Get your company’s culture right and more often than not the financial results will follow suit in spades, says one leading CEO.
“I think any business today that doesn’t have an engaged, respectful, passionate, inclusive and diverse culture will not be successful long-term,” WW International CEO Mindy Grossman tells Yahoo Finance. “You may get some short-term business results, but what you really have to do is look underneath and it has to be led by the CEO. There is no other way. If you look at my board and executive team, it not only has what we consider diversity but also diversity of thought.”
Toxic, inappropriate culture led to some high profile C-suite ousters in 2019. Chief among them was the booting of McDonald’s CEO Steve Easterbrook following an undisclosed, consensual relationship with a subordinate. McDonald’s corporate guidelines prevents managers from having romantic relationships with subordinates or direct reports.
Several months following Easterbrook’s departure, The Wall Street Journal reported Monday that McDonald’s culture included late night booze-fests between corporate managers. Easterbrook is described in the story as having made some female employees uncomfortable with his flirtatious nature.
While McDonald’s found early success under Easterbook, its financial performance did begin to weaken a little toward the end of his tenure. Obviously, it’s difficult to link the company’s alleged cultural issues with that deceleration in performance, but it’s worth investors pondering.
Besides McDonald’s C-suite shake-up, WeWork founder Adam Neumann was pushed out after a failed IPO and steady stream of losses. One could easily point to the awful culture — including high spending and partying — that Neumann created for the IPO disaster.
As for WW’s Grossman, she was named CEO of then Weight Watchers in April 2017 after years of successfully building the modern day HSN Inc. as CEO. She even took HSN public in 2008 after being given the keys to the kingdom by IAC Interactive (former parent company of HSN) chief and mentor Barry Diller.
Grossman has undertaken an aggressive re-branding of the now WW International (WW) with an eye towards turning the company into a broader health and wellness entity. She has also sought to improve WW’s culture by bringing in new executives and board members. Grossman has also brought media mogul — and general do-gooder — Oprah Winfrey closer into the company’s mission beyond simply having her sit on the board.
Now that is putting your money where your mouth is.