20 November 2014

Uber-competitive leadership culture: A winning strategy?

Many bits have been spilled this week over Uber, the Silicon Valley start-up that has disintermediated the highly regulated and nepotistic taxi industry. Toronto mayor-elect, John Tory’s comments notwithstanding, Uber’s sustainability will be a question for a future tech retrospective. What merits closer examination and reflection is the sustainability of its culture, and indeed, the cultural values consistently rewarded by today’s Silicon Valley investors. In a blog post yesterday, Sara Haider laments that Silicon Valley venture capitalists “tend to value ruthless execution and short-term success…and we make media heroes out of founders that deliver on what we value.” Fred Wilson, himself a VC, points out Uber’s culture of “ruthless execution combined with total arrogance” combined with “about the best execution I’ve witnessed in a long, long time.”

These days, hyper-competitive behaviours that often typify start-up cultures and are always instigated from the top inevitably lead to toxicity throughout the organization. Or so it seems. (And there is good research that supports the notion of “cascading abuse” in organizational cultures.) Not surprisingly, these organizations are, more often than not, led by relatively young men who have yet to mature into seasoned leaders. Clearly, evidence suggests that, at least in the short to medium term, such willful disregard for employees’ well-being (and especially those low-level workers who actually supply the services; hello Amazon), customers (viz. Uber’s laissez-faire, puerile attitude towards its users’ privacy), and the public at large (goodbye Enron) can yield stellar financial returns (not to mention the odd jail term here and there). However, over the longer term, misbehaving CEOs  arguably destroy value for shareholders, tarnish the brand, and stifle innovation.

“Culture eats strategy for breakfast” is an aphorism commonly attributed to Peter Drucker (and popularized by Mark Fields of Ford Motor Company in the context of a massive culture change effort in 2006). This claim was not intended to cast culture and strategy as opponents, but rather to highlight the polarity tension between them. Too much of one in the absence of countervailing effects of the other will lead to the inevitable demise of the organization. Instead, contemporary leaders must enable a culture that supports sustainable, long-term strategy. What is needed is less emphasis on bad-boy, celebrity, start-up anti-heroes and more visibility for leaders who live values that are not typically associated with psychopathy.

That moves me to ask: Are hyper-competitive start-up cultures necessarily toxic? How can they be created to be otherwise?


Anonymous said...

this has been my experience even in low key (supposedly) high impact consulting groups.

John Nolan said...
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