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.

Lessons in Bravery from In the Heart of the Sea

You may have seen the following trailer for the upcoming move In the Heart of the Sea, about the whale ship Essex. If you haven't give it a look.



Most of you are probably familiar with the fictionalized story this move depicts known as Moby Dick, but the real story is more gripping and holds many important lessons for anyone in management.

I use these lessons as a through line for my book, Corporate Bravery. Its application to our subject matter is the role fear played in decision-making by the townspeople, the ship’s owners, and the ship’s crew.

Was the town afraid of losing its status, pressuring citizens to work where they weren’t equipped? Were the owners afraid of losing profits, making them rush the ship to sea? Was the crew afraid of coming back empty-handed, pushing them to take reckless risks? Beyond any single decision, many small decisions can create a culture of fear and negatively influence our ability to make the best decision in a crucial, potentially life-threatening (or profit-maximizing) situation.

Leadership, management styles, team political environments, the role of investors, and competition — these and other factors are explored in depth throughout Corporate Bravery along with some practical ways to rise above fear-based management and decision-making and become the bravest manager you can be.

Some of the critical leadership lessons that this story raises include:

• What unique combination of factors in your corporate culture could lead you down a route that feels safe only because it’s familiar? 
• Are you clinging to any broken and tattered whaling ships? 
• What imaginary fears might actually lead you into even greater dangers?

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Jerk Bosses and Their Successes (or failure?)

I recently came across one of my favorite news articles of the year in the Atlantic. The article, entitled "Why It Pays to Be a Jerk" is a long read and includes some great photos like the one below:

The article looks at scientific (and unscientific anecdotes) evidence regarding jerk-ish behavior - primarily in the workplace - and its impact on your ability to have success in the short and long-term.

This is relevant at Corporate Bravery because we spend a lot of time in the forthcoming book of the same name discussing bad managers' role in creating a culture of fear. Trust is at the heart of good managers and creating a culture that isn't fearful but brave in attacking new business opportunities and growing a long-term, sustainable business.

If that is so why does bad behavior that erodes trust persist in Corporate America? The article cites a few reasons. The first is embodied in the following quote.

But “to the extent that innovation and risk taking are in short supply in the corporate world”—an assertion few would contest—“narcissists are the ones who are going to step up to the plate.”

Grant argues that many takers are good at hiding their unpleasant side from potential benefactors—at “kissing up and kicking down,” as the saying goes. The article mentions a video series experiment where regular people were shown two different management styles to gauge their preference in managers.

And in a series of follow-up studies involving different pairs of videos, participants, responding to prompts, made statements such as “I would like this person as my boss” and “I would give this person a promotion.” The conditions had to be right, but when they were, rule breakers were more likely to be put in charge.

In fact, it’s easy to see how an initial advantage derived from a lack of self-awareness, or from a deliberate attempt to fake competence, or from a variety of other, similar heelish behaviors could become permanent. Once a hierarchy emerges, the literature shows, people tend to construct after-the-fact rationalizations about why those in charge should be in charge. Likewise, the experience of power leads people to exhibit yet more power-signaling behaviors (displaying aggressive body language, taking extra cookies from the common plate). And not least, it gives them a chance to practice their hand at advocating an agenda, directing a discussion, and recruiting allies—building genuine leadership skills that help legitimize and perpetuate their status. 

The commonality for most of the examples provided in the Atlantic article is a lack of trust.

Should something go wrong, jerks don’t have a reserve of goodwill to fall back on. The article tells the story of Howell Raines at the New York Times and how a scandal broke on his watch in 2003 when a Times reporter, Jayson Blair, had been fabricating material in his stories.

A town-hall meeting that was intended to clear the air around the scandal, during which Raines appeared before staff members to answer questions, turned into a popular uprising against his management style. “People feel less led than bullied,” said Joe Sexton, a deputy editor for the Metro section. “I believe at a deep level you guys have lost the confidence of many parts of the newsroom.” 

Raines himself had acknowledged as much earlier in the meeting. “You view me as inaccessible and arrogant,” he said. “Fear is a problem to such an extent, I was told, that editors are scared to bring me bad news.” It was an attempt to show he was a listener, Seth Mnookin reported in his book Hard News. But after listening to Sexton’s comments, Raines blew up. “Don’t demagogue me!” he shouted.

The article concludes - being a jerk will fail most people most of the time. Yet in at least three situations, a touch of jerkiness can be helpful.

1. leadership involves a series of onetime encounters

2. at the moment after a group has formed but its hierarchy has not.

3. when the group’s survival is in question, speed is essential, and a paralyzing existential doubt is in the air. (when fear is driving behavior)

The Weekly Fearful Roundup

This is a new feature that I am starting this week to highlight examples I see in business & life where fear is ruling our decision making processes.

1. Lets start this week with a Vanity Fair article on the Brian Williams mess, but more specifically the fall of NBC News and how it happened. It is a fascinating read on the impact of mergers and acquisitions on corporate culture and how not to handle employment decisions.

My favorite excerpt from the article is the following two paragraphs that highlight poor leadership, lack of trust, corporate politics and how they each can play a role in fear-based decision making.

According to one view, the Burke administration’s troubles at NBC News can be traced to the Ann Curry episode at Today, a messy situation it inherited from the Zucker regime. Line executives were sharply split over Curry’s desire to ascend from newsreader to Lauer’s on-air partner. The head of news, Steve Capus, was in favor; Today’s executive producer, Jim Bell, and Matt Lauer were wary. Capus prevailed, only to watch Curry’s ratings slide. By June 2012, when she memorably and tearfully announced her departure from Today, Capus and Bell were not speaking. “That’s where this whole thing begins to fall apart,” says the onetime executive. “Burke was the principal player [who made the decision to demote her], though he hid desperately behind this. Finally he makes a deal for her to go away and then gets cold feet about pushing her to announce it. Despite pleas from everyone, Burke would not push the situation. He just felt uncomfortable doing it, and he wouldn’t explain why. Which leads directly to this thing being a national ‘Oh, poor Ann Curry’ story, which was the furthest thing from the truth.”

The Curry saga convinced Burke that the news division under Steve Capus’s direction was broadly dysfunctional. “The prevailing line from the Comcast people when Steve Capus was in charge was all News needs is a real grown-up in there,” says a top NBC executive at the time. “You know, ‘These people don’t know how to run a business. What they need is organization. Change the structure, business development, better H.R., get some women in there.’ I mean, that’s verbatim. That was the script.” Bell was removed from the equation when Burke gave him the Olympics to supervise, but Burke wanted deeper changes. Insiders believe he found the Curry episode so distasteful that he resolved to distance himself from the details of talent management altogether. “This thing exploded into a soap opera, and let me tell you, it scared the hell out of Steve Burke,” recalls an executive who met with Burke regularly. “And that’s not a phrase you use about a tough guy like Burke. But I saw it.”

2. Next, I recently read about this new company that is participating in a business accelerator that I am familiar with.

Avoiding Pain Doesn't Lead to Growth

From helicopter parenting to legislating safety in mundane daily activities, our culture continues to try and short-circuit the learning process.

The most recent example of this trend, but in a business context, was an article from the February 11th Wall Street Journal entitled "You're Awesome! Firms Stop Negative Feedback". The premise of the article is that the trend in corporate America is to minimize or avoid all-together any negative aspects of performance and to focus on strengths only. A couple of comments from the article that are particularly striking:

"Commerce company Wayfair teaches its managers how to make feedback 'palatable', according to learning and development specialist Ashley Kibitz, so that the company's hundreds of young workers, "not only understand they're doing a great job but exactly what it is they're doing great."

"No judging, rating or critiquing is allowed at VMWare, says Victoria Sevilla, who develops training for employees there. 'It doesn't depress employees into thinking one more thing to develop, one more thing that's wrong' she says."

Hey, I like the Strengths Finder process as much as the next person, but I don't think this is exactly what they had in mind when they want their readers to focus on their strengths. Ignoring their weaknesses all together is not part of the process.

Don't get me wrong, I think it is important to spend as much time as possible on positive feedback. As a manager I have experienced first-hand the power this has on employees' performance. However, avoiding difficult conversations that need to be had only creates conflicting expectations, eroding performance and / or cultural issues with your team.

While growing up in church as a kid I would hear stories from the Bible about the dreaded disease of Leprosy and only recently realized that those afflicted with the disease lost extremities - not because of the disease itself but because they had an inability to feel pain and thus lost parts of extremities due to repeated injuries. I can't help but think this is the same thing that is happening in organizations employing this approach - but it is our people that are atrophying.

The problem with many of our organizations is that our Managers have a different mindset regarding safety and try and insulate their people from making mistakes either to avoid pain for themselves or for their people. In reality the safety that we need isn’t to not feel pain but to know that when those situations arise our managers will help us learn what caused the pain and thus correct our performance to be successful the next time we step out boldly towards results.

Along that line of reasoning the article provided this counterpoint: