Travis Kalanick and Uber have been in the news for the wrong reasons. The latest is that the 40 year-old Founder and CEO may be forced to go on leave temporarily or his role as a CEO may be curtailed.
The news is not surprising as the ride-hailing app has been embroiled with aggressive and abrasive behavior by the founder who is leading the company. Remember the incident in San Francisco in February this year, where Kalanick was found arguing with an Uber cabbie who complained of dropping prices and less pay to drivers?
When does the founder of a company, with an innovative idea that gets traction and is successful, cross the line and think that success equals bad behavior and he/she can get away with it?
It is also true that startups by its nature is about working with an idea that is innovative and solving an issue. When the idea gets traction with several rounds of funding, and the founder/s are valued and serenaded by investors and the media, they sometimes falter in handling the success thrust upon them as most of them have no experience of managerial skills or running a company.
Santosh Desai, social commentator, and Managing Director-CEO, Future Brands, says that often when the founder/co-founders are successful, they err in thinking that the skills required to run a business and manage it is the same. “The startup founders have the passion and have developed the business to scale, but to expect them to also have the skills to manage the business is stretching it,” he says.
However, Mahesh Murthy, Founder, Seedfund, feels that it is fallacious to think that a founder of a start-up or fast-growing company can be sidelined. He feels it is easier, relatively, to do that for large, established companies.
Murthy says that the personal charisma of a founder/s plays a huge role in the loyalty and motivation of the team that reports to them. And it's hard for a replacement to take their place and command the same respect and energy. He posits: Do you know who Michael Scott, Mike Markkula, Michael Spindler and Gil Amelio were? The answer - they were the CEOs of Apple after and before Steve Jobs. Apart from John Sculley and Tim Cook, of course. Yet, there is no doubt that Apple's best years have always been identified with Steve Jobs himself. Yahoo was never the same without Jerry Yang and David Filo.
But does that excuse bad behavior in a co-founder/CEO? The fact that a startup is successful, is being funded and is in the news should ensure that it is about time for the founders to behave maturely against oft-seen startup brattish behavior, isn’t it?
Uber has been notorious for brash behavior and in fact that has been its culture, says Sanchit Vir Gogia, chief analyst, Founder and CEO of Greyhound Knowledge Group, a global strategy and transformation research, advisory and consulting group. He says that it is difficult to comprehend that Kalanick would have not noticed the brashness in employees in key positions in the firm.
Uber hired the law firm of former US Attorney General Eric Holder which conducted a review of the company's policies and culture. Employees and former employees interviewed by Holder's team complained about sexual and racial bias, bullying and retaliation, according to people familiar with their accounts.
They said that Kalanick and his lieutenants had favorites who played by different rules than other employees, and that even those favorites were nervous that they could fall from grace, which they sometimes did. Uber declined comment on that characterization, Reuters reported.
So Kalanick was aware of what was going on with the company. “As a Founder-CEO, Kalanick has to take charge and the onus of what is going on within Uber. He cannot have missed the culture within,” says Gogia. It also seeps in from the top to bottom with one instance of Kalanick’s record of brashness being recorded on video.
However, Kalnick apologized. But that does not mean anything, says Gogia. He says that a startup can get away with a lot but that is not par for the course when it becomes successful and is no longer a startup. Sensitivity has to kick in, he says.
One cannot be comfortable with success, points out Santosh Desai. Granted, the nature of a startup is such that bad behavior by its founders are unnoticed when it is just that – a startup that is struggling to make it. Once success has touched it, it has a responsibility to behave in a mature manner. “Many times bad behaviour in Founders/CEOs are celebrated by the media. When it gets the approval of the employees, the people around the CEO/Founder and the media, the Founders make a grave mistake of making it part of their psyche,” says Desai.
Will Travis be replaced or sidelined in the company he founded and is now a world famous name albeit with its warts all up for everyone to see? Murthy says that he knows of no case where the sidelining of a startup founder created a better company than the original. "While in large companies, changing of the CEO is a more common occurrence: Jack Welch was replaced by Gary Immelt and GE has been fine right through," he points out.
In a matter of hours, the board is likely to reveal its decision on Kalanick's role. Whatever the outcome of the board meeting, one thing is clear: He indeed has to take responsibility for the goings-on in the company. No escaping that.
Updated Date: Jun 12, 2017 21:19 PM