BRANDS THAT LEARNED FROM CULTURAL DISASTERS

BRANDS THAT LEARNED FROM CULTURAL DISASTERS

March 11, 2019

Leaders make every effort to think through the best outcome for their trade, which includes communication and setting up certain standards for their teams. While these standards may not be carved out as ‘must be’ in stones, they sure do come in handy in defining organizational culture. It is the guide for the organization outlined with various beliefs, aims, goals and it helps create a stable and running environment of an organization. Though organization leads are the main architect of this culture, an established culture is worked upon and improved by the workers and the working environment itself, which also dictates what kind of leadership is actually needed by the people working.

Alongside the name organizational culture, in business terms it can also be referred to as business culture, corporate culture or workplace culture. With a small title, it definitely holds a lot of properties inside of it than one might think. It not only refers to the aims and goals of a certain company, but also holds experiences, members’ behavior guide, and philosophy – all by inner workings and interaction with clients outside office walls. It is the ultimate curry that has been slow-roasting overtime with unwritten rules and first hand experiences.

“The way things are done around here” – simply stated by Deal & Kennedy (2000) when asked about organization culture couldn’t be more precisely stated in a convenient way. No two organizations are alike and in every team, things are done a bit differently; as teams are mostly used to their own charms and quirks and the ultimate way towards success is to use these factors to their advantage, efficiently.

WHAT MAKES AN IDEAL ORGANIZATIONAL CULTURE?

So, what is an efficient organizational culture you might ask? In the year 2004, Cummings & Worley proposed the following points for a full-proof organizational culture changes to be a success.

  • A clear strategic goal – A clear vision that gives the clear message and direction for where the organization wants to be or needs to be.
  • Commitment from the top-management – The cultural change needs to be respected and maintained by top authorities to ensure actual implementation by the rest of the organization.
  • Realistic model culture – The cultural changes that are brought about need to reflect the persona of the organization and the workers involved otherwise it is no different than New Year’s resolution that no one keeps. The changes must be realistic and workplace appropriate to broadcast the right kind of image.
  • System modification – The working system needs to be compatible with the organizational culture. Therefore, the system rules will need to be in complete sync with the changes being made to ensure efficiency. Only then, the desired output can be achieved.
  • Ice-breaking and socialization – Recruits and newcomers need to be embedded with transparency and be trained to have a healthy culture in the workplace to ensure loyal workers who know their way around and meet up with expected results.
  • Ethical and lawful sensitivity – Bringing changes can lead to resistance and complications both physically and emotionally for workers already accustomed to a particular system. To ensure smooth sailing, employees need to be introduced to the reformed system gradually as well as compensated with rewards of equivalence to encourage the procedure of alterations.

ORGANIZATIONAL CULTURE STRUGGLES

Organizational culture is definitely one of the key elements for an organization’s success, but one thing that needs to be kept in mind that it is dynamic, and requires constant change and maintenance. A stiff culture will result in inability to cope with a crisis and a forever-changing culture would leave a complete butchery of employees’ mentality and their performance. There is a very fine line of balance and this is why there has been so many business fails just because of it.

There are some key points to what goes wrong when cultural changes occur or don’t occur, and not all organization can take the blast from a rough public backlash. They crumble and fall never to rise again while others crumble only to come back stronger.

UBER

UberCab founded in 2009 by Garrett Camp and Travis Kalanick, evolved fast and changed its name into Uber in 2011. The company introduced UberX into its app which basically allowed private car owners to offer ride to customers, exactly what we know Uber to be today. The growth of Uber excelled over the next three years and has even made ‘Uber’ an actual verb in the English language. With its immense success and rapid love from the customers, everything at Uber seemed like a dream, however, a formal employee spilled all the beans about the organizational culture inside and it wasn’t as tasty you would consider it to be.

The organization used a backhand software “Greyball” to their advantage that helped them deceive and avoid certain customers as well as a number of other tricks that helped them get ahead of competitors. While the backlash was big, it didn’t stop the rising popularity of Uber.

This initiated investigation on Uber and in 2017, Uber has received a ton of problems all jumbled up in their hands:

  • Law suit asserting its rating of defrauded drivers and customers.
  • HR manager’s comment on doing well at Uber being equivalent to accepting the dark culture inside the company
  • CEO Kalanick verbally abusing an Uber driver on tape.
  • Sexual harassments of employee with warnings of being fired if reported
  • Followed by resignation of CEO Kalanick in June.

