Article originally posted in the American City Business Journals on February 27, 2017.">American City Business Journals on February 27, 2017.
An important responsibility of all CEOs is to deal with toxic managers and toxic cultures within their organizations. I wrote about this recently, and find myself doing so again with the recent high-profile sexual harassment complaint against Uber.
First, a little context. Uber, known for its very aggressive, only-the-strong-survive competitive culture, has not as yet developed a culture or mechanisms to prevent or properly deal with sexual harassment. These are not mutually exclusive.
The company will need to adopt the proper culture to be an attractive employer of talented female employees. This is critical to the company in a technology-driven competitive environment.
In a blog published Feb. 19 by former Uber engineer Susan Fowler, she outlined how her sexual harassment complaint to the Uber human resources department against her team manager was ignored. Fowler also wrote about other events, indicating women face a hostile working environment at Uber.
Fowler wrote, “When I reported the situation, I was told by both HR and upper management that even though this was clearly sexual harassment and he was propositioning me, it was this man’s first offense, and that they wouldn’t feel comfortable giving him anything other than a warning and a stern talking-to.
“Upper management told me that he ‘was a high performer’ (i.e. had stellar performance reviews from his superiors) and they wouldn’t feel comfortable punishing him for what was probably just an innocent mistake on his part.”
Fowler said she was given a choice: move to another team and avoid her former manager, or remain on the team and probably receive a poor performance review.
Fowler explained, “One HR rep even explicitly told me that it wouldn’t be retaliation if I received a negative review later because I had been ‘given an option.’ I tried to escalate the situation but got nowhere with either HR or with my own management chain (who continued to insist that they had given him a stern-talking to and didn’t want to ruin his career over his ‘first offense’).”
Fowler later learned that this was not his first offense, making it obvious that HR and management had lied to her. The most concerning aspect of this situation is that HR and management had let a man continue to harass women in the workplace – an inexcusable lack of action.
Even after these women escalated this issue as far as they could, proper action was still not taken. Every corporation should have a hotline in place to the audit committee of the board so employees can report issues that are not properly addressed by management.
The allegations described by Fowler might have in fact violated the law, which could cause the Equal Employment Opportunity Commission (EEOC) to launch an investigation.
Uber has seen a decrease in female workers, from 25 percent to 6 percent in Fowler’s organization, according to her post. Fowler stated most women are either transferring to a different part of the company or simply quitting due to organizational chaos and rampant sexism.
Within days of publication of Fowler’s blog, Uber CEO Travis Kalanick tweeted, “What’s described here is abhorrent and against everything we believe in. Anyone who behaves this way or thinks this is OK will be fired.” Hopefully, this scandal will be a wake-up call for him and the rest of his staff.
Uber is sensitive to how this scandal is affecting the company’s reputation. After the publication of Fowler’s blog, Uber sent a message to those customers wanting to delete their accounts which said, ”Sorry to hear that you wish to delete your account. … Everyone at Uber is deeply hurting after reading Susan Fowler’s blog post.” Similar to Kalanick’s public statement, the message also said, “What she describes is abhorrent and against everything Uber stands for and believes in. …”
The extent of Uber’s reputational damage will depend on how Uber responds to Fowler’s allegations.
Former attorney general Eric Holder has been hired by the board to do an independent investigation of the culture at Uber. Holder has done work for Uber in the past, raising questions on whether he can be truly unbiased. However, he has said that he is betting his reputation on it.
If Fowler and other women at Uber experiencing sexual harassment had the ability to report these issues directly to the audit committee of the board through an employee hotline, the situation could have been investigated properly and changes could have been implemented, avoiding the loss of talented women engineers and damage to Uber’s reputation.
Public companies are mandated to have hotlines. Private companies should adopt this best practice and have hotlines in place for employees to report issues that they would feel uncomfortable reporting up the chain of command.
Kalanick, like all CEOs, has the responsibility to set the tone at the top and organizational culture at Uber. Had he established the proper tone and culture, Fowler’s experience and those of other women employees might not have occurred or would have been addressed appropriately, and damage to the company’s reputation avoided.
Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School. He can be reached at Stan@SilvermanLeadership.com.