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How Uber's Hard-Charging Corporate Culture Left Employees Drained

Uber's headquarters in San Francisco, March 27, 2017.
Ryan Young /The New York Times via Redux
Uber has been in the news lately for various reasons. The following article from our friends at Buzzfeed go a little deeper and explore some of the other issues inside of the brand, and how they translate to impacting team members everyday life. Not everything is about branding - we must remember people too. Take a read, and let us know what you think.

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SAN FRANCISCO — At Uber, the workday starts early and ends late. Engineers working on certain teams are accustomed to predawn pings from work: Something might be broken, or about to break, and if you don’t get up and fix it, there’s hell to pay — including the possibility of an eviscerating email from a top executive, sometimes sent to the whole company.

“I felt like I was on call all the time,” said one employee. “I got texts on the weekends. Emails at 11 at night. And if you didn’t respond within 30 minutes, there’d be a chain of like 20 people.”

During periods of rapid growth, current and former employees said, on-call employees could be paged dozens or even hundreds of times a night. Even employees with realistic expectations of the hard work that fast-growing startups often demand felt burdened by an on-call system that they say often amounted to unpaid extra shifts. “There was a three- to four-month period where I was getting woken up every Friday, Saturday, and Sunday at 3 or 4 in the morning to fix something,” said an engineer who started at Uber in 2014 of his earlier years there. “Months of that, on top of working 10-plus hours a day.”

As it revolutionized the transportation sector, Uber also created its own corporate culture. That culture, according to interviews with more than two dozen sources, was one that valued and rewarded hard-charging, hard-working, and even hard-partying employees — literally ranking them above others who weren't seen as aggressive enough — and a management style that many say fostered anxiety and fear. Uber is now in the midst of trying to change that culture, following an investigation spurred by allegations of sexual harassment and led by former attorney general Eric Holder. But at a company with more than 15,000 people that has historically based both promotions and terminations on those most willing to go all in on its values, current and former employees paint a picture of deeply embedded problems.

In May 2015, an on-call engineer failed to respond to alerts about an issue with a master database. As a result, Uber suffered a service outage that affected operations teams worldwide: Drivers signing up to drive couldn’t be onboarded to Uber’s platform, and employees couldn’t respond to rider requests for help.

At the time, Uber had recently reached a valuation of $50 billion. Stakes were high, and CTO Thuan Pham used a companywide email to let staff know the cost of a mistake like that.

“The on-call engineer received/acknowledged three alerts about master database being low on disk space, but ignored it. This is not acceptable,” Pham wrote in the email, sent to more than 3,500 employees and obtained by BuzzFeed News. “We are looking to determine whether this is negligence or whether a different on-call engineer could have reasonably missed the alerts amidst a flood of other alerts from the systems at that time.”

Even more than two years later, some remembered the email as an example of what one former employee called a “culture of fear” at the company. Pham didn’t name the employee in the email, but multiple engineers familiar with the incident told BuzzFeed News the person's identity was widely known and broadly available via an on-call schedule that is internally public.

“We try to have a blameless postmortem,” said one engineer. “That email from Thuan [...] was great example of not following that.” Besides, the employee added, “if you’ve been woken up at 3 a.m. for the last five days, and you’re only sleeping three to four hours a day, and you make a mistake, how much at fault are you, really?”

In a follow-up email two days later, Pham addressed criticism of his decision to email the staff about the engineer’s mistake. "It came to my attention that some people in the org think that my note to the company is overly critical and has the feel of throwing people under the bus,” he wrote.

“I don't want to create a culture [where] people are fearful of making mistakes or causing outages because they want to move fast and take smart risks, but I also don't want a culture where we do substandard work and cause outages that are easily avoidable,” Pham wrote.

He continued: “Feeling defensive, or feeling like a victim, is NOT the way to get ourselves better.”

For the past several months, Uber has been in the midst of a very public meltdown. In February, Susan Fowler, a former engineer, came forward with allegations of sexism and sexual harassment at the company. As a result, Uber launched two internal investigations: one into her claims, and another into the company’s culture at large, conducted by former US attorney general Eric Holder. In the end, the company fired 20 people for offenses ranging from sexual harassment to bullying and retaliation. Executives including New York general manager Josh Mohrer, senior vice president Emil Michael, and Eric Alexander, Uber’s president of business in Asia, left. (Through his personal spokesperson, Michael declined to comment. A spokesperson for Alexander did not return a request for comment. Uber has not named the individuals who were fired in the course of the investigation.) Uber’s board voted to adopt all 47 of the suggestions put forth in the Holder report; these included changing Uber’s 14 cultural values from ideas such as “toe-stepping” and “principled confrontation” to more positive guiding principles, and expressly prohibiting romantic relationships between managers and reports.

Meanwhile, Uber is also fighting an unrelated, blockbuster lawsuit from Alphabet’s self-driving unit Waymo, which alleges that the ride-hail giant stole its technology. And perhaps most significantly, Travis Kalanick, whose mother died suddenly in May, resigned as CEO on June 20, facing pressure from investors. (He will remain on the board, and sits on the committee that will pick his successor.) While the board searches for new executive leadership, the company is being run by a 14-person group.

But before its months-long implosion, Uber was one of the great success stories of the modern tech boom, a young company that swiftly devastated the taxi industry and grew to a staggering $69 billion valuation in the process. Even today, it is the most valuable tech startup in the world. As interviews with more than two dozen former and current Uber employees show, the company reached such great heights by asking forgiveness, never permission, and pushing to the limits everything that it could: laws, municipalities, markets — and workers.

These employees — all of whom shared their experiences with BuzzFeed News on condition of anonymity, mostly for fear of repercussion — described impossible workloads, around-the-clock emergencies, fear of management, a total erosion of work-life balance, and a pattern of public humiliation at the hands of higher-ups as Uber pushed to become the juggernaut it is today. Many attributed panic attacks, substance abuse, depression, and hospitalizations to the stress of the job. All — even those who ultimately enjoyed their time there — recall a uniquely high-pressure environment in which employees were regularly pushed to a breaking point, but afraid to quit and leave large amounts of equity on the table.

