Over the last six months, Uber’s been rocked by a series of scandals that brought this soaring unicorn back down to earth. It all really started with Susan Fowler’s blog post on February 19, 2017, that detailed incredibly poor management practices and a human resources department that prized the success of the company over the needs of its employees even in the face of sexual harassment allegations. Since then, revelations of sexist and other inappropriate behavior at the top of the company have dominated headlines, including an outing to an escort bar in South Korea and an executive obtaining the medical records of a rider who was raped by her Uber driver in India.
Many of Uber’s issues stem from the brash attitude cultivated by former CEO Travis Kalanick; one that prioritizes high performance over everything else. It doesn’t just affect corporate culture, it also impacts Uber’s drivers, who often feel undervalued due to low-fare pricing and the company’s pursuit of autonomous vehicles.
The ride-hailing giant is desperately trying to reset its course and has since hired law firms (including former U.S. attorney general Eric Holder’s firm Covington & Burling) that conducted investigations both into Fowler’s claims and Uber’s general culture. The ensuing reports led to the firing of roughly 20 people as well as a purge of Uber’s leadership, including Kalanick, and a lengthy set of guidelines for fixing Uber’s ailing workplace. There’s also been turnover on the board with both Benchmark Capital partner Bill Gurley and TPG investor David Bonderman being replaced by Matt Cohler and David Trujillo, respectively.
But a company’s culture is hard to change, especially in a short time frame and at a workplace with thousands of employees. The difficulty of reforming ingrained bad behavior was highlighted at Uber’s town hall meeting to discuss the findings of the investigation, during which Bonderman managed to burp up a sexist remark about how women talk too much. To emphasize that the board was serious about change, Bonderman agreed to step down.
Since February, Uber has taken some actions to turn itself around. The question it’s facing now is whether it can pull off a makeover. We sat down with Liane Hornsey, who is both Uber’s chief human resources officer and the liaison between Uber and the board committee overseeing Uber’s implementation of Covington & Burling’s recommendations, to see how the company is moving ahead.
FC: Critics have said that much of the change that has taken place at Uber over the last several weeks has been in the name of optics. What do you say to that?
LH: Let me address head-on any thought of what we could be doing as optics. You know, my honest sense here is that this is the most detailed and most thorough change program that I’ve ever seen in my working career. I’ve never seen such dedication from a leadership team to change and from a whole company to change. And frankly when you’ve had the spotlight shone on you the way we have, it’s absolutely essential that you take change seriously. So there are no optics here.
What we’re doing we’re doing for our employees and because we want to make Uber the very best place to work. And we have been working seriously hard for the last five months, to ensure that everything that our employees think is important to them, we have heard and we have responded to. And to give you a little bit of background, one of the things we did after the Susan Fowler blog is that we ran a lot of listening sessions across the company because I felt very strongly that whatever we did needed to be employee-led. As a result of the listening sessions, we had many things that came out of things that they felt could be improved.
What we have been doing every single week since then is tackling those things. That is what my life has been, that is what my team’s life has been. We have a very holistic plan. And in truth, when Holder came out with his recommendations, we found that much of the plan that was already in place was very simpatico with the Holder recommendations and I can give you many many examples of that. But there’s been a lot of blood, sweat, and tears in leadership oversight really going into making sure this is for real.
FC: What’s the timeline for implementing these new practices?
LH: It’s very hard to give you a timeline, because there are so many recommendations and some of them are extraordinarily substantive and some of them are extremely easy. Some of those things that were in there were already implemented. Some of those things will take longer. I’ve never seen a cultural change that takes, in its fullness, less than twelve months.
The most important thing is that we take all of those recommendations and we have a project plan for each and every one of them and we measure our progress very regularly. The board has established an oversight committee, which comprises a few members of the board [David Trujillo (TPG), Matt Cohler (Benchmark) and Arianna Huffington] and I am the executive who has to report to that oversight committee every two weeks. And they will have my project plan and they will hold me and the team accountable for movement across each of those recommendations.
And, in addition and absolutely as importantly, I am wholly accountable to the employees. So whilst I’m presenting to the board, I am also sending an email every two weeks to the whole employee population outlining every single thing that we are doing. And I have been doing that for, gosh, I think maybe ten weeks, eight to ten weeks. So accountability is super high. And frankly, our success will be judged on whether we successfully do that and we know that.
FC: Can you paint a picture of some of the ways you imagine that playing out?
LH: In every company, there are some things that you can do very fast that have very significant far-reaching impacts. In particular, I’ll give you two examples. One is that the employees felt very strongly that our performance management must change. Our performance management system was very similar to the performance management system that many companies use and it’s really that of forced distribution. And actually Susan Fowler alluded to this in her blog. In my experience, forced distribution is just not positive, it’s not a good thing to do to employees. So one of the things that we’ve done already is we’ve said to our employees, because they waved to us that they didn’t like the performance management system, is I went out and we put out a survey to 100% of our employees around performance management. We basically said, ‘Tell us what you like, tell us what you don’t like and tell us how you want it be.’
