Lessons from a San Francisco Start-up and Travis Kalanick

“I hate Human Resources,” the CEO began. “When I worked at Sun Microsoft, Human Resources was always getting in the way, with its bureaucracy and rules.” The sneer on his face suggested that he not only hated Human Resources policies and procedures, but also the people in HR.

“Why am I here?” I asked.

“You are here because when I come in to work, I don’t know every employee I see. I don’t know why we hired them and their qualifications. I used to.”  He went on to explain, from his 22nd story office in San Francisco’s business district, that his software and analytics firm recently had its first layoff. Further complicating his job, his company has operations in both the U.S. and in Europe.

This CEO was thinking about how his business needed to “upgrade” its processes for employee selection, performance management, and compensation. He needed analytics about his workforce’s level of commitment, productivity, and innovation. He was beginning to question if some of his current leaders might not have the skills to further grow the company.

The latest news last week about Uber exposed that its Singapore branch knowingly bought more than 1,000 defective Honda SUVs, and then rented them to their drivers without doing the needed repairs.  Subsequently, one caught fire, sparking panic throughout the company.

The Wall Street Journal observed that this was the latest crisis unfolding under Uber former Chief Executive, Travis Kalanick, who insisted on running the ride-hauling company as if it were still a scrappy startup, even though it had become a large global concern, with operations in over 70 countries. Despite its global growth and domination of the ride-share industry, Uber hadn’t added the executive leadership, nor built the kinds of systems and professional bureaucracy that multinational companies typically employ.

Every start-up wants to hang on to the mission, passion, and dedication to changing the world that led to its initial growth and success. At what stage is it critical for a startup CEO to realize that the company now needs new systems and processes and more sophisticated leadership to take it to the next level?

It is not only start-ups that require transitions. Mid-level companies, too, can require changes to their systems, processes and leadership as they grow, expand into new countries, and create new business models, products and services. Growing companies need more sophistication with predictive talent analytics, performance management, and the ability to align and grow regional and global operations.

Many CEOs of growing companies are beginning to consider the need for talent succession planning. Many have invested in new digital work technology and are wondering how to quickly integrate and align employee skills and work processes with the new technology. Sometimes, they need to rekindle the innovation they had as a start-up.

In my work, I have come to respect the CEOs who realize that their future success requires the processes and systems they once eschewed, and even ridiculed.  It is difficult for CEOs to look into the faces of the leaders who helped them achieve the company’s current growth, and realize that some of these leaders might not be able to take the business further.

Is your company reaching such a transition point? Do you have a transition story to share?

Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and is a Managing Partner of InnovationOne. He consults on innovation, global talent strategies, developing agile leaders and teams, and other strategic initiatives. Do you want to chat? Please e-mail Victor at victorassad6@gmail.com. Visit http://www.victorhrconsultant.com. For innovation visit http://www.InnovationOne.io.

 

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