Even an Uber-Bad CEO Isn’t Responsible For All of a Company’s Problems
In this piece, Nathan Palmer argues that the resignation of Uber CEO Travis Kalanick will likely not solve the companies systemic and complex problems.
Last week, Travis Kalanick, the controversial CEO of Uber resigned. Under Kalanick’s leadership, Uber grew into a disruptive international force worth an estimated $69 billion at the time of his departure. Both Kalanick’s leadership and the company during his tenure were defined by their blatant disregard of the traditional rules of business, government regulators, and social norms in general. During Kalanick’s reign, Uber also developed a workplace culture that many of its employees found hostile and sexist. A blog post by former Uber engineer, Susan Fowler about sexual harassment and over 200 allegations of sexual harassment by Uber employees, prompted the company to commission an investigation by former Attorney General Eric Holder and Tammy Albarrán. At a meeting to go over the Holder-Albarrán report, Uber board member David Bonderman made a sexist joke and Bonderman resigned shortly after that.
In the news media’s coverage of Uber’s rise and its current struggles, the personality of Travis Kalanick has been both the secret ingredient behind its success and the toxic element behind its company culture. For instance, in February Biz Carson of Business Insider said that “Uber would not exist without Travis Kalanick.” and that “[Kalanick] has the soul of the business in him and Uber was crafted in his form.” Articles in published on CNN, Slate, and The Telegraph said Kalanick personified Uber and its company culture. Randall Stross in a New York Times Op-Ed went even further, saying that the company’s cultural values are Kalanick’s culture values and that, “The entire mess that Uber is in is, ultimately, his doing.”
As a sociologist, I don’t think this is a fair depiction of Travis Kalanick or Uber.
At The Risk of Stating The Obvious…
Uber is not a single individual. Uber is a multi-national corporation with 12,000 employs operating in 570 cities around the globe (Lashinsky 2017). A company of this size cannot even be thought of as one single entity. The company has a board of executives who oversee divisions of workers responsible for maintaining the app, keeping the service up and running, marketing, human resources, accounting, customer service, and so on. Even amongst a single one of these divisions, there are teams of workers who focus on one particular aspect of their division (e.g. a team in accounting that just focuses on handling the company’s taxes). Uber is not an individual, nor is it a single organization. Uber is a complex network of teams of people working together.
How Much Do You Know About Uber?
Trying to understand the actions of a large and complex organization like Uber is hard. Often we know very little about the organization in question. We don’t know how the specific organization works, how it relates to other organizations in its industry, nor do we know much about the organization’s history. If we know anything at all about an organization like Uber, it is likely based on news stories we came across, our personal experiences with the company as a customer, or stories we’ve heard from our friends about their interactions.
The Special Person Hypothesis
When we try to make sense of the actions of large organizations like Uber we use the information we have available to us. Most of us do not know a great deal about how complex organizations operate, but we all have ample experience dealing with individuals. Furthermore, we are often more familiar with the figureheads or the public faces of a large organization than we are with any other member. Therefore, when we try to understand why Uber did x, y, or z we often point to the actions or personal characteristics of the most notable individual within that organization.
The special person hypothesis argues that the actions and outcomes of complex organizations can be attributed to an individual member of that group, most often the group’s leader. The special person hypothesis leads us to say things like Steve Jobs, the former CEO of Apple, created the iPhone even though we know that thousands of people at Apple collaborated on creating the product. The special person hypothesis tells us that if a company succeeds or fails, the person at the top deserves the credit or the blame.
CEOs Aren’t That Special
In Searching for a Corporate Savior, sociologist Rakesh Khurana, argues that the success or failure of a corporation can largely be attributed to factors that are outside of the CEOs control. For instance, corporations succeed when the economy as a whole grows, when the industry they are in flourishes, or when governments change their laws in ways that favor their business — all of which are factors beyond an individual CEOs control. Khurana (2002) suggests that our reliance on individual narratives to explain the outcomes of corporations stems from our limited knowledge of the company/industry, psychological biases, and cultural values. Duncan Watts (2011), extends Khurana’s analysis, adding that, “The media, too, prefers simple, human-centered narratives to abstract explanations based on social, economic, and political forces.”
Uber’s Problems Are Bigger Than Their CEO
Travis Kalanick was a brash leader who often said and did things that were inappropriate. As the CEO Kalanick may have been one of the most influential people inside Uber’s organization. But in an organization with over 12,000 members, the problems at Uber cannot be laid solely at his feet. The hundreds of sexual harassment allegations and the sexist joke made during a public meeting of the board suggest that Uber’s problems are more widespread and systematic. In the Holder-Albarrán report, they suggested that the company’s core values and many other aspects of its corporate structure were potentially contributing to the creation of the hostile and sexist workplace culture at Uber.
In discussing “Uber’s broken company culture,” the journalist Cale Guthrie Weissman said, “one thing is certain: There is no one problem that leads a company to this point.” Rather, “Company culture crises are often the product of many small failures.” I would echo this sentiment and add; there is no one person that leads a company to this point either.
Dig Deeper:
- When speaking about large organizations why do we often “personify” them? What are some reasons discussed in this article? Why else might this happen?
- What is another example of how people use the special person hypothesis to explain the actions or outcomes of a large organization? Explain your answer.
- If many of the factors that predict a company’s success/failure are outside of a CEOs control, then why do we pay them salaries that are so much higher than the rest of their workers?
- When people refer to the Affordable Care Act as “Obamacare” how is this an example of the special person hypothesis?
References:
- Khurana, Rakesh. 2002. Searching for a Corporate Savior: The Irrational Quest of Charismatic CEOs. Princeton, NJ: Princeton University Press.
- Lashinsky, Adam. 2017. Wild Ride: Inside Uber’s Quest for World Domination. New York: Portfolio.
- Watts, Duncan. J. 2011. Everything Is Obvious: Once You Know the Answer*. New York: Crown Business.