“It’s a money cult. People are putting up with massive amounts of abuse, mental abuse, constant threats to fire you so you’re losing your equity,” one former employee told BuzzFeed News. “The equity, people see that as their future, their retirement, the reason they moved to America, or why they moved halfway across the country, or across the country.”

In an interview, Liane Hornsey, who joined Uber as chief human resource officer in January, openly acknowledged employee burnout. “Many employees are very tired from working very, very hard as the company grew,” she said. “Resources were tight and the growth was such that we could never hire sufficiently, quickly enough, in order to keep up with the growth.”

Asked if Uber executives were aware that employees have experienced panic attacks, visited the hospital, and attempted self-harm while working at the company, Uber declined to comment.

To be sure, a lot has changed at Uber in recent weeks. Hornsey said she has held more than 200 listening sessions with employees across the organization as a means of hearing their concerns. Uber now serves free dinner at 7 p.m. rather than 8:15, so that employees can take advantage of the perk without working well into the evening. While it was once a stated company value to work harder, longer, and smarter, Hornsey and her team “eradicated the word ‘longer,’” she said. “I thought that was both symbolic and rather important.” Hornsey told BuzzFeed News the company is planning to soon begin paying engineers extra for working on-call shifts, and will offer employees reimbursements up to a specific threshold for not just gym memberships, but also massages and relaxation therapy.

Hornsey insists Uber is committed to correcting course on employee wellness. “It is very much my belief that we will leapfrog much of what you find in corporate America,” she told BuzzFeed News. But for some Uber employees, the mea culpas, work-life balance surveys, and vows to do better come too little, too late.

“You can’t change the culture. It’s set,” said a former senior employee. “Travis can’t hire Eric Holder or Arianna Huffington and change the culture of a 10,000-person company. It’s unrealistic. People pay lip service to change knowing it’s not coming.”

Even its most outspoken critics agree that Uber has dramatically and irrevocably changed the way the world gets around. But the company’s great breakthrough isn’t the concept of cars on demand, or even the technology that enables it. It’s an accelerated restructuring of the American labor force and dramatic redefinition of the future of work. In Uber’s vision, work time is elastic, workers are expendable, and the workday itself has no clear start or end. The individual is uniquely responsible for their own financial success, and the company achieves maximum output without having to compensate people for their downtime.

For drivers, this means accepting ride after ride with cash bonuses, hourly incentives, and a five-star rating system in which drivers are expected to maintain at least a 4.7-star rating. Without those drivers, their cars, and the millions of miles they’ve driven, Uber wouldn’t exist. But all that work has cost Uber very little — drivers receive no benefits, pay their own income taxes, and earn, based on Uber’s estimation, wages that are roughly equivalent to an employee at McDonald's. Uber revolutionized work by turning people into flexible, mobile, iPhone-wielding, car-driving widgets. It is a machine for squeezing value out of people — and that applies as much to its many thousands of drivers as to the 14,000 corporate employees working in offices around the globe.

Like many companies of its kind, Uber attracts the best and the brightest by pitching itself as a pure meritocracy, a place where best thinkers and hardest workers are richly rewarded. Meritocracy — the tech-industry-beloved organizational ethos that assumes everyone, regardless of gender, race, or economic background, has an equal chance of success — was one of Uber’s now-abandoned 14 core values. As one former employee said, explaining why he joined the company, it seemed like a “libertarian playground where the best would rise to the top.” But, he said, “I quickly realized that environment also means work becomes a blood sport.”

Working seven days a week, sometimes until 1 or 2 a.m., was considered normal, said one employee. Another recalled her manager telling her that spending 70 to 80 hours a week in the office was simply “how Uber works.” Someone else recalled working 80 to 100 hours a week. (Uber disputed that it is common for employees to work seven days a week, and emphasized that it is in the midst of changing expectations surrounding work hours.)

Those who apply with the best proposals are rewarded by a chance to join the company’s annual “workcation,” typically between Christmas and New Year’s, during which employees brainstorm product ideas. Workcation is seen as a perk — even though employees pay their own airfare and commit to working over the holiday, Uber offers daily stipends for meals and transportation. (One former employee described it as the opportunity to “go to an island paradise and lock yourself in a room to code for 12 hours a day.”)

“You were always on the clock,” said one former program manager. He said he never took a vacation day, though he did take a personal day once because of stress. When he came in the next day, his manager pulled him into a conference room and told him that “taking that personal day was really not a great idea,” he told BuzzFeed News. Someone else remembered being asked to work through a high fever for two days at the implicit request of a teammate, despite sending an email saying they needed to take the day off.

“I never even thought of spending the weekend not working,” said one employee. Another said it “was a problem” with management that he left work at 6:30 or 7 to be with his family.

“It’s overwhelming to be told, 'We’re the top startup, we’re killing it, we’re expanding to China,' and all this other stuff, and to be asked to work weekends and pour hours in,” said a former employee. “I feel so broken and dead.”

“Travis used to always talk about redlining,” said one former employee, referring to the practice of driving a car at maximum speed. “Once it starts to get to the top of the meter, it gets in the red zone, which means your engine is about to explode. If you weren’t redlining, you weren’t working hard enough.”

Indeed, many employees attribute the company’s hard-charging culture to its recently ousted CEO. “The mentality is to find your line and keep pushing it,” one employee said. “You can’t say in every instance ‘Travis did it!’ But the overall culture... I feel like he shaped it that way.”

Ironically, Uber board member and media mogul Arianna Huffington — a Kalanick ally who served as one of the company’s public faces as it grappled with the harassment investigation — has built her brand in recent years around the importance of sleep. She is the CEO of a wellness company called Thrive Global, and copies of her book, The Sleep Revolution, were often available in piles on tables in Uber offices. Huffington even went so far as to attribute the company’s recent scandal to a “workplace culture fueled by burnout.”

“For me, it’s kind of like a joke,” said one former employee of Huffington's contributions on the topic of sleep.

“I don’t understand how you can have a course on work-life balance with Travis up there talking about how he never stops working,” a current employee said.

