Even Tylenol Can’t Cure Uber’s Headaches

March 29, 2017
Blog
By Chris McGoff

The best and worst part of leading a company is the inevitable confrontation of one’s self. The job is like looking into a mirror in a fluorescent-lit bathroom. You can’t escape the details staring back at you, no matter how much you would like to run or hide. Issues of temper, fear, control, indiscretions, greed, aggression, and insecurity simply cannot be denied and your company will ruthlessly make you aware of any inadequacies they observe. In some instances, companies will do more than just reveal a leader’s faults, they mandate their leaders deal with their shortcomings immediately … or leave. This is where Travis Kalanick, CEO of Uber, finds himself.

Uber, for many of us, was our first experience in the ride sharing phenomenon. We fell in love with the idea of just a tap of the screen, and suddenly, Uber was ready to take us to our destinations. The company enjoyed meteoric growth. It was another American startup changing the world.

Now – eight years to the month since Uber’s launch and following several other breaking stories – Uber’s president of 6 months, Jeff Jones, has quit citing differences over “beliefs and approach to leadership.” Kalanick – welcome to the mirror.

At the heart of the issue is the organizational culture that emanates from Kalanick and the damage it has done to the company. He proudly touts that Uber embraces its intensely aggressive and competitive organizational culture. And in response to sexual harassment accusations by employees, he has also stated that he aimed to create a “just for all” culture. Both are great ideas, but what happens when these values conflict and collide? Uber’s leadership is tested when the hyper-competitive producers create injustice for others. As The New York Times chronicled last month, employees reported that Uber’s human resources personnel often made excuses for top performers accused of harassment. So which value – performance or justice – trumps the other.

From a reputation management standpoint, Kalanick might take a lesson from James Burke, whose leadership at Johnson & Johnson in 1982 during the Tylenol poisoning scare has become became the gold standard for corporate response to breach of trust. Burke acted quickly from a single dominant principle: safety. Today the company’s reputation is stronger than ever and shareholders have enjoyed huge returns.

Thirty-five years ago Burke was at the helm of Johnson & Johnson facing the nightmare realization that their flagship product, Tylenol, was killing people. Within a few days of September 29, 1982, seven people had died by taking cyanide-laced capsules of Extra-Strength Tylenol. Extra-Strength Tylenol accounted for 17 percent of Johnson & Johnson’s revenue. Johnson & Johnson’s pristine reputation was at risk. Burke acted quickly from a single dominant principle: safety.

In an unprecedented move, he immediately recalled 31 million bottles of product, transformed the product packaging, and offered free replacement at a cost of $100 million dollars. His speed, resolve, and handling of the press was breathtaking. James Burke’s action became the gold standard for corporate response to breach of trust. Today the company’s reputation is stronger than ever and shareholders have enjoyed huge returns. What dominant principle will drive Kalanick as he acts to right Uber?

Following Burke’s example is an essential start to restoring Uber’s reputation, but it will not be sufficient. Burke was reacting to something done to his company. Uber’s leadership is dealing with multiple self-inflicted wounds. From a reputation stand point – they and Uber’s culture – are the problem.

To restore the reputation of the company, Kalanick and Uber’s top leadership will need to confront themselves at a personal level that begins with taking a long look in that mirror. All of us who have breached the trust of another know how painful and difficult this process can be and how wonderful personal transformation can be in the end if successful. But few people actually pull it off. It’s hard to change our nature. It will be critical for Uber’s Board of Directors to monitor this situation carefully. They may need to draw some lessons from Fox News Corp, which determined the only way to stem the erosion of their reputation was to replace their CEO and Chairman.

I hope it does not come to this. I hope that Kalanick realizes that the guiding principles that got them this far might not take them further. I hope he uses this moment in time to become the leader that Uber needs and creates new possibilities for his employees and for himself. And I hope that Kalanick joins the ranks of Burke and other great American corporate leaders.

If you or your organization are struggling with leadership or culture-based challenges, The Clearing provides organizational culture change consulting and  leadership development programs to help organizations achieve peak performance. Contact The Clearing to discuss your needs.

 

 

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