When A CEO Takes A Leave, It’s Serious Business

By Tracy Lien
Los Angeles Times

WWR Article Summary (tl;dr) Uber co-founder and CEO Travis Kalanick’s leave of absence signaled a shift in the company’s too big-, too hot- and too-innovative-to-fail attitude. It was an admission that as CEO he had to bear some of the responsibility for Uber’s mess. But business and management experts say Kalanick’s leave of absence means a lot more.

Los Angeles Times

When chief executives take leaves of absence, it’s typically because they have serious problems.

So when Uber co-founder and CEO Travis Kalanick announced this week that he was going on indefinite leave, people took notice.

Kalanick’s announcement came at a tumultuous time for Uber. Former U.S. Attorney Gen. Eric H. Holder Jr. had just finished a months-long investigation into allegations of systemic sexual harassment, discrimination and bullying at the company. Holder’s firm, Covington & Burling, made 47 recommendations on how Uber could address its toxic culture.

Kalanick’s leave signaled a shift in the company’s too big-, too hot- and too-innovative-to-fail attitude. It was an admission that as CEO he had to bear some of the responsibility for Uber’s mess.

But his leave of absence means a lot more, business and management experts said.

When CEOs go on leave, it means that they’re taking a break from their day-to-day duties and that others will step in to perform their roles.

It’s different from taking a vacation because it signals that the executive, for whatever reason, is unable to effectively do his or her job at that point in time.

One of the more common reasons for executives taking a leave of absence is health, said David Mayer, a professor at the University of Michigan’s Ross School of Business.

Steve Jobs, for example, took multiple leaves of absence from Apple when he was receiving cancer treatment. Patrick Byrne, chief executive of Overstock.com, went on indefinite leave last year because of hepatitis C complications. He returned three months later.

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