A lesson for Uber, and for the startup culture in Silicon Valley and elsewhere, is that you need more than one kind of manager at different times to make a company a success.
Travis Kalanick’s decision to leave the company he co-founded and ran as CEO was necessary. Kalanick himself realized this, which is a primary reason he acquiesced to the request that he do so by his biggest investors. He could have fought that request but chose to.
By doing this, Kalanick may have saved Uber. The ride-sharing company was already in extremis as it fought scandal after scandal, and even though the company was still growing, it was also at the edge of the precipice. Had Kalanick stayed on as CEO, a plunge to finality would be more and more certain.
The reason that Uber was in so much trouble goes far beyond the scandal of the day and instead calls on a more significant reality; for long-term success, a company needs different managers for different phases of its growth and operation. Kalanick was exactly what Uber needed in the early days of the company, but now Uber needs someone else.
Like a Spacecraft on a Deep Space Mission
I like to compare the startup culture which Uber demonstrates (but which is a part of most startups in different amounts) to the launch of a spacecraft on a deep space mission. Initially what the spacecraft needs is great power to overcome the resistance of gravity and air pressure as it ascends to the edge of space.
Without that power, the mission has no chance of success, but you can’t fly all the way to deep space with your launch booster. Instead, you need a means of sustaining long-duration flight, and that’s an engine with smooth but steady power that’s in place for the long term. And sometimes you need a third type of propulsion for even longer flights.
Travis Kalanick was the booster rocket, the one that propelled Uber out of theory and into the reality of transforming transportation. Kalanick’s drive was necessary to get Uber out of the confines of the ordinary and into the freedom of success. To do this, he needed to be loud and powerful, and he was those things.
But now Uber is entering a different phase of its flight, and a different type of engine is needed to propel Uber while it gathers its successes and transforms itself into a company that must operate and improve on a daily basis. The new engine must sustain Uber for the long term as it enters the rest of its mission.
A new CEO is what Uber needs to enter that new phase of flight, and that person needs to be a CEO who has the skill and training to propel Uber and to help guide the company as it transforms from explosive growth into long-term operation. To accomplish this, Uber’s board and the company’s investors must find a leader who can inspire the company’s employees and customers to believe again, and to become advocates for the company.
Search for New CEO a Daunting Task
Uber is currently pursuing the daunting task of finding a new C-level executive team. In addition to finding a new CEO, the company needs a new COO and a new CFO. Currently, the company is operating with a team that consists of Kalanick’s former senior managers. While a leader may emerge from that group, there’s certainly no guarantee that one will.
The person the board needs to find on short notice is going to be a unique individual who already has experience as the head of operations of a moderately large company, one that exists in a dynamic environment and one that must react in real time. But that person must also have the ability to form a management team of seasoned executives that can take command and operate the company while it transforms itself into one that shows a new culture that exists for the long term.
Who might that person be? That’s for the Uber board to decide. But I keep thinking of one person who meets all of those requirements. Her name is Michelle, and she lives in Washington, D.C. Now that her husband is no longer president, I suspect she’s looking for something new and challenging.
But there’s the other problem that needs to be addressed, which is not unique to Uber, and that’s how to take a startup that’s become a success and turn it into a company for the long term. One way to accomplish such a goal is to realize from the beginning that it will be necessary if the company is to be a long-term success.
A Clear Succession Plan is Required
This means that when investors decide to support a startup, they should include in their due diligence an examination of a company’s succession plans. The question they should ask is whether there’s a plan in place for how the company will move from startup to operations. They should ask if a successor to the founder has been identified. They should know what the mechanism is that will decide when the next stage of the company’s growth will begin.
If there had been a succession plan in place and a successor identified, all of the Sturm und Drang surrounding Uber would not have happened. Perhaps better, Kalanick would have been able to move on to new challenges knowing that Uber was in good hands for the long term. And that would be good for Kalanick, Uber, the company’s employees and its customers.