Of 100% of our employees, about three and a half thousand responded to us telling us what they wanted the performance management system to be. We then ran focus groups with 600 people and our employees themselves have designed a new performance management system. And I can’t tell you how excited I am about that because I don’t know any company that’s ever done that. So I didn’t sit in a darkened room and design our new performance management system—our employees did it. There is no stack rank, there is no forced curve, and there is no numeric rating. And we’re just about to implement that process now and that process is all about how to give meaningful and supportive feedback and how also to set goals so that people no longer have any subjectivity in the system when it comes to assessing their personal accomplishments over the period.
So Holder asked us to do that and we were doing it anyway and we’re implementing it now. And we will also run a survey at the end of the process to say, ‘Hey, what went well and what do you want to change,” so that next round we can even build further on what we’ve done so far.
Another example of where Holder and our employees totally coalesced was in the area of management training. It’s no secret that last year we grew very fast. We doubled our employee base last year in 2016 and we hired a lot of people who had never been managers before and this did have an impact on the culture for sure. And so we started the year with 63% of our managers being first-time managers. We hired Frances Frei from Harvard to come in and train those people and turn them into the very best managers they could possibly be. So we are running really rigorous and extensive training for all our managers on core managerial skills, how to be supportive as a manager, how to coach as a manger, how to give feedback as a manager, how to set goals as a manager, and how to make sure that your employees are fully supported in the round. This is a huge initiative and something we’re taking super seriously.
And one of the things that I’m talking to Frances about right at this moment is perhaps we might even launch a certification so that people can be certificated in great management at Uber, which would be an amazing thing. Very few companies do that. Again, this is something that we’re doing right now, everyday. She’s just run twelve sessions over the last fortnight or the last two weeks and that’s something that we’re going to do for the rest of 2017 and beyond. So building that leadership and management capability is something that is so very important to us.
FC: Who on the board has a background in implementing this cultural change?
LH: Honestly, I don’t know, because I don’t know much about the constituents on the board. It’s a little bit above my pay grade if I’m absolutely honest with you. I do know that Arianna is on that committee and I know that she has forever been very, very involved in diversity and inclusion and ensuring the real consideration of diversity and inclusion across companies and society in general. But honestly, I don’t know those board members super well yet, because we’re on the start of our journey together. But I do know that we have expertise in our company. One of the Holder recommendations, and we’ve already started doing this work actually, is that we should have a diversity and inclusion advisory board. And we’ve already—on our shortlist of who we think should be on that board is an extraordinary diverse, across intersectionalities [sic], list of people. So having that advisory report will be very important to us for sure.
FC: Will the diversity board be made up of Uber leadership?
LH: It will be both. So the [diversity] advisory board as we’re looking at it at the moment will be a mixture of people, who probably at this point in time run our employee resource groups. So, some of the most senior people who are helping today run Women of Uber, or UberHue, or Los Ubers. And also a mixture of academics and people who are super well-known in the field. So a mixture of internal people and external people. And our whole purpose here is to make sure that we’re super bleeding-edge and super meaningful. Just to add to that, there are several people inside of the company who are really personally committed to this agenda and we will use this advisory board extensively.
FC: There was some speculation that Bernard Coleman, Uber’s diversity officer, would be the liaison between Uber and the board helping to implement the cultural change. Since it’s you and not Coleman, do you have other plans to promote him?
LH: So, first of all, the reason it’s me is that obviously there were many recommendations and they are not all about diversity and inclusion, they span all sorts of areas. So to have somebody who is just the chief diversity officer report to the board would be a little narrow in terms of the totality of what we need to do. In terms of Bernhard himself, the types of conversations that we’ve had with him categorically are that we must have a chief diversity officer. This is a very important role for us and much more than symbolism. What we want to do is make sure that we advertise that role so that we get the very best person possible and Bernhard is on board with that and of course he will apply. So, it could be that he’s going to be our chief diversity officer and it could be that it’s an external hire. But either which way, Bernhard will be a very critical part of our diversity team.
FC: There’s been concern at Uber that people who are related to Susan Fowler’s situation are still at the company.
LH: First of all, I have to tell you that this company took the Susan Fowler blog extraordinarily seriously. Susan blogged on Sunday, February 19, and I walked into my first all-hands when I stood on this stage on the following Tuesday. And truly the organization was in shock. I have never in my entire career seen so many people so hurt and so confused and so bewildered. So we decided immediately and—all credit to the company because this was not my decision, because I was too new to make this decision—but the company decided there and then to hire two law firms, one to look into Susan Fowler’s situation in its entirety and any other individual cases that people wanted to bring to us and that was Perkins Coie. And then a second law firm was hired the same day, again within 24 hours, to look at our culture in its entirety.
I have never seen a company act so responsibly and so swiftly and take so much accountability. Perkins Coie investigated the Susan Fowler case in its entirety and they objectively made recommendations on what we should do. They also made recommendations on 215 other cases of egregious behavior, not all sexual harassment I have to say. I think I should let you know that that was spread across a number of behaviors and we terminated 20 people and honestly that’s not something we do lightly because when you terminate 20 people you’re taking their livelihoods away. So I cannot understand how anybody can ever say that we have not acted with speed and real thoroughness and absolute accountability.
