On Tuesday, Uber CEO Travis Kalanick announced his resignation from the ride-hailing company he co-founded after a reported rebellion from shareholders made his tenure untenable.
In his email to employees, Kalanick, whose mother recently passed away, cited personal reasons for his departure rather than issues of performance, although he did note that the company’s shareholders had asked him to step aside.
“I love Uber more than anything in the world and at this difficult moment in my personal life I have accepted the investors’ request to step aside so that Uber can go back to building rather than be distracted with another fight,” he wrote.
But it was his professional failures as a leader, not his personal reasons, that led five of Uber’s major investors to write a letter entitled “Moving Uber Forward” demanding Kalanick’s immediate resignation. This comes a week after Kalanick said he was taking an indefinite leave of absence to work on “Travis 2.0.”
With his forceful exit, it becomes clear that no one in a position of power wanted any version of the CEO who became known for his brash, aggressive workplace culture of “Always Be Hustling.”
Here are key missteps that Kalanick and other CEOs before him have made that led companies to say “no thanks.”
1. Too much talk and none of it is good
As a leader, you will be judged every moment, even during your off-hours, so watch what you say and how you hold yourself. You never know who will be listening (or recording).
In our digital era where actions can be seen by millions in seconds, CEOs are under more scrutiny than ever about their professional and personal conduct. One offhand comment can tank people’s perception of you, as seen by the example of Kevin Roberts. The former Saatchi & Saatchi chairman was forced to resign after he told a reporter that he did not think gender diversity was an issue in the advertising industry and he spent “no time” thinking about it. Once his comment had been circulated and reblogged on the internet, Roberts’ fate was sealed.
For Kalanick, his self-defeating impulses helped his company become synonymous with Silicon Valley startup culture gone wrong. Kalanick engaged in a tone-deaf argument with an Uber driver over decreasing fares, and after video of his encounter went viral, Kalanick apologized for disrespecting his driver but the damage was done. His unprofessional, boorish behavior was reinforced time and time again as he attended escort bars with employees and used company email to advise them on sex rules at parties. His behavior left a lasting impression on the public and his shareholders that no email on how he would improve himself and seek leadership help could undo.
2. Enabling the bad behavior of others
Kalanick’s behavior alone is bad enough. But his unprofessional behavior was modeled by those who worked under him. Top executives were forced to resign following sexual harassment allegations. After a law firm looked into allegations of sexual harassment, bullying and retaliation at the company, more than 20 employees were fired. The toxic behavior had taken root, unchecked for far too long by managers who looked the other way. Susan Fowler, the former Uber engineer who kicked off the firm’s investigation, alleged that Uber’s human resources department tolerated and enabled sexual harassment from “high performers.”
As a leader, your job is to set the tone of what’s acceptable and what’s not. Kalanick oversaw a human resources department that defined high performance as one that tolerated harassment as long as you hit your Objectives and Key Results. For Uber’s toxic behavior to be eradicated, it became clearer to stakeholders that the company would need to unroot where the bad behavior stemmed from at the top.
3. Mismanaging their company into unprofitability
The real CEO kiss-of-death is when they commit the most unforgivable sin to investors: making their company unprofitable.
American CEOs are paid up to four times as much as their European counterparts, and with that increased pay, comes higher expectations from activist investors who will push for change when CEOs don’t meet their performance standards. It’s in this setting that it becomes possible for shareholders to plot a revolt like they did with Kalanick.
It’s not surprising then that tenures in the executive suite are getting shorter than ever before in the U.S. CEOs now only stay an average of six years and that number decreases to four years if they’re an external hire. With his resignation, Kalanick beats the average tenure but still gains membership to a club no CEO wants to join.