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Uber CEO Dara Khosrowshahi’s Approach to Decision-Making
Whether a business is booming thanks to well-timed expansion activities during a stable economy, or a company is contending with declining revenue due to major global events outside anyone’s control, the way the executive team responds dictates how the company will get to the next phase.
Uber CEO Dara Khosrowshahi calls these different moments “peace time” and “war time,” and adapts his leadership approach accordingly. When things are going well, he takes the opportunity to spend more time collaborating and hearing different perspectives throughout the organization. During challenging moments, he prioritizes speed and top-down decision-making.
“There’s this push and pull,” says Khosrowshahi. “During easier times, I’m much more consultative. During tough times, I’m much more hardcore.”
The inherent challenge, Khosrowshahi says, is recognizing which moment is upon an organization. Given the high degree of variation in the way businesses are impacted by economic or geopolitical events, it can be difficult to assess how a particular scenario will affect an organization. It’s up to the leader to set priorities and establish the mindset that will trickle down through the company, says Khosrowshahi.
“There’s a human bias to process good news very quickly and to process bad news very slowly,” he says. “In tough markets, to some extent, the leader has to be able to stare down a black hole and understand what’s happening, and process very quickly, and then be decisive.”
Khosrowshahi joined me for a discussion on navigating different market conditions, his perspective on the pace at which companies should adapt their tactics and cultural norms, and his outlook for the future of transportation and delivery.
This interview was recorded in late 2022 as part of Greylock’s Iconversations series. You can watch the video of the discussion on our YouTube channel or listen to the podcast at the links below. And if you aren’t already a subscriber to Greymatter, you can sign up wherever you get your podcasts.
Episode Transcript
Reid Hoffman:
Today, obviously, we’re in that kind of a troubled market and troubled times. When you have capital markets work like this, when you have potentially fundraising difficulties, you have disbelief in the market, reflecting in multiples, other kinds of things, what skills of leadership, what ways of thinking about this as leaders most come to mind for you? And what are you doing? And how would you talk to leaders here about how to think about how to navigate these difficult times?
Dara Khosrowshahi:
Well, we’re in the middle of it. And so. I don’t pretend to know everything about it, but there are a couple of things that come to mind. First of all, as a leader, there’s a human bias to process good news very quickly and to process bad news very slowly. The minute you see a signal on good news, it’s like, “Good news. What do we do here and there?”
You see a signal on bad news. It’s like, “Nyah, let’s see what happens tomorrow.” And then, if tomorrow’s the same. You’re like, “Well, maybe things will change next week. Got to be patient. Got to be patient.” So, I think one is just to recognize, in tough markets, to some extent, the leader has to be able to stare down a black hole and understand what’s happening, and process very quickly, and then be decisive.
So, there are different styles of leadership during, let’s call it wartime and peacetime. And for me, during peacetime, I’m much more team-oriented. I want to hear everyone’s opinion, et cetera. I think we’re definitely during war time. During war time, you just have to be much more decisive and action oriented. It was a little lesson for me, I remember. This is not the first tough time for Uber, right?
RH:
We’re going to get back to that.
DK:
Yeah. Tough times are just kind of what we do. It is like a Thursday. And a much tougher time, frankly, for us, more than where we are now, was post-pandemic. Our mobility business, which was our cash cow, lost 85% of its volume overnight – within the context of we were losing two and a half billion dollars anyway.
So, I had some friends who were profitable businesses that lost a bunch of their volume. We were deeply unprofitable and lost a bunch of volume. And I knew we had to make some tough calls. And I really wanted my team to be bought in. So, we would get together on Zoom over and over, talk about what we have to do here and there. And one of the exchanges that I had with my CFO, Nelson Chai (that still sticks with me), as we were talking in circles all over, was that Nelson’s was like, “Dara, just tell us what you want to do. We’ll do it. You don’t need to ask our opinion and all this. Tell us.”
During tough times, your team needs leadership. You’ve got to assume that mantle. Once Nelson told me that, I was like, “All right, let’s go.” And I took input, but I started leading.
And this is not something that you do all the time, because you want your team involved. You’ve got to be top-down and you’ve got to solve for speed, and you’ve got to solve for decisiveness, because even if you’re decisive and you make 20%, if you make a decision that’s 20% off, it’s better than being indecisive and not doing anything.
So, there’s this push and pull. During easier times, I’m much more consultative. During tough times, I’m much more hardcore. And my team kind of knows that now. They understand, once in a while, I’m just going to come in, and we’re just going to go, and we’re solving for speed.
The second part that I would say is – and this isn’t just during tough times – is it’s the job of the leader, to some extent, to go against the grain. And it’s very easy for a leader, during good times, for you to become the cheerleader. Everything’s fine. The good times are when you’ve got to be the asshole.
The good times are when everyone feels great about what they’re doing, they lose discipline, they think they’re terrific. That’s when you’ve got to come down really hard on your team. And it feels nonsensical. It doesn’t make sense. They’re doing great. They’re amazing. That is not the time for you to be a cheerleader at all. And on the other side, it’s during the tough times when you’ve got to start being a cheerleader. And you’ve got to make an assessment of your team, your situation, et cetera. So, if you have a team member who’s not a wartime person, move them out. That’s a separate decision. But once you assess that your team is the right team there around you, that’s when you really have to lift them up. And it’s really hard because, at the end of every day, You’re like, “Oh my god, this is so terrible.”
But then, when you wake up that morning, and you get together with your team, it feels weird a little bit, because you don’t want to come off as too optimistic and not recognizing there’s this duality of understanding the reality and be like, “We can do this. Come on. We can do this. Let’s go.”
And it’s tricky because your team has to understand that you’re staring at that black hole, but then you’re like, “We got this.” And then, really lift up that team because, believe me, if you feel like crap, they’re feeling like crap. They need you to lift them up.