She apologized for her management style and stepped down as chief executive. Now, she says it was a mistake to fall on her sword and is taking her job back.
Former employees of Away luggage, one of the fastest-growing retail startups in recent years, accused the company’s chief executive, Steph Korey, of creating a toxic culture within the company in an article published by technology website The Verge that went viral last month.
The article included text messages that a Verge editor described on Twitter as showing Korey using the workplace messaging application Slack “as a tool to stalk and bully junior and minority employees.”
In the article, former employees – who were identified by pseudonyms – contended that Korey pushed them too hard. In one message quoted in the article, which was sent at 3 a.m., she told employees on the customer service team that they could not work from home or submit vacation requests until customer service problems she had identified were resolved. In others, she came across as passive-aggressive.
Within hours of its publication, the article had created a social media firestorm around the company, which is worth more than $1 billion in the private market with plans to go public. For a company focused on a millennial audience and a brand that seeks to evoke a sense of community, the story was viewed internally as existential.
Within 24 hours, Korey had issued a lengthy apology. “I am sincerely sorry for what I said and how I said it. It was wrong, plain and simple,” she said. “I can imagine how people felt reading those messages from the past, because I was appalled to read them myself,” she wrote. Days later, the company said that it was hiring a new chief executive and that Korey would become executive chairman.
The episode, the latest example of a fast-growing company run by young founders that has found itself in a crisis, was viewed within the insular world of startups as a swift fall for Korey, Away’s 31-year-old co-founder.
The new chief executive, Stuart Haselden, plans to start his job Monday, having been recruited from Lululemon Athletica, the company famous for its leggings.
But there is one new, significant wrinkle: His title won’t be chief executive – he will be co-chief executive with Korey. She isn’t going anywhere. The company plans to announce the move Monday morning.
“Frankly, we let some inaccurate reporting influence the timeline of a transition plan that we had,” Korey said in an interview last week. With some time and perspective, she said, the company’s board members decided to reverse themselves. “All of us said, ‘It’s not right.’ ”
The members of Away’s board say they feel as if they fell victim to management by Twitter mob.
The company now says it disputes The Verge’s reporting and has hired Elizabeth M. Locke, the lawyer who successfully brought a defamation case against Rolling Stone magazine for a story about a supposed gang rape at the University of Virginia. It is unclear whether Away plans to bring a lawsuit.
In a statement, The Verge said, “Steph Korey responding to our reporting by saying her behaviour and comments were ‘wrong, plain and simple’ and then choosing to step down as CEO speaks for itself.”
Sitting in a windowless conference room at the company’s SoHo headquarters, Korey, at one point nearly breaking down in tears, said that the month since the article was published had been a tough lesson about management – and herself. She was bombarded by criticism on Twitter and other social media platforms that she thought would put the company’s future in jeopardy.
“It’s very upsetting if suddenly total strangers tell you that you should get an abortion,” said Korey, who is pregnant. One user on Twitter wrote: “Imagine how she’ll treat that baby.”
In the moment, she said, she chose to take herself out of the chief executive role and make herself executive chairman. “I said, ‘I don’t know if the company needs a CEO under fire right now,’ ” she said. “ ‘Why don’t we just accelerate our transition plan?’ ”
In a separate interview, Ludwig Ensthaler, a partner at venture capital firm Global Founders Capital and the only independent director on Away’s four-member board, confirmed that it had been Korey’s decision to step down and that there was no pressure from outside investors. He added that he should not have accepted the restructuring plan she proposed in the first place.
Korey had already recruited Haselden to the company to become its president, with the promise that, after a transition period, he would be elevated to chief executive to help take the company public. When the plan changed after the Verge article was published, she said she would become executive chairwoman and Haselden the chief executive. But behind the scenes, she said, she expected both of them to operate pretty much in their original roles, just with different titles. Korey’s co-founder, Jen Rubio, will remain president and chief brand officer.
Haselden said in a telephone interview that the article didn’t paint Korey as the person he knew and said her original decision to step aside “was very selfless in trying to defuse the firestorm of social media.”
“But it just created a misconception that she was exiting the business, which was never the intent,” he added. Making them both co-chief executive, he said, “will clarify how we intended to operate from the beginning.” Korey said she still planned to eventually step aside after a transition period and Haselden will become the sole chief executive.
Korey said she has done a lot of soul-searching since the article was published. While she maintained that it misrepresented her behaviour, she said she recognized that she had made mistakes and could improve.
“When I think back on ways I’ve phrased feedback, there have been times where the word choice isn’t as thoughtful as it should have been, or the way it was framed actually wasn’t 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.”