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Why Uber’s New CEO Loves Leaks

Uber CEO Dara Khosrowshahi has been converted to a pretty radical theory of management and transparency — one that will no doubt be tested when Uber’s leaks concern his own plans and decisions.

Posted on January 25, 2018, at 11:55 a.m. ET

Denis Balibouse / Reuters

On Dara Khosrowshahi’s first day as Uber’s CEO, the company suffered what would be, for any organization, a massive and embarrassing leak: Someone recorded the new CEO’s all-hands with his new staff — and his bold promises that he would be “absolutely honest with you” and was “not going to bullshit you” — and passed the recording to Yahoo! Finance.

“It hit me right in the face on Day One,” he said in an exclusive interview with BuzzFeed News Tuesday at the World Economic Forum in Davos. But a friend soon talked him down from his initial, frustrated reaction, to an unusual realization: “Oh boy, so this is what transparency means."

Khosrowshahi’s first-day shock produced a kind of a revelation in one of the US’s most closely watched executives.

“If I step back then, the leaks and the Susan Fowler exposure, etc. — it not only started a real cultural change that was painful for Uber but incredibly positive,” he said, to a ripple of surprise in a packed hall on Thursday earlier in the day. “The leaks led Uber to finally understand that it had to make the changes that it is making as a company to break from the past and go forward as a company that does the right thing, and the press played a very, very big part in it.”

That is, perhaps, easy for Khosrowshahi to say. The leaks — or rather, the ruthless, dishonest, and misogynistic management that they revealed — got him his job. They also gave him reason to make a clean break with prior management, to push dramatic governance changes, and to tell a new story.

At BuzzFeed News, we published some of the most riveting Uber leaks — including a particularly sloppy one, after Uber staff forgot to tell me that a dinner was off the record. So I have a special interest in this question, as well as in the broader topic of what leaks from institutions mean, how leaders ought to see the internal sources who drive them crazy, and even how to explain the work of journalism to the often frustrated people we cover. So I asked Khosrowshahi’s communications staff if he’d be willing to elaborate on his view on leaks.

Before he arrived at Uber, Khosrowshahi hadn’t spent much of his career worrying about leaks. He made his name at Expedia, the travel website that, while it earns several billions of dollars in revenue every year, hasn’t been a source of major journalistic or public interest. Expedia, based away from the tech press in Seattle, didn’t leak much, not that anyone outside really cared.

“I think we were much less interesting as a company,” Khosrowshahi said.

But there was another reason, too: “I think that the company was aligned … the external message was the same as the internal message. It was transparent. It was consistent.”

“And I think Uber can get there as well, and I think once we get there … we'll be a less interesting company — maybe probably for you — or we'll be interesting not for the drama inside the company but for the great things that we accomplish,” he said.

And so, after the initial sense of betrayal that comes when your private comments go public, Khosrowshahi’s perspective shifted on the Uber staffers who had been shoveling internal scandals to the tech and national press.

“The leaks here were the voices of, I think, employees who truly want to make the company great, and the only way that they were able to be heard was through the press,” he said. “While it is not how you want a company to develop, I believe that what happened last year is going to be regarded as an incredibly important stage of the company and a necessary stage of really making this company a great company, and a great global company.”

“I'm hoping to reduce the number of leaks that our company is subject to, but I do think that the leaks that happened in the past at Uber were as a result of voices that weren't heard,” he said.

Khosrowshahi said he is a curious and open leader. If you want your employees to be honest with you and transparent with you, he said, "the only way to get that is to be transparent back.”

That sounds like a management cliché, and “transparency” is a buzzword in corporate America in general and the venture-backed tech industry in particular. It typically means an open and egalitarian internal ethos that stops at the sign-in tablets by the reception desk (at Uber, Facebook, BuzzFeed, and most other tech companies) that ask visitors to sign NDAs; at CEOs’ demands for plumbing expeditions after minor leaks; at federal investigations of “insider threats”; and at dire warnings aimed at potential leakers. Meanwhile, the world’s leading leak entrepreneur, Julian Assange, sees leaks as weapons of insurgency against established institutions and the existing order.

Khosrowshahi, however, seems to be talking about a kind of external transparency and embracing of the value — obvious to journalists, less so to executives — of whistleblowing.

That kind of transparency has demonstrable cultural power. We naturally fetishize secrets, as the opening of even banal aspects of Hillary Clinton’s closed world by hackers showed; open communications preemptively neutralize them. And you could argue that Donald Trump has benefited from the sluice of information coming from his campaign and White House, an open stream of leaks and infighting that have been a sort of safety valve keeping his chaotic circle from actual explosion.

That kind of forced transparency may also be inevitable in a changed world. Companies now operate with insecure data, social media that connects every staffer to curious journalists, and encrypted messaging tools that allow secure leaks without even the mild hassle of PGP keys.

You don’t have to buy that prediction, though, to think Khosrowshahi has been converted to a pretty radical theory of management, and one that will no doubt be tested when Uber’s leaks concern his own plans and decisions, rather than his predecessor’s. I asked him at the end of our conversation if he really meant what he said, whether he was comfortable with the logical conclusion.

“Does that make it hard to have secrets? Because you do need secrets, right?” I asked.

“I don't know if that's true,” he replied, to my genuine surprise. “I think, if you tell the truth, life gets easy.”

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