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Inclusion Could Be Uber Directors’ Key to Cultural Change

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Probably the last thing Uber needs right now is to have anyone recount their recent setbacks, but the company’s quick, Icarus-like fall from grace tells us much about how technology companies going through hyper-growth can go wrong. By 2016, the ride-sharing firm was a segment leader, present in 570 cities worldwide and with 12,000 employees. Yet just since the beginning of the year, Uber’s company culture, marked by “sharp elbows,” has rapidly become a liability.

Betsy Atkins

The key is to preserve the great parts of the culture that drove Uber’s market leadership, including the company’s relentless focus on results, and now augment the culture for a larger scale. Specifically, it would be wise to add an appropriate level of processes and gender rebalance to the company’s board.

For Uber, the hits have just kept coming. First there was the video of CEO and founder Travis Kalanick chewing out one of the company’s own drivers. This was followed by lawsuits and first-person stories alleging a toxic company culture of sexual harassment. For good measure, long-time board member David Bonderman resigned after allegedly making sexist remarks at a meeting to unveil plans for reforming Uber’s sexist culture. Then, Kalanick resigned, Uber investor Benchmark Capital is suing him and the company, and Uber agreed to audits for the next 20 years by the Federal Trade Commission (FTC). The FTC’s actions demonstrate the level of long-term damage cultural problems can inflict.

Now that Uber has selected Dara Khosrowshahi to lead the company, and is likely to become a publicly-traded company in the year and a half to three years, the board has even greater impetus to change the direction of the company’s culture.

As a woman who’s served on many major tech company boards, much of this sounds like old news. Women in technology industries still push against a silicon ceiling when it comes to career advancement and cultural issues. Research from the Society of Women Engineers found that 20 percent of today’s engineering school graduates are women, yet just 11 percent continue working in the field. Women in information technology leadership roles (such as chief information officers or technology vice presidents) are just nine percent of the total, according to a survey from Harvey Nash and KPMG.

The numbers are also bleak in other Silicon Valley boardrooms. Among the Valley’s 150 largest tech firms, only 15 percent of board members are women (versus 21 percent in the S&P 500). A Korn Ferry study of the top 100 U.S. tech firms saw just three with women as CEO/chair, and five with a woman as the board’s lead director.

Changing any corporate culture is a challenge, but I’ve found bringing diversity to the tech industry is even trickier. Fast-growth “unicorn” companies can quickly outgrow their founding, venture-based startup corporate governance, and find themselves facing Uber-like crises with too few seasoned, level-headed business people in the boardroom. Yet in my own experience, I’ve seen technology companies nurture diverse, inclusive cultures, starting with a few one-on-one approaches from the boardroom.

Build internal career networks. At Volvo Car AB, where I serve on the board, we’ve launched a regular program where I have the opportunity to meet with senior and mid-level women executives on personal career development. We work with these executives to build on their strengths, clarify their career aspirations, and offer advice on advancement. This is a new program, but it is already proving a success in energizing and motivating the paths of these current and future female leaders.

Make mentoring personal. On the board of Schneider Electric, I make it a point to directly mentor a number of women on the company’s senior executive team. Women in management find it tremendously helpful to have someone in the boardroom take a personal interest in their career strategy and development. At Uber, new board member Ariana Huffington will be in an ideal position to put her mentoring and career savvy to work in helping rising women execs rebuild the company. The key is a regular ongoing program of mentoring and support.

Go beyond mentoring. The tech industry, in particular has too few role models for rising female talents. The mentoring aid above is helpful, but why not go one step better?  Companies can ask their male and female executives and board members to either mentor or sponsor promising female executives. There is a big difference between mentoring which is periodic advising and coaching and sponsoring where you take ownership for introducing and more actively helping sponsor an individual for their next step up in their career. Women who are already senior managers or board members can kick mentoring up a notch by sponsoring high-potential women. Take personal ownership of career coaching for the top talent in your organization. Give them advice, introduce them to the people they need to sharpen their skills, and introduce their names at strategic moments.

Recognize the women making a difference. When I served as chair of the board’s compensation committee at tech firm Polycom, we were active in the annual recognition event for sales staff. I noted that women were leaders in sales, making up less than 10 percent of the sales force, but were 34 percent of our “President’s Circle” top sales performers. Making an added effort to celebrate and promote this talent is crucial in sending the message that sales is not just a “guy thing” in the company.

