Professional Documents
Culture Documents
2021Cohort
LeadingOrganizationsCaseStudy
RobinChasefoundedZipcarwiththegoalofmakingacar-sharingbusinessprofitableand
long-termviable.Herleadershipinclinationsappeartohavegotteninthewayofachievingthat
broadgoalefficiently.
RobinChase’sLeadershipStyle
- TheMission
ChasewantedZipcar“toprovideurbandwellerswithconvenient,reliable,fastaccesstocars.”If
thisstatementcanbeascribedtoherandtothefounding,Chasehadadecentmission
statement.Itcontainedaclearexplanationofwhatwasbeingprovided(cars)andtowhom(urban
dwellers)andthebenefits(convenience,reliability,andspeed).However,w hythosethingswere
importanttoprovidetotheworldwaslacking.ChaseknewthatdatafromEuropeancar-sharing
companiesshowedclearenvironmentalbenefitsfromreducedcarownership,andthustrafficand
emissions;however,thataspectwasdeemedsecondarytothemission.
Chaseexploredthecar-sharingindustryandfoundittobelargelyunsuccessfulandunprofitable.
Shedevelopedanunderstandingthatthechallengetomakingmoneywasduetoclunky,manual
reservationsystemsandlimitedcontrolofoperationalcosts.Chasebelievedthatwireless
technologywasthesolutionandwouldbethekeydifferencesettingZipcarapart.However,that
stilldidn’texplain“why”Zipcarneededtoexist.Infact,itseemedtomuddlethecompany’ssense
ofurgencyintoexistingforurgency’ssake.
Withoutacriticalmissionofservingapopulationindistinctneedoraddressingacritical
ecologicalconcern,Chase’sleadershipofZipcarwasangledmorelikeapersonalenterprise.
Insteadofbuildingthebestteamtocreatethebestproductasquicklyaspossible,Chasechose
toiterateonherownpricingassumptions,ignoreready-madetechnologicalsolutions,andbuilda
leadershipteamthatwasmadeofpeopleunlikelytoquestionherjudgment.
- TechnologyandthePricingModel
Chasebelievedthattechnologywasthebackbonetomakingacar-sharingbusinessprofitable.
However,whenZipcarwasfounded,shedidnotpersonallyfocusonthattechnology.Instead,she
focusedon“raisingmoney,writinganddesigningthewebsite,anddeterminingapricingmodel
forthebusiness.”Theseeffortsarecriticalaspectsofanybusiness,butit’sworthyofcriticismthat
theZipcarCEOwasnotfocusedontheonethingthatwassupposedtodifferentiatehercompany
fromalistofhistoricallyunprofitablecompanies.
Chase’sideawastoleveragewirelesstechnology,butinearly2000,therewerenoready-made
wirelesssolutionsthatwouldallowthecarstocommunicatewithacentralserver.Anengineering
firmhiredbyZipcardesignedakeypadprototypethatwouldletthememberusethecar,but
Chasediscardedthissolutionastoocomplicatedandnotsetuptoleveragewirelesstechnologies
-betheyinexistenceorimagined.Asaresult,Zipcarhadtodesigntechnologyfromscratch,
incurringexpensesandcostingthecompanytimetolaunch.It’sabitofatoss-upastowhether
thisisamisstep.Ontheonehand,designingthetechnologyresultedinasimplerexperiencefor
theZipcaruserandledtothetechnologybackboneChasewantedforthecompany.Ontheother
1
hand,importantly,it’snotclearthatZipcarcouldn’thavepursuedbothtechnologysolutionsatthe
sametime.Byrejectinganavailablesolution,Chaserejectedanopportunitytogetsomecarson
theroadgeneratingsomerevenueand,moreimportantly,datafromherwould-becustomerbase
tohelpbuildthepricingmodel.
Chasereliedonherfinancebackgroundandbusinessschoolreputationasa“quantjock”in
developingthepricingmodel.ExistingCanadianandEuropeancar-sharingcompanypricing
modelsweretherootofherZipcarmodel-butChaseadmittedthat“wehadnoinsightintohow
muchusewasgoingtobehourlyversushowmuchwasgoingtobedaily.”Asaresult,shespent
threemonthsrefiningamodel-byherself-thatappearstohavebeenbasedlargely(ifnot
entirely)onassumptions.Asaresult,whenthedatafromJune2000toOctober2000useand
earningscamein,thepricingmodelhadturnedouttobemateriallyinaccurateandnot
sustainable.Inavacuum,it’snotentirelyclearwhytheotherleadersatZipcarwouldhaveallowed
Chasetoholdalloftheactionandresponsibilityforthiscriticalmodel.ThemotivationChase
exhibitedinchoosingherteamshedssomelightonwhy.
- InnovationandTheTeam
Asexpected,Chase’spersonalvaluesandaimsforZipcarestablishedmuchoftheearlyculture
forthecompany.Chase’swordsdemonstratebeliefinanadhocracymodelofcompanyculture.
Shewantedtohaveemployeeswhowere“can-do,non-complainerswhowereingeniousand
innovative,didn’tneedalotofoversight,anddidn’tneedmoneytogetsomethingdone.”Despite
thisoutwardbeliefininnovationandbeingresponsive,Chase’shiringandfiringoftheZipcar
startupteamwasmoreindicativeofclassichierarchicalpositionpoweroverpeople.Theaspectof
adhocracythatwaspresentwastheinclinationtowardautonomousleadershipstyle.Chase
expectedherteamtoactbasedontheirownbeliefsandideas-andshedrewthisteamfrom
family,friends,andpeopleshealreadyknew.Presumably,thiswassoshecouldhavealevelof
certaintythatwhentheyactedfromtheirownbeliefsandideasitwouldbecongruentoratleast
compatiblewithChase’sown.TheZipcarstoryshowssomeoftheinherentdangerinseeking
homogeneityofviewpointinthisfashion.
