Is the Company’s DNA Killing Your Brand?
By Doug Stephens
In 1965 American sociologist Arthur L. Stinchcombe introduced theory around what came to be called organizational imprinting – that organizations tend to be products of the age in which they were founded. Their structure, values and even core business models can be so deeply imprinted, revolting against their genetic pre-dispositions can be difficult and in some cases impossible.
Consequently, as the world changes exponentially around them, these organizations continue to view everything through the lens of an earlier era. They lose touch with the economic, demographic and technological realities affecting their industries. They hold fast to their founding values, beliefs and methods, even if it’s abundantly obvious that they’re outmoded.
Brands like Borders, Blockbuster and Sears often figure highly in discussions about failure to change but another brand might just be the poster-child for just how much America has changed over the last 60 years and what happens to brands that fail to properly recognize it.
Avon, a pioneer in the direct-sales market, is in trouble and has been for some time. The brand once synonymous with American entrepreneurial values and middle-class aspirations has seen its North American sales decimated and profits per sales representative plummet by 75%.
A recent Wall Street Journal piece highlighted a few of the challenges that incoming CEO Sherilyn S. McCoy faces. Competitively the company is precipitously giving up share to everyone from LVMH, Moet Hennessy and Sephora to Drugstore.com and Walgreens. Add to that allegations of illicit behavior on the part of senior employees and it’s just a really bad scene.
Yet, it’s not as though these troubles are sudden. Consider just how many mega-transitions Avon failed to capitalize on.
When women began entering the workforce in numbers in the early 1980’s, their time and inclination to host in-home parties lessened and Avon failed to adequately react. Being one of the very earliest pioneers in helping women attain a degree of financial independence, Avon should not only have seen this shift coming but also been in a position to own it.
When the Internet threatened to forever redefine convenience, rendering door-to-door and in-home sales inconvenient by comparison, Avon didn’t adequately react. Also a big miss for the brand that, in its day, took convenience to a new level with in-home sales.
When the mid-tier of the consumer market began to erode in the 1980’s, steadily giving way to gains by both luxury brands and deep discounters, Avon didn’t adequately react. Even as it became increasingly clear that Avon was being attacked from both the low and high ends of the market, they clung to familiarity of a middle-of-the-road position.
And when Facebook and other social media sites offered brands like Avon a golden opportunity, Avon didn’t react. Particularly ironic for a company that