not just a tactical position anymore; it's becoming more strategic with time, Gartner's Ramsey said. Depending on the company, CIOs are also involved in developing key parts of the business and making sure they work, he said.

It, therefore, should come as no surprise that CIOs do have a role in driving the importance of company culture and shaping it, experts said. But they must have a plan in place, which is built around a set of guiding principles, and take responsibility for making sure the people underneath them follow the plan, Ramsey said.

Olding, a member of Gartner's leadership, culture and people dynamics team, referred to Gartner's ESCAPE model that enumerates six steps to change leadership -- envision, share, compose, attract, permit and enable.

"The important step for CIOs who are helping create a culture in their organization is compose," Olding said. "And that has to do with ... looking at their current and future state of leadership -- where are we today, where do we aspire to be tomorrow -- and then to be able to break that down at the behavior level, because leadership behavior sets the context for how an organization will act."

Nigel Fenwick, former Reebok (U.K.) CIO and principal analyst at Forrester Research, urged CIOs to demonstrate the culture by "doing" and not just "saying." Many companies claim they have a customer-first culture, but many CIOs never go out to meet their customers, he said. He suggested CIOs go on sales calls to get to know their customers and hear about their biggest challenges. The CIO must then translate that behavior into metrics.

"How people are measured conveys what is important to senior management. If your team's metrics don't emphasize what you want to be important in your culture, change your team's metrics," Fenwick said in an email interview.

CIOs can then work with the CEO and chief human resources officer to steer companywide metrics by highlighting how adjustments to their IT teams' metrics helped to shape and improve team culture, Fenwick added.

Uber is this week's morality lesson on what can happen when leaders allow "toxic" behaviors to seep into an organization. But it can happen anywhere, when good behavior is not modeled and measured. CIOs can play a role in preventing toxicity from marring company culture, Olding said.

"If you're in a leadership-team meeting with the CEO and COO and you see bad behavior, it's incumbent upon [you] and everyone ... to call each other out in a respectful way. Silence is passive agreement," she said.

CIO news roundup for week of June 19

This week, the abrupt departure of Uber's hard-driving Kalanick put the spotlight on the importance of company culture; here's what else made news:

Widespread AI adoption predicted to have mixed outcome for companies. The number of businesses adopting artificial intelligence technologies worldwide will grow from 7,000 this year to nearly 900,000 in 2022, according to forecasts from ABI Research. Not all these companies will benefit from the technology, however, said Jeff Orr, research director at ABI Research. "Many businesses will have to adapt their corporate governance policies to deal with the lack of a guaranteed outcome when implementing machine learning," Orr said in a statement. Organizations comfortable with measuring changes in key performance indicators will find the most to gain from enacting machine learning projects, but companies that focus only on ROI timetables will find emerging technologies frustrating to implement, according to ABI Research.

Google's new jobs search engine powered by machine learning. Google has launched a feature on its search-result pages that helps people search for jobs across many sites, including LinkedIn, Monster, WayUp, DirectEmployers, CareerBuilder and Facebook. The feature uses machine-learning-trained algorithms to sift through and categorize postings to see which jobs are available without having to find duplicate or irrelevant opportunities. "For many jobs, you'll also see reviews and ratings of the employer from trusted sites, right alongside the job description, and if you're signed in, for some jobs you'll even see how long it would take to commute to the job from home," Nick Zakrasek, Google's product manager for this project, said in a blog post describing the new search function. He said the company will continue to add more filters and information in the future.

Facebook changes mission statement. Facebook CEO Mark Zuckerberg revealed a new mission statement for the company this week: "Give people the power to build community and bring the world closer together." The evolution of Facebook's mission statement from "making the world more open and connected" began when Zuckerberg was catalyzed by the fake news scandals surrounding the U.S. presidential election, TechCrunch reported. "We have a responsibility to do more, not just to connect the world but to bring the world closer together," Zuckerberg said when announcing the change at the Facebook Communities Summit. In an interview with TechCrunch, Facebook Chief Product Officer Chris Cox called the new mission a "refinement," as the company strives to "make social media the greatest force for good possible."

Senior Site Editor Ben Cole contributed to this week's news roundup.

Check out our previous Searchlight roundups on what's next for GE after its storied CEO Jeff Immelt departs, the Argyle CIO Leadership Forum and the MIT Sloan CIO extravaganza.

Next Steps

Read more about the importance of company culture:

Read why DBS Bank in Singapore is using hackathons as a method for changing company culture.

Read why company culture is the first step to DevOps implementation.

Read why traditional financial services are adopting the startup culture.

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