Businesses aren’t all about the bottom-line. Company culture can make or break businesses in the long-term, as proven by the inevitable collapse of BHS, SportsDirect’s poor treatment of workers, and more recently, Uber’s toxic ‘brogrammer’ culture.
Last week, Transport for London (TfL) said it would not renew Uber’s licence in the city, which has cause waves for the ride sharing giant. The future and success of businesses must see corporate culture as a key element in order to minimise this level of corporate failure happening again.
According to John Colley, Warwick Business School professor of Practice in the Strategy and International Business Group, the main reason for this is Uber’s poor corporate reputation.
“Poor values ultimately bring leaders and companies down. Uber is already effectively banned from a number of countries including France, Spain and Belgium and now London,” he says. “There is a very long list of businesses who have suffered for failing to uphold the level of values necessary. Until Uber gets this message, it will suffer lost trade as a result of its deteriorating reputation. Customers do have options in London with Addison Lee and the likes. In the short-term expect plenty of positive PR but the prospects of the culture changing while Kalanick is still there are slim.”
“Uber faces litigation and investigation all round the world. Uber’s thrusting style, which many have labelled a macho and sexist culture, is predominantly a consequence of Kalanick’s approach to leadership.”
Colley is also a former MD of a FTSE 100 company, so he’s no stranger to the benefits of cultivating an inclusive, efficiency-driven company culture. According to Colley, even though Uber has a new CEO, Dara Khosrowshahi, Kalanick is still on the board with two of his close supporters, which does little to address the core issue of misogyny and mismanagement.
“It is his management team and the culture follows his personality. While he is still there the culture is unlikely to change. Entrepreneurs will never leave their ‘baby’ unless they are forced out by investors. Most will cling on despite damaging and even destroying their business,” adds Colley. “Dara Khosrowshahi has little chance of changing the culture while Kalanick is still there and a strong influence on the company.”
Colley believes that with a possible Uber ban will do little to change business as usual. Uber has a major cultural problem which has been found to be sexist, macho and lacks concern for regulation of almost any sort, he explains. It won’t change without strong leadership and hiding behind lawyers won’t cut much ice.
“There is no better way for (Khosrowshahi) to send a clear message to his employees, customers and regulatory bodies around the world that Uber is changing than with a successful meeting today,” he says. “One suspects the door is open to negotiation as there may be 3.5 million voting customers at stake as well as 40,000 Uber drivers about to be looking for work. Sadiq Khan will be keenly aware of the risk to his reputation as Uber will be missed.”
“Like TfL he wants transparency and compliance from Uber and reassurance of real change. Kicking out Uber is a last resort, following their previous warnings.”
Appealing is likely to be painful for Uber as their history in London will unfurl over a period lasting possibly a year, Colley adds. “A negotiated trial license from TfL over a limited period to demonstrate Uber has changed would be the best option for all concerned. However, then Khosrowshahi would have to make sure Uber does change, which might be a tall order.”
Building a better corporate culture starts with recognising what doesn’t work. In this case, Uber serves as a cautionary tale to many start-ups, that, in the thirst for rapid growth, may overlook building strong foundations. Hiring for diversity, checking biases at the door, being inclusive and flexible are all good in theory, but can cash-strapped start-up eager to cut their teeth in the market actually achieve these things?
The first step is to recognise the value culture can bring to a business. Culture should be demonstrated at all levels within the company, from the founders, employees and even investors.
Culture should be assessed, measured, engaged with and embedded into the business – even in the boardroom. The values a company holds should be open, accountable and respect stakeholder’s interests whilst ensuring the performance/reward management is consistent with the company’s purpose.
So what are the positive examples of strong company culture that is also beneficial for the bottom-line? This infographic from SilverDoor outlines the biggest examples of building a strong company culture from 15 successful companies.