Some Uber employees who spoke with BuzzFeed News felt that given how fast the company was growing during certain periods, the level of stress and the pressure to be constantly working made sense, even felt necessary. But one former operations employee who worked in New York speculated that an atmosphere of constant fire drills was simply Uber’s business model.

“In college I took several business classes, and one was about Southeast Asian business. The professor said ... there's this spectrum of stress level. You want workers to be as stressed as possible, but not over the line where they're going to do something like light themselves on fire outside the factory,” he said. “It felt a little bit like that was what they were trying to do at Uber.”

Anyone who’s spent time in a San Francisco coworking space or coffee shop understands that long hours are as baked into Silicon Valley’s corporate culture as free snacks. But Uber differs from tech’s other behemoths in that — unlike Google, Amazon, Facebook, Microsoft, Apple, and other companies of its size — it is still privately held. This impacts employees in a few ways: Despite its gargantuan valuation, it is not profitable, which means that it is focused on reaching scale at almost any cost. And perhaps most significantly, like many private startups, Uber weights compensation toward equity and away from salary.

While engineers in the Bay Area are, by any standard, well-paid, Uber acknowledges that it pays less than some of its top competitors for talent. For example, a software engineer at Uber earns an average salary of about $115,000 annually, according to data from Glassdoor — about $10,000 less than those at Facebook. The Information reported that Uber uses an algorithm to estimate the lowest possible compensation employees will take in order to keep labor costs down. Asked about the algorithm, Uber declined to comment.

Hornsey told BuzzFeed News she plans to announce changes to Uber’s compensation policies to employees this week, but declined to say what those changes would be. Concerns about compensation ranked among employees’ top nine issues during her listening sessions, she said.

But some employees say they feel trapped at Uber by financial incentive, whether they’re waiting four years for their shares to vest or trying to save enough money to actually buy the options they’ve already been offered.

“You’re just so invested that you can’t walk away from it … the equity is in the millions for some people,” one former employee told BuzzFeed News. “You’re young enough to be able to invest the crazy amounts of time and energy. It’s really valuable, but you really are trading in a piece of yourself for it.”

Effective in June, Uber changed its policy for employees who have been there for at least three years, extending the time window for making that purchase from 30 days to seven years after a person’s last day at the company.

Still, the reality is, the longer you stay, the more you stand to make if and when Uber goes public. The company’s gigantic valuation and the associated potential windfall is a highly effective incentive to keep people from leaving.

“People think they have one shot,” said one former employee. “It kind of seems like this is the one big shot in life to be financially secure.”

The promise of cashing in big kept many employees at Uber despite what some described as humiliating treatment at the hands of managers.

“We’d be cursed at,” one former program manager who left over a year ago remembered. “People would get yelled at on the floor in front of everybody.”

In fact, Pham’s email about the on-call engineer wasn’t the only time sources say employees were publicly belittled by higher-ups. In March 2016, Uber began encouraging its corporate employees to drive for the platform as a means of better understanding the organization. These employees were expected to drive in their spare time, and their earnings were donated to charity.

During an all-hands meeting in the summer of 2016, one such employee, an engineer, was brought onstage to discuss his experience with Kalanick.

But the tone of the presentation quickly shifted, four former and current Uber employees recalled, when Kalanick learned that the engineer was struggling to maintain a driver rating above 4.7, the threshold below which drivers are blocked from using the platform.

According to people who were present at the meeting, Kalanick teased the engineer about his rating, asking why it wasn’t higher. Echoing professional Uber drivers, the engineer tried to explain that problems with the app — for example, a failure with the map function — frustrate passengers, who take it out on drivers by giving them lower ratings. Uber said that Kalanick was merely asking the employee to share what he’d learned and why his rating was relatively low. But employees felt differently.

“TK grilled him hard in front of everyone,” one employee, who recently left the company, recalled, referring to Kalanick by a widely used internal nickname. “It was hella uncomfortable.”

A second employee interpreted the exchange differently. “I took it as just teasing,” the employee, an engineer, said. “But some coworkers were more offended.”

"I talked to coworkers,” said a third person, “and we were all just like, that was kind of mean.”

Though Uber confirmed that video of the incident exists, it declined to share it with BuzzFeed News. And employees told BuzzFeed News that aggressiveness wasn’t just tolerated but valorized at Uber.

“It was a culture of finger-pointing,” said a former program manager.

A former senior employee described being “fearful” of “aggressive” higher-ups: “You felt like you were walking on eggshells.”

The person also said that kind of ever-present fear of management was even more enervating than the long hours. “It's not about burnout, it's more about this incredibly pervasive toxic atmosphere of not knowing what's going to get you in trouble,” the person said. “What's exhausting is being around the Uberness of it all.”

Until the Holder report’s recommendations were adopted in June, the company was governed by 14 company values, including “stepping on toes,” “always be hustlin’,” and “principled confrontation.” The independent review of Uber’s workplace found that these have “been used to justify poor behavior.”

“Asshole culture is promoted at Uber,” said a recently departed employee. “You’ve got to be a certain assholeish type of personality, otherwise you’re considered weak.” She contended that this was particularly difficult for the company’s female employees: “You pretty much have to behave like a man to succeed,” she said. “Either you are an asshole, or you are considered not valuable.”

This culture extended beyond Uber’s San Francisco headquarters. In New York, for example, Josh Mohrer was a general manager made in Kalanick’s image, according to employees.

“Josh did what he wanted, and [Kalanick] gave him latitude to do what he wanted because he was so good. He was wicked smart, but he was brutal,” said a former senior operations employee. “He came in, cleaned house, and turned New York into a dominant market. He played hardball. He did the kinds of things [Kalanick] expected to get results.”

Mohrer became well-known during his time at Uber for things like advocating against tipping drivers and admitting that he used Uber’s “God View” to track a journalist’s movements. His approach may have appealed to Kalanick’s sensibilities, but some of the people who worked under him in New York, three of whom shared their experiences with BuzzFeed News, felt he was overly aggressive.

“He would yell at and berate employees in front of their direct reports, and the tone he used was always half joking,” said one former employee who worked for Uber on the East Coast. “He was an impulse bully who fought anyone if he didn’t get his way and routinely made his direct reports cry in the office from his bullying.”

Mohrer left Uber in May. Sources told BuzzFeed News that Mohrer was a subject of an internal investigation inside the company, but Uber declined to comment on Mohrer’s behavior and the circumstances of his departure. He has since joined Tusk Ventures, a strategy firm he worked closely with at Uber. Mohrer declined to comment on this story.

While more than a dozen Uber executives have left the company for varying reasons this year, including its CEO, many leaders who were bred in the ride-hail giant’s aggressive culture remain. But Hornsey said executives at Uber “know that we need to put our people first and know that this is an existential issue for us.”

“Post Susan Fowler’s blog, many executives in this company have been somewhat personally shaken, somewhat shocked. And that shake and that shock gives you a remit for change,” she said. “It gives you a moment when people are more open to change than they might have been.”

The personal consequences of working in an environment like the one at Uber — high-pressure, combative, all-consuming — can vary greatly based on personality and experience. Some people told BuzzFeed News they found it exhilarating. Others described it as a psychically draining but occasionally rewarding experience. For a few, some of whom shared their stories with BuzzFeed News, the mental health situation teetered on dangerous.

Multiple former employees said they’d personally witnessed people having panic attacks in the office. A former employee who spent two years at Uber remembered watching a stressed-out teammate unravel at a meeting. “This guy broke down in tears, saying that he’s not happy here, this wasn’t what he expected. That he left his job where he was getting paid more for this, and he feels like it was a huge mistake,” he said. (The employee in question did not respond to multiple requests for comment from BuzzFeed News.)

One former manager found a means of dealing with acute pressure: “You start faking meetings.” When he started to feel a panic attack coming on, he would say he had to meet someone off-site and he would walk to a nearby coffee shop that had benches outside. “I would go to turf there and lay down and look at the sky for 20 minutes and just try to calm my breathing,” he said. “I was just nonfunctional.”

Hornsey told BuzzFeed News that about 10 to 15 employees told her in one-on-one sessions over the last five months that they experienced panic attacks while working at Uber.

“I have talked to people, particularly in engineering, I’ve got to be honest, who felt overworked, who felt concerned, who felt heartbroken by some of the things that have happened,” Hornsey said. “I have to be honest with you. There are people that have been panicked and there are people that have been anxious. If any one person feels like that, it’s one person too many. My job is to turn this into a kind and compassionate and thoughtful company that puts its people first.”

In a statement to BuzzFeed News, Uber said it’s made mental health services available to employees since 2015. US employees were eligible for up to three face-to-face sessions with a counselor until January 2017, when Uber expanded its mental health benefits through a company called Lyra Health to include 24/7 counseling via an app, unlimited in-person sessions, and resources for family members of Uber employees. And since April, Uber has expanded mental health services to include on-site counseling services to employees in major offices worldwide. Asked about demand for and usage of these services, Uber declined to comment.

One employee, an engineer, recently started seeing a therapist. “I probably should have been talking to somebody who would have pointed out more of the issues,” he said. “It’s pretty clear that giving that much of yourself to any one thing is not healthy. There were days where I'd wake up, shower, go to work, work until midnight or so, get a free ride home, sleep six hours, and go back to work. And I’d do that for a whole week.”

In April, the San Francisco Chronicle reported that Uber engineer Joseph Thomas killed himself in August 2016. His wife Zecole, who found her husband’s body, is now seeking worker’s compensation benefits from Uber after being initially denied them by the company. Through her lawyer, Zecole Thomas declined to comment for this story, but she and her late husband’s father both told the Chronicle that Uber’s competitiveness and high expectations pushed Joseph over the edge.

“The guy just fell apart,” his father, Joe Thomas, told the Chronicle. “If you put a hard-driving person on unrealistic tasks, it puts them in failure mode. It makes them burn themselves out; like driving a Lamborghini in first gear.”

Uber told BuzzFeed News it wasn’t made aware that Thomas’s death was a suicide until five months later, in December 2016. After the Chronicle story came out in April, Uber head of security Joe Sullivan sent an email to all staff explaining that, legally, the company had been prohibited from commenting on Thomas’s death sooner. “We care deeply about our employees well-being,” Sullivan wrote in an email Uber provided to BuzzFeed News. “As a community it’s important that we can talk about these issues openly and share our thoughts and feelings.”

The day after the Chronicle published Thomas’s story, former Uber engineer Yu-En Tsai published a post on LinkedIn titled “Be human, at least to your employees,” in which he discussed the intense anxiety he experienced during his three years at the company. “It's not a surprise I got depression due to lack of sleep for straight several months,” he wrote. “I didn't kill myself but honestly I almost did.” (Tsai later updated his post to say that over time the working conditions at Uber improved, and that he doesn’t claim to be “a victim of anything.”)

Reached by BuzzFeed News, Tsai said he didn’t want to talk about the post. But in the comments on the LinkedIn post, he did respond to some of the 14 self-identified current and former Uber employees who expressed their sympathy, support, and concern. “A healthy work culture is more important than anything,” wrote one.

“I am grateful to my family for supporting my decision to leave this place after only a few months,” wrote another. “Sometimes money just isn't worth it.”

Hornsey started in January. But in the years before that, employees say, HR was inadequate.

“There was a complete lack of HR,” said one former operations employee. One former senior employee described it as one of the “bits of the puzzle” Kalanick “had to outsource.” As a result, individual managers had outsized control over who got to keep their jobs, a former employee said. Hornsey admitted to employees in a June email provided by Uber to BuzzFeed News that the HR team had been understaffed, but said the department was increasing its head count and adding more resources.

In particular, sources described the performance review process as, variously, stressful, political, and a popularity contest in which connections to Kalanick, or other people in positions of power at Uber, could make or break your future at the company.