FromaLeader-MemberExchangeTheoryperspective,hiringfamilyandfamiliarsintuitivelyseems
tobeapracticalwaytoimmediatelymovebeyondthestrangerandacquaintancephases.Zipcar
makesonequestionwhetherthatwouldwork.Forexample,Chase’shiringofherfriendand
neighborStephenOakleytobealeaderinZipcaroperations.Oakleywasapersonwhohada
variedandunfocusedcareerbackground,headmittedthat“[Chase]hadthisimpressionofmeas
anumbersperson,andI’mreallynotanaturalnumbersperson.”Therealityofthisstatement
showsthatOakleywasstillverymuchastrangertoChasefromabusinessperspective,even
thoughtheywerefriends.Thatbusiness-unfamiliaritymeantOakleywasanearlyhirewithoutany
apparentabilitytoaidthecompanytowardaddressingthecrucialtechnologyorpricingfactors.
Moreproblematically,Chase’sinclinationtowardhiringpersonalconnectionscreatedapotentially
falsein-groupout-groupdynamic.It’snotaddressedintheassignedcasestudy,butCo-founder
AntjjeDanielsonwasfiredbyChasewithinayearofZipcar’sincorporation.1 Danielsonwasa
scientistwithpreviousexperienceinthetechnologyandautomotivesectors.Theideafora
1
Duhaime-Ross,Arielle.“Driven:howZipcar'sfoundersbuiltandlostacar-sharingempire.”TheVerge,2014
https://www.theverge.com/2014/4/1/5553910/driven-how-zipcars-founders-built-and-lost-a-car-sharing-empire
2
car-sharingcompanywasDanielson’soriginallythatshesharedwithChase.WhenZipcarwas
founded,Danielsonwasworkingherfull-timejobatHarvardandanadditional30hoursweeklyat
Zipcar,whichwouldindicateawillingnessto“gotheextramile”typicallyascribedtoanin-group
member.However,Chase’shusband,brother,andherbrother’scolleague,LarrySlotnick-all
earlyZipcarleadership-characterizeDanielsonassomeonewhowasnotdedicatedor
incorporatedintoZipcar’sgoals.2 ThisisacontraryviewpointtoPaulCovell,Zipcar’sfirst
engineer,whodescribesDanielsonassomeonewhowastryingtocontribute,butwhowas
excludedfromdecision-making.3 Ultimately,inJanuary2001,ChasereceivedBoardofDirectors
approvaltomakeunilateralhiringandfiringdecisions,andshefiredDanielson.
Similarly,ChasedevelopedadistasteforKeeferWelchascompanypresident.Advisors
suggestedthatZipcarneededcorporatemanagerialexperienceonstaff,andWelchwasselected
forthatrole.ChaseterminatedWelchinthreemonths,assertinghewasnotagoodrolefit
becausehelackedstartuporsmallcompanyexperience.Assumingthiswastrue,theseare
characteristicsthatcomeoutinacandidate’sinterviewprocess.Moreover,Chaseandteamnever
replacedWelchwithabetter-fittingpresident.IwonderhowmuchdiligenceChaseandhercore
teamputintotheselectionofWelch,andwhetheranyonethatwasnotalreadyintheircoregroup
offamiliarswouldhavebeendeemedtobeacceptable.InadditiontopayingWelchseverance,
Zipcarlost$150,000incommittedinvestment-acautionarytaleofwhatcanhappenwhenyou
ignorecriticalstakeholderdesires.
Chase’sResponse
WhenChaserealizedthatherpricingmodelwasfaulty,herinitialresponsewasvisibledespair
andself-isolation.Thisisanextremeexampleoftransparentleadership,andnotonethatIcan
endorse.Leadersshouldbeexpectedtodisplaythecoreandaspirationalvaluesderivedfroma
company’smission.Transparencyislaudable,buthowdoyouconvinceyourworkforcethatthey
aredoingsomethingworthwhilewhileyoudemonstratelackofbeliefinyourmissionandyour
abilitytoachieveit?However,whenChasecomposedherselfanddiscoveredasolution,herstaff
feltthatshedemonstratedherselftobeanemotionallyinvestedandtransparentleader.4 Ihavea
strongsuspicionthatthiswouldonlyoccurinaveryyoung,veryleancompany,staffedalmost
entirelywithleadershipdrawnfromfamilyandfriends.Ithinkthissuspicionisborneoutby
Chase’sdismissalfromthecompanythatshefoundedinlessthanfouryears.5
TheonedecisionthatChasemadethatIcompletelyagreewithishersame-dayemailtoher
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customerbaseaboutthepricingissueandtheneedtoraiserates. Directproblem
acknowledgmentandsolutionproposalisthekindoftransparentleadershipthatralliescustomer
andemployeeloyalty.IfIhadfoundmyselfinChase’sposition,Iwouldhavesentthesameemail.
However,Ialsowouldhavehiredsubjectmatterexperts,leveragedexistingtechnologyfordata
sources,andinvitedotherstoworkonthepricemodelbeforelaunch-soIquestionifIwould
havebeencaughtinthesameposition.
2
uhaime-Ross.“Driven.”Paragraphs8-9.
D
3
Duhaime-Ross.“Driven.”Paragraphs8&10.
4
Quittner,Jeremy.“RobinChase:HowISurvivedaHugeScrew-up.”Inc.,2013.
https://www.inc.com/magazine/201303/how-i-got-started/robin-chase.html.
5
Duhaime-Ross.“Driven.”TimelineGraphic.
6
Quittner.“RobinChase”Paragraph5.
3