World thought leaders in High Performance


Uber: how an organization with high market value doesn’t necessarily have to be an HPO

The recent case of Uber serves as an illustration of what a high performance organization actually is … and isn’t. Many people believe that an HPO’s main concern is achieving better financial results than its competitors. If this were the case, companies like Uber, and also Airbnb, would be HPOs for sure. After all, these companies have boosted their market value to enormous heights.

But why is it then that recently Uber CEO Travis Kalanick, and with him several other executives, were forced to resign from their postsUber: how an organization with high market value doesn’t necessarily have to be an HPO because they failed to deal with the sick business culture at Uber? Why have there been so many complaints about the company’s sexist culture, stories about fights, and legal procedures with their main “employees” the taxi drivers? And why did Minister of Justice-turned-advisor Eric Holder write, in a recent report, no less than thirteen pages of recommendations to sanitize Uber’s organizational culture? Surely none of the above are signs of high performance.

The clue is in one of the characteristics of an HPO that states it maintains good and long-term relationships with stakeholders. In many companies shareholders benefit most from the financial success of the organization. Other stakeholders, such as employees, clients, suppliers, government, interest groups, and society at large, often share less direct in the profits. And although there is nothing wrong with shareholders getting a good return on their investment, it is only acceptable as long as it is not detrimental to the interests of other parties that have dealings with the organization. It seems clear that at Uber the alpha-male culture of chasing financial success at all cost went at the expense of the treatment of (especially female) employees, one of the most important stakeholders of the company.

The key issue is finding a balance. As the interests of different stakeholder groups may not always coincide, it is essential to find a balance between them to make and keep every stakeholder happy. In this respect, an important difference between HPOs and non-HPOs is how they view the world and their position in it. HPOs look at their organizations from a more holistic perspective, take responsibility for their role in the world, and are strongly committed to responsible and sustainable entrepreneurship. By simultaneously focusing on the financial and non-financial aspects of their operations they are able to make a profit as well as balance the interests of all stakeholders of the organization. HPOs have the motto that everybody who gets into contact with the organization should get a good feeling, experience added value, and get a smile on their face when thinking of the organization.

To achieve this, HPOs aim to treat all people fairly and respectfully, regardless of their age, race, gender, or origin; deliver quality by giving clients, and also partners, value for their money; and pay attention to the effects of their operations on the environment. But make no mistake: HPOs may look like “playgrounds” where freedom rules and everyone can do whatever they like, but they are not. They are tough places with hard-working people, precisely because these organizations do not only focus on the financial results but also and especially on the non-financial results. Being financially successful is actually not that difficult to achieve as many managers know. After all, practicing cost reduction gives quick results. Or the company might be lucky enough to sell innovative products that everyone wants. The challenge however is to achieve both profit and non-financial results at the same time, and with that, safeguard the balance of all important aspects of organizational performance. This balancing act makes being an HPO so hard – but also so worthwhile.

But being an HPO is not for everyone, as the recent unfortunate occurrences at Uber show. In fact, one could argue that it is precisely because Uber did not pay (enough) attention to non-financial aspects that these incidents could take place. Thus, readers of success stories in business magazines should bear in mind that an HPO is always financially successful, where as a financially successful organization is not always an HPO. To be successful, it takes more than just chasing the almighty dollar!

More information:

Brad Stone (2017), The Upstarts, how Uber, Airbnb and the killer companies of the New Silicon Valley are changing the world, Bantam Press, London