Until recently, Uber used a ranking system that both measures employee performance on a scale of 1 to 5 and tries to predict future performance on a scale of 1 to 5. Employees who get 4s and 5s can expect big bonuses and maybe promotions; employees who get 1s and 2s are put on performance improvement plans, a sign that they should start looking for new jobs.

One former operations employee based in the New York office remembered a colleague who was fired not long after he started at Uber. Chief among the reasons he was given for that person’s termination was that they were uninterested in attending a company retreat in upstate New York; the manager had determined that the individual was a bad fit.

Six months later, when the time came for the operations employee’s first performance review, he was surprised to hear that he, too, had been deemed a bad fit, specifically because he too often left work before 7 p.m. in order to spend time with his family. After that, he said, “[I] went in every day thinking I was going to get fired. That was one of the more psychically damaging and challenging parts of it.”

By the time he left a year and a half later, he questioned whether the atmosphere of constant anxiety wasn’t intentional on the part of Uber management. “I wondered if there was a template managers used to make people feel like shit to get people to work harder,” he said. “It was like an abusive relationship. Your boyfriend keeps making you feel bad, and then they come back and say, ‘I love you, you’re so beautiful’. They’d come back and be like, ‘You’re a part of this amazing team, you’re part of the fastest growing company in history.' But on an individual level, it seemed like the systems were designed to make you feel like you were never good enough.”

The performance review system used at Uber — until the company pledged to revamp reviews when it announced the results of the Holder report — is known as stack ranking. The system places all employees into categories, such that some must be ranked at the bottom, essentially pitting colleagues against one another. It’s similar to systems that have been used at Microsoft, GE, and, perhaps most infamously, Amazon. There are clear parallels between Uber and Amazon, a company that’s also notorious for its cutthroat, high-octane work environment. Amazon CEO Jeff Bezos is an Uber investor. Uber’s chief product officer Jeff Holden, who joined the company in 2014, is a nine-year Amazon veteran. Uber’s 14-point value system is said to have been derived from Amazon’s, though Amazon’s — which includes “insist on the highest standards” and “have backbone; disagree and commit” — is slightly more subtle.

Some former and current Uber employees who spoke with BuzzFeed News felt that one way to avoid falling to the bottom of the stack ranking pile was to ingratiate themselves socially with their managers and other power players inside the company. Depending on what team you were on, that could mean staying at work until midnight in hopes of running into Kalanick on the floor. In other circumstances, it could mean putting in hours at the bar.

“There was a lot of pressure to go to events and drink. That was seen as making your way up,” said one former Uber employee. “If you weren’t participating in that party culture and going to all those drinking events, you weren’t going to get promoted. You’d get sidelined.”

Said another, “If you wanted to be recognized and noticed, you had to be social. Having to go out drinking with the team was a big deal.” A third former employee likened the environment at one company retreat to that of “a frat party.”

One former employee cited a personal concern about substance abuse as one of his primary reasons for leaving Uber. “It was the only place I’ve ever worked where people would get aggressively drunk at work and continue working,” he said. “It was also a powerful wake-up call for me wanting out.”

Last month’s workplace culture report advised Uber’s board members to limit the access to alcohol employees have at work, especially during core work hours, and to deemphasize its role in work events. Specifically, the report says that “Uber should support work events in which alcohol is not a strong component to ensure that employees who do not partake in consumption of alcohol still have opportunities to engage in networking and team building activities.”

Even employees who didn’t experience consequences to their health often take long breaks to recover after finally calling it quits at Uber. One person, who left Uber around the beginning of the year, told BuzzFeed News she took a few months off to “recover and recuperate and get back my confidence, because people there treat you like shit all the fucking time.”

Another, who took three months off after quitting, said leaving Uber “felt like [I] got out of prison.” Another former operations employee said even though he left the company involuntarily, he “immediately felt liberated.”

Not every Uber employee described their experience at the company as a time of suffering. One engineer described his own workload as manageable and his managers as fair, but said some teams were more stressful than others. For example, the engineers working on Uber China were pushed especially hard, in part because of how important the now-failed China expansion was to Kalanick. “If I experienced what my coworkers experienced, I probably wouldn’t still be at Uber,” he said.

Another former employee said the perks of working a fancy tech job sometimes felt like a justification for how hard everyone was working. “You keep giving Uber the benefit of the doubt,” she said. “We have good coffee here, we have good food, a cushy office, some of the brightest minds in the world.”

And there are some people who genuinely found Uber’s corporate culture rewarding. “There was a pretty strong correlation between the highest performers and how hard they worked,” said a former senior employee. “Most of the people who worked nonstop were also important people getting a lot done.”

For years, one former operations person said, the intensity and camaraderie at Uber was fulfilling; the harder he worked, the more quickly he was promoted, and the larger his bonuses were. The culture was brutal but efficient, and high performers were always rewarded; as the company grew, his sense of validation swelled. The experience, he said, was not dissimilar to being an addict.

“The highs were incredible,” he said. “But no addiction turns out to be good.” After a few years with almost no breaks, his enthusiasm started to lag. As he scaled back the amount of work he was doing, his rise through the company's ranks slowed. Eventually, he quit.

Other Uber employees who’ve put in the hard time are also learning to set boundaries for themselves. One engineer who’s still with the company said when he started the job he was new to California. Previously, his hobbies included skiing, photography, cooking, and hiking. But after he started at Uber, those activities melted away.

“It was easy to sink 100% of my life into [Uber]. I'd definitely say that on all dimensions, life outside of work suffered,” he said.

But three years, two internal investigations, and much soul-searching later, he says he’s learned to separate his self-worth from what’s happening at Uber.

“They're not able to prioritize our health,” he said. “So I probably shouldn’t be killing myself for this.”

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Quote of the Week


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Learning from the Impact of Regulation Changes

We all know that the only constant in life is change. It can be quite frustrating – one day things are smooth; the next day, policy has changed and that can adversely affect your business. It is more common than you think, and it is not limited to certain sectors only.

I experienced this first hand in New Zealand in the early 2000’s. Was I running a bar, a brothel, or a car dealership? No. I was involved in the tertiary education sector. Constant governmental changes and directives towards the immigration department saw the private sector tertiary education market come to a standstill – no new investors as strict limits were suddenly being placed on visa’s being issued. For me, that meant no new clients.

