Uber’s Always Be Hustlin Doctrine

Always be hustlin’ is number seven out of fourteen core cultural values of Uber, the company that has globally transformed the way city residents commute. Well at least those were the 14 core cultural values when founder Travis Kalanick led the organization from 2010 until his game-faced resignation as CEO in 2017 following an embarrassing video recording of an altercation between Kalanick and an Uber driver together with reports of wide spread sexual harassment, bullying and discrimination within the firm. The reports were verified by an independent investigation undertaken by two law firms after interviewing over 400 staff and reviewing more than 3 million internal documents. Kalanick was recorded on video having an argument with one of his drivers about some of the company’s rate reductions. “People are not trusting you anymore,” to which Kalanick replied, “Some people don’t like to take responsibility for their own s***. They blame everything in their life on somebody else.” A conversation that was clearly straight out of the Uber core values play book, of which value number three states “Meritocracy and Toe-Stepping” read together with value number four which states “Principled Confrontation”.
Kalanick’s Oscar award winning apology quickly followed the video’s viral publication. “I must fundamentally change as a leader and grow up. This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.”
Uber’s eight-year exponential growth into a global commuter solution provider, valued at $68 billion as at October 2017, is nothing to sniff at. Even though it came at the great cost of employee well-being and board room governance issues, its impact on the entrepreneurial capacity of ordinary citizens in multiple countries is praise worthy. I recently met Martin (not his real name) in Johannesburg, where he works as a senior manager at one of South Africa’s largest financial institutions. Martin’s 5-year-old son goes to a school about 7 kilometres from where they live and it was costing him 3,000 South African rand a month (Kes 25,800) to pay for school transportation. In an “always be hustlin” spark, Martin purchased a vehicle and recruited a driver. “It was a no-brainer,” Martin tells me. “The driver drops off my son and picks him up from school every day. In between, he makes up to 7,000 rand per week (Kes 60,200). After netting off fuel, the driver gives Martin about 2,000 rand (Kes 17,200) weekly which Martin entirely uses to pay for the car’s financing and insurance and the driver keeps the rest as his earnings which amount can range from 2,000-4,000 rand (Kes 17,200 – Kes 35,400) per week. “I will be breaking even for 18 months, after which the car will be fully paid off and then I can see profit,” he surmises. “But most importantly, I’ve found a cheaper solution to transport my son to school that gives someone employment and also puts money in my pocket.”I’m sure this story is replicated here in Kenya too.
One of the recommendations that came out of the Uber investigations were to reformulatethe company’s values (14 values are unusually many and quite difficult to inculcate as an organizational culture) especially seeing as some were seemingly promoting self-seeking (such as toe-stepping) at the expense of building a team spirit. More importantly, following protracted board room struggles to reduce Kalanick’s power on the board that culminated in a law suit, a refreshed governance structure was formulated following a billion-dollar investment by Softbank.The Uber board has now been expanded from eleven to seventeen members, four of whom are independent directors.
While a seventeen-member board is unwieldy at best, and a strain for any normal person to chair, it is the unintended outcome of a founder CEO’s unfettered grip to power over a fast growing global organization that has had an inarguable impact on urban commutes, entrepreneurship and employment. The jury remains out as to whether this new governance structure at the top, together with a new CEO Dara Khosrowshahi will be sufficient to change an unhealthy organizational culture while maintaining the strong growth momentum it has enjoyed. “Culture is written bottoms up,” was one of Khosrowshahi’s initial statements upon taking up the CEO job. Only time will tell whether the new CEO can upend the trend that cultural norms start at, and are set by, the apex of an organization.
[email protected]

