Whenever I think of strong company culture, I think of The Coca-Cola Company, headquartered here in my hometown of Atlanta.
I imagine everyone has experienced at least one major embarrassment in his or her career. Mine involves Coca-Cola. The first time I arranged a lunch meeting between consultants from our firm and an executive from The Coca-Cola Company, I booked a private table at a hip, new restaurant. I just knew the well known chef and locally sourced menu would be a hit. But lunch didn't go as planned. The restaurant served (gasp!) Pepsi products instead of Coca-Cola ones, prompting the Coke executive to turn on his heel and request a change of venue.
Of course, I was mortified, but my colleagues were understanding and gave me a much-needed crash course on Coca-Cola etiquette (I was new to the firm then). I now know that Coca-Cola employees won't dine at a restaurant that doesn't serve Coke products. You can't go through security at Coca-Cola HQ with an Aquafina-brand water bottle in your purse. And you must never, ever wear blue to a meeting with Coke.
These quirks make for great anecdotes, but they are indicative of something much larger. Whether or not you think a client should be able to tell you what brand of water you can drink -- and whether or not you're bothered by the fact that Coca-Cola makes billions of dollars a year selling acid-laced sugar water -- The Coca-Cola Company makes a compelling case for the power of culture to enable organizational effectiveness.
According to The Coca-Cola Company website, "From day one, you’ll notice a culture where our people are truly dedicated to living our values." This is so true. It's not that everyone at Coca-Cola is happy with their work all the time (though some are), but it is amazing to behold the way these employees conduct themselves with passion and unity of direction day in and day out.
Sorensen (2009) reveals that companies with strong cultures not only perform well, they do it consistently -- so it makes sense that Coca-Cola is described by economists as "the perennial safety play" (David, 2010). Yet Sorensen (2009) also warns that companies like Coca-Cola will have difficulty adjusting to change -- and Coca-Cola has been going through some major changes. Since 2010, the company has been working its way through the largest vertical integration in U.S. history (Ali, 2010) as it absorbs Coca-Cola Enterprises and a number of other, smaller bottling companies. If ever there was an appropriate time for Coke to adjust its positioning on some dimensions of the Hofstede (2009) model, this is it.
I read with interest an interview with Muhtar Kent, Coca-Cola's CEO, conducted by Adi Ignatius of the Harvard Business Review (2011). I thought it would be interesting to hear Kent's perspective on implementing change in the face of such an ingrained culture.
In the interview, Kent claims to be an instinctive leader who doesn't spent much time reading management theory or best practices (Ignatius, 2011). Yet in describing the challenges inherent in a strong culture organization, he echoes themes from this week's readings. Kent criticizes Coca-Cola's culture as having become insular and "arrogant," (Ignatius, 2011, p. 1), even going so far as to say the company has "lost its soul" by losing sight of its "core business"(p. 1). He emphasizes the importance of looking externally at the changes going on in the world outside of Coca-Cola.
Like Sorensen (2009), Denison and Mishra (1995) acknowledge that "highly resistant cultures are often the most resistent to change and adaptation" (p. 215). Their studied advice is that companies like Coca-Cola must make adaptability itself a valued cultural trait in order to support effective performance even through times of change (Denison & Mishra, 1995). If Coca-Cola is to maintain its legacy as a financial "sure thing," Kent might do well to bone up on his theory.
References
Ali, T. (2010, February 26). The Coca-Cola Company to buy Coca-Cola Enterprises: Vertical integration continues. Street Capitalist. Retrieved from www.streetcapitalist.com
Davis, P. (2010, October 21). Pop culture: My interview with Coca-Cola CEO Muhtar Kent. Seeking Alpha. Retrieved from www.seekingalpha.com
Denison, D. R., & Mishra, A. K. (1995). Organizational culture and effectiveness. Organization Science, 6(2), 204-223.
Hofstede, G. (2009). Dimensionalizing cultures: The Hofstedemodel in context. Online readings in psychology and culture, Unit 2. Retrieved from http://scholarworks.gvsu.edu/orpc/vol2/iss1/8
Ignatius, A. (2011). Shaking things up at Coca-Cola: An interview with Muhtar Kent. Harvard Business Review. Retrieved from hbr.org
Leslie, I was with you until "no wearing blue to meetings." Do the Coca-Cola employees actually follow this rule? I wonder if one of Coca-Cola's cultural issues is its preoccupation with its competition. Perhaps the company has allowed external forces like Pepsi to infiltrate its organizational culture. Could the unity that the employees exemplify be caused by the competitive environment? Do you think a common enemy (such as Pepsi) can build a strong organizational culture?
ReplyDeleteI have only occasionally worked on site at Coca-Cola -- a few days here and there -- although some of my colleagues sit at their offices five days a week. But I can tell you that the last time we had a team of about 40 HR leaders from the organization come to our offices for a training, everyone was dressed in shades of black, red, or silver. Not joking.
DeleteI do think a common "enemy" can help build a strong culture, whether corporate (care to comment on USC vs. UCLA?) or national. But this practice presents problems as well. For instance, what if two "enemies" merge? My own company (Towers Watson) was formed from the merger of two former competitors, Towers Perrin and Watson Wyatt. Competition is a big part of the culture in consulting, and it made for a hugely painful integration.
My company too has a cultural style of dress. An executive comes to town for a meeting and everyone pulls their blue shirts out of the closet. Our executives also have their attire peculiarities, there's one who prefers the half-zip sweater, another who likes the v-neck sweater, and still another who dons a sweater vest. And people emulate in dress one or the other of these "styles". This may be a good area for research... what fashion choices say about culture.
DeleteIt is so interesting to me that we all, at some level, buy into the cultures of our work environment. I know for me as I interview the culture of a company plays a big part in my decision making process. I wonder how many of the people at Coke headquarters started with the attitude of "well I can make this work" and then were slowly converted to the gospel of Coke...
ReplyDeleteThe commonly-heard phrase is, "I've drunk the Kool-aid... I mean the [insert Coke product here]." Really. People say that.
DeleteCasual Fridays mean red jeans.
ReplyDeleteI loved your post, Leslie. A few months back, I read an article in Forbes or Wired or a similar magazine about the changes at Coca Cola, and I think it's a good thing that their new CEO is shaking things up. MySpace could have used a shakeup about a year after they started to slide. They may have been saved.
In spite of his disparaging remarks and the truths that they may contain, Coca Cola still remains the market leader, by far.
Leslie, I enjoyed your post on Coca Cola. The culture seems cult like with only supporting Coke venues and staying away from blues. With Kent making the comment about the company losing its soul I wonder if a culture change is brewing over there or perhaps employees are not as committed to the Coke only lifestyle.
ReplyDeleteMy comment is echoed in Audrey's. I wonder to what extent corporate culture is affected by people who just want to keep their jobs and to what extent it becomes a mindset. And is this mindset confined to the corporate offices or does it extend out to the bottling companies, which I believe are somewhat autonomous. (I've been to the Coke bottling plant in Kabul and saw many blue shalwar kamizes [Afghan dress], but whatever.)
ReplyDelete