The rise of Glass Box Brands – be careful of the cracks when company values don’t stack up

Two months ago, Tony Hsieh’s retirement as CEO of Zappos got me thinking about culture and alignment.

Early last decade, I was fortunate to hear him speak in Melbourne, and talk with him briefly, about his story at Zappos. He spoke about how important it was to pursue your passion and define your higher purpose, and that profits would follow.

The number one priority at Zappos is culture, which was formalized in 10 core values created over a year with employees. They aligned the whole organization around the values, to live, and deliver 'WOW' – happy employees, happy customers, happy vendors. These are committable values that they hire and fire on.

The Zappos culture is synonymous with the Zappos brand. Every employee understands their role in delivering WOW and owns the moment of truth as the brand guardian. Zappos shares their culture, their processes, ways of working, wins, and failures – radically transparent at that time.

That day was my light bulb moment aligning culture with brand, and internal communications and HR with marketing. Prior to that many organizations operated within a black box – what the organization did may or may not have been true to the brand, the values, or purpose, but you had some semblance of control over what the external world could see. Your culture was internal.

Fast forward to today, we have connectivity like we’ve never had before, and radical transparency is now widespread. Everyone can see into the organization if they want to. The brand is now everything that is visible. They can see the people, the values, the process, and what people within the box feel about what is going on.

Think about all the touchpoints of the brand, inside and out, the experiences that are had, and the impact of these on brand perceptions.

Known as Glass Box Brands, this has been identified as a trend over the past decade growing into a megatrend according to TrendWatching.

More and more we see internal communications are made public – the leaders who are good communicators understand the power of communication done well. We've seen this with employee layoff comms by Brian Chesky at Airbnb and Anthony Tan at Grab in South East Asia.

Transparency is the amplifier of your strengths and your flaws. When people look into your organization, they see your culture. It can be your asset like in the case of Zappos, Airbnb, or Grab, or it can be a powerful brand liability – the crack in the glass box.

In the past few months, a number of high-profile corporate brands, AMP Capital and Rio Tinto, have felt the pain, where their behavior and decisions did not align with their stated corporate values and reflected poorly on their culture. Both tried to downplay these and ride it out.

AMP Capital promoted a high performing senior executive to the role of CEO who had a case for sexual harassment of an employee settled a few years prior. There was significant disquiet amongst employees with some of the senior talent walking out.

To access high-grade iron ore, Rio Tinto destroyed the 46,000-year-old Juukan Gorge rock shelters despite opposition by the Aboriginal traditional owners.

These were leading and trending stories in the media, that could not be ignored.

In both cases, the big corporates’ behavior was unacceptable by community standards and, in turn, to the large and powerful pension fund investors. Change is underway but how effective it is, is yet to be seen.

As a leading journalist in the Sydney Morning Herald put it:

“… the days where companies could get away with blaming systemic failures or flawed corporate governance on a few bad apples, errors, and other lame excuses dreamt up by PR teams are all but over. We are now operating in a world where trust has been broken and communities will no longer put up with companies that operate in the dark and feast on opacity.”

So, what can your organization do to stop the cracks in an era of Glass Box Brands?

• Recognize and accept you’re in this environment
• Be authentic to your purpose and values
• Teach your people and leaders to be better storytellers.
• Don’t just tell but show – show through your actions and behaviors
• Create a culture of psychological safety where your people have a voice
• Give your people a platform to tell your stories that are true to your brand
• Ensure your brand platform is genuine – your people and your actions are your proof points
• Proactively work to uncover the issues in your culture and find positive ways to involve your people to address these, and then share this in meaningful ways.
• Most importantly, apply an ethics lens to decision making.