The downfall of a top brand is hard to resurrect
ONE HAS TO question Steinhoff ’s culture: now ex-chief executive Markus Jooste has taken the blame for accounting irregularities and gone into hiding, but many of his colleagues must have known what was going on. This is an indictment not only on them, but also on the culture at Steinhoff.
This reminds me of an article by Helen Rosethorn, a partner at branding consultancy Prophet.
She makes the point that a market-disrupting killer app can earn a company a dominant market position, but that this dominance will only be short-term if the organisational DNA of a company – its culture – doesn’t give it long-term sustainability.
We are all aware of the success of techsavvy disrupters like Amazon, Alibaba, Tesla, Google and Uber. But Uber lost 30 percent of its value because of all its leadership scandals and squabbles.
And that wasn’t something happening “over there”, because the international lack of purposeful leadership at Uber echoed in the South African market: what kind of company doesn’t visit a driver of theirs when he has had acid thrown on him? And then has the audacity (stupidity) to argue the issue in public.
Under its new leadership, Uber is fixing itself, with its new chief executive, Dara Khosrowshahi, recognising that: “What got us here is not what’s going to get us to the next level.”
Messing up your brand by not looking after your culture isn’t restricted to the audacious wunderkinds of the killer app world – look what happened to Volkswagen’s value when their lies about emissions came to light.
That’s what it’s about: value. Break trust, lose value – which means that culture isn’t a soft issue, it’s about hard cash.
When I facilitate brandstorms to get input to building a brand strategy, one of the questions I ask executives to get them into a brand frame of mind, is what a favourite brand of theirs is and what their brand can learn from it. There’s lots of mention of Apple, Coke and arguments between BMW and Mercedes drivers; but Google is seldom mentioned.
Until that is, we get to the part about company culture and the importance of employees building a brand from the inside out. Then Google comes up most of the time, as in: “We want to be like Google, that kind of place to work, those kind of engaged employees”.
Culture right So killer app companies get culture right. And companies that take a serious smack because their culture isn’t what it should be, can correct.
Steinhoff has been working hard to claw their way out of the hole and if their new leadership (whoever that ends up being) recognises their responsibility to purposefully lead a healthy, honest culture, they could get the company back on track.
They have to make an authentic, relevant brand promise and then demonstrate integrity by keeping it, remembering Warren Buffett’s warning: “It takes twenty years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Keeping promises, building trust and as a result increasing value, is about having the right culture: leaders who set an example of integrity, win respect and earn trust, and get employees to do the same.