The Nestle Noodle Example

At Corporate Bravery we highlight examples of bravery but we also highlight epic examples of fear-based failures. Lost in the details of major corporate blunders is the role that fear played in management decisions and how the culture of fear or elements of a fear-based culture contribute to major losses.

Fortune magazine's May 2016 provides one such example. While we don't typically think noodles when we think Nestle, the international conglomerate is in a lot of food lines beyond chocolate and sweet confections.

The Fortune article dives into the problems surrounding their Maggi line of Ramen Noodles sold in India and issues it had with the Indian version of the FDA. If I could sum the problems up in a few words I say that pride, dismissiveness and fear created a host of problems.

In the words of the Fortune author, "a violation punishable with a fine of up to $4,500 - had Nestle paid it, the story might have ended there." But they didn't and after a series of blunders ended up costing the company 1/2 billion dollars.

Nestle's culture was to avoid using the press because of fear resulting from a past experience. As the story states, "Chalk it up to a natural Swiss reserve, but Nestle's aloofness also has to do with the long shadow cast by the company's notorious baby formula scandal." A scandal from 1974 had informed the company approach some 40+ years later. The author continues by saying "Nestle executives lost their appetite for broad public engagement. It has taken a generation to overcome this feeling."

This aversion to engaging the press caused many problems with public perception.

"Why wasn't Nestle more proactive? Partly because , as a general rule, the Nestle way is to deal with authorities directly rather than through the press. To outsiders, Nestle appeared paralyzed - or worse, guilty. Rumors spread in the hinterlands that Maggi contained glass particles - a mix-up due to the linguistic similarity of the words "lead" and "glass" in Hindi."

What followed was a succession of fear-based decisions that led them to fighting regulators in the legal system. This was based on words used in a statement by regulators that the product was "unsafe & hazardous for human consumption."

"They felt the phrase exposed them to legal action. Millions of people in India ate Maggi. What was to stop anyone who had health problems from blaming Nestle's noodles?"

To recap, at this point Nestle has violated several key tenants of a brave organization. This includes aversion to media engagement, use of the legal system as a weapon, uncooperative approach to regulators. That is 3 of the 8 fear factors we outline in the book Corporate Bravery.

Ultimately the issue would get swept up into a larger national debate in India about multinationals. The case went all the way to the nation's high court where they would side with Nestle but not before fear-based decision making led to the loss of hundreds of millions of dollars in shareholder value, new competitors and a tarnished reputation among consumers.

What Morgan Spurlock Can Teach Us About Brave Business

I recently watched this Ted Talk by Morgan Spurlock that is an oldie but a goodie (released in 2013). For those of you that may not be familiar with Morgan he came to fame with his documentaries the most famous of which is Super Size Me. He parlayed that success into a series on A&E entitled 30 Days in which he walked in other people's shoes to provide a perspective on issues that were controversial at the moment.

What I like so much about his Ted Talk is how he exposed the fearful decision making in the Advertising industry. But this isn't a hit piece on that industry and the same decision making processes and cultures exist in any industry and in most organizations.

One of my favorite moments in the talk involves a clip at the 10 minute mark where he is meeting with the Ban deodorant marketing execs and asks them what the one word they would use to describe Ban and there is silence. Then the first answer is superior technology... for deodorant!

Some of the takeaways from the talk include:
1. The brands that were obviously brave and took a risk with Spurlock's movie were ones that cut out the middle man (advertising agency) because they understood that they may not have the brand's best interests at mind. This is a theme covered in my book Corporate Bravery.
2. Spurlock's summation of what he experienced with trying to make the movie was, "When you train your employees to be risk averse, then you train your whole company to be reward challenged."
3. It is remarkable that EMC won the rights for his Ted Talk with just over $7K. A small sum for the millions of views that this clip has experienced.

Corporate Bravery - Fearful Business Examples

We have been on hiatus for a few weeks while we launched our book - Corporate Bravery (now available on Amazon and iTunes). But we are back and this week we feature a few recent examples of fearful management.

1. First we begin with the slow death of Google+, although many will be quick to point out that Google+ hasn't been killed (yet), as documented by a Mashable article entitled "Inside the Failure of Google+"

I also want to point out that Google is typically a brave company (coming in at #2 on the Brave Rankings) but this was a clear example of a fearful manager talking a brave leader into a fearful decision.