FC: What about your CTO specifically? Why did you choose to keep him on?
LH: Honestly, it’s because there was… Perkins Coie has come out and said there was nothing that he did that was egregious. And I know that an email that he sent to all employees, that has recently just been published, talks about that. Obviously he was the CTO at the time, but there was nothing in the investigation that showed that what he did was egregious.
FC: You expressed thanks towards Susan Fowler at one of Uber’s town hall meetings for revealing problems at the company. What’s going on between Uber and Susan—are there plans to compensate her?
LH: There is ongoing litigation, but I am actively not a part of it. It is something that is totally handled by the legal department. But there are ongoing conversations with Susan’s lawyer.
Honestly, I am thankful, because shining a spotlight on something that clearly needed to be illuminated has really given us a lightning rod for change. And I actually think Susan Fowler helped us make sure that this change was taken super seriously. I am thankful for sure.
FC: What about forced arbitration as specified in employment contracts? Are there plans to take that clause out of your contracts going forward?
LH: I don’t write our employment contracts, obviously they are put together with legal and an external law firm. What I can tell you, personally, is that I haven’t seen anything in our employment contracts that I haven’t seen in many other companies’ employment contracts. But honestly, our legal department would have to answer that because it’s outside my expertise and area of responsibility.
FC: The reason I ask is, arbitration often dissuades people from suing because it forces the matter to be handled privately by an arbiter rather than a jury. It also inhibits class-action lawsuits. But it also prevents issues (like the ones that Uber has grappled with) from seeing daylight. Typically, in court and not via blog posts is where people like Susan get public hearings and, when appropriate, compensation for mistreatment.
LH: So one of the things that we’ve taken really seriously is … we are going to have and—we’ve really literally had over the last few months—a zero tolerance for anything that is egregious. We are in a situation where we have to stamp out anything that is a remnant of the past. So we have introduced a hotline that is wholly confidential and can be totally anonymous, by the way, so that we can investigate any complaints that come to us. We’ve also… there’s a department that now [reports] directly to me that never used to [report] directly to me called employee relations. And we have [more than] doubled the size of that team. And we have made sure there’s been an employee-relations person in all our major hubs across the world. Employee relations are simply there, their only raison d’être is to support individuals who might have issues. So in terms of egregious issues that might happen in the future, and I hope that they do not because we will have zero tolerance, we have fully extended all of the ways I know of making sure anybody can raise any issue that they want to have heard.
Companies have complaints, companies will always have complaints of some sort. In the right culture, it’s at a minimum. So my first priority is to make sure we have the most incredible culture and we turn this into the best place that anybody would ever want to work. And I will work my socks off to make that happen. The second thing is if there is ever a case where there is egregious behavior we would be very swift and very decisive with our action. It’s just not even tenable that it couldn’t be that way.
FC: There are reports that you’ve made changes to employee compensation. Is that true and what are you changing?
LH: Yeah we’re in the process, so one of the things that employees have raised is compensation. Obviously because our employees raised this during our listening sessions we’ve had to take a really close look at our compensation. One of the things we’re definitely looking at and we are literally in the process and I’m going to announce what we’re going to do mid-July. We’re very excited about the fact that we have already said that we’ll absolutely ensure that we’ll have total pay parity across gender and ethnicity and race. We will. We’re really deep down in the data with a third external law firm to make sure that what we do is objective and correct. But we’ll be announcing changes to compensation in mid-July.
FC: You’ve explained your role as a liaison, what’s your role in helping to rebuild the executive team?
LH: So clearly we really need to build our leadership team and absolutely recruiting reports to me and I am the person liaising with the board on all of the key hires. So that CEO through COO hiring is part of my role. It’s a role that I’m taking super super seriously.
FC: How long will it take you to find a new CEO?
LH: How long is a piece of string, because obviously we need to find the right person. Obviously this is all about the board, I’m really in the service of the board here. I know our aim is to have somebody soon, faster rather than longer. But it’s a whole speed-quality equation. The next CEO, whoever that person is, it’s so very important and I think the board is in a place where we’d rather get the very, very best person who can move Uber to its next phase rather than be fast. But what I can tell you is that we’re meeting super regularly. We met this morning, we already have a short list and we will be moving forward with gusto.
FC: Are you concerned that employees who are upset about Travis’s resignation as CEO will leave?
LH: No I’m not. Because Travis has been very much a part of this company. But Travis himself said he needed to leave the company for the good of the company. And that’s the message that he left with employees.
FC: What’s your biggest challenge?
LH: Well you know there’s a ton here that’s super positive. Because our employee base was so shocked and so hurt back in February, there is so much energy for change. Our employees are writing to me every day saying, in the hundreds not in the tens, ‘How can we be a part of the change? How can we move us into the new reality?’ Our employees are so positive in a way that I’ve never seen at any company and our leadership is so committed. My resources have been doubled. I spend more time at these leadership meetings talking about culture than we do about anything else. I’ve got to say I’m really optimistic.