In the fast-paced world of booming start-ups, increasing market competitiveness, the need to constantly match investor expectation has forced most new age companies to have lean working structures. This often has resulted in prioritizing certain functions of an organization over others. Cost-incurring functions like a dedicated HR team or finance teams are usually ranked below having teams of working professionals directly contributing to the performance of the company. The rush to get the product market-ready and meet consumer preferences is often heavily prioritized. This method of organizational design, pioneered and accepted by most start-ups in the Silicon Valley, has become a norm in the startup ecosystem; a culture that demands high returns in relatively shorter periods. 

But as is the case with most popular systems in place today, this comes with a cost to the company. One that is not necessarily reflected in the company’s bottom-line performance but rather in its ability to sustain superior performance and maintain ethical standards of working in the long run. And sometimes the half-hearted approach to ‘softer’ organizational functions like HR rears its ugly head to the world. This problem was recently highlighted as one the Silicon Valley’s top performing startup, Uber, recently found itself amidst a sexual harassment scandal. This was soon followed with it founder and CEO Travis Kalanick admitting that he required ‘leadership lessons’ following an incident where he was found treating an Uber driver with not the best form of respect. 

The ‘devil’ in the details 

Susan Fowler an engineer with Uber recently penned her journey in a blog post alleging that her supervisor and manager had propositioned her. To make matter worse, her complaints to the HR team within the company yielded no results. Being cited as a ‘high performer’, the blog claims, HR and the upper management within the company shrugged off the complaint as a first-time offence. The senior management within the company didn’t feel “comfortable in punishing him for what was probably just an innocent mistake on his part” write Sarah as a part of her experience in Uber. She was then given the option of either shifting to a new team or continue working within the team nad face the probability of facing bad performance review at the end of her her review cycle by the very same person in question for sexually harassing her. “I was then told that I had to make a choice: (i) I could either go and find another team and then never have to interact with this man again, or (ii) I could stay on the team, but I would have to understand that he would most likely give me a poor performance review when review time came around, and there was nothing they could do about that” she adds.

The repeated failure to any action against the said manager by both the HR  and the senior leadership of the company on the basis of similar allegations filled by other female workers points towards a trend that is all too familiar with companies in the Silicon Valley. The fact of the matter remains that there seems to be a sanction given to the existence of week people management policies on the behest of financial performance. Successful technology start-ups like Snapchat and Github Inc. have all found themselves reflecting upon the need of having strong HR policies to ensure that employees are able to work in an environment, that although promotes healthy competition, also works to safeguard their personal boundaries. Most new age companies have been found (https://techcrunch.com/2017/02/20/uber-is-not-the-only-tech-company-that-mishandles-sexual-harassment-claims/) lacking in this regard. Unfortunately, Fowler’s experience with sexual harassment at Uber does not seem to be uncommon in the tech industry, with 60 percent of women in tech reporting receiving unwanted sexual advances, according to the 2016 Elephant in the Valley survey reported Tech Crunch. 

A problem, which often goes by unnoticed in the general coverage of the growth stories of startups, should be addressed before it becomes a symptomatic problem for every new company within the industry.  

A case of too late too little? 

After her blog being was picked up my major media outlets and Uber coming under the scanner once again, Tech Crunch reported that Uber CEO Travis Kalanick sent a memo to his employees, informing them of investigations being undertaken and the company bringing in former US Attorney General Eric Holder and Tammy Albarran, partners at law firm Covington & Burling, to independently investigate the workplace issues Fowler spoke about in her blog post. Along with this Uber board member and founder Huffington Post, Arianna Huffington suggested in a tweet that she would also be heading an independent and Uber CHRO Liane Hornsey and the associate general counsel Angela Padilla.    

 But in light of several areas where the Uber leadership has been found wanting, are such stop-gaps measures really the solution? Many within the industry are doubtful that these investigations would change the status quo, with two early investors feeling “disappointed” and “frustrated” in light of Uber’s response to claims of sexual harassment at the company. Their disappointment lies in the fact that Uber has appointed a team of ‘insiders’ to investigate the allegations of toxic work culture, compromising the transparency and validity of such investigations. 

The only way to increase transparency and make their work culture less toxic would be to strengthen HR and management function to be more cognizant of their work culture and be able to bring violators to justice in a fair and ethical manner. Even if this means investing in setting ups HR teams that look beyond managing just the usual recruitment and legal ends of human resource management. Having an HR function that has the voice and the spine to book offenders and actually contribute towards the growth of the company by building employee skillsets in both areas of technical expertise and other areas like leadership and diversity management. “One of the biggest mistakes that new companies make” Marc Andreessen- of the Andreessen Horowitz, a Venture Capitalist firm- wrote in a blog post, is that, “is to  fail to take HR seriously.” This was back in 2014. And three years down the lane the essence of his statement still comes to haunt the giants of Silicon Valley.