Twitter: @carolmusyoka

Lipa Na Mpesa As An SME Growth Engine

[vc_row][vc_column width=”2/3″][vc_column_text]A tweep (citizen of #KenyansOnTwitter county) recently drew my attention to a July 2nd 2017 Bloomberg article titled “MYbank deepens push for business banks won’t touch.” MYbank is an online lender that is 30% owned by Ant Financial, Alibaba’s financial affiliate.In case you missed it, Chinese billionaire Jack Ma’s Alibaba Group is the number one global retailer with its monolith ecommerce platform. The article quotes MYbank’s President Huang Hao, who is looking to win as many as possible of China’s 70 million to 80 million small businesses as customers, most of which have no access to bank loans as they lack collateral. “We are like capillaries reaching every part of the society. It could be a small restaurant, a breakfast stand, no other financial institution would have served them before.” By 2016 MYbank’s outstanding loan portfolio was US$ 4.9 billion with a non-performing loan ratio of about 1%. The article further quotes Huang as saying that the bank’s technology, which runs loan applications through more than 3,000 computerized risk control strategies, has kept delinquencies in check.

Huang’s description of MYbank as being like capillaries is eerily reflected by Safaricom’s Lipa Na Mpesa mobile payment platform. From large hotels to food kiosks, from barbershops to Uber taxis, from petrol stations to supermarkets, everywhere you turn, Lipa Na Mpesa (LNM) is now a viable option for payment of goods and services. The product has successfully straddled the small, medium and large business spectrum as a reliable cashless payment option with lower merchant transaction charges (in the range of 0.5% compared to 2% and above for debit/credit card services). According to Safaricom’s FY 2016 annual report, there were 43,603 LNM active 30 days+ merchants on its network. The FY2017 results announcement reflects that the number of merchants is now just over 50,000.

Cash flow is the lifeblood of a business, as any long suffering entrepreneur will tell you. LNM offers real time settlement of payments made on its platform working with 19 banks. What this means is that the business owner will receive the cash generated from revenues straight into its bank account on a real time basis which essentially makes it an attractive revenue collection tool for the entrepreneur weary of sticky fingers at the cashier’s till or even stickier encounters with gun toting customers. The game changer in the peculiar Kenyan economic space is the obvious intersection between the real time mobile payments being collected at the till and the potential to leverage on these cash flows for working capital expansion. 50,000 merchants are fairly low in a country with hundreds of thousands of businesses primarily using cash as the mode of payment. But this is where it gets interesting.

According to the FY2016 Safaricom annual report, the LNM payments in the month of March 2016 alone were Kshs 20.2 billion or an average of about Kshs 459,000 per one of the 43,603 merchants. Bear with me for a minute. Assuming these were SMEs, imagine the relief of being able to borrow from a financial institution, without any collateral, and using the real time unassailable revenue collection history from this payment platform. Imagine even further, that the repayments can simply be deducted at source and calculated as a percentage of historical daily takings.Then before the settlement of each day’s revenue collections, the financial institution collects a daily repayment, thereby reducing the loan amortization amounts into bite sized, easy to swallow chunks unlike the monthly hernia-inducing ubiquitous loan repayments.

Your generic bank will not be interested in this model. It’s simply “too much admin” to start configuring their systems to undertake daily as opposed to monthly loan amortizations and to try and guesstimate an SME’s potential risk of default on a loan without collateral using only mobile payment history as the risk variable. But a modern fintech can build the risk algorithms required to do this well. There is also the dual opportunity for Safaricom to grow its LNM merchant base into hitherto unchartered territory, using collateral free business loan products in addition to helping to formalize the large number of informal businesses operating in Kenya. The fintech space is where this innovation has already started happening here in Kenya, but it will only make economic sense if it is done on a large scale. Partnering with Safaricom will be key to this growth.

[email protected]
Twitter:Twitter: @carolmusyoka[/vc_column_text][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row]

Dump your gadgets for your own sanity

[vc_row][vc_column width=”2/3″][vc_column_text]”This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” Western Union internal memo, 1876.

