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Here’s what Uber needs to do to actually make change happen

Travis Kalanick, co-founder and chief executive officer of Uber Technologies.
Udit Kulshrestha | Bloomberg | Getty Images
Travis Kalanick, co-founder and chief executive officer of Uber Technologies.

Uber CEO Travis Kalanick is taking an indeterminate leave of absence in the wake of repeated scandals at the company. Reflecting on the process leading up to Kalanick's leave, Uber board member Arianna Huffington said "Our task now is to learn, rebuild and move forward together to write Uber's next chapter." A next chapter that is truly different from the just ending chapter will require different leadership, a culture transformation, and a lot more work than the company is likely anticipating.

Effective leadership requires a combination of competence and character. Above all it requires a capacity to model values like respect and fairness that are essential to a positive culture. If Kalanick is up to the task of demonstrating clear, consistent and credible commitment to such values, great; if not, a different CEO will be needed.

"I respectfully suggest that 'there is nothing more important' than Mr. Kalanick working on Travis 2.0, and then building out a leadership team that will work well with his new and improved self."

In an email to employees, Kalanick wrote "For Uber 2.0 to succeed, there is nothing more important than dedicating my time to building out the leadership team. But if we are going to work on Uber 2.0, I also need to work on Travis 2.0 to become the leader that this company needs and that you deserve."

I respectfully suggest that "there is nothing more important" than Mr. Kalanick working on Travis 2.0, and then building out a leadership team that will work well with his new and improved self.

As for culture, the Holder report recommends rewriting Uber's cultural values. That is fine so far as it goes, but articulating the right set of values in a company is no more a guarantee to a good culture than having a great wedding is a guarantee of having a good marriage. The latter objective requires a lot more work.

Most companies when they focus on ethics and values spend a disproportionate amount of their time articulating a set of core values and code of conduct that is consistent with those values. But companies that are truly values-based spend about ten times more time embedding the new values into the culture than they spend on the much simpler task of writing those values.

Embedding good values requires, among other things, the long and hard work of looking at which concrete practices, policies and procedures in the company either support or undermine the desired values. For example, the practice addressed by former Uber employee Susan Fowler in her Feb. 19 blog post — Uber's HR department failed to punish a manager who propositioned an employee for sex because he was a top performer.

Attention also needs to be paid to promoting leaders and hiring employees who are a values-fit for the company's desired culture. I think of this objective in musical terms. Leaders and employees in a values-based company need to be like notes in a chord. They do not need to be the same, and it's better if they are not. But they need to go well together.

The goal, as a wise Jesuit scholar once put it, is "unity, but not uniformity." Achieving that unity requires identifying leaders and employees who represent notes that don't fit in the company's values chord, and wishing them well in a company in which they might be a values fit.

When I'm working with companies on issues of values and ethics there are two things I especially look at to get a sense of the company's real, rather than professed, values. The first involves asking: Who is at high levels of leadership in the company, and how did they get there? Are they there because they are exemplars of the values of the company at its best, or because they are top performers but not credible representatives for the company's professed values?

The second thing I look at is: What values-related behavior gets rewarded or punished? In a values-based company, modeling the company's values should help advance one's career and falling short of them should hinder one's career advancement. Professed values do little more than invite cynicism unless there are serious consequences to following or violating them.

I wish Uber well in writing its next chapter. I think they will find that ethics and values in business are best understood as a competitive advantage than as window dressing. If your product or service is pretty much like your competitor's product or service and similarly priced you will have an advantage if you also have a reputation for good ethics and your competitor does not.

Uber's service, in my experience, is pretty much like Lyft's service, but Lyft has not been in the news in recent months for scandal-related reasons. I suspect that negative publicity has led more than a few ride-seekers, like myself, to use Lyft rather than Uber in recent months. Whether Lyft continues to have that advantage will depend on whether Uber does all the hard work that will be needed to write a truly new and improved chapter with a balanced emphasis on economic and ethical performance.

Commentary by Joseph Holt, a business ethics professor at the University of Notre Dame's Mendoza College of Business. Follow him on Twitter @busethicsdude.

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