Innovation and leadership are two important components for an organization as it supports its growth and success. In an organization, combination of innovation and leadership influences the employees to generate innovative ideas, services and products. In this practice, the major role is played by the innovation leader. Each and every organization needs to set some priorities for developing innovation and leadership in its working environment (Adams, 2006). For this discussion, Uber Corporation is chosen here that is using continuous innovation to stay competitive in taxi and transportation industry. Uber is the organization with higher technology that has started its business operations in the year 2009. This company is operating its business in different areas such as food delivery, ridesharing and transportation network. Currently, Uber is running its business activities in more than 55 nations and headquartered in San Francisco, California (Uber Technologies Inc., 2018).
Innovation has been playing a vital role in the growth of Uber since its establishment. It can be noted from the fact that it is connecting transportation sector with the information technology as its platforms can be used through its mobile applications and websites. There are some factors such as market trends, evolution in transportation and competition, which led Uber to prioritize innovation in its operations. The company used innovation in different forms like shared value, new technology or ride sharing. In addition to this, Uber is adopting innovation to provide a better and affordable ride experience that cannot be provided by traditional taxies. It aligns its business model with innovative practices, so that they can increase profits and improve experience of both passenger and driver (Casadesus-Masanell, Makenzie and Didiomov, 2015).
Leadership is the process or action of leading a people’s group in an organization. This is a term that shows the ability of firm’s management to establish and attain challenging objectives, take appropriate actions, deal with the competition and motivate other people to perform effectively. Working as a leader can be really rewarding, but it can also be very tough. Leadership continuously presents challenges to the leader and whole organization. These challenges are an indication to grow to another level, to examine and enhance the process (Jordan, 2017). Under these situations, the leaders need to show that they can attain something, which is complex or even impossible. The leadership at Uber is beginning to attain something complex to imaging during past few months of boardroom infighting and scandal (Christensen, Raynor, and McDonald, 2015). Apart from this, the organization is facing various leadership challenges, which have adverse impact on the brand image of organization. The leadership challenges to Uber are stated below;
In this context, it can be stated that corporate culture is directly linked with the brand reputation of an organization. It has been found that Uber has a poor corporate culture, which is continued unchecked by leaders for several years. In February 2017, an employee of Uber blasted the company over sexual harassment and endemic sexism. This was the major reason that ended the duration of Kalanick. The corporate culture of the company has become wicked under constant pressure. The leaders at Uber were unable to manage its culture and employees that has affected its brand reputation adversely. In the past years, employees were engaged in harassment acts with the colleagues. Currently, a former employee Susan Fowler exposed to media that she was sexually harassed by her colleague (Latham, 2014). To overcome this leadership challenge, current CEO of Uber needs to adopt visionary leadership and improve its corporate culture. Implementation of this leadership style will assist the leaders in establishing a supportive and inspiring culture in the organization. Through this, Uber will grasp how to revitalize the teams of employees far from its headquarters and readdress the attention to future.
In addition to this, another leadership challenge at Uber is that organization is adopting a contractor relationship with its employees and drivers. The major problem is that company has executed contractor relationship with its drivers. This is the primary issue, because company is breaching the rights of drivers by seeing them as drivers only, not as actual employees. Because of this, drivers were not able to use their employee rights. The leaders of Uber were not taken this issue seriously and they have not taken any action against this. The deactivated drivers of the company had filed a case of unfair dismissal against Uber. The employees of the company thought that the actions of company are not justified and they are not included in the decision making process of company (Taylor, Cornelius and Colvin, 2014). Top management did not include its employees and drivers in decision making process that led them to dissatisfaction and increased employee turnover at Uber. To overcome this leadership challenge, the leaders at Uber can use and practice democratic leadership style. Democratic leadership style (Participative leadership) is shared leadership, in which people of a group can take participative role in business and decision making process. By the use of this leadership framework, the top managers can distribute the responsibilities equally and involve all the people in decision making process (Bhatti, et al., 2012). It can adopt the below-given leadership framework for the effective flow of information.
In addition to this, Uber needs to consider the ethical theories such as; stakeholder theory and right theory, which offers employee rights and responsibilities to drivers of Uber. The adoption of democratic leadership framework will assist Uber in developing job satisfaction and enhancing motivation among drivers and other employees.