I recently stumbled upon an interesting info graphic titled Future Work Skills 2020 published by the Institute For The Future. The Institute predicts six drivers or disruptive shifts that will reshape the workplace landscape. The six drivers are extreme longevity, rise of smart machines and systems, a globally connected world, a computational world, super structured organizations and, finally, new media ecology. The last three drivers are of keen interest. A computational world foresees that massive increase in sensors and processing power makes the world a programmable system. Super structured organizations assume that social technologies will drive new forms of production and value creation. New media ecology predicts that new communication tools will require new media literacies beyond text. The info graphic then aligns each of the drivers into key skills that will be needed in the future work force. Those last three drivers of interest morph into one key skill: Cognitive Load Management.

Why should this interest anyone today? In this highly connected world full of multiple distractions from various media such as smart phones, computers and digital television, it is becoming increasingly difficult to spend an hour concentrating on your work without a distracting beep from an incoming Whatsapp message, intrusive ping from an incoming email, or blinking light on your smart phone screen indicating a Facebook, Instagram or Twitter update. All these incoming distractions are like proverbial onions. You click on it only to discover another layer of data or action that needs to be peeled. You click on that data or take on that action and it reveals yet another layer of data or action that requires attention. An hour or two later and you’ve been sucked into a vortex of activity that had nothing to do with what you had been attending to before you succumbed to that seductive distraction. And your desk is still piled high with work. These distractions simply help to create a cognitive overload for the desk situated professional.

In cognitive psychology, cognitive load refers to the total amount of mental effort being used in the working memory. A colleague recently shared with me how his South African based client decided to deal with what was equivalent to an organizational cognitive overload. The organization, a financial intermediary, declared Wednesday as a no –Internet day. The email servers automatically send a standard auto-reply message that politely encourages the sender to pick up the phone and call the person they are trying to email. The message is subtle: Email is a lazy way to communicate, and going back to good old fashioned human interaction once in a while may remind one of why they are a member of a flesh and blood race. During that Wednesday, Internet is blocked for the entire organization for the entire day so there is no possibility of surfing the Internet while pretending to be busy at work. [Obviously the exception is the customer call center] The result is that employee productivity shot through the roof on Wednesdays and it is now a permanent fixture in the organizational calendar. The future world predicts that the world around us will be more interconnected leading to a higher demand for real time customer driven solutions. Our electronic gadgets at home such as fridges will be connected to our vegetable and grocery suppliers for automatic restocking, our transportation solutions be they private or public will be connected to our phones for real time traffic updates and preferred route advice, and so on. Our world will be impossible without the Internet. Our world will be driven by data. Our world as we know it, will be easier to navigate but harder to remain present and fully immersed in the moment as there will be multiple incoming data salvos in the daily battle for limited brain space. It will be as difficult to shut down office Internet as it will be to shut down an oxygen machine on a life support patient in the ICU. And therefore cognitive load management has been identified as a key skill for the 2020 workforce. Sounds easy? Have you ever seen a slow moving vehicle in front of you on a road that has minimal traffic? I now take bets with anyone who is in the car with me that if we overtake the vehicle, we will find it being driven by a middle aged male driver actively talking on a hand held mobile device. I’ve concluded, in a most non-judgmental and non-feminist manner, that middle-aged men cannot drive and hold a phone simultaneously. It is, quite simply, a cognitive train smash. Middle aged male readers, try not to get your knickers in a twist on this anecdotal finding, rather you should ask yourselves your relevance in the next 20 years in the work place. And this is for no other reason that the extreme longevity driver described above will keep workers in the work place longer and the possibility of multiple generations struggling to build cohesiveness in the same workplace will be a notable challenge. Add the fact that the generations in school today are for the most part computer savvy by the time they are ten years old and will have adapted to cognitive load management like a duck takes to water. When Western Union predicted the shortcomings of the telephone as a means to communicate in 1876, they could never, ever have predicted what that instrument would evolve into a century and a half later. It makes me start to ask: what disruptive technologies are we dismissing with a snort of ignorant derision today? Perhaps the local taxi drivers fighting Uber might be better placed to answer that.

Twitter: @carolmusyoka
[email protected][/vc_column_text][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row]