Last week I posted about the 7-Eleven experience in Jakarta, Indonesia. This article from techinasia.com delves a little deeper on that, but it also highlights a broader perspective for entrepreneurs to consider – that of keeping abreast of policy change and how it can potentially impact upon your business.

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Photo credit: Bagus Ghufron
When 7-Eleven’s iconic storefronts first emerged in Indonesia in 2009, it was anticipated that the stores would appeal to the country’s growing young urban population with its unique restaurant-cum-convenience store hybrid model. Offering fuss-free, ready-to-eat meals, free wireless internet, seating, and air-conditioning, “Sevel”, as 7-Eleven is known to the locals, soon became a popular haunt for young Indonesians.

The convenience store’s parent company, PT Modern Internasional Tbk, is controlled by the Indonesian Honoris family, who first made a name for themselves as the sole distributor of Fujifilm Japan products in the country. The family acquired the license to operate the franchise at a time when the photo processing business was declining with the advent of digital technology. In 2013, 7-Eleven had accounted for over 60 percent of PT Modern Internasional’s US$127 million sales.

However, business is rarely straightforward in Indonesia and although the franchise is not foreign-owned, there is little local entrepreneurs like PT Modern Internasional Tbk can do in the face of the country’s frequent regulatory changes.

Local opposition, local competition
The introduction of an alcohol ban in April 2015 dealt a significant blow to 7-Eleven’s earnings. Caving in to the pressures of media and religious groups in Indonesia, the government banned the sale of alcohol by any mini-market and convenience store in the country under Trade Regulation No. 06/M-DAG/PER/1/2015 on the Control and Supervision of Procurement, Distribution, and Sale of Alcoholic Beverages. For a company that relies on sales of alcohol for 10 percent of its earnings, the ban was a great setback for the chain, especially as it had a multiplier impact on the sale of snacks frequently purchased together with alcohol.

Indonesia’s retail market has long featured key players like Indomaret and Alfamart, backed by the Salim and Djoko Susanto families, respectively. The alcohol ban only served to further edge 7-Eleven out of the sector while its competitors remained largely unscathed, as consumers more frequently associated them with household goods and necessities—market segments that were untouched by regulatory hurdles.

In June 2016, after two years of declining revenue and intense competition, PT Modern Internasional announced the closure of 7-Eleven outlets, which numbered 161 nationwide, at the end of 2016. The company’s initial plan to sell the franchise to a unit of PT Charoen Pokphand Indonesia Tbk (of the Thai Charoen Pokphand conglomerate) for US$74 million was also scrapped just six weeks after it was announced, as both parties had failed to reach an agreement.

The case of Uber
In a similar fashion, the growth of app-based ride-hailing services like Uber and Grab is hampered by regulatory restrictions. Pressure from incumbent players such as taxi giant PT Blue Bird Tbk has pushed the government to enact new regulations on the operations of app-based taxi services. The new regulations include setting minimum and maximum prices (a direct attack on Uber’s core business model of dynamic pricing), limiting the number of vehicles operating in a district, and requiring that all drivers possess a vocational license for public transportation, with all cars licensed to a commercial entity or cooperative.

Despite long protracted appeals by ride-hailing services against them, the new regulations were slated to come into force in July 2017. However, the government has since extended the “tolerance phase” for its implementation, giving companies another six months to comply with the new rules. This is not the first time the deadline for regulatory enforcement has been extended since the rules were released over a year ago.

Public sentiment and its effect on regulation
Both cases of 7-Eleven and Uber in Indonesia have demonstrated something that investors have long known about the country—regulatory uncertainty can cause dramatic swings in company performance and, when faced with such hurdles, there is little that the company can do to avoid its pitfalls.

However, what is perhaps more pertinent is the impact of public sentiment in swaying these governmental regulations. In the case of 7-Eleven, the alcohol ban was preceded by protests by hardliner Islamic parties and groups like Indonesia’s Islamic Defenders Front, who pressed the government to ban alcoholic beverages in a bid to push for Islamization of the secular state. These measures culminated in the ban that was deemed necessary to protect young people in the Muslim-majority country, as alcohol consumption had been rising.

The presence of ride-hailing services in Indonesia was met with large-scale protests by taxi drivers and unions like the Land Transportation Drivers Association (PPAD), who decried—in some cases violently so—on the streets the apps for unfair business competition practices.

Moving forward with foreign investment
Investments into a foreign country have to always be accompanied with an acute understanding of the local market and landscape. Foreign investors frequently have to contend with changing regulatory regimes in Indonesia, which can even impact long-standing contracts, as in the ongoing case with PT Freeport Indonesia. As a young democracy, these regulatory changes can be mired by vehement public opposition, which tie the hands of the ruling government.

Under the regime of President Joko Widodo, Indonesia is increasingly becoming open to foreign investment. A “Big Bang” in the country’s economic liberalization took place in early 2016, which included the easing of foreign ownership restrictions on sectors such as tourism, transportation, and retail. With the size of the domestic market—many sectors within remain underserved—the potential for foreign companies looking to invest is immense.

One way foreign companies can enter the Indonesian market is by working with local partners. For instance, when internet giant Alibaba entered the Indonesian market, they acquired a controlling stake in Lazada Group SA, the Indonesian unit that is pivotal for the group’s performance. Lazada Indonesia is the most visited ecommerce site in the country, with homegrown site Tokopedia coming in a close second.

Alibaba also teamed up with Indonesia-based logistics company J&T Express to launch a new company called J&T Alibaba to facilitate the push of Indonesian SMEs onto the global market. More recently, in order to meet the growing demand for reliable data storage services, Alibaba’s cloud computing arm Alibaba Cloud also announced plans to open a data center in Jakarta. This meets the recently tightened government regulations on the fintech sector.

A deeper study into the Indonesian market can help to anticipate the possible risks or setbacks that a company might face if its investments affect different social groups or working classes in Indonesia. Teaming up with local partners is a way to lay the necessary groundwork to ease the entrance of foreign companies into the market.

