Avoid the "Uber Moment:" Prioritize your culture from the start

Eric Holder’s report on Uber was released last week after months of investigation into Uber’s workplace practices. There’s been both praise and criticism for the 13-page report, which is high-level in its recommendations, and lightweight in assigning responsibility for the scandal.

In many ways it’s surprising that a company of Uber’s size lacked basic HR policies, but Uber is also a true startup - just three years ago the company was only 550 employees, much smaller than the 12,000 employees it has today. It’s challenging to have an effective HR function with that kind of growth, and only a matter of time before a company like Uber drew criticism for bad workplace practices. In a larger sense, the tech industry has some progressive perks and benefits, but has also been under fire in the past few years for its machismo culture and exclusion of diverse groups.

Uber’s scandal and the subsequent Holder report are good reminders of the best practices all tech startups should ascribe to, regardless of size or stage. Here are three takeaways from the Holder report:

Culture starts with the C-suite

Travis Kalanick, like many startup founders, surrounded himself with like-minded executives over the years. This is not unusual or even discouraged for small startups, as the first employees a founder hires usually come from their immediate network.

Executives set the tone and expectations of the company’s culture and Kalanick’s “A-team,” an internal name for the slew of early employees Kalanick relied on, established what became Uber’s current culture, with its now-apparent downsides. It’s generally understood that diverse viewpoints bring better workplace practices, and it’s well established that diversity brings new perspective and better financial outcomes to a company. More broadly, if those at the top model good behavior, others will follow.

Does this mean that startups shouldn’t hire like-minded people from their networks? Certainly not. At the smallest stages, hiring from a founder’s network is often necessary to hire anyone at all. Hiring is challenging enough for tech companies with brand names, and near impossible for the seed-stage startup with a handful of employees.

That said, keeping an eye on the c-suite’s make-up just makes sense as a company grows. Leaders need to hire people that challenge them, not just people who follow them or think alike. Hiring outsiders not only helps avoid problems like Uber’s, but is often necessary to tackle new markets and verticals effectively. Many of Silicon Valley’s biggest companies brought in outside executives to see their company through critical periods and became more successful for it.

Design culture, don’t just let it happen

Of course, founders are not the only people that influence company culture. Company values, team building activities, perks and benefits can have significant impact on diversity measures. Policies (or lack thereof), as well as the perks that a company chooses to highlight sends subtle signals to the team about what the company deems important.

Uber’s values such as being obsessed with the customer, making bold bets, toe-stepping and principled confrontation clearly outline a culture favoring employees unilaterally focused on hitting business goals, even if it means hurting others along the way. Uber’s values are an extreme example, but the point is important - if cultural values and other perks and benefits aren’t written without a diverse group or diversity in mind, they’ll be reflective of the wants and needs of the people who wrote them.

Another focus of the report was on some of Uber’s perks and team building activities. Holder suggested moving up catered dinner to an earlier time, limiting alcohol at team building events, and accommodating employees who need flexible work arrangements. Again, what works at a small startup won’t always work as a company scales. Dinner at 8:30pm and frequent happy hours may make sense for an early-stage startup where employees work 60 hours a week, but becomes a barrier to retaining diverse employees as a company of thousands.

The point is to think critically about designing company culture and continue to revisit and iterate on the culture as the company grows.

No company is a meritocracy

The meritocracy myth is rampant in tech, and it’s not hard to understand why. Shouldn’t we eschew workplace politics and simply let the best rise the to top? It’s a noble idea, but one that systematically oppresses women and minorities. Paradoxically, research shows that people who think they’re unbiased when evaluating hiring, promotions, and performance are biased like the rest of us, but fail to acknowledge and adjust for their biases.

Uber, along with many other startups, expected that an exclusive focus on meritocracy would bring them a workforce and leadership team made up of the best employees, regardless of gender or ethnicity. The reality is that pure “meritocracy”, in the absence of any other important considerations of diversity, leads to a workforce representative of our implicit biases.

Holder’s recommendations for establishing sponsorship programs, revamping performance review processes and establishing mandatory trainings for managers are measures to understand and account for implicit bias. Understanding that no company is as simple as a pure meritocracy is the first step and establishing processes and trainings to acknowledge and counteract bias is important to ensure women and minorities participate in the growth of an inclusive, strategically nimble and culturally strong company.  

written by Emily Kraft, Tech Recruiting Consultant

Establishing an effective HR function is key to building a successful company. Need help? Gray Scalable offers trainings, workshops and strategic consulting to help you build and scale your company culture.