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Uber has bucked convention from the outset, so it wasn\u2019t entirely surprising when, earlier today, company cofounder and CEO Travis Kalanick announced that he\u2019s taking a leave of absence from his San Francisco-based ride-hailing juggernaut \u2014 \u00a0without naming an interim CEO or disclosing a return date.<\/p>\n
Instead, Kalanick told employees, the company will be run by his direct reports. Meanwhile, owing to the results of a probe<\/a> led by former U.S. attorney general Eric Holder \u2014 who was hired to look into allegations of harassment, bullying, and discrimination at the company \u2014 some of Kalanick\u2019s responsibilities will be shared or given outright to other senior executives when he does return.<\/p>\n Of course, it all begs the question of how long a 12,000-person company that\u2019s valued at between $60 billion and $70 billion<\/a>\u00a0can operate without an active CEO.<\/p>\n Jeffrey Pfeffer, a renowned professor at Stanford\u2019s Graduate School of Business who has written\u00a0extensively about organization theory, suggests the answer is, pretty long, particularly given that Kalanick will still have his hand in executive decision-making.<\/p>\n \u201cMy sense is that most of what Uber has done is to \u2018signal\u2019 that they are changing,\u201d says Pfeffer. \u201cWhether they are [truly implementing change] is another matter.\u201d<\/p>\n Consider: If there are disagreements between sales and operations, who will settle them? If one of Kalanick\u2019s direct reports threatens to quit or takes another job, who has the authority to fill that role? Assuming Uber\u2019s COO search continues, who is doing the interviewing? If it\u2019s Kalanick \u2014 who said today that he\u2019ll \u201cstill be available as needed for the most strategic decisions<\/a> \u201d \u2014 then he\u2019s not really taking a leave.<\/p>\n Still, Uber had to do something, says one well-known crisis communications expert who asked not to be named. \u201cAs long as\u00a0Travis was in the CEO role, the company would continue to be the focus of media attention and would be likely the focus of criticism. I think this maneuver puts an end to it, because the focus of all that media criticism is now gone.\u201d<\/p>\n Uber\u2019s move isn\u2019t entirely unprecedented \u2014 though it comes close. Pfeffer notes, for example, that it\u2019s not uncommon for CEOs to take a leave of absence, pointing to Oscar Munoz of United Airlines, who took a leave of absence<\/a> in 2015 to have a heart transplant, and who returned to the role in 2016.<\/p>\n Another CEO who recently took a leave of absence: Ron Wainshal, the CEO of the commercial aircraft leasing company Aircastle, who was granted time away in January to focus on his health (and who\u00a0announced yesterday<\/a> that he\u2019s now resigning entirely to \u201cfocus on a speedy recovery\u201d).<\/p>\n Of course, both Munoz and Wainshal stepped aside for medical reasons. Jeff Cohn \u2014 a succession planning expert at the New York-based leadership development firm Elevate Partners<\/a>\u00a0\u2014 \u00a0says he has never before seen a CEO step aside when there wasn\u2019t a medical reason for it.<\/p>\n \u201cPerhaps it has happened,\u201d says Cohn. \u201cBut I can\u2019t think of any high-profile situations where a board has encouraged its CEO to step aside in the context of becoming a better leader.\u201d<\/p>\n There\u2019s a reason for that, says Cohn, who says it \u201cdoesn\u2019t work. You can take a week-long executive leadership course on empathy or resiliency, but you don\u2019t develop these skills in weeks or months. It takes years to address fundamental leadership issues. Anything else is window dressing.\u201d<\/p>\n In fairness, says Pfeffer, Kalanick has likely been \u201cknocked a little off kilter\u201d by the unexpected passing of his mother in a boating accident late last month. \u201cSurely that \u201cprofoundly affected his family, on top of all the media blitz,\u201d he notes.<\/p>\n Yet a far stronger motivation for Kalanick not to name an interim CEO, presumably, is to minimize the possibility of a power struggle upon his return. Says Pfeffer, \u201cHis return is more certain as there is no one \u2018in the role.’\u201d<\/p>\n Only time will determine the impact of that decision. For his part, Cohn thinks it\u2019s a mistake. \u201cLeading from the shadows when you\u2019re such a powerful founder \u2014 \u00a0it won\u2019t work. [Kalanick\u2019s direct reports] will always be second-guessing themselves now and wondering what Travis would do in a particular situation. Even if he\u2019s not physically there, they\u2019ll be wondering if they have to get his approval. It\u2019s a terrible way to lead.\u201d<\/p>\n Ultimately, says Cohn, \u201cI think the board and even Travis will figure out that they need to get an interim CEO in there.\u201d<\/p>\n Pfeffer disagrees wholeheartedly. \u00a0\u201cYes, some senior friends of Travis are gone, and some people he hired have left.\u00a0 But my forecast is for the company to push along.\u00a0 Some things with respect to the culture, and particularly their treatment of women \u2014 and customers \u2014 will and should change,\u201d Pfeffer says. \u201cBut Uber is going to be Uber, mostly because it is actually not that different from many of their brethren.\u201d<\/p>\n Either way, it seems more and more likely that unless Kalanick has a massive charge of heart, it may prove impossible for dislodge him from his role. Not only does he have a famously hard-charging personality, but he has super voting rights that protect his position. As the New York Times reported this morning, Kalanick has also separately established a mechanism through which he garners more control\u00a0every time an employee sells some shares<\/a>.<\/p>\n That kind of foresight is what\u2019s turned Uber into such a valuable company; it has also rendered Uber\u2019s\u00a0influential<\/a>\u00a0board members<\/a> somewhat powerless.<\/p>\n \u201cEver since the Steve Jobs saga at Apple, Silicon Valley founders have tried to make sure they won\u2019t have a similar experience,\u201d Pfeffer notes, \u201cand for the most part, have done exceptionally well at that.<\/p>\n The idea that a strong founder like Kalanick would be be pushed aside? It was always far-fetched, says Pfeffer, adding: \u201cMs. Holmes still runs Theranos, in case you didn\u2019t notice.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2017\/06\/uber-empty-chair.png?w=680\"){kind=spacer}
Instead, Kalanick told employees, the company will be run by his direct reports. Meanwhile, owing to the results of a probe led by former U.S. attorney general Eric Holder — who was hired to look into allegations of harassment, bullying, and discrimination at the company — some of Kalanick’s responsibilities will be shared or given outright to other senior executives when he… Read More<\/a><\/p>\n\n<\/img><\/a>
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