I woke up to today’s news of Uber releasing a report on its diversity, inclusion, and bias practices. The report was written by former U.S. Attorney General (the lead lawyer for the US Government), Eric Holder.
The report concludes an investigation conducted by Holder, following allegations of harassment, discrimination, and retaliation from Susan Fowler, a former engineer at Uber.
The report is a scathing criticism of virtually every aspect of how Uber leads and manages its personnel.
I’ve stated for many years that there are two jobs that a CEO can never fully delegate: 1) setting strategic direction, 2) setting the company’s culture.
When there’s a culture crisis at a company, the solution must always start at the top — usually by removing the top most leader or making some kind of radical change.
Holder’s report includes 47 specific recommendations.
Not surprisingly, the very first recommendation is to strip the current CEO of the vast majority of his operating responsibilities and assign them to a new COO (Chief Operating Officer).
On the same day as this report was released, Uber CEO Travis Kalanick announced an indefinite leave of absence from the company.
This is not a coincidence.
And if that weren’t enough bad news for one day, one of Uber’s board members resigned this morning after making a sexist comment about Holder’s report during a board meeting.
If this doesn’t constitute a corporate culture crisis, I have no idea what else would.
Here’s why the solution to a strategy or culture crisis must always start at the top.
The CEO of a company leads a company in two ways — based on words and based on actions.
Effective leadership necessitates that words and actions be congruent.
As CEO, let's say that your stated strategy is to invest in innovation and drive increased revenue growth from new products. This is your stated strategy.
However, your employees notice that every employee assigned to an innovation project eventually gets fired because the high risk project wasn’t an immediate success.
Your actions say taking risks to innovate is NOT the company’s strategy.
When words and actions are in conflict, actions speak louder than words.
For example, imagine your parents stressing the importance of being respectful to others and not yelling at other people. This is the family’s stated culture of how we treat each other.
Now imagine that when you make a mistake in this area, one of your parents yells at you, calls you derogatory names, and humiliates you in front of others.
As a child, which message do you receive? Be respectful or be disrespectful?
Actions always speak louder than words.
Here are a few key takeaways for you and your career:
1) As a leader, be mindful both of what you say and what you do.
When you have a track record of your actions matching your words, your employees will trust your word... because it nearly always translates into predictable and consistent action.
This helps reduce internal conflicts, chaos, and uncertainty. It allows a team to focus on the marketplace goals rather than be mired in internal, often self-inflicted problems.
2) If you work for a leader or a CEO that’s incongruent with his/her word, be careful.
Ignore their stated strategy or culture. Instead, look at their de facto strategy/culture implied by their actions.
Ask yourself the question: Do you feel comfortable betting your career on the actual strategy and culture?
3) Culture is profoundly strategic. It’s what guides your team's behavior in your absence.
As you manage larger and larger organizations, you can’t be involved in every single decision. The ability to set a team, department, or company culture is one of the key levers to get results through others — in a way that you intend.
4) In terms of diversity, inclusion and eliminating unfair discrimination, there are two reasons to embrace it. First, it’s the fair and right thing to do. Second, it’s more profitable.
For example, there’s ample research to indicate that Fortune 500 companies with at least one female board member tend to perform better financially than those that have none. It’s astounding to me that more boards aren’t more diverse.
This is especially true with global businesses that serve a diversity of geographies, populations, and market segments.
In my own experience, the best ideas come from starting with a diversity of ideas as your starting point. People who are very similar tend to have very similar ideas that only vary within a narrow range. The more diverse the people in the room, the more diverse the ideas.
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