“The past 12 months have been a period of widespread change at Uber. After just 8 weeks on the job, our CEO Dara Khosrowshahi introduced a new mantra to employees: “We do the right thing, period.” Accomplishing that requires three key elements: transparency, integrity, and accountability”
Building the first iteration of a successful business or organization is quite hard. That is why most startups fail.
But creating a company that enables continuous innovation is even harder.
Data from S&P, which indexes the largest American companies, makes this point clear:
In 1950, the average age of a company listed on the S&P was 60 years. Today it is less than 20 years.
It turns out that, in most cases, time is a company’s enemy. What happens over time?
The first answer is competition. The cost of starting a company has dropped substantially. Lower costs mean, in hockey terms, more good players can shoot at the same goal. These players are now global, so the nature and intensity of this competition are relentless.
Statistically, most companies cannot survive this endless onslaught. The barbarians at the gate will eventually occupy the castle.
The second reason is inertia. At some point, a company becomes slow, clumsy, and dull.
I call this the curse of incumbency. Building an early-stage company is a very different muscle movement than growing an established business. The longer a company is around, the worst it is at innovating.
That’s why Uber’s plan is exciting.
Uber is unique for many reasons. It has a sky-high valuation but, as I wrote last year, has had poor executive leadership. Its fierce competition has further contributed to its recent stumbles.
The question will be can its leaders transform what is already a giant.
That seems to be their goal. Uber’s CEO Dara Khosrowshahi has announced sweeping changes — including a new mantra: “We do the right thing, period” — to what amounts to the core of the company.
These moves are not small tweaks. They are significant changes.
Time will tell whether they work, but either way, it is clear that Uber is trying to fight off the curse of incumbency. They are trying to transform a giant.