Culture Can Make or Break Your Brand

August 6, 2019 | blog | By Mike Sullivan
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What happens when a company’s brand isn’t aligned with its culture? Generally speaking, the outcome is less than optimal. Sure, the world is loaded with brands that say one thing but are run by people who do another. As consumers, we know what that’s like, and it’s the source of a lot of frustration. This month, we’re starting a discussion about the impact a company’s culture has on its brand — for better or for worse. We’ll start with worse and work back to the good stuff in the next two installments of this three-part blog series.

When culture hits you cold.

Orit Gadiesh pulls no punches. The Chairman of Bain & Company is an imposing intellectual whose command of both logic and emotion is paired with a matching command of any stage where she’s a featured speaker. Her resume includes a psychology degree from Harvard, an MBA from Brown, a faculty position at The Hebrew University’s Jerusalem Institute of Management, and service in the Israeli Army. She’s appeared on Forbes list of the world’s most powerful women four times. She’s also one of the world’s foremost authorities on corporate change.

People pay attention to what Gadiesh has to say, and when she told a room full of CEOs who they should blame when a warm meal is served cold, they listened carefully. We’ve all had a poorly prepared meal at a restaurant, she explained. The impulsive response is to blame the servers or the kitchen staff and, while that may not be entirely wrong, it’s not entirely right, either. Blaming the staff misses a much larger and far more important point, she told them.
Ultimately, Gadiesh intoned, it is the restaurant’s culture that informs the behavior of the staff.

Something about the culture of the restaurant tells the waiter, who no doubt knows when a dish is poorly prepared, to serve it to the customer rather than push back on the kitchen to get it right. It’s the restaurant’s culture that signals what is acceptable and unacceptable behavior, either overtly or more often through things left unsaid. What’s more, the restaurant’s culture — like that of any organization’s — is a direct reflection of its leadership. The values of leaders are communicated by their behavior and transmitted through relationships. Intentional or otherwise, the way leaders lead tells a group all it needs to know about how to behave.

When a restaurant serves a warm meal cold, more often than not it’s no simple mistake. Instead, it’s the restaurant’s unmistakable culture that allowed it to happen at all, and the restaurant’s leader is responsible for shaping that culture.

Blame for a dish served cold is most correctly assigned to the restaurant’s head boss.

Culture starts at the top.

What does a bad meal have to do with the leader of JPMorgan Chase and the bank’s behavior during the housing crisis of 2008? Gadiesh shared this restaurant anecdote during a talk she gave in 2009 as the nation wobbled under the weight of the worst recession since the Great Depression. The world was gripped by a global financial crisis catalyzed in the United States by the subprime mortgage meltdown, and then compounded by a number of factors whose unfortunate combination delivered devastating financial blows to millions of Americans. They lost jobs, savings, homes, hopes, and dreams.

While it might be useful to know who to summon the next time dinner out goes badly, the question posed to Gadiesh was far more serious than that. She had been asked whether Chase Chairman and CEO Jamie Dimon was personally responsible for the actions of subordinates who were accused of knowingly underwriting fraudulent securities. The room was full of somber business leaders who were still making sense of a newly emerging counter-narrative about the banking stalwart and its principled leader.

Chase was positioned as the vanguard of an industry under siege. They had long been heralded as the lone white hat bank that, unlike all their Wall Street peers, hadn’t done anything wrong. Chase was the last bank standing after sidestepping the historic credit crisis under Dimon’s canny and charismatic leadership. More than anything, it seemed he had led with integrity where others had failed to lead at all. Desired or not, Dimon was cast as the wartime General of the banking industry and Wall Street was grateful. Everyone was grateful. At this particular moment in the history of America’s most significant financial brands, the brilliance of the Chase brand was eclipsed only by the shiny virtue of Dimon’s personal brand.

As the financial crisis unfolded, Chase had become widely regarded as the North Star in an absolute mess of a constellation. Wall Street needed a savior and it had one in Dimon when he marshalled Chase to the rescue of both Bear Stearns and Washington Mutual. It was the stuff of heroes after the breathtaking demise of a series of luminous financial industry brands, including Goldman Sachs, Morgan Stanley, Merrill Lynch, and Lehman Brothers. The world, and more specifically the American economy, couldn’t take much more. In a retrospective piece some five years after the collapse, Vanity Fair described the rescue of Bear Stearns and Washington Mutual as an act of “financial patriotism that certainly helped prevent the U.S. economy from further doubling over on itself.”

Given the backdrop of an economy in freefall and relentless headlines about big banks behaving badly, it didn’t take much to arouse a little anxiety in a room filled with business leaders. The simple question to Gadiesh did the trick: was Dimon responsible for the behavior of his employees? He had offered ignorance as his alibi, after all, claiming he was simply unaware of the fraud being perpetrated by subordinates in his bank.

It was perhaps the very lionizing of Dimon which provoked Gadiesh to begin gently, with a benign example about a poorly served meal at a restaurant, but the trajectory of her answer was clear soon enough. Her position was unambiguous as she noted that the Chase culture, while perhaps well concealed from public view, most certainly promoted behaviors conducive to a fraudulent and deceptive scheme to sell mortgage-backed securities loaded with defective loans.

Dimon may have been the protagonist in a badly needed Wall Street hero’s journey, but that most certainly did not exonerate him. Dimon was responsible for his company’s behavior.

In the end, Chase settled with federal and state authorities for a record-setting $13 billion in fines. As it turned out, in an industry made rotten by an industry-wide culture that fostered environments of predatory opportunism, Chase was simply no exception. With six- and seven-figure bonuses as their prize, big bank employees pursued personal fortune with reckless abandon and with no regard at all for the law or for the dire consequences to be paid by their fellow Americans.

Culture is powerful. So is the perception about it.

A decade hence, the big bank brands remain indelibly damaged by their deeds. Where trust and fidelity were once synonymous with America’s major financial institutions, consumer suspicion and a lingering sense of betrayal are attached to them now. While the big banks are awash in cash today, all the money in the world cannot buy back the industry’s integrity. It’s a stubborn residue that will not be cleansed anytime soon by polished ad campaigns and outsized big bank marketing budgets.

When push comes to shove, a company’s culture is far more powerful than its brand.

Culture is also very durable, and impossible to shift without serious intention and the will to match. In 2016, just seven years after a banking crisis that’s estimated to have cost every American $70,000, Wells Fargo was embroiled in a scandal borne of the same malicious cultural cues. Top-down pressure to generate fee income motivated Wells employees to open millions of fraudulent savings and checking accounts on behalf of customers without their consent.

Culture is durable, indeed.

MIKE SULLIVAN is president at LOOMIS, the country’s leading challenger brand advertising agency and a top Dallas advertising agency for digital, social, mobile and user experience. For more about challenger branding, advertising and marketing, leadership, culture and other inspirations that will drive your success, visit our blog BARK! The Voice of the Underdog and catch up on all of our posts.

For more about LOOMIS, or to discuss how we can help your company succeed, CLICK HERE

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Mike Sullivan

President at LOOMIS, the country’s leading challenger brand advertising agency

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