Another strategy could be using social media as a tool to reach domestic audiences, with the country being the fastest growing one in internet use. As Indonesia opens up its shores to foreign investments, companies could do well by playing on the country’s unique strengths to maximize its growth potential.

Converted from Indonesian rupiah. US$1 = IDR 13,316.

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Craig J Selby Craig is a long-time proponent of structured and measured change. His early career saw him teaching marketing and management at a variety of Universities and PTE’s in his native New Zealand, where he quickly climbed the management ladder to head several private sector institutes. Needing to do that little bit extra, Craig formed his own consultancy firm and was engaged by many in the sector as a trouble-shooter - responsible for internal auditing, restructuring and redevelopment of many departments and institutes in order to remain competitive in a highly contested market. This involvement motivated him to branch out and work with other industries - focussing on change and development as a core theme in business survival. When Craig moved to Malaysia, he went back into the Education sector to share his ideas with local private sector educational facilities. In 2009 Craig co-founded Orchan Consulting Asia, an award-winning Public Relations agency. His areas of specialisation are Crisis Management Communications and Change Management.

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New Leadership Requires New Thinking

Any conversation about leadership is both important and evolving. The following (abridged) article from The Edge | Markets (7 July 2017) offers a brief, but excellent, modern, local take on leadership today and beyond. 

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Image Source - The Edge Markets
Former Bank Negara Malaysia (BNM) governor and chairman of Iclif Tan Sri Dr Zeti Akhtar Aziz said the concept of leadership in the 21st century demands new thinking.

This new thinking, she said, takes into account the increasing rate of change, the complexities of a more globalised world, and the need for sustainability in the face of heightened uncertainty.

“Unlike conventional thinking, leadership has nothing to do with one’s position, title or authority. Rather, leadership [now] is about the drive to create a better future, and having the inner energy to keep going despite resistance and obstacles,” she said during her keynote address at the launch of the 2017 Leadership Energy Summit Asia (Lesa) yesterday.

Zeti also touched on the importance of “Open Source Leadership” — ... which seeks to explore what it takes to be a transformative leader in the 21st century, who must reinvent themselves to thrive in a connected, transparent and disruptive environment, and how technological empowerment has transformed companies into open-source organisations.

“We must consider the uber-connected environment of today as well as the increasing number of sophisticated young talent that do not think, act, perceive, strategise or make decisions like their parents did; where business-as-usual is a thing of the past”.

Source: http://www.theedgemarkets.com/article/zeti-concept-leadership-21st-century-demands-new-thinking

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Quote of the Week


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Your Legacy is Investing in the Other’s Future

Training members of your team is an essential responsibility of every organization, and at every level. It does not mean spending thousands of dollars on sending team members to courses; it can be as simple as mentoring – often underrated as a training tool, but one of the most powerful training methods available to help employees at all levels to develop in their craft and enhance their professional skills.

I have previously written about the power of mentoring, and the amazing mentors I have been fortunate enough to have throughout my career. Today, I focus on a Forbes ‘problem / response’ article which struck a chord – about an organization which did not deliver on the promised training to their employee.

Not only does non-delivery affect the person’s long term career (they could end up well behind their peers), but it impacts upon motivation levels, and general capabilities within the workplace. Moreover, it reflects poorly upon the organisation’s leaders – for not developing internally. As I said, it doesn’t have to be expensive courses – training can involve time invested, shadowing, internal training, peer partnerships, and a plethora of other options.

In our creation of our legacy, or responsibility is to create the next generation – to honour our responsibility, we must find ways to train and develop talent at all levels.

I shall leave you to reflect on the Forbes post, as the response offered is certainly sound advice.

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Image Source - Shutterstock
They Promised To Tain Me -- But That Training Never Happened

Dear Liz,

I took a new job in March. I interviewed with four managers, and they were all very nice.

I liked them a lot. That's one reason I took the job.

I still like some of them. Some of them turned out to be con men. The CEO in this company is the biggest con man of all. He's a salesman. He's not a bad person, but he speaks without thinking.

He was the last person I met during my interview process.

I was flattered that the company CEO wanted to meet me. He said "Everybody here likes you and I like you, so the only remaining question is 'Do you like us?'"

I took the job.

I'm a Regional Operations Coordinator. There are six of us in my department. We were all hired within the past year.

The company is growing fast -- way too fast in my opinion considering there are no processes, we work way too much overtime (unpaid) and our leaders are constantly making changes.

It's really stressful.

Before I was hired, they promised to train me. On my interviews, I asked a lot of questions about the training for this job. The CEO told me I would get two weeks of training followed by three weeks of shadowing a current employee.

I think he made that up on the spot. I haven't had two minutes of training. They threw me into the job on my first day. My coworkers and I constantly exchange ideas but we are all in the dark. We are all floundering. We feel like idiots and our customers are starting to complain more and more.

I have tried in my very limited personal time to create a training outline for new hires in my department.

I've listed about 80 critical topics already and I'm nowhere near done with the outline. I've talked to my boss a dozen times or more about the need for training. She says "Yeah, we need to get to that" and then the idea evaporates again.

What else can I do?

Thanks,

Marisa


Dear Marisa,

It sounds like a crazy environment -- but what amazing learning you are getting!

I don't know if your CEO is a con man or not, but he certainly sounds like a person who lives on the edge. It was not cool of him to promise you training that turned out to be vapor ware -- but there is a huge opportunity in front of you!


It's time for you, with or without your coworkers by your side, to speak up in a way you haven't done before. Make a business case to your manager and/or the whole management team.

This is not the story of an aggrieved and misled employee. It is a much bigger story than that -- but only when you get altitude on the problem and address it as a business issue.

You have the opportunity, if you want to grab it, to step back and create a business proposal that your boss will have a hard time turning down. To accomplish that, you must see the problem through  "business eyes."

How does it cost your company money to go without a training program for people in your position? Begin to quantify and note the complaints you're getting and the volume of business the unhappy customers generate for your firm.