Uber’s recovery was fast and prompt. While it wasn’t easy to let go of the CEO who helped found this company and set the building framework for the company to stand, it was also during his time that the company had developed such toxic norms and environment for employees that had cascaded down to such backlash and accusations. Therefore, the actions of changing for the new and rebuilding the company’s reputation seemed to have been the first steps taken by the company that helped to continue building its name for the general public.

JOHNSON & JOHNSON

J&J is one of those renowned brands that we know very clearly, and it is very familiar to the most of us since childhood. It is an American Multinational medical device, pharmaceutical and packaged goods manufacturing company which was founded in the year 1886.

Nearly edging on almost a hundred years of success in their products, J&J found themselves in a tight spot in the year 1982 when seven people in Chicago had died after consuming one of their products called “Extra-strength Tylenol Capsules”. Apparently they were laced with potassium cyanide and the CEO was quick to respond that innocents were killed and Tylenol will be off the market.

The company acted quick to save the reputation and had pulled over thirty-one million bottles off the shelf throughout all of America just to ensure user safety as well as halting all forms of advertisements related to the product, this had cost J&J a total revenue of hundred million dollars. However, this rapid action had pulled J&J into the good books of the consumers regardless of their mistake made.

Organizational Culture done right at J&J:

  • Executive decision – The concept of pulling the products off the shelf wasn’t made by the CEO, rather by the brand manager, which goes to show how far the culture has been saturated with a mutual respect for consumers and the end goal of the company to be consistent.
  • Consumer Idealization – The priority of the company was customer safety and satisfaction. The cost for the rapid action was a huge blow; yet J&J decided to prioritize customer safety. And it eventually brought them goodwill and helped them run this establishment for such a long time with uninterrupted services. 

The three real life examples can demonstrate the impact of organizational culture in three different aspects and results. Not one company is same as the other; but the ideals are close enough and the key mistakes and successes are right there for comparison. Even though there is no hard-core rigid rules to follow by, it is clear that organizational culture plays a leading role in how global leaders are moving forward and it is never a solo game plan. A successful organization requires the collaboration of all the minds that work together and one single aim that they need to take up the map for. It is truly a diverse array of priorities and finding the right balance is the key towards success.

BORDERS

Borders was an international book & music retailer that started in the year 1971 by two university graduates from the University of Michigan. Their own system for tracking sales was rejected by many book sellers before, in return they started their own which was a revolution in the world of book retailing.

It was big and successful, yet it wasn’t one of those big firms that forgets its core. Borders had devoted employees, each was the master of their own craft and they prided of themselves in the knowledge and help they could provide to their customers, which made it the right place to be for all book lovers.

Over 20 years of success in the United States, Borders was acquired by Kmart in 1992 and that is when the organizational culture shifted and so did their success. Kmart was a departmental store chain which already had another book venture under their arms, Waldenbrooks, but was ultimately struggling to be what it should. The concept of merging these two was their light out of the dark tunnel, but Border’s management wasn’t having any of it. Senior management teams left the company since their interests were directly with the books and no other genre of retail.

This was the start of the downfall of their organizational culture as Kmart and spun off Waldenbrooks and Borders together. While the age of digitalization came near, Borders chose to have a blind eye when taking their market into consideration making Amazon created its way into customers’ hearts in the year 1995. Instead, they opted out to open many retail branches over international borders that played a huge role in their later on bankruptcy cases. While the company struggled to succumb to the changes that had been occurring, they even tried to make a deal with Amazon to make sales online; however, that didn’t end well for them either.

The last domino fell when Borders decided to move to DVDs and CDs which they later on expanded to e-readers. Due to incompatibility, their system failed completely and their financial grounds were not strong enough to support their projects any longer.

Key points to note from Borders’ drastic changes over the years:

  • Staying true to the kind of market workers are experienced in is important. No one can force a fish to climb a tree and just like that book people should have been left with books instead of trying to involve them in other systems they aren’t familiar with.
  • A culture needs to be aware of their target market, entering the game after it has already begun will not benefit; rather, it will ensure a certain failure. With the age of digitalization, investments should have been more considerate to where and what the target needs.

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