Two of the most polarizing companies in recent years are Tesla (TSLA -1.92%) and Uber. The two, in their own respective ways, have flipped the automotive industry on its head, and, along with other technology companies, have set the industry on a path to evolve wildly over the next two decades. Uber was a wake up call to major automakers, such as Ford Motor Company (F 0.66%), on ways to expand its top line without a traditional vehicle sale. And Tesla showed automakers electric vehicles are a viable business if you develop a strong product and brand.
However, what is becoming clear is that Tesla and Uber have something important they can learn from Ford: Corporate culture matters.
Tesla's upcoming Model 3. Image source: Tesla Motors.
What's going on?
Uber's public relations team has put in some work lately with multiple stories regarding company executives and treatment of employees. Here's a snippet from Susan Fowler's blog post, a former Uber employee, about her time there and the culture she witnessed.
I remember countless meetings with my managers and skip-levels where I would sit there, not saying anything, and the manager would be boasting about finding favor with their skip-level and that I should expect them to have their manager's job within a quarter or two. I also remember a very disturbing team meeting in which one of the directors boasted to our team that he had withheld business-critical information from one of the executives so that he could curry favor with one of the other executives (and, he told us with a smile on his face, it worked!)."
Also within Susan's post are allegations of sexual harassment and apathy from HR regarding the allegations. There's also a video of Uber CEO Travis Kalanick berating an Uber driver earlier this year. Just recently, respected Uber President Jeff Jones quit his position after only six months at the company because the controversies aren't what he signed up for.
"Any time you're going through a big change it's important to have consistent management," Colin Langan, a UBS analyst, told Bloomberg. "Jason Wheeler was a big hire and he's leaving, and there have been many other departures. If you're putting out aggressive targets and the people aren't there to meet them, it's a problem."
A trip down memory lane
Let's rewind a second, as many investors have forgotten how broken Ford's culture was in decades past. Ford was notorious for its toxic culture with executives putting their own advancement above their own departments and company as a whole. It created a culture of backstabbing, undermining, and anything but working together for the greater good.
Left: Alan Mulally. Middle: Bill Ford. Right: Mark Fields. Image source: Ford Motor Company.
The result was a cutthroat, careerist culture that didn't produce results and culminated in a company that had failed product designs, failed business strategies, and little leadership. Its stock price was declining, its debt was junk rated, and it was about to get much worse as the looming Great Recession was just around the corner.
In 2006, Alan Mulally, a former star executive at Boeing, took over the struggling Detroit automaker and pulled off a miracle getting the automaker through the Great Recession without taxpayer money. Mulally and his team fostered a culture that encouraged teamwork, consolidated and simplified the company's strategies, and produced vehicles people actually wanted to buy. It was a wildly successful turnaround and the cornerstone of its success was driven by Mulally fixing the toxic culture -- and that might be the most important thing Tesla and Uber can learn from an automaker that's been in business since 1903. I'm not saying the CEO's need to go, quite the opposite, they need to take a page out of Mulally's book and fix the culture they started.