Before outlining the training program itself, start building the case to get a training program established - either with the help of an outside consultant or by giving you and your peers enough time and space to build the training program in-house.

Your first step is to understand the pain your employer is experiencing now or will experience as a result of your missing training program and lack of procedures. Looking for the pain will teach you critical consulting skills we all need to develop.

If you don't feel like diving into this project, your alternative is to start looking for another job.

No one would blame you if you did -- but I hope you stick around and overcome this obstacle. Your mojo and muscles will be enormous if you do!

All the best,

Liz

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Interview: Too Many Competing Malls? How Can One Stand Out?

Source - Cédric Dhaenens | Unsplash
The not-so-recent proliferation of shopping malls in Klang Valley has led many operators to look into ways they can stay competitive. With extensive experience in supporting clients in the retail industry, Orchan Directors – Craig J Selby and Farrell Tan share with us what mall operators and owner can do to survive the competitive climate.


1.    What are some of the challenges malls face in this competitive climate? 

There are simply a lot of malls out there. There are a lot of the ‘same outlets’ and the ‘same A & P initiatives’. The challenge is keeping relevant to your core demographics, keeping relevant to the new customers that you are attracting, and staying fresh with ideas to bring in new customers. No one wants to see the same roadshow at four consecutive malls – customers want variety.

Additionally, customers want convenience. Parking. Retail. Food and beverage. Convenience. They want to be considered as part of the process – not just “oh, customers will come as long as we have Brand X here”.

2.    How do consumer habits and spending power affect the survivability of malls? What can mall operators do to influence this?

Malls need customers to spend. Simple. Malls, and individual outlets need to explore how best to engage with customers. The recent e-commerce trend – virtual stores and online shopping – is having an impact. But at the end of the day, customers still want to feel and touch products too – they just do their research online first, and are therefore more targeted in their purchases. Because of this, stores, and malls need to step up their game to encourage and facilitate impulse purchases.

Survivability however is beyond just purely customers. It is having the right tenant mix, creating a community hub (be it a hub for a geographic community, or a community of like-minded individuals [eg; electronics mall, discount stores mall] – somewhere where the stratums of society feel at home, want to come to shop, to be seen, and to function – all of this is relevant too. Mall operators need to know their demographics, and their psychographics; then work with retail brands – both established and new – to create unique experiences that people want to enjoy.

3.    What are some of the elements that can make a mall standout for consumers and tenants?

For consumers – tenant mix – a variety of great brands, but also the unknown and emerging brands. A mall without a strong food & beverage selection can be a massive failure – you have to give reason to people to hang around. Interesting and diverse activities, roadshows, customer engagement opportunities.

For tenants – a mall must be active in marketing (A & P) – they must be committed to helping all tenants equally in putting forth their brand. They must also be committed to creating a positive mall environment (cleanliness, security, accessibility, maintenance).

4.    What are some of the strategic approaches existing malls can take in order to keep up with the game?

By taking a strategic approach to tenant mix, to marketing (A & P) support, and to expansion plans – by keeping relevant to their catchments – these are what will help. As a society we are heading more and more towards micro-integrated-townships – does your mall reflect this trend? If not – consider whether you should be.

5.    If freeze on new malls is not implemented, what can new operators or owners expect if they wish to start the business?

They can expect a challenge. They can expect a lot of competition. They can expect to find the early months extremely tough. They can expect to find tenants who want bargain rental deals. They can expect to do a lot of hard work in marketing for potentially disproportionate results.

But they can expect things to get better. Malls, just like brands, attract loyalty. When you consistently maintain the standards that your customers expect, and you deliver on a quality retail experience, your customers will come back. They might like a certain outlet, or they may like the vibe; but it will become their “go-to” place for select activities.

6.    Looking into mall concepts might be one of the ways malls can stand out. What are some mall concepts operators and owners can consider?

There are many concepts out there. My personal favourite is Grand Indonesia in Jakarta, and how they have created functional and fun zones for shoppers. It’s a huge property – vertically massive, which creates its own challenges.

Concepts may go from the simplistic of targeting select tenants only – fashion and textiles; homewares and furniture; electronics; through to more micro-level concepts – cultural alleys, continents, technology zones.

For this to work, operators really need to consider both their catchment and their attractiveness. Will this work for the current catchment? Or, is it stretching the experience too much? Likewise, am I similar to my competitors? What makes me different? Nothing worse than being a boring neighborhood strip mall – unless, of course, that’s what your neighborhood wants, supports, and makes viable.

7.    In this climate, should mall operators focus on getting the right tenants, or getting the right number of tenants?

Both.

The right tenants are extremely important. The wrong tenants will close shop anyway. But, the mix that works, that meets the needs of the customers is important.

Concurrently, the right amount of tenants is important. If you only have a 20% occupancy rate; it will not inspire confidence in either customers (there’s simply not enough to attract and wow them) or prospective tenants (what went wrong).

8.    Are online stores necessarily a threat for brick-and-mortar stores, or can they be a blessing in disguise? How can mall operators work with retailers to ride the wave of online shopping?

The industry gossip is that they are a threat. Large retailers are closing down across North America.

But, I contend people want to shop. We are social beings. We still need our malls. At least, in Asia that is.

What is changing is how we choose our products. We either research online to target then purchase. Or, we head to a retail store to check products out, then purchase online via aggregator sites to get the deals.

Retailers and mall management need to understand these trends, and see how they can work within the phenomena. That’s the key to a successful future.

9.    Will freezing new mall licenses solve Malaysia’s impending retail problems? What benefits can a freeze bring to existing operators?

I do not believe it will.

Developers are not stupid. They don’t invest hundreds of millions to fail. There’s a longer-term plan / goal in sight – call it land-banking, hedging, whatever. So, it works for them.

Freezing mall licenses is a temporary measure only. It allows the population to catch up with the malls. But it lulls retailers and operators into a false sense of security too – they won’t feel the true essence of competition.

10. Based on current trend, we can foresee that the rising number might not change anytime soon. What are some of the things existing mall operators need to take into consideration if the number grows larger in the coming years?

Keep themselves relevant to their catchments.

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