Why corporate culture matters

Your corporate culture has a bearing on your brand's performance; otherwise Jeff Bezos wouldn't be worried

Jeff Bezos is known to often keep one seat empty at Amazon conferences and tell the other attendees to assume that the seat is occupied by the most important person in the room: their customer. The internet giant he runs tracks its performance against some 500 measurable goals. Nearly 80 per cent of those relate to customer objectives. It is said that Bezos is even more careful about what customers don't want. So there is a veritable army of people at Amazon working to eliminate page loading and shipping delays, defective and out-of-stock products.

Most former executives, researchers and analysts have some anecdote about his obsessive focus on the customer.

So some 10 days ago when a damning front-page report appeared in The New York Times that depicted Amazon as a vicious place to work in and Bezos as a ruthless taskmaster, many were rattled. Was that the same person who is known to coddle his customers? Some said, it was a well-known fact and has been sporadically reported as well. Others said, well you don't run a business to make all people happy. But while the incidents alleged by the article were yet to sink in, Bezos wasted no time to refute the story. In an internal memo he said, "I don't recognise this Amazon and I very much hope you don't, either."

Even if what was described in the story wasn't 100 per cent true, it was clear Bezos was keen on avoiding a public relations disaster. It is easy to see why. A lot of readers who commented on The New York Times story said they didn't want to patronise Amazon anymore. Social media was agog with discussions that made it apparent that a huge majority of people taking part in those discussions felt conflicted about giving their money to a company that might be as nasty as the article described.

Such a report might not have been damaging in the past, but research shows that today, consumers do care about the culture that drives a company or the brand they would like to patronise. Adage.com's critique on the subject quoted a 2012 study by consumer insights company, The Intelligence Group, in which an overwhelming majority of the consumers surveyed said that a company's ethics and practices were key factors in deciding what brands they would buy. Dubbing this as "wallet activism", the survey found that in the past many respondents had stopped supporting a brand/company because of something they learned about its corporate practices or ethics. Among those were Walmart, McDonald's, BP and Gap.

Clearly, the work culture you have nurtured at the company - or even the public representation of that work culture - is just as important as your product development or advertising efforts. Some scholars would go as far as to consider it more important, because your work culture decides your ability to attract talent and therefore everything that comes out of the assembly line. While a poorly-conceived television commercial or Big Billion Day sale might not help your business, the effects of such ill-designed moves are at best temporary. They wouldn't 'alienate' consumers to the point that they start seeing a brand in a negative light or feel ashamed or embarrassed to pick it up from the shelf the next time they visit a grocery shop.

In a nutshell, The New York Times article was an attack on Amazon's culture and everybody today understands what it could mean if such a thing was allowed to blow up. No wonder in his memo Bezos also wrote: "… if you know of any stories like those reported, I want you to escalate to HR. You can also email me directly at jeff@amazon.com. Even if it's rare or isolated, our tolerance for any such lack of empathy needs to be zero."

Human resource managers have long said that people are their company's biggest strength. The way Bezos has jumped to defend Amazon managers and its culture clearly shows how you treat those people matters.

Source | Business Standard | 25 August 2015