Innovation is one of the strongest factors in the process of building competition and for the growth and survival of company in competitive business environment. It is essential for a company to understand that what processes and factors can drive innovation in the organization and it can help the firm in simplifying it by the use of effective leadership, strategies, systems and corporate culture. Innovation has a critical role in business performance of company (Pontefract, 2017). However, Uber has started its business operations with several innovative processes, but now transportation and ridesharing industry has various competitors. So, company is facing various challenges in relation to innovation. These innovation challenges at Uber are stated below;
Uber operates its business in an industry, in which trust between strange people is very important. This trust provides a comfortable and safe ride for both the driver and passenger. To deal with this issue, the company has made innovation and created a rating system to assure this reliability and trust between drivers and passengers. This system is known as rideshare rating system. For Uber, this innovation has also posed a challenge due to the way that the company has established this system without considering benefits of customers. Company’s policy of maintaining a five star fleet was disadvantageous for Uber’s drivers (Elliott, 2015). The competitors of Uber have also implemented same policies such as Lyft asks its customers that anything less than 5 stars shows dissatisfaction and unhappiness with the ride. Uber stated that the people, who fail to enhance their scores, will lead to permanent deactivation. It has led the drivers and employees to lower morale and job dissatisfaction. To overcome this issue, the firm should not rely on rating system only as it depends on rider’s mood. The organization should make changes in this system and use some other criteria to measure the ride experience.
Technology Innovation is one of the major innovations at Uber that assisted the organization in establishing its business operations in taxi and transportation industry. However, this innovation was unique and better for the growth of organization, but it posed various challenges to the company. It was challenging because there were various employees and drivers, which were not familiar with the updated technologies and smart phone applications. There were several drivers, who didn’t know that how to operate the Uber’s application (Rainey, 2010). To overcome this challenge, Uber needs to offer an effective training and development program for drivers. This training program will assist them in learning that how they can use and operate modern technology and mobile application. The organization can use open theory of innovation and it should use the inflow and outflow of knowledge to develop the internal innovation. After developing internal innovation, the company should implement other innovative practices.
Surge pricing is one of the most interesting innovations at Uber that was adopted for its labor. It is the technique, under which the company can charge higher prices in some specific situations. This was the innovation that was not welcomed by the customers and they criticized for paying higher fares during various times. The major reason behind this innovation is that organization faced the issue that they do not have sufficient drivers in particular location at specific times. So, they use this system to bring more drivers to those locations (The Economist, 2018). It has affected the buying decisions of customers towards Uber’s services and there was a decline in the client base of Uber. According to Diffusion theory of innovation, an organization that is introducing any innovation, should consider the target segment. Thus, Uber should understand the needs and level of its target audiences, and then it should develop a pricing strategy. To deal with this issue, Uber should use an effective pricing strategy and give some discount coupon to the customers. After completing the ride, the organization should pay total ride fare to drivers. It will assist the organization to satisfy both the drivers and customers as well (Vaccaro et al, 2012).
There is a significant relationship between innovation and leadership in any organization. One of the major priorities of leadership at Uber is to engage the drivers and employees in innovation and creative work. Under leadership, the first priority of Uber is to engage right persons at right time to the right extent in innovative work. This process of employee engagement starts when top managers change the roles and responsibilities of employees. By using effective leadership, the leaders at Uber are managing the drivers and implementing policies to maintain a better relationship with drivers and other employees. With the assistance of creative direction, the leaders are developing and encouraging collaboration. In this way, leadership is playing an important role at Uber and company is able to create a working environment, where employees are happy and satisfied (Santacreu, 2015).
Apart from leadership, there are various priorities, which have forced Uber to adopt innovation. Innovation has played an important role in Uber’s organizational life as it assisted the organization in establishing and then growing its business in many countries. Through this technology innovation, the company as planned to provide a better and unique ride experience to riders. This organization uses both open and disruptive types off innovation, which assist it to stay competitive in today’s transportation industry. Now, various new players have entered in the market, but still Uber is able to maintain its image by adopting innovative practices. Thus, these are the priorities, which led the organization towards innovation and leadership. To overcome the above challenges, Uber Company should use effective strategies and leadership styles (Slimane, 2015). These strategies will assist the company in managing the drivers and their conflicts. In addition to this, the organization should introduce something new, which is beneficial for organization, drivers and customers as well. The pricing strategy of the company should be effective, so that customers can afford the riding with Uber.
Conclusion
From the above report, it can be concluded that Uber is a well-established organization that has implemented both innovation and leadership. Innovation and leadership are two important processes, which support an organization to deal with the competitors and retain its customer base. However, both approaches assisted Uber, but it faced various challenges related to innovation and leadership. These challenges are such as corporate culture, relationship with drivers, technology innovation, rideshare rating system and surge prices. These challenges have affected the brad image of Uber in today’s competitive business environment. By implementing effective strategies and leadership styles, the company will be able to overcome these challenges and regain its brand reputation. Furthermore, there are some priorities of Uber in the relation of innovation and leadership. Both processes play an important role in the growth and success of Uber Company
References
Adams, K., 2006, The Sources of Innovation and Creativity, National Center on Education and the Economy.
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Christensen, C. M., Raynor, M. E., and McDonald, R, 2015, What is disruptive innovation Harvard Business Review, 93.
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The Economist, 2018, Uber is facing the biggest crisis in its short history, Available from https://www.economist.com/news/business/21719509-can-ride-hailing-giant-stay-fast-lane-uber-facing-biggest-crisis-its-short on 14 March 14, 2018.
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