HR & Management
Meet the five businesses you should never copy when it comes to company culture
11 min read
26 January 2016
In 2014, the subject of workplace culture was so prevalent that Merrian-Webster identified it as the word of the year. With this being based on the number of “lookups” of crises that appeared in the news, it seems it remains an elusive subject for some – including these five firms.
While countless articles go into endless detail about people wanting workplaces to be fun, considering how many hours of their lives are spent there, there are quite a few firms that have yet to grasp that fact.
According to John Kotte, there are two core reasons that businesses often fail miserably to implement a working environment such as Zappos. One, people don’t understand what culture is, and two, they don’t understand why it’s important, how it’s formed and how it changes.
So to get things right requires both a heavy dose of passion and “role model research”. At the same time it’s also important to learn who not to use as an example. With that in mind, we looked for five of the worst corporate culture’s that bosses need to stay away from – and we didn’t have to look far to find some rather “inspiring” stories.
(1) Sports Direct
Sports Direct has garnered a reputation for mistreating members of staff. In fact, in a 2014 speech on the “Victorian” exploitation of workers on zero-hours contracts, Ed Miliband called the company one of the worst places to work for.
He said: “Sports Direct has the vast majority of its workforce on zero-hours contract. It is a modern company with stores on many high streets and, judging by its success, where many people shop. But it is a bad place to work.”
Allegedly it is store policy to hire as many people as possible on zero-hour contracts. What is perhaps the most shocking are claims that workers are not allowed to enter the shop via the front entrance. There was also a sign on the back door that said if it was opened without a supervisor present, you would face immediate dismissal for the crime of opening it.
Meanwhile, a recent Channel 4 investigation revealed that employees working in Sports Direct depots were subject to a points system, whereby employees feared losing their jobs on a day-to-day basis. This led to people feeling they had to work despite feeling unwell because of the “six strikes” policy, in which anyone who gets six warnings in six months will lose their job. It was suggested that warnings are issued to workers for taking long toilet breaks, excessive chatting and for having time off due to illness.
The New York Times unveiled a story which incorporated responses from 100 former and current employees and concluded that Amazon was essentially conducting its own experiment and was testing the limits of how far they can “push white-collar workers to achieve their ever-expanding ambitions”.
Read more about Amazon:
- What can online retail behemoths like Amazon learn from boutique counterparts?
- Uncovering Amazon’s new retail secrets
To make things worse, Amazon makes use of monitoring technologies to track the movements and performance of its employees. In an investigative report by Financial Times correspondent Sarah O’Connor, she suggested the company tagged employees with personal sat-nav computers that revealed the route they must travel to shelve goods, and sets target times for their warehouse journeys.
Much like Sports Direct, there is a “three strikes and you’re out” culture, and employees further claimed they were hired for 12 weeks before being sacked and re-employed so the company did not have to give them the same rights as full-time staff members.
This was according to reporter Hamilton Nolan, who cited an email received by a former employee, suggesting that: “The work/life balance is c**p. I once was asked why I turned my BlackBerry off on some random Saturday afternoon. The fact I was in a movie theatre with my family was not ok. Your BlackBerry stays on at all times. Apparently Bezos said something about ‘if you aren’t working at least 60 hours a week you aren’t working’ or something to that affect.”
Read on to find out more about destructive cultures such as Microsoft’s stack rank system and Target’s “pyramids”.
A trend seems to be arising. “Stack Rank This! Memoirs of a Microsoft Couple,” may be written by two former employees, but the same complaints are still being voiced on review site Glassdoor.
Stack ranking is a Microsoft review process that ranks employees compared to other employees. Even if everyone in the team performs great, only a few will be credited with being top performers.
And according to Vanity Fair author Kurt Eichenwald, whom interviewed several employees, stack ranking effectively crippled Microsoft’s ability to innovate. “Every current and former Microsoft employee I interviewed – every one – cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees,” Eichenwald wrote.
Furthermore, management go out of their way to label employees.
The Microsoft Redmond Campus is like its own little city with every convenience right there. “Whether intentional or not, the conveniences led to a culture or mindset where you were basically at work 24/7,” the authors “Stack Rank This!” said. They argued that they ended up working crazy hours and only associated with other Microsoft employees because of it.
After its emissions scandal, CEO Martin Winterkorn was forced to leave the building. When he left, however, executives started declaring that the company needed to change its approach.
“We have to streamline our processes,” Volkswagen (VW) Group of America CEO Michael Horn said. “This company has to bloody learn and use this opportunity in order to get its act together, and 600,000 people worldwide have to be managed in a different way. This is very, very clear.”
On the up side, at least the company knows that its toxic culture needs to change. And according to Bernd Osterloh, a member of VW’s supervisory board, Volkswagen “needs in future a climate in which problems aren’t hidden but can be openly communicated to superiors. We need a culture in which it’s possible and permissible to argue with your superior about the best way to go.”
Former VW executives interviewed by Reuters and industry observers described a management style under Winterkorn that fostered a climate of fear, with Ferdinand Dudenhöffer, an automotive expert at the University of Duisburg-Essen, saying the culture and organisational structure of Volkswagen is not comparable to Daimler or BMW in the fact that all you hear when you speak to people is that there is a special pressure at VW.
The company essentially calls its departments “pyramids”. And while Target claimed it made progress in the past two years at cutting the time it takes to implement innovations, a penchant for perfection at the cost of speed doesn’t come close to encompassing the recent criticism directed at Target’s headquarters.
The biggest consequence, which most businesses should keep in mind, is the potential for staff rebellion.
For example, an anonymous employee sent an email to Gawker that specifically targeted the company’s culture. Among its listed complaints was the bureaucracy’s “misplaced priority” of making sure employees were “fast, fun and friendly”. It was suggested that despite its harmless concept, if too much attention is focussed on making sure you are genuinely fun and friendly it often becomes difficult to do your job.
The employee wrote: “CEO Greg Steinhafel getting fired was a good step, along with the CIO being fired a few months prior, but it’s not enough. The entire executive team with the exception of CMO Jeff Jones needs to go. Why? Because everyone was homegrown and ‘Targetised’ and has no concept of how to run a 21st century business.
“They still think it’s 1996 and you can keep throwing up Target stores and suburban moms will love them. They pay lip service to how retail is evolving but it when it comes to actually making good decisions, they do horribly.”
As such, it can be gleaned that by creating a strong company culture, you can boost employee morale, boost your customer satisfaction and boost your bottom line. Here’s how to do it.