Repairing cultures in disruptive technology companies

 

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During the last few years, the new economy technology giants have become the employers of choice for the smartest graduates, leapfrogging the investment banks who had long held the top positions.  Who wouldn’t drool at the prospect of working at Google’s yet-to-be-built new London campus at King’s Cross in Central London that will come complete with a pool, a roof-top running trail through meadows and trees, a woodland cafe and a full-sized sports hall and gym?  And Google’s focus on working environments is matched by a well-deserved reputation globally for being a brilliant company to work for that looks after its employees extremely well.    

But the truth is some other big companies in the new economy have found it difficult to scale their cultures successfully and create the sort of working environments I suspect they aspire to. Uber’s announcement today that they have fired 20 employees for behaviours including sexual harassment, discrimination, unprofessional behaviour, retaliation and bullying highlights a problem that is by no means limited to that company.  Technology disruptors have often grown incredibly quickly, based on a start-up mantra that is all about challenging industry norms. Their disruptive business models, based on doing everything differently, have perhaps led them to decide that the need to establish and police acceptable working practices is far too “old economy”.  But the sad fact is that however much fun, individuality, entrepreneurial spirit and creativity you try and inject into a corporate culture, if you don’t allow your employees to feel valued, and in extreme cases safe, you are in some trouble.  That means putting in place checks and balances, and admin, and, dare I say it, costs that are appropriate to the size of the business. Uber CEO Travis Kalanick’s recent extraordinary apology for his own behaviour and leadership style is very significant.  By identifying and acknowledging that he and his company need help, Mr Kalanick has taken an important step in rebuilding his company’s damaged reputation – both internally and externally.

So why does this matter?  It seems like a dreadful thing to ask, but if you have the killer disruptive technology in your industry, and success looks assured, why should you care about your employees and if they are happy at work?  Well obviously, employee morale is important in itself.  When the team starts to distrust the organisation they work for, and stress levels increase, there’s no amount of table football, Xboxes, flat white bars, sleeping booths or even stock options that will make them work well and go the extra mile.   Numerous studies of millennials in the workplace, such as this one by PWC, demonstrate that younger employees tend to be significantly less loyal to their employers than us Generation Xers.  If they aren’t happy at work, they vote with their feet – and retaining talent becomes a significant issue. 

And externally it goes without saying that companies who develop reputations as poor employers can very soon be shunned by customers and suppliers and put in an uncomfortable spotlight by politicians.  And if there’s one thing that reinforces bad employee morale it’s reading critical commentary of their own companies in the media.

 

Tom Buchanan

Tom Buchanan

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