On Steroids: Uber's Wild Psychological Ride
Uber dramatically disrupted the global taxi industry in less than a decade. Now, former Uber engineer Susan Fowler has disrupted Uber by blogging about being sexually harassed while working at the firm. That blog post turned out to be a tipping point that set off a chain of events leading to the firing of Uber visionary and CEO Travis Kalanick in June 2017. It also led to public conversations about a variety of psychological and ethical issues impacting Silicon Valley, including sexual harassment in Valley technology firms.
Risk-Taking Fueled by Testosterone: Direct and Indirect Evidence
One of the distinctive features of Silicon Valley’s entrepreneurial culture is its appetite for taking risks.
During the past 10 years, psychologists and neuroscientists have demonstrated how elevated levels of the steroid hormone testosterone are strongly associated with high-stakes risk-taking. Notably, studies of primate behavior, including humans, have found that alpha males—the dominant male in a particular group—have above average testosterone levels relative to their peers. Notably, risk-taking that produces success serves to increase testosterone levels further, thereby generating a feedback loop that can lead those levels to become excessive. When this occurs, risk-taking becomes excessive and in nonhuman primates manifests itself as the picking of injudicious fights with other males over territorial expansion and breeding opportunities with females.
In the absence of direct biological evidence, such as blood test results, it is wise to avoid making specific attributions about hormone levels. However, it is possible to look for indirect evidence such as signs of imprudent behavior in high-risk environments. Doing so is often the first step on a path to mitigate problematic behavior without losing creative energy.
Warning Signs of Imprudent Risk-Taking
Signs of imprudent risk-taking include excessive optimism, overconfidence, the setting of very lofty goals, and an extremely strong need to succeed. Even a cursory look at Kalanick’s history provides clear indications of these signs. The recent media coverage of Uber has emphasized that the company had no CFO or COO. Both posts were vacant, and only recently did Uber attempt to fill them. Think about it: a company with a $70 billion valuation operating in more than 70 countries without a COO or CFO? Talk about excessive optimism and overconfidence.
Disrupting the global taxi industry is a very lofty goal. Interviews with people close to Kalanick shed insight about his aspirations, with one close colleague saying that he will run through a wall to achieve his goals. Kalanick has certainly been willing to risk the survival of the company itself, most notably when Uber impinged on others’ property rights in its dealings with Apple and Google sister company Waymo. Property right infringement in the human world is akin to aggressive territorial expansion in the non-human world; however, in the human world, these types of infringements have legal and ethical overlays.
Kalanick’s firing in June has propelled him into the classic position of a toppled alpha male. That toppling came at the hands of a particular set of investors who believe that the ex-CEO’s past actions have threatened the value of their investment in Uber. Kalanick spent the rest of the summer working to build a coalition to help him regain dominance. A reasonable guess is that testosterone levels ran high as this battle unfolded, and in late August Uber’s board announced that Expedia’s head Dara Khosrowshahi would be Kalanick’s replacement as CEO.
Tone at the Top
In organizations, the tone gets set at the top. Excessive optimism, overconfidence, lofty goals, and the drive for success filter down through organizations. A single-minded focus on goal achievement can foster environments conducive to the various problematic behaviors mentioned above.
Setting the right tone in entrepreneurial environments like Silicon Valley can be an enormous challenge. It takes self-control. Corporate leaders would do well to deal with the associated challenges not only for themselves, but also for the people in their organizations. Otherwise, they face the risk that control will be exercised externally, as happens when a company’s investors fire the CEO. For a vivid example of that, we need not travel far.