Leadership, Ethics, and Organisational Culture: The Case of Away Travel BUS304

Away Travel:

A Troubling Case

Case Studies:

Leading Organizations

The Start of the Voyage

Away, the trading name of JRSK Inc., has certainly had an interesting journey in the few years it's been around. Starting life as a feisty, ambitious start-up, the company soon became known for an it product loved and demanded in equal measure by Millennials, and then, dramatically, fell from public grace as an aversive organizational culture was revealed. But to understand the various turning points on this strange voyage, we ?rst have to go back to the beginning.

Away founders Jen Rubio and Steph Korey ?rst met at another Millennial brand favorite: the eyewear company Warby Parker, where they were both part of the early executive team. After working together for two years, they parted ways, with Korey taking a merchandising position at a bedding company, and Rubio joining clothing retailer All Saints. In 2015, they brought together their start-up and marketing experience, and got ready to launch Away, a direct-to-consumer company focused on manufacturing and retailing innovative suitcase designs.

It wasnt long before sales began to soar. Just 12 months after launching its ?rst product in February 2016, the company brought in some $12 million in revenue (Lagorio-Cha in 2019), and Rubio and Korey managed to raise $8.5 million in Series A funding, on top of $2.5 million in seed funding theyd secured less than a year earlier.

Why did the product take o? so quickly? Marketing professionals often describe product design and retail as incorporating a series of trade-o?s: as the notion of the iron triangle suggests, you can have a product thats cheap, convenient or goodbut you cant have it all. Aways suitcase intended to disrupt that way of thinking. As a review in Business Insider extols, It takes all of our most important concerns about moving our belongings from Point A to Point B into consideration: ease of transport, durability, organizing ability, security, and reliability.In fact Away has done the seemingly impossible and made packing and carrying a suitcase downright enjoyable (Chen 2021). Multiple commentators agreed with Chen. Vogue magazine called the ?rst product to launch the perfect carry-on, Adweek named the company a Breakthrough Brand with Ingenious Marketing (in 2017, the company launched a travel magazine and podcast which featured celebrities using its products), and Fast Company named it as one of its Top 10 Most Innovative Companies.

Even within a saturated market, Aways suitcases certainly stand out. They have a distinctive, chic, minimalistic look with eye-catching accents, an indestructible design, and come in four useful sizes (the Carry-On, the Bigger Carry-On, the Medium, and the Large). Limited edition collaborations with major brands and celebrities (Serena Williams, Pantone, Pop, Miami Heat and Suki, to name just a few) have only added to their appeal. But the major selling points are the myriad features available for a selling price that starts at $225: 360-degree rotating wheels; a wipe-down, compartmentalized interior; a built-in, removable airline-compliant battery charger; a TSA-approved combination lockand for the indecisive consumer, a 100-day trial period.

The company imagebuzzy, responsible, and inclusiveonly served to bolster the appeal of the core products. Underlying the companys statement of purpose (an integrated mission and vision statement) was a message of inclusivity, a desire to democratize travel, and a focus on ethics:

We believe all travel makes us better. At Away, its not only our job to make every one of those journeys more seamless, but our responsibility to make a positive impact on the world. We do this through our products, through the platform we have, and the community we create. In fact, before selling a single suitcase, we made it a priority to partner with organizations seeking to create a better world for everyone. Since then, we have worked with Global Giving, Peace Direct, International Medical Corps, Gods Love We Deliver, and the Trevor Project. If youve bought anything from Away, youve also contributed to their work. The world is a shared placetogether, we can leave it better than we found it (Away 2021).

However, it soon became clear that while the brand image was appealing and the main product was structurally sound, the internal organizational culture was not.

Publicly Airing Their Baggage

In December 2019, less than four years after its inception, all of the positive PR Away had built up su?ered a major setback. The Verge, a US-based technology news website, published a detailed expos of what it described as a toxic working environment.

Perhaps not dissimilar to some startups, employees were regularly requested to work long hours to drive sales and build the emergent brand. Additionally, as a digitally focused, globally minded organization, communications mostly took place via the popular chat platform, Slack. But, thats where the similarities end. First, there were very onerous rules about how Slack was to be used for business communications. Ostensibly in the name of transparency, employees were not allowed to send emails to one another, and were only allowed to contact over Slack direct message for minor requests, such as to ask someone if they wanted co?ee. Instead, all communications were required to go through specially created work channels arranged around teams or projects. This meant that when employees were berated for transgressions or errors, it happened publicly in front of other team members. For example, one employee told The Verge that coworkers and executives regularly engaged in Slack bullying, which felt like having your pants pulled down in front of the whole company. In one instance, CEO Korey described an account manager as brain dead when a suitcase was accidentally sent to a customer without their initials being fully stenciled onto the tag (Figure 1).

