The Uber lesson: A strong workplace culture eats corporate strategy for lunch every time

September 5, 2017

When I first started using Uber, it was hands-down a world beater. The app was slick, cool and modern – you felt great just using it. The drivers were often pros. The cars were mostly clean and nice – far nicer, for sure, than your average taxi. Uber clearly delivered a better experience than its competitors, which is why it quickly became a verb.

That was then, this is now. Uber is still a leading light of the gig economy but it no longer delivers a noticeably better experience than, say, Lyft or other car services. And of course there is the turmoil of the past year that has changed many people’s perceptions of the company. (A June survey said things were so bad that only 40 percent of U.S. adults had a favorable view of Uber.)

Uber’s troubles and the dwindling of the Uber experience, I contend, have nothing to do with its corporate strategy and everything to do with the company’s culture.

I first noticed something was amiss a few years ago when an Uber Black driver told me he was frustrated when the company began emphasizing lower-cost UberX fares, which were often not cost effective for drivers of big, expensive, gas-gulping vehicles like his.
“They stabbed us in the back,” he growled, adding that he and fellow drivers felt the company didn’t listen to them or care what they thought.

When your workforce starts talking like that, you know something’s very wrong.

But far worse was yet to come. In February, a former engineer wrote a blog detailing her experiences at Uber with sexual harassment and gender discrimination. That sparked investigations that revealed hundreds more complaints. Lawsuits followed. Bad press ensued.

In the end, CEO Travis Kalanick resigned and Uber was pledging to implement no less than 47 fixes to its broken culture – everything from banning “aggressive values” to employee diversity boards and a complaint procedure to hold executives accountable.

Did it need to get to this point? Not at all. In my view, Uber’s troubles were utterly predictable and entirely preventable. If there’s one thing I’ve learned in business it’s that workplace culture eats strategy for lunch every time. You can have the world’s greatest business strategy and it won’t mean diddly if employees are unhappy. A company built on strategy alone and not on a strong employee culture is built on sand.

As an Uber fan and customer, my hope is Dara Khosrowshahi, Uber’s dynamic new CEO, understands that, and the company regains its footing. But one of the first comments Khosrowshahi made to employees last week makes me wonder. He said changes to the company’s culture must start at the grassroots level and that “if culture is pushed top down, then people don’t believe in it. Culture is written bottoms up.”

No, it’s not. The seed of culture is planted at the top by enlightened leaders who intentionally choose the business path less traveled. Once planted, culture works its way down until it infuses and enriches the whole organization. The organization and its employees, in turn, nurture and expand that culture.

They make it their own and work to protect it. Because it IS them, in a sense, and they are proud of it. The result of that pride – coupled with a sound corporate strategy – is a fantastic product or a world-beating experience.

And that is how the best companies become the best companies.