By Frank Merritt
Uber has inundated your newsfeeds lately with one PR disaster after another — the most recent being the resignation of its CEO, Travis Kalanick, following pressure from board members and key investors. Many of the Uber blunders can be traced back to the company’s questionable business and HR practices, which were described by Kara Swisher, executive editor of Recode, as akin to a “toxic goat rodeo”. Swisher noted that under the helm of Kalanick, Uber has been affected by the “bro culture” that is all too common in tech start-ups.
Bro culture, as Dan Lyons of the New York Times puts it, can be characterized as follows:
“What is bro culture? Basically, a world that favors young men at the expense of everyone else. A “bro co.” has a “bro” C.E.O., or C.E.-Bro, usually a young man who has little work experience but is good-looking, cocky and slightly amoral — a hustler. Instead of being forced by investors to surround himself with seasoned executives, he is left to make decisions on his own.”
Kalanick undoubtedly played a large role in Uber’s thunderous disruptive success. But by allowing, if not perpetuating, an organization in which sexual harassment is ignored and managerial accountability is absent, Kalanick joins the ranks of several bros who’ve gone before him.
Peter Conrad, former CEO of Zenefits, is another example of a young, inexperienced Silicon Valley “leader” who quickly garnered a lot of attention and investment equity ($582 million, to be exact), yet took a swift tumble from grace when it was discovered that part of Zenefits’ software was programmed to skirt state licensing regulations. Upon taking office, replacement CEO, David Sacks, quickly issued a memo to his new staff: “The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong”.
Another example is Elizabeth Holmes (a bro-ette, perhaps?), CEO and founder of Theranos, who helped her blood-testing company reach a $9 billion valuation in 2014. She was 30 years old at the time. Today Theranos is in shambles as it battles several lawsuits following the discovery that Theranos failed to use its own technology for most of its blood testing and that the technology itself may not have worked in the first place.
Mark Cuban, a more experienced leader, sums up my own reaction:
What can TQ teach us and who is really responsible?
So, what’s the lesson here? Don’t allow inexperienced leaders to have full rein over companies that are worth hundreds of millions of dollars? Maybe. But what can be done to develop the young leaders of companies when unforeseen success and wealth collide with egocentrism. And how can boards and investors be aware and take corrective action? After all, isn’t it ultimately the responsibility of a board to be monitoring and appraising the CEO?
Luckily, “CE-Bro” behaviors can be identified in the early stages through data-driven human capital strategies and an involved board. Here are some of the ways that TalentQuest can help investors avoid inadvertently supporting and “enabling” the next BRO-CEO.
Here are some prescriptive recommendations for dealing with young leaders who have quickly fallen into success:
- Assume the negative. An immature leader, especially with an adoring investment group and fawning press, can easily begin to believe that they are God’s gift to business. Who knew it would be this easy? Like young athletes or young entertainers who have experienced sudden success, bad decisions and poor ethical behavior are more common when money and adulation from others is coupled with a lack of seasoned perspective. More structured environments (like the NFL) now have programs to assist young people in regards to investing their money appropriately, managing their image, and controlling their behaviors. Education, mentoring, and tight rules are used to assist them.
- Recruit independent board members who have backgrounds with public companies. Investor boards are typically more concerned “about the valuation growth” than company culture and CEO development. Independent board members who have a background as public board members should be used to instill typical checks and balances, including regular CEO performance reviews, systemic succession planning, and sufficient company engagement to recognize when behaviors are running amok.
- Use TQ executive assessments and 360’s to create development plans. By exposing development gaps, a pathway of training can be created and implemented that will show the young CEO what they don’t know and what they need to learn. It concomitantly teaches a bit of humility and can prepare them for lifelong learning and adaptation.
- Engage Executive Education and Peer Networks. Often, the creation of a network of other business executives/peers gained through attending executive education at the major business schools is the greatest payoff for attending. Similarly, participation in groups such as the Young Presidents Organization will informally provide peer role models and input from others that is delivered in a private, helpful way.
- Carefully select and engage a business mentor. The mentor should be a person who has credibility from gaining business success, a strong moral compass, and the ability “to connect” and ask difficult questions. This person has gained perspective from time and business/life experiences, and enjoys coaching young people. They need to be humble servant leaders themselves who want to help the young CEO grow, develop, and mature. They must be listeners who can non-judgmentally and simultaneously guide and challenge.
- Use TQ employee engagement surveys. An employee engagement survey can quantify where your organization stands on cultural behaviors and values that matter to you. Well designed and administered surveys will provide benchmarks to similar organizations and specific recommendations to improve organizational culture and employee experience.