Culture Eats Strategy for Lunch, Part 3

2007: A year most notably known for the introduction of the iPhone, Jack Kevorkian’s release from prison, the Congressional Medal of Honor presented to the Dalai Lama and 2 Brandeblog entries entitled Culture Eats Strategy for Lunch, Part 1 and Part 2.

Edgar Schein, the MIT management professor who actually coined the phrase “culture eats strategy for lunch,” wrote that the success of a company is determined not by its business plan but by its people.

Welcome to Part 3, as we watch with interest Goldman Sachs’ loss of more than $2 billion in market value after a searing indictment of their culture in the New York Times by one of their own people, Greg Smith in his very public letter of resignation.

While we may think that Goldman Sachs became one of the world’s most successful investment banks because of aggressive business practices, Smith reveals that it was actually because of its employees.  “[C]ulture was always a vital part of Goldman Sachs’ success,” Smith writes. Culture “was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years.”

Smith reflects on his former “pride” and “belief in the organization.” This is the real-deal—the emotional connection Brandemix strives to embody in each of our branding assignments.

It’s the living illustration of the service-profit chain, a philosophy that proves engaged, empowered employees may increase company profits by as much as 22%. For an investment bank, that could ladder up to billions of dollars.

Today, Smith rues the lack of “humility” and “integrity,” two of Goldman’s core values, which also include include placing clients' interests first, commitment to excellence and innovation, and teamwork. Smith calls out Goldman's two leaders, President Gary Cohn and CEO Lloyd Blankfein, for "decline in the firm's moral fiber."

No surprise. Culture starts from the top down and, as I tell clients, senior leaders must buy in, live the values, and set an example for everyone else.

I’m not alone; Frederick E. Allen, the Leadership Editor at Forbes, responded to Smith’s letter with an article titled To Save Goldman Sachs, Lloyd Blankfein Must Go. 
 

If you’re ever attended a Brandemix presentation on Employer Branding, you know how important I think an organization’s values are to employee acquisition and retention. Well, here’s that idea in reverse: a lack of values is actually causing an employee of 12 years to leave a lucrative position with bonus money on the table.

Smith isn’t just saying that the new culture isn’t for him. He’s not saying that it isn’t right. He’s saying that the culture threatens the firm’s very existence. Because the culture puts profits ahead of clients, Smith makes the equation clear: “Without clients you will no longer make money. In fact, you will not exist.”
 
Today’s disgruntled employees are sharing their stories to more than their friends and colleagues. It’s a world of One Brand, and they are speaking to your clients, your vendors, and your applicant pool.

Is your organization’s culture is the best it can be?  Let’s find out. 

Four Signs You're Ready to Rebrand

It’s January,  the time of year to take stock of your business and goals for the year. 

Besides upgrading your software or buying a new printer, you also should look at your branding. Whether you want to redesign your website, extend your brand into social media, or align your internal communications with your consumer advertising, January is a great time to launch a rebranding effort.

Are you ready to rebrand? There are four signs that you might be. Do any of these match your company’s situation?

Your focus has changed.

This often happens to small businesses. Sometimes the mission you had when you started the company no longer matches what you’re currently doing. Maybe you opened a deli but found that only cupcakes were selling, so you transitioned into a cupcake shop. Any of your previous branding that mentions, say, breakfast, no longer works…unless you invent a breakfast cupcake, for which I’d be the first in line!

Image via MrMalique.com

You have a new market or audience.

Perhaps you’re speaking to a new demographic now, which isn’t responding to your previous messaging. Both Farmers and State Farm insurance were known as solid, reliable – and boring. Both have launched new ad campaigns that add humor to the usual dire insurance company warnings. Both firms were founded in the 1920s, but realized that 90-year-old branding wasn’t speaking to consumers in 2012’s competitive marketplace.

There's been a merger, acquisition, or expansion.

Circumstances might be forcing you to rebrand. If your company merged with another, or was acquired, or launched a new division that modifies your core mission, you’ll need a new brand to reflect the change. Or perhaps your brand is too close to another’s, and you’re pre-emptively changing to avoid legal issues. Or maybe you need to shed some baggage, which is why Philip Morris became Altria or GMAC became Ally Bank.

It's been a while.

Sometimes branding just becomes stale. Some fonts and logos can become dated; maybe yours fell victim to what Marty Neumeier called the Great Swoosh Epidemic, when every company wanted a curved or circular icon. You may find that your logo doesn’t fit well in the icon space allowed by Twitter, or looks good onscreen but not on paper. These missteps are relatively easy to fix.

Image via Concept Genius

If you answered “yes” to any of these questions, get ready to rebrand.
If you’ve never been through a corporate or employer rebranding effort, you may be asking yourself these questions:

• How do I create a plan to rebrand?
• How long will it take to rebrand?
• How much will it cost to rebrand?
• What is the ROI of a rebrand? 

Unique goals and objectives make these questions hard to answer in general terms, but future blog articles will endeavor to add clarity to your quest. In the meantime, if rebranding is on your New Year's resolution list, get in touch with your friends in BRANDEland.