Uber’s Crisis Management Strategy Offers Lessons for CEOs

Uber's management failed the company and its people when it turned a blind eye to the problems behind closed doors, but its swift action to hire an outside law firm once the problems became public and then follow through on its recommendations set a good example for how to handle a crisis situation.
Security personnel keep watch at Uber headquarters as the company releases the results of its sexual harassment investigation.

A lot of moves are happening at Uber since the San Francisco-based ride-share company has accepted many of the recommendations by former U.S. Attorney General Eric Holder’s law firm to eradicate Uber’s sexist corporate culture.

Uber hired Covington & Burling after former engineer Susan Fowler alleged sexual harassment, discrimination and retaliation, and the ineffectiveness of the company’s then-existing policies and procedures. On Tuesday, Uber released the law firm’s recommendations, which included reallocating Kalanick’s responsibilities, but outright firing senior vice president Emil Michael for many of his alleged practices. The law firm also called for Uber to enhance board oversight, improve the human resources and complaint process, and increase the profile of Uber’s head of diversity, among other recommendations.

On Monday, Michael stepped down, after the board met on Sunday to review the law firm’s recommendations. Uber’s second-in-command has been admonished for wanting to investigate journalists for criticizing the firm’s sexist corporate culture, and was the subject of a formal complaint by a female Uber employee after employees visited a South Korean karaoke club, among other allegations.

“Recent events have brought home for me that people are more important than work, and that I need to take some time off …to reflect, to work on myself, and to focus on building out a world-class leadership teaM.”

Then on Tuesday, Kalanick emailed Uber employees saying he would be taking some time away from the company to grieve his mother who had recently died in a boating accident.

“Recent events have brought home for me that people are more important than work, and that I need to take some time off of the day-to-day to grieve my mother, whom I buried on Friday, to reflect, to work on myself, and to focus on building out a world-class leadership team,” he wrote.

But sources at the Sunday meeting said that Kalanick might also be taking time off amid pressure from the board to resign.

On Wednesday, another bombshell: Uber board director Bonderman resigned, after an audio surfaced of an off-color joke he had made at the Sunday board meeting. In the audio, Bonderman was responding to an announcement by fellow director Arianna Huffington that Uber was adding a woman to its board, Wan Ling Martello. “There’s a lot of data that shows when there’s one woman on the board, it’s much more likely that there will be a second woman on the board,” Huffington said. To which Bonderman quipped: “Actually what it shows is it’s likely to be more talking.”

After the audio was made public, social media exploded in outrage, leading to Bonderman’s resignation. He apologized in an email, saying that the comment was “disrespectful” and “inappropriate.”

The latest moves come after 20 Uber employees were fired, prompted by another law firm’s investigation into 215 incidents of sexual harassment, bullying and other workplace transgressions brought forward by Uber employees in the past four months.

While most companies don’t suffer from this kind of heavy-handed breakdown in command and communication, stories like Uber’s serve as fresh reminders that it can’t hurt for all CEOs to have their practices audited and evaluated by a neutral party. An anonymous employee survey also could add tremendous insight for management into what is really going on at their organization.


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