The news emerging from Uber can serve as a spark for making the support and advancement of women in your company a boardroom mission. The talents of these women are a strategic asset to companies, and there is a growing body of research proving that firms who nurture and empower their gender diversity gain in revenues and adaptability. In any company, balance sheet results are always found downstream from company culture. When it comes to reshaping that culture to be welcoming to women, the boardroom is the ideal place to start.

 

Betsy S. Atkins is a three-time CEO, serial entrepreneur, and founder of Baja Ventures. She has co-founded technology, CPG, and energy companies, and currently is director of Cognizant Technology Solutions Corp., HD Supply Holdings, Schneider Electric SE, SL Green Realty Corp., and Volvo AB. A version of this article appeared in June on TechCrunch’s Crunch Network.

A Message to Our Members in the Houston Area

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Peter Gleason

Peter Gleason

Dear Members of the Houston NACD Family:

As the news of the devastation in Houston continues to come in, please know that our thoughts are with all of you and your families during this crisis. As the home of our Texas TriCities Chapter, including dozens of NACD members who volunteer with the TriCities Board in Houston, not to mention chapter staff and two of our own national staff members stationed there, the city is a key geographical point of our membership, and our thoughts and prayers are with everyone in the community. We know the storm is not yet over, and there are more trying times ahead. We also know the spirit of the Houston community will persevere and will bring the region back stronger than ever.

All my best,

Peter R. Gleason
President & CEO

Innovation: A Board Imperative

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Lorrie Norrington has over 35 years of operating experience in technology, software, and Internet businesses. Norrington is currently an Operating Partner at Lead Edge Capital, and serves on the boards of Autodesk, Colgate-Palmolive Co., HubSpot, BigCommerce, and Eventbrite. She lives in Silicon Valley. This blog is part of the 2017 NACD Global Board Leaders’ Summit series.

Lorrie Norrington

A company’s board sets the tone from the top and oversees long-term strategy. However, now more than ever, boards also must actively work to understand technology trends and encourage a culture of innovation that drives long-term growth. The development of an innovation mindset has become an imperative for directors.

The pace of technological change is forcing governance needs to evolve faster than anticipated. As a result, the inability to innovate has become one of the biggest business risks in most enterprise risk management assessments. It is useful to understand that both evolutionary innovation (or the combination of small ideas into bigger change) and discontinuous innovation (which is disruptive to companies and industries) can render companies uncompetitive in months and years—not decades.

Below are some of the techniques I’ve used over the past decade as a director to keep current on my knowledge and help boards embrace technology and innovation.

Take It Personally

You don’t have to live in Silicon Valley or be a technologist to possess a solid working knowledge of innovation and technology trends. In our previous roles as executives, we were forced to keep current on business and technology changes. The same holds for board directors. It is up to you. Annual updates through events like the NACD Global Board Leaders’ Summit are essential to learn about key trends and best practices from other boards. However, given the rate of change, you cannot rely solely on annual updates. Every year, at a minimum, I read the top three business technology books on Amazon’s bestseller list, attend one technology conference (Mary Meeker’s annual pitch is a must), and read my favorite tech-focused publications (i.e., Recode and TechCrunch) daily. This routine enables me to engage in the boardroom with an informed perspective.

Go Beyond the CEO

With today’s rate of change, it isn’t realistic to expect the CEO to have all the answers regarding innovation efforts and how teams are applying technology. If your board has a technology and innovation committee, take time to understand executives’ areas of focus and ensure the agenda is balanced to include both the risks and opportunities technology change can create. If your board does not have one, ensure one of your board members is designated to engage regularly with the chief technology officer or chief product officer about their mid-and long-term innovation and technology plans.

Create an “Innovation System” for Your Board

A technology and innovation review should be part of your annual, board-level strategy or product review. Examining current technologies and innovations, as well as early-stage technologies and innovations that management believes to be part of the future, are two key behaviors to build as a part of your board’s robust “innovation system.” Last, by including technology and technical product skills as part of the criteria for new board members, you will ensure the board has the right skills long-term to encourage and challenge management.

In sum, boards set the tone for the entire organization. If you embrace technology and innovation, this empowers everyone throughout the company to do the same. In a world where the rate of technology and innovation will determine long-term success or failure, directors must embrace the changes needed to encourage and challenge management to accelerate their understanding of technology and the pace of innovation.

 

To learn more about technology and innovation, attend the 2017 Global Board Leaders’ Summit, Oct. 1–4, 2017, in National Harbor, MD. For the full Summit agenda, please visit the Summit website.