I'm not going to ruin much about the article for you but this quote stood out to me and highlights the fear-based decision making that led to the birth of Google+:

"Vic was just this constant bug in Larry's ear: 'Facebook is going to kill us. Facebook is going to kill us,'" says a former Google executive. "I am pretty sure Vic managed to frighten Larry into action. And voila: Google+ was born."

2. There is a very cool example from Popular Science about ants and the biological example of how conservatism (often based out of fear) can keep organizations from meeting its full potential 

The article chronicles studies of ants and how they cooperate together to carry larger pieces of food for long (relative to the spatial sizes of ants) distances. It was partially due to the ants conformist mentality, but there was much to be learned about their group leadership and efficiency. Specifically, the group think of the group required that individual leader ants from outside the group get involved to re-direct them to the best, direct path until they lost track and then another leader ant would join the pack. The conclusion of scientists? In effect, says Feinerman, the larger groups were collectively too conservative, which prevented them from completing the task." Read the whole report, there is a very cool video of the scene to kill some time as well.

Fear and Advertising

I saw this commercial recently for Schick where the premise of the commercial is that of a man that shows up for an interview and while sitting in the lobby of the office awaiting the interview he notices that the pictures of the executives are all bald. To gain an advantage in the interview he runs out and shaves his head using a Schick razor and the commercial ends with the other men with obvious concern.

Perhaps this speaks to some men, but honestly it makes me never want to buy a Schick razor - EVER. The message is that it is OK to present yourself as someone you are not in order to get the job. But what happens when after a few days on the job he and his manager realizes that culturally he isn't a good fit or that he has to compromise more than just his hair in order to be successful at this company?

It is yet another sad attempt by marketers to tell us we need to act a certain way to get ahead in business and it is patently false. And unfortunately it is another in a long line of examples recently that show how advertisers continue to chase some idea about who we are as consumers that just doesn't line up with our real values.

The Wall Street Journal ran an article in January about this tweet from Denny's in September of 2014. According to the article,

"The message, which to teens translates to "these hash browns are on point," garnered almost 30,000 retweets and was seen in the advertising industry as something of a social media marketing masterstroke. Taco Bell & IHOP later sent out their own tweets using the phrase "on fleek" looking to get in on the action."

The article goes on to discuss that while these examples may generate some buzz it also has the opportunity to 'provoke eye rolling' for the obvious attempt at trying to act cool. The problem is that consumers see straight through weak attempts to be something that you aren't. This example is punctuated by the sad copy cat nature of Taco Bell and IHOP's attempt to use the same phrase later the same day. It is all akin to your dad using some slang term that is an obvious break from character and only serves to prove how out of touch he really is with your culture.

Fear Should Never Be Our Compass

On the night that Sony cancelled their movie "The Interview" because of terrorist threats from North Korea I stumbled across an article from a website named the Under 30 CEO. The article is entitled "How to Use Fear As Your Compass and Fuel for Growth".

While the author makes some good points in the article about the negative impact of fear, the idea that you could use fear as a compass for business success is ridiculous. It is clear that Sony used fear as a compass the last few days culminating in their decision to pull the movie "The Interview" from theaters. Needless to say that didn't turn out well. In addition to the potential for massive losses on the movie they are suffering a blistering beat down in the court of public opinion.

How about replacing fear as our compass with things like courage, integrity or passion? No doubt you can use fear as a compass or to fuel your activities - but the consequences of doing so can lead you to a place with dysfunctional organizations, uninspired teams and poor performance.

America is better than this - we shouldn't be bullied and run from what we believe in. We also shouldn't be teaching our young business leaders to use fear as a compass. Whether in business or in life, having a deep and abiding sense of who you are when fear comes calling will keep you from making decisions that take you or your organization to the wrong places.

Jeter's Example

Picture from the Derek Jeter Facebook page

On February 12, 2014 Derek Jeter announced his retirement after the coming season via a Facebook message that read almost as a love story between a great baseball player and the team, city and sport that gave him so much.  The well written announcement received accolades across the media landscape for its truly representative expression of who Derek Jeter is - its true authentic voice.  It was a rare gem in a world that has carefully crafted PR spun messages that have been written by PR firms and reviewed by 13 attorneys prior to submitting to the world.  It was a real breath of fresh air.  There was no fear behind the message.  No concerns about legacy and trying to shape, with a final message, about how history should view Derek Jeter.  Just a heartfelt expression of a full career and a desire to grow in different ways as a person.

Read the full statement here:

 

What Happens When A City is Brave

 
In the few months since I started this blog I have profiled brave business leaders and what it looks like to overcome fear in a corporate context but I want to talk today about being a brave city.

A city is different than a corporation because it is the people that makes a city and democracy is the ultimate form of accountability.  Business leaders and eras of leadership can define a corporation and while political leaders can leave a mark it is the people of the city that create the culture and define who a city is.

An interesting case in fear and bravery is Cincinnati.  It happens to be my adopted hometown (I live in a suburb and own property in the city) and I have learned a few things about the culture of the community in the decade and a half since I moved there.

As background, Cincinnati was settled largely by Irish, Italian, and German immigrants - emphasis on the German.  And each people group influenced the city in various ways.  All three contributed to the heavy Catholicism, the Italians contributed to the architecture and the Germans contributed the staunch conservatism.  Not political conservatism - although that is a hallmark of today's political influences, but rather a penny pinching, survive a famine or the Great Depression kind of conservatism.

This DNA manifests as a change aversion deeper than anything seen in other parts of the United States.  At its core this change aversion is rooted in fear.  Fear of trying new things, of stepping out boldly, of trying new modes of transportation, of embracing new industries.  One of the best historical examples is when the 'Queen City' (that is the name we were given by Longfellow when we were the largest city in the West) placed a bet on barges as the nation's transportation future instead of the railroads and subsequently watched Chicago flourish and surpass Cincinnati as an inter-modal and commodities hub.

Or what about the half-finished subway?  That's right, what began as a vision for 7+ miles of subways connecting previously disconnected neighborhoods in 1910 for a sum of $6 million ended in decades of squabbling over escalating costs and questions about the viability of rapid transit in a period of the automobile.  What is left is hollow tunnels that exist to this day with no tracks and no riders.

If you live in Cincinnati, you are sick of hearing the famous Mark Twain quote, "When the end of the world comes, I want to be in Cincinnati because it's always twenty years behind the times."

It is perhaps the weariness of seeing this quote played out again and again that has made a loud and growing group of people stand up and say enough is enough.  The flashpoint is the multiple waves of attacks against the city's plan for a streetcar.

In its current incarnation the plan has weathered multiple elections, changes in mayoral and city council support to the point where $35 million has been spent to relocate utilities, build 10 blocks of track, buy the actual streetcars, among other investments only to see the new mayor halt all construction at the risk of losing $45 million in federal transportation spending.

(overview of current status, cost to complete & abandon - h/t Cincy Streetcar Blog)

For a city that has seen a massive renassiance over the past 10 years it is a line in the sand.  After turning the tide with an emerging start-up scene, the re-birth of a great neighborhood in OTR (Over-the-Rhine), an improving reputation through movies and the media, the city had finally started to shake off the rust belt malaise that had beset it for the past few decades.  Being at the precipice of a new story for the city - one that embraces change, is adventurous, and willing to make bold gambles only makes the current struggles that much more difficult to swallow for emerging Millenials and Gen X'ers who have fallen in love with the city only to watch fear creep back into the city's psyche.

The question for the city now is do we continue to live with the embarrassments of the past century or do we shake off the labels and condescension for a new future.  The rest of the story will be written over the coming weeks and months but what is clear is that there is a growing group of people in the city interested in writing a new story for Cincinnati.  One that isn't rooted in fear and failure but rather on hope, optimism, and bravery.

Nelson Mandela and the Art of Politics

Yesterday I wrote about Nelson Mandela's view on fear and the lesson it provides us today in our busy corporate lives.  Today I want to focus on another Mandela quote that teaches us about a component of living a brave corporate life.

"A good leader can engage in debate frankly and thoroughly, knowing that at the end he and the other side must be closer, and thus emerge stronger.  You don't have that idea when you are arrogant, superficial, and uninformed."

I spend a whole chapter in my upcoming book Corporate Bravery on politics.  Not the politics that we think of from Fox News and MSNBC but the true essence of politics.  Corporate politics has the ability to inject fear into a corporate culture but that doesn't have to be the case.  Politics are an essential part of getting things done since at its core it is just finding common ground between two differing perspectives or positions.

Whether in business or in government the true art of politics has been lost.  Listening to opposing positions, searching for a compromise, using the power of a position to move people closer to a reasonable solution are all lost arts.  However, they are extremely necessary for a functional organization.

This infographic from the Economist highlights the growing divide of politic discourse in our government and unfortunately we imitate in a corporate context what we see played out on television in our government.

Jack Welch had this to say about the lost art of schmoozing - his way of saying politics:

“You have to schmooze.  You can’t suddenly burst out of your office to build relationships when you hear rumbles of trouble from down below, and it’s certainly too late by the time a crisis flares. No, schmoozing has to be what you do all the time as a leader; it has to be a massive part of your job.

Building — in two big fat words — trust and transparency.  And look, we’re not talking about the standard, ho-ho-ho kind of social schmoozing you do with your customers and your team and your boss. That’s easy. That’s like President Obama schmoozing with Nancy Pelosi, or John Boehner schmoozing with Eric Cantor.

Leaders have to do something harder and more essential; something that can feel awkward at first. You have to schmooze with your known “adversaries” too, say, for instance, your union, or the group of employees who hate your new strategy and want the old one back. The resistors that exist in every organization. The perennial naysayers. Smart and annoying. Them.”

Nelson Mandela understood this better than anyone.  He built trust with his adversaries.  They may not have agreed with his position but through the trust that he had built they were willing to work with him to find a better solution.

Brief Departure for Thoughts on 9/11

I know we generally talk about corporate bravery on this site but today is reserved for bravery of another kind.  Twelve years ago today many first responders in NY and DC risked their lives and many eventually lost them in a terrible attack on our country.  While you might think that I would reserve this post to salute those men and women who did risk their lives (and I do) the other heroes from that day are all of you for continuing to live your lives without fear of commercial flights, large public gatherings, or anywhere else that terrorists have sowed the seeds of fear.

While sadly, we continue to lose freedoms and sink into an ever more dreadful march towards fear, the United States wasn't founded with that culture but rather one of bravery.  Those early pioneers had a lot to fear but they persevered despite a long and uncertain sea voyage.  Our ancestors persevered despite the British desire to hold onto us as a colony, and again in the face of tyranny and destruction that was the Nazi party and eventually led us into world wars.  They persevered through famines and economic crashes and each time bounced back stronger than before.

So I salute every American today who continues to live their lives without fear of bombs and without feeling the need to add layers of security that only provide a false illusion of safety.

TedX Talk on Fear by Karen Thompson

I ran across this TedX Talk by Karen Thompson recently and I wanted to share it with you.  Karen Thompson is the author of 2012 book The Age of Miracles, a young girl and her family awake one morning to discover that the rotation of the Earth has suddenly begun to slow, stretching the length of the 24-hour day and throwing the natural world into disarray.




Karen's talk focuses on a story of American sailors with a troubled boat that eventually became the basis for the story Moby Dick.  With a broken boat in a remote part of the Pacific Ocean they are faced with a choice between 3 options to survive.  The first is take the closest route to land and end-up somewhere near modern day Tahiti where they have heard stories of cannibals.  The second option is a more intermediate route to modern day Hawaii which in the current season will face certain storms and rough seas.  The third is the longest route towards South America where it is certain they will run out of food and face likely starvation.

Like any good story, her story of the men of the Essex can teach us some important lessons about the impact of fear in a corporate context - specifically its impact on decision making.  The basic premise of her talk boils down to three things:

1. Fear can be profound and imaginative and that some of the best minds in history were haunted by intense fears
2. We should think about fears as stories with characters and plots that make us think of the future
3. By thinking of fears in this way we can apply a filter of better reason to our fears and improve our decision making

While not necessarily wrong, Karen points out the benefits of fears but almost seems to glorify fears as a motivator above the negative realities of our fears.  She references a study of fears in entrepreneurs and glorifies how they study fears and put plans in place for the fears which they think are most likely to come true.  But how much time, effort, resources, and emotional energy go into this process?  These are resources that could have been used to move their business forward and in some cases could even be preventing them from being successful, much like the men of the Essex.

She mentions that sometimes fears do come true but they are statistical anomalies.  Take a look at the picture below that outlines the chances of dying in the following ways.  Notice the paradox that exists between the chances of dying in a horrific way that fuels our fears versus those that are the result of everyday habits.

Much like the men of the Essex, corporations must pay attention to the more subtle and realistic problems facing them and that starts with the components of culture that create a fear mentality so that when faced with a possibly life threatening problem (a manifestation of a fear) you are not distracted by all the other possibilities (that are oftentimes more remote in likelihood) and you stay focused on the task at hand for the best possible outcome.