Naked, Majestic, and Angels: a cautionary tale of belonging?

"NO-ooh!" 

A cry from my husband over Saturday morning coffee.

Political comment on the election?
News of the death of a much-loved actor?
Another tech innovation hit the dust?

No. Much more personal…
An email from Naked Wines saying it has been bought by Majestic Wine Warehouse for £70m.

It was a cry of betrayal of belonging.
Naked Wines was the antithesis of wine warehouses.

As part of the deal Naked's founder, Rowan Gormley, is taking over as CEO of the group.
It felt like David had put down his slingshot and gone to man Goliath's big guns.

Belonging is right at the heart of Naked, as an enterprise and as a brand. Customers, growers, and the team behind it, all feel a close sense of belonging.

My husband has been an Angel with Naked Wines since soon after it started eight years ago as a new concept. For a modest investment 'Angels' support independent wine-growers and in return buy interesting decent wines direct from the source at a good price. A small community with individuality, interest and mutual benefit.

It all felt like belonging to a maverick, independent club of like-minded people. Wine-lovers without the pretension. Insiders but outside the establishment.

The note to Angels emphasises that the deal solves Naked's biggest bugbear - distribution. Plenty of reassuring words of ‘exciting news... good for you’ or ‘we’re not selling out’. But could ‘Majestic wine warehouse’ and ‘click and collect’ undermine this?

The personal dismay of one Angel reveals a hidden commercial risk. 
What happens if a deal dislocates the sense of belonging for customers and partners? 

As well as employees, mergers create wide ripples of impact on markets and communities that can quickly destroy belonging - and value.

BBC Business correspondent Linda Yueh has called 2015 the year of the mega deal. This one's a bit modest at mere £70m, compared with last week's £47bn Shell-BG Group acquisition. Still it exposes some of the belonging challenges in these big deals.

All the fine talk of compatible businesses, synergies in strategy, creating more value... can ignore the complexities of culture clash:
 
What if the people whose loyalty has created all that value just don't want to belong any more?

Belonging to Naked was liberating. A bit anarchistic even.
It defines us because of what we don't what to be. 

Naked's style has been joyously informal, sociable and direct. We've enjoyed exploring, discovering new possibilities. At the wine tastings we chat with the growers while sampling - a real sense of intimacy. No spitting-pretence to be proper tasters: just enjoy flavours. Then rollock our way home, slightly squiffy, on the tube.

Naked’s unique relationship with customers is acknowledged by Phil Wrigley, Majestic’s chairman, in the FT's Lex column

 “Our online [business] is only 10 per cent and we are behind in building bridges with our customers online.

“Naked specialise in customer loyalty. We could have built it, but it would have taken time so this deal is an accelerator.”

It’s a virtuoso performance in social enterprise networks, far better than most retailers.

But, though Naked already has 300,000 customers compared with long-established Majestic's 640,000, maybe the commercial reality didn't add-up without bigger backing.

The Telegraph comments:

"Although Naked Wines grew its sales 40pc in 2014 to £74m, it made a loss before interest, tax, depreciation and amortisation of £3.3m.
The City gave the deal a lukewarm response, with shares in Majestic rising ½ to 318¼p”

Will Naked throw the baby out with the bath water (wine?) ?

I can only tell you that there's a slightly glum Angel in North West London, feeling a little less Naked.


At Belonging Space we help organisations create a sense of belonging, keeping ethos at the heart of their business.

isabel@belongingspace.com


www.belongingspace.com

BG-Shell merger: beware the Belonging challenge

A mega merger between Shell and BG Group in the headlines this morning with news that "Royal Dutch Shell says it has agreed to buy oil and gas exploration firm BG Group in a deal that values the business at £47bn."

Mergers and acquisitions pose some of the most complex and costly Belonging challenges for business.

This promises to be one of the biggest mergers so far of 2015 and the first big energy company merger in a decade.

It comes just a couple of months after Helge Lund took up his position as CEO earlier than planned in order to get stuck into the challenges of reviving BG's fortunes.

Interesting times. As the oil and gas market continues to crash, taking economists into a tailspin, what future - in a sector where big is not just best but apparently the only way - other than the gobbling behemoths?

The numbers look impressive. But beware the excitement of 'look at the size of my merger'.

Time and again the early promise of big mergers ends in small value - and, after the swag claims, headlines of disaster.
KPMG, among others, a few years ago found that more than 80% of mergers fail to create value - and over 50% actually destroyed value.

And the biggest cause? Failure to merge cultures.
 
Culture can be the greatest invisible threat to business - or the most powerful intangible asset.

What does it mean to belong to this newly merged company?

