Riblet#47: A Fish rots from the Head

“How we do things around here” is how the idea of an organisational culture is frequently expressed. The words describing a culture do not deliver it on their own; it is the active implementation of those words, the actions themselves that define the culture.  And the drive to implement, enforce and sustain a positive organisational culture comes from the top, as does the influence of a neglectful or negative vibe – as the saying goes, a fish rots from the head.

Victor Value was a UK supermarket chain in the 1960s.  It tried to take over its then smaller rival, Tesco, but failed.  After that, the MD and founder of the chain retired and passed the business on to his sons.  The sons had little interest in the business and started raking off the takings from the last hour of trading each day. The employees saw that as a green light to do the same and the company soon folded and was then taken over by Tesco (there had been a long-standing rivalry between the founders of the companies, both men called Cohen).

In the early 1990s, the ASDA supermarket chain nearly went bust following the disastrous purchase of 63 stores (two of which did not actually exist) from Gateway.  A new chairman came in who bought time by negotiating with the banks, and then brought in a new management team.  The new team borrowed ideas from other retailers such as the small Connecticut chain Stew Leonard’s, Feargal Quinn’s Irish chain Superquinn, and Wal~Mart who later bought ASDA (and have recently sold it again).  The new CEO claimed not to manage by slogan, but there were a number of mantras repeated endlessly that underpinned a swift culture change, mantras such as “We hate waste of any kind”, written over the walls and repeated over and over.  The collection of mantras became the “ASDA Way of Working” – a defined culture.  The change was however not wholehearted – one director said that the only culture he recognised was the one in a yogurt pot; nor was it that radical – Harvard Business School said they could see nothing new to study from it; nevertheless, it was achieved quickly, returned the chain to profitability, and gave Sainsbury’s and Tesco a run for their money.  The culture does not have to be 100% to have a positive effect.

When one of the Albrecht brothers was kidnapped in Germany, he refused to be released until he had knocked down the ransom.  The Albrechts were the founders of Aldi the discount retailer, Aldi being short for Albrecht Discount.  The boss clearly lived the culture of the business, demonstrating their deep discounting culture which is the foundation of their success.

An actively promoted, positive culture is a key foundation for managing risk and achieving corporate objectives.  A culture that is left to drift into negativity will pose a threat to the survival of an organisation – almost nobody remembers Victor Value.

Data Sources: Tesco inhouse history, First-hand accounts, The Grocer magazine, The Sunday Times, Wikipedia, www.asda.co.uk

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