Business Monday

Five ways a company can avoid a crisis like Uber’s

A man walks past the building that houses the headquarters of Uber in San Francisco. Uber’s recent troubles were largely of its own making, says Mike Valdes-Fauli: “In the case of Uber, we witnessed a drip, drip, drip of dumbness.”
A man walks past the building that houses the headquarters of Uber in San Francisco. Uber’s recent troubles were largely of its own making, says Mike Valdes-Fauli: “In the case of Uber, we witnessed a drip, drip, drip of dumbness.” AP

For the past five years, virtually every new tech startup had one thing in common. They began their fundraising pitch by claiming to be the “Uber of” something as a catch-all way to describe their niche within the sharing economy.

Unfortunately, this phrase will also apply to future corporate crises of the highest magnitude, as Uber has faced an unprecedented series of calamities over the past 90 days.

MVF Headshot 2016
Mike Valdes-Fauli is president and CEO of Pinta.

If you are a key stakeholder in the Uber universe, the most frustrating thing about this death-by-a-thousand-cuts must be that it was entirely preventable. There was no nuclear plant that caught on fire, oil spill that threatened our environment or untimely death. These crises were self-inflicted, and largely caused by poorly managed public relations.

Here are five key lessons for future companies to avoid such turbulent waters:

Rip the Band-Aid: One of the most important factors in successful crisis management is to quickly reach the worst possible place (rock bottom) and then begin building back up. The faster a company publicly apologizes, opens to total transparency and creates a plan for improvement, the faster the public will begin forgiving and ultimately forgetting.

In the case of Uber, we witnessed a drip, drip, drip of dumbness. Susan Fowler, a former employee, blogged about an unacceptable frat-house culture. CEO Travis Kalanick joined a Trump White House business forum, which rapidly upset the company’s disproportionately large immigrant employee base. Eric Holder, a former attorney general, was hired to investigate sexual harassment charges. Jeff Jones, the company’s president, was forced into resignation after less than a year on the job. Google accused the company of stealing its self-driving tech patents, and ultimately the company placed Kalanick on a leave of absence only to fire him fully one week later under further pressure.

This kept business reporters quite pleased with a constant stream of negativity but surely didn’t help the Uber begin a healing process.

Culture has its limits: Uber fostered an internal culture of aggressive ambition. That strategy may have worked well in establishing jovial drive and fun, but a company’s unique culture can only extend until the point it crosses the threshold of being disrespectful. It’s OK to create a unique corporate vibe and set of values, but they must always fall within the confines of equitable business practices and respect for the inherent dignity of all employees.

Lead from the top: Kalanick should have been more responsible in setting the tone from Day One, and he was anything but. This is a CEO who was caught on video arguing with one of his own drivers in a tone-deaf rant, and once bragged that his company got him “so much tail, it should be called Boober.” Yes, he said that. On the record.

Remember the audience: Uber once proudly proclaimed it was focused on “growth at any cost.” That appealed to investors who put in enormous amounts of money to create a $50 billion valuation, but those initial investors should never have been considered the only audience. Uber was uniquely placed at the center of multiple industries and stakeholder groups and should have paid more attention to its employees, board of directors, watchdog groups, bloggers and media.

Words matter: As a communications professional, I take some comfort in the fact that words (and not just revenue numbers) truly do matter. In addition to everything done by Kalanick, an Uber Board member recently resigned over a sexist joke. In a world where Tweets can reach millions of people in seconds, it’s critical for companies in the public sphere to consider the ramifications of not only their actions, but also their words.

Valdes-Fauli is president and CEO of Pinta, a marketing agency, which has an office in Miami Beach. mvaldesfauli@pintausa.com or pintausa.com.

▪ Spreading the Word is an occasional column that features professionals sharing thoughts and advice on branding and social media. To be considered, submissions of 750 words or less should be sent to rclarke@MiamiHerald.com.

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