What is our ethos, what is 'doing the right thing'?
This is what guides decision-making in daily business, far more than stated strategy or policy.

The question for employees post-merger, once they have some assurance that they still have a job, is
"What do I belong to?"

BG group has done steady work on creating a new brand, though whether for employees this meant a confident sense of belonging is unclear from the outside.
Shell has a deep-rooted sense of belonging in its blood-line. Its mammoth scale with 92,000 employees dwarfs BG Group's 5,200.

Both companies make fine claims about values and principles that, in theory at least, sound compatible. But the reality of integration is all about how those values are put into action.
And how well people with different heritage and specialism can work together - quickly.


Far from being soft, this is hardcore: culture and belonging can make or break the success of a merger. The need for rapid shifts to survive, reconfiguring teams and structures, intuitive collaboration, upholding shared ethics... this takes  deep commitment within - not separate from - daily business activity.

And what of leadership? Does BG still gain the opportunity from Helge Lund's direction? 

While a lot of focus in the British press was on his pay offer, more interesting is his style. 
In over ten years as President of Norway's Statoil Lund gained respect for both shrewd commercial direction and careful stewardship of the wider impact on society. His emphasis was on values, safety and sustainability alongside profit. 

It's an unusual balance that business - especially the oil business - sorely needs. And requires much subtle craft in culture behind the strategy.

So let's watch this merger carefully.

Will cultures merge to support success?
How will the business create a sense of belonging?
And will shared values turn into value?


At Belonging Space we help organisations create a sense of belonging, putting ethos at the heart of their business as the greatest intangible asset.

isabel@belongingspace.com


www.belongingspace.com

Belonging, ethics, Starbucks - and what you say 'No' to


What would you say no to?

It's a great question to ask if you want to see how ethical your culture is.
 
How does this play at Starbucks?



I'm sitting in Starbucks in Covent Garden. My first time in a Starbucks for some time. Partly I wanted a cup for the photo above. And, in the interests of fairness, to experience a company I've tended to avoid.



Starbucks seemed to say 'No' to taxes for quite a while, had some bad press suggesting it was grumpy it couldn't quite say 'No' to homeless people hanging around a branch nursing one cup of tea all day, and recently said 'No' (pretty soon after saying 'Yes') to its rather blighted #racetogether campaign.



But last week it said 'No' in a way that may have brought it more of an ethical glow in a few minutes' exchange at a shareholder meeting than in the previous ten years.



At Starbucks' annual general meeting in Seattle last week a shareholder was disgruntled that the company had lost value because of its overt stance supporting gay marriage. 

The far-right Christian lobby had organised a boycott of Starbucks which apparently affected sales. The shareholder was identified by Huffington Post as Tom Strobhar, founder of anti-gay-marriage pressure group Corporate Morality Action Centre.



Without blinking, CEO Howard Schultz responded with

“Not every decision is an economic decision... I don’t know how many things you invest in, but I would suspect not many things, companies, products, investments have returned 38% over the last 12 months.

Having said that, it is not an economic decision to me. The lens in which we are making that decision is through the lens of our people. We employ over 200,000 people in this company, and we want to embrace diversity. Of all kinds.”

And then, the clear-cut 'no':
 

“If you feel, respectfully, that you can get a higher return than the 38% you got last year, it’s a free country.
You can sell your shares in Starbucks and buy shares in another company.
Thank you very much.”

The audience rose in cheers and applause.



From the rough film clips on news sites and YouTube it seems this was an on the spur response to an impromptu question. Though sometimes canny investor relations teams have an idea of the issues that may be raised by activist investors, this seems the real McCoy: a moral stand by a leader with conviction. 

It's a straightforward rejection of the investor, his ethics, and his cash.
 
If you don't share our values, then don't question our value: We don't want your money.

Howard Shultz has taken a stand behind what the company believes in. Belonging to Starbucks - as an employee or as an investor - means ensuring everybody can belong on an equal-footing. And if you don't believe in that, then you don't belong.
 

Purpose over profit? It's both, of course.
More importantly: ethos.


And that's the heart of belonging, at the heart of business.



It'll be interesting to see if any other big corporations are prepared to say no, quite so openly, to defend what they believe in.



Maybe we're beginning to nurture early seedlings of a new capitalism.


How would that feel to belong to?
 
So, what would you say 'no' to? 

And, in your organisation, would your CEO stand up boldly for what you all belong to?



At Belonging Space we help organisations put ethos and purpose at the heart of their business, and create a sense of belonging.

isabel@belongingspace.com


www.belongingspace.com

Culture of ethics: catching people in rather than out

"It's alright, When people do something wrong we'll catch them out"
the Head of Risk Compliance told us

The compliance guy's view sounds sensible, doesn't it, in the circumstances. Except that catching them out afterwards is already too late.

This was a global engineering firm, in rehabilitation with the regulator after a fine and prosecution for a serious ethical misconduct.

I was running a programme of ethics and values with them and their CEO who said 

"We need to build a culture of ethics"

But in fact catching-people-out undermines a culture of ethics. 

It's more important to catch-people-in: so that they know they have done the right thing. 

This helps avoid doing the wrong thing, and helps people know why it all matters. That's the best way to avoid ethical contraventions and keep on the fair side of the regulator.

In the same client company, the CEO shared concerns that it was taking too long to recover market position and investor confidence. After damage to reputation it was much harder to heal relationships than they expected.

The COO was worried about lack of innovation,  too long to get things to market - competitors were beating them. 
And the biggest concern was lack of collaboration. The problem of silos and infighting between divisions and constituent businesses was worse then ever. People pulled back into small teams and cabals.
Well of course they did. They were scared of being caught out.

Far from making the company stronger, the whole ‘catching-them-out’ approach had caused another huge problem:
inertia 

We saw all the cultural symptoms:

• People looking over their shoulder…
• Afraid to ask a question or check…
• Lack of trust between colleagues…
• Restricts ideas...
• Creates dependency...
• Crushes confidence...

This will kill the business.

No risk, no gain.

Inertia is a crippling business risk. 

How do you take the right risks with the right safety measures? 

Manage risk rather than avoid it?

By catching people in.

The regulatory bodies are no soft touch. It's not a question of paying a fine and getting on with business as usual. The company has to show how they’ve changed, especially how culture has changed, how this can be measured and sustained.

To do this, organisations need a clear code of conduct and careful management legal and conduct risk. They need to provide guidance to make every day decisions, and an environment of candour and confidence around risk.

• Reinforce the guidelines
• Show what ‘doing the right thing’ means, and why this matters
• Provide context overall and relevance to each part of the business
• Help people navigate the grey areas

With the engineering company, we made the principles really clear and trained managers in using a toolkit. Catching people in was a big part of the success. 

• Reaffirm good decisions
• Share what’s gone wrong in a way that people can learn how to do it better
• Share what’s gone right and how this helped to manage risk
• Acknowledge the small actions and choices made every day
• Say thank you for taking the time to listen or for raising the issue so we can manage the risk

Upholding ethics needs to be a fast reaction. This works best when people are confident about doing the right thing – not because someone’s watching or telling you what to do.

That’s why ethics comes down to commitment more than compliance: Doing the right thing because you WANT to, not just because you have to.

And commitment begins with Belonging, choosing to uphold the principles of the organisation you belong to. Belonging makes ethics a team thing: shared responsibility.

This is far more powerful - and commercially productive - than an army of compliance officers telling you what you can't do.

Go on, find a colleague who’s done the right thing: catch them in.

We help organisations create a culture of ethics and belonging

Drop a line if you'd like to try our toolkits for 'How to deal with ethical dilemmas' and 'Catching people in' 

isabel@belongingspace.com
www.belongingspace.com


See also
Freedom to Speak Up: Candour and ethics
http://belongingspace.blogspot.co.uk/2015/02/freedom-to-speak-up-candour-leads-to.html

Racism turns the beautiful game ugly

Football is once again in the news for the wrong reasons. 

Footage from The Guardian of Chelsea fans on the Paris Metro blocking a black man from entering a carriage and chanting
“We’re racist, we’re racist, and that’s the way we like it”

Football has too long been a comfortable place for the spores of racism to multiply.

The sheer pleasure of the game, the sociability, the passing of time marked by adventures together to matches, the shared elation at success, commiseration and post mortems at being robbed: all beautiful. How sad when the bonding turns ugly.

Last year I asked a mate, a gentle giant and long term Spurs fan, about the chants of Yid Army at White Hart Lane. He pointed out the positive origins, a chant of pride in identity.

“Aah it’s great!” he said 

“You’re in there with thousands of you, and the chant builds up, and it just takes you over.
You lose yourself in it. It’s a brilliant feeling.”

And that’s just the point. More like going to a Celtic battle than a sporting event. The face paint could be woad.

It’s all too easy for human beings to lose individuality in a crowd. Our inate tribalism takes over:

‘Someone looks like me, sounds like me, thinks like me: I feel safe. Let’s keep the others out.’

The small-mindedness of small tribes is our biggest threat.

21^st century life requires us to belong to many tribes.

Interdependence remains a tough challenge for societies: tolerance needs to work harder, not be taken for granted.

In organisations it may not be as obvious – no chanting or flags – but the strength of groupthink can quickly become prejudice. Unconscious bias influences us all.

Whether it’s around race, social background, gender, sexuality, mental health, our blind spots affect our decisions. Harvard University’s ‘Project Implicit’ has a great online test: the results may surprise you.

https://implicit.harvard.edu/implicit/

Back to the football. Nice words from Chelsea, that the fans actions have "no place in football or society".

If racist bullying has no place, show us, don’t just tell us. 

Demonstrate a show of tolerance, open up the blind spots.

Let's hope football fans react with more than a reassuring chuckle or an easy wave away with a hand of anything serious behind it. As a fan said to me on the Jubilee line (I live a few stops below Wembley), the carriage shaking with chanting and stamping, a tone of menace on that day rather than the usual exuberance:

 “Ah no, you don’t understand love, it’s just banter”

Banter can mean camaraderie. But it can also be the respectable mask for bigotry.

Be wary.

Do your tribes work well together?

How deep is unconscious bias in your culture?

Talk to us about a quick litmus test to check

We help organisations create a sense belonging

isabel@belongingspace.com
www.belongingspace.com

Freedom to speak up: candour leads to commitment, much more powerful than compliance

"I have been so depressed by this experience that I have often considered suicide.... I have lost all faith in the NHS and the employment tribunal system"

One of the witnesses quoted in Sir Robert Francis' review of NHS culture, the Freedom To Speak Up Report, published yesterday.

Candour is the foundation of a healthy culture.

The overriding culture of an organisation can be measured in the ease - or tension - of daily conversations.

It's easy for leaders to say "We need a culture of ethics" but hard to do.

To mak it so, a simple code of principles is far more useful than complex rules.

When rules and compliance take over, candour is the first casualty. That’s when ethics starts to go wrong. 

The cultural symptoms are easy to spot. People look over their shoulder, 'doing the right thing' becomes 'doing what I'm told and not thinking for myself'. Blame, control, fear take over. Inertia sets in. People are suspicious, the maverick voice is isolated, a mania of Cc-ing emails.

In a culture of principles rather than rules, something different happens. Within a shared belief of what we stand for, it's easier to open up. People feel permission to ask the tricky questions, confident that this is helpful not risky.

Candour comes when it is demonstrated to be safe and open, that sensitive matters can still be discussed in a common sense way. It's ordinary, everyday.

Candour becomes normal, part of 'how we do things'.

That’s why values need to be active - not just a list of words on a wall.

In cultures based on rules and regulation candour closes up.

And, as the NHS has seen, this will cause a whole lot more ethical risk than it prevents.

Francis calls for a culture in which

"Speaking up about what worries them is a normal part of everyone's routine"

A culture of principles leads to candour and commitment: compliance leads only to control or censure.

The foundation is the basis of belonging:

- purpose (what we're here for)
and
- ethos (what we stand for).

On top of this, the principles Francis has outlined allow openness and candour to flourish.

This sets the context, so that code of conduct, or policies for specific roles, can be more easily observed.

The new recommendations, which the health minister has committed to takingseriously, include:

• All staff feel safe to raise their concerns
• Leaders to demonstrate that they encourage raising concerns
• Chance for reflection on learning from experiences and how to improve
• Guardians for whistleblowers and those who want to speak up

This is relevant to any organisation, far beyond the specific context of the NHS.

Francis conducted a comprehensive study of experiences across the NHS, getting right to frontline. He stresses the need for informal exchange, early in concerns, rather than reliance on structure and bureaucracy. This resonates with what I've seen in many organisations recovering from regulatory ethical contravention or prosecution.

He acknowledges many examples of great practice and stresses that it's not just whistle blowing or raising issues that matters:

"My review also brought home to me how challenging it can be to receive concerns - issues can be difficult and sensitive to solve"

And of course, like healthcare, ethical prevention is better than cure.

If you have to blow the whistle it's already too late.

That's why freedom to speak up is so critical.

Do you have a culture of candour?

Talk to us about a quick litmus test to check

We help organisations create a culture of ethics and belonging

isabel@belongingspace.com
www.belongingspace.com

Culturevist and other (positive and respectable) C-words

Plenty of inspiration at the Culturevist event last night, in (positive and respectable) C-words.

Matt Partovi set up Culturevist just over a year ago, as a forum for Culture Activists.

He said he was 

"looking to find people who felt as passionately as I do about culture in business, to share ideas and challenges". 

He was happy if five people turned up to the first event: he reached over 80. 

And last night, the 9^th meet-up, 120 people took part, from all kinds of professional background and stages of life.

The theme was:

"Open Source Culture: What happens when everyone has a say?"

The format, five speakers with five-minute presentations, sparked stimulation.

Our hosts yesterday were ustwo, a global digital product studio with a particularly open and vibrant culture.

In ustwo's environment of structured-randomness - comfy sofas, drawings on the pillars, goldfish, and a tailor's dummy in a pink wig - we loosened quickly into an open conversation ourselves. Beyond the surface this was far more than the trappings of yet another groovy Shoreditch agency. 

Clarity and candour

Collin Lyons shared 11 key points of what makes the culture tick at ustwo, beginning with why you will never forget your first day as a member of the team

"Because you will be given the best welcome you will ever get, from everybody, all day". 

You are quickly, completely, invited in as part of the group.

The principle of openness and transparency runs through everything. 

"But it's not all sunshine and rainbows. Being this open means facing some tough issues".

In his next two points: 

- Hire for culture

- Communicate transparently

Collin shared the benefits of candour: deep principles with practical application and the commitment of all employees.

Perry Timms has tweeted notes on Collin's full list. 

Size is important for an open culture. There are around 200/220 people at ustwo globally, but a principle to have no more than 120 in any one studio. Clever, keeping just below Dunbar's number of 150, will help to keep a sense of Belonging and community. 

As always, when culture drives business success, it's not just nice: it has a point. For ustwo openness is essential for the demands of digital development. The work they do is fast, requires agility and constant iteration. The goal is to get things out and working, improvement rather than perfect and absolute. So if team members are not direct, or if small groups are huddled separately from each other, that will block the flow. 

Openness makes for  commercial health as well as personal reward at work, everybody thrives as a result.

Culture Hacking and Mapping

Esko Reinikainen @reinikainen of The SatoriLab 

introduced himself as a Culture Hacker who works for government helping to build culture for people who don't know what it is and don't want it.

A Finn based in Wales getting public bodies to change the way they think and interact: Esko surely has plenty of cross-cultural experience.

His specialism is how to narrow the gap between what we say and what we do. He gave an example of company whose claims of  

“We have an open culture”

were trashed in the daily reality of  

“My manager says if I know what's good for me I'll keep my mouth shut”.

Generously Esko has shared an example of the Culture Map, developed with David Gray, via twitter @reinikainen 

Coupling top-down with bottom-up

Laura-Jane Parker talked through experiences of nurturing culture at Direct Line after the split away from Royal Bank of Scotland: a tale of DeBelonging and ReBelonging. 

She shared the importance - alongside bottom-up development - of top-down leadership of values and culture. Culture belongs to everyone but leaders must, well, lead. As soon as leaders use the language of 'Us' and 'Them' the unity of culture is lost. The values are just nice words on a wall, not reality.

Commitment

Nick Matthews of Yammer's gave us three rules for openness

1) You really have to want to do it 

2) Choose your medium 

3) Leaders must lead 

He described commitment with no compromise. 

"If you want an open culture you have to really go for it".

Control and community

William Higham, a futurist from The Next Big Thing Company, pointed out how connected we are in almost every aspect of life: except at work. Organisations have much to catch up on to make culture and internal communication as connected as contact with customers.

He pointed us to two Cs for the future of corporate culture- Contol and Community. Control not just by those at the top, but in an agile way across the business. Community in a more fluid exchange of like minds and support, all connected.

Conversation

The quietly incisive Tom Nixon of Nixon McInnes suggested we all introduce ourselves with 

"What I need is..." 

so that we could match up conversations to offer appropriate support.  

It worked a treat. Plenty of evidence for David Gurteen's @Davidgurteen research on the power of conversations in business. 

(Un)Conference

And finally, Matt's specialism, a short unconference where people offered a subject and self-managed discussion in small groups.

Conclusion

Open source culture can make a powerful difference to organisations' success: and it takes commitment to keep it up.

One year in to Culturevist, there is an open conversation in this group. And, with the lightest-touch of control and intuitive culture, a clear sense of Belonging.

We even have some symbols (badges!) and habits - we like loose structure, fluidity and informal environments. We Culturevists share a purpose, and an ethos, we have developed a community and camaraderie. And we're keen to put our shared talents to mutual support and good use.

Well done Matt and Culturevists: we set out to chat and have built a community.

 

Join the next Culturevist event

http://www.culturevist.com/about/

@culturevist 

Does your organisation have a strong sense of belonging?
Talk to us about how to create effectiveness from Belonging.
 
isabel@belongingspace.com
www.belongingspace.com