However, the problems extended beyond Slack, and Korey was seen at the heart of them. Described as equal parts aloof, funny, critical, and cruel, Korey had a fanatical work ethic. She was always in the o?ce, oftentimes obviously working online past 1 AM, and encouraged her direct reports to do the same (Schi?er 2020). One whistleblower, Caroline, told The Verge, She would say Ill be working late tonightdinner is here if any of you can work beside me. I mean, leave if you have to, but I have to stay... Her messages were long and loving, but they were manipulative. If she didnt hear from you shed just contact you directly asking for verbal con?rmation you could work. Koreys leadership team followed her lead. In one story reported by a former worker, Customer Experience Manager Xandie Pasanen sent a Slack message at 1 AM, telling her direct reports to share on Slack photographs of themselves working once they got home (she then went on to share a picture of herself, in bed with a facemask on, typing at her laptop).

Korey also believed heavily in criticism, arguing that it was vital to employees growth. She was blunt with her opinions and encouraged her managers to be hypercritical towards their direct reports. The harsh criticism and gruelling work hours were presented to employees as valuable to the development of their careers. In order to ensure that the customer backlog was cleared, Korey advised her customer support team that she would refuse to accommodate any requests for paid time o? or home working unless, for six consecutive days, they each answered a series of random calls and messages from managers. According to Korey, this exercise would be invaluable in developing the career skill of accountability (emphasis Koreys¹). Later, once Korey saw that two employees still had some time o? scheduled, she reprimanded them again, publicly, on Slack, saying If you all choose to utilize your empowerment to leave our customers hangingyou will have convinced me that this group does not embody Aways core values (Figure 2). As Aggeler and Lampen, writing in The Cut, pointed out, many of these demands were couched in a saccharine type of empowerment language that framed their managers demands as generous and team-building instead of exploitative (Aggeler and Lampen 2020).

All Slack messages are reproduced as written by Korey, and other managers.

I hope everyone in this group appreciates the thoughtfulness Ive put into creating this career development opportunity.

- Slack message from Steph Korey to her customer service team stating that paid leave would no longer be approved

One of the reasons that the Slack messages and other communications revealed by the Verge were so shocking to observers was that they seemed to contradict almost everything that had previously been written about Korey and Rubioand indeed about the brand itself. The cool, cult brand was mismatched with a cutthroat company culture where sta? were micromanaged and dissenting views silenced. In one telling example, a group of LGBTQIA and employees of color created their own Slack channel, #Hot-Topics: a kind of safe space where they could air their grievances and support each other. After Korey found out about the group, she ?red each member one by one, telling them that they had been racist and discriminatory by discussing their feelings of marginalization. One former employee, a person of color, described her shock to The Verge, That was jarringthree white people telling me I was racist, she said.

Going in the Wrong Direction

How did the mission and company culture become so misaligned? Co-founder Jen Rubio described a somewhat unconventional rise to the top in an interview with Inc. Magazine. (Lagorio-Cha in 2019). Born in the Philippines, she moved to New Jersey with her family at the age of 7, and experienced some marginalization at school. In New Jersey, I was the girl with an accent who ate di?erent foods. Who was put into lower classes, because I was an ESL [English as a Second Language] student she said. All of these things, I wanted to hide. Despite being an honors student, she left school at 20 and juggled a series of part-time jobs, including tweeting for a caf, which led to her being named as Warby Parkers head of social media, where she met Steph Korey.

Korey had a very di?erent upbringing. The daughter of immigrant parents (from Lebanon and Romania), Korey grew up in Cleveland, Ohio in a 55,000 square foot mansion with an indoor swimming pool. After boarding school, she attended Brown University, and unlike Rubio, Korey did go on to get an MBA, soon afterwards becoming a consultant for the mattress company Casper (Feldman 2018).

The idea for Away allegedly came when Rubio called Korey after her suitcase broke. Korey recognized that the problem with suitcaseshigh markups, poor quality, frustrating shopping experienceswere similar to the problems she was trying to solve about mattresses. To address this problem, they rallied support from friends and family, eventually raising $150,000, which they used to hire an industrial designer to create the prototype, and to ?nd a factory in China willing to produce a few thousand suitcases. I went from my last class of business school to JFK to Asia, described Korey, of a frantic time spent preparing to go-to-market while also completing her MBA (Feldman 2018).

Rubio and Koreys commitment was perhaps most evident in 2017 when major airlines banned lithium ion batteries being placed into the cargo hold because of the risk of ?re (Wamsley 2017). At that time, Aways luggage had batteries that could only be removed with a screwdriver, and customers began sharing on social media stories of having to dump their suitcases in the garbage at the airport. The ban could have spelled disaster for sales, but instead the leaders coordinated swift action: the product development team fast-tracked the development of a kit that would make existing batteries removable, the customer experience team personally contacted every a?ected customer to send out the kit, and the development of a new suitcase with a fully removable battery was expedited.

You don't have to graduate from an Ivy League school, and work at a particular place, and get an MBA to start a billion dollar company. But you have to have a purpose. If you start a company because you think you should, but your heart is not in itthat won't give you the fuel to get through the hard stu?. We had the passion, so when the battery ban happened, we knew how to push through it.

- Jen Rubio, on Aways response to the airline battery ban

Although this level of business agility is admirable, in the wake of The Verge expos, commentators were left wondering about the impact on the companys employees. As Brand Culture put it, the company grew to a $1.4b valuation while behind the scenes Aways employees, many of whom considered themselves supremely lucky just to associate with one of the decades most inspiring brands, su?ered one humiliation after the next (Brand Culture n.d.)

The Departure Lounge

The leadership response to the accusations were chaotic to say the least. At the beginning of December, shortly after the expos, Korey issued a public apology, saying that she was appalled at her own behavior and adding that I am working to be better every day and I promise to keep at it for the sake of our employees, our customers and our company" (Meisenzahl 2019). Just three days later, however, she announced her resignation, with the executive team announcing Lululemon COO Stuart Haselden as her replacement. In January, though, Korey renounced her decision to resign, telling The New York Times that she would not give in to a Twitter mob and that it would be wrong to walk away from the company she had built. I honestly thought that people didnt care that much about the inner workings of Away, she told Aaron Ross Sorkin, Who is C.E.O. and who is executive chairmanthat wasnt something that, at a private company thats less than four years old that sells travel products, I just didnt think would be news and people would care (Sorkin 2020).

Korey announced that she and Haselden would act as co-CEOs, an act that immediately prompted the resignation of Aways Chief of Human Resources, Erin Grau. Protests like these, and the continual leak of business communications after The Verge article, seemed to indicate that Korey had not changed her behavior. When I think back on ways Ive phrased feedback, there have been times where the word choice isnt as thoughtful as it should have been, or the way it was framed actually wasnt as constructive as it could have been, she said. Those are not, in the eyes of our leadership and the eyes of our board, terminal, unsolvable problems. Nevertheless, after criticism for public attacks she had made against digital companies over social media, in July 2020, it was announced that Korey would be stepping down after all (Schi?er 2020). In January 2021, Haselden announced that he too would be quitting the company, with Jen Rubio appointed interim CEO (Away 2021b).

According to an interview with Rubio, sales of Aways products dropped by 90?ter the scandal; however, it is important to note that this coincided with a global pandemic that hit the travel industry especially hard (Crino, 2021). The remainder of the tale is one of turnaround. In the aftermath of the story breaking, Pivot, a tech-focused podcast known for its unabashed criticism of corporate failings decided to report on the incident (Swisher and Galloway 2020). Interestingly, Haselden, the new (male) co-CEO took the decision to buy the ad rights to the episode, ultimately sponsoring the entire podcast. The focus of the show pivoted to the action that the company took to redress sta? grievances, rather than the toxic environment itselfrepresenting some fairly positive PR amidst a sea of negative coverage. Later, Rubio herself has also discussed her plans for turning the company culture around, as well as the way she leads, including promoting positive communications with team members, focusing on work-life balance and encouraging transparency. Speci?c policies that have been implemented include o?ering a gender-neutral parental leave policy, company-wide wellness days o?, and a paid-time-o? program for religious holidays (Crino 2021)

Rubio says one strategy she has adopted since taking over the CEO role is regular check-ins with all of her employees to talk about the direction of the brand, her vision, and her values, and to give them the chance to o?er feedback to her directly. She says she makes it a point to never skip those meetings, even if nothing to discuss.

- Tim Crino, on Jen Rubio becoming Away CEO

Extra Baggage for Women

At the time of the original announcement that Korey would be stepping down, multiple commentators pointed out that male company CEOs who had made transgressions of a comparable, or even worse nature, had been given longer before being forced out. K.J. Miller (2019), for instance, drew attention to the case of Ubers Travis Kalanick, who remained with the company for six months following disclosures about that companys work environment, including multiple allegations of harassment. An article in Fortune drew on examples of other high-pro?le female resignations at companies like The Wing, Reformation, Outdoor Voices, Re?nery29 and others, arguing that there is mounting evidence to many entrepreneurs, investors, and Silicon Valley executives that female founders are held to an impossibly high standard (Aspan and Hinchcli?e 2020). Miller agrees: Everyone knows that Amazon and Net?ix, two high-growth companies helmed by men, are di?cult places to work; the people who work there accept that going in. Why cant it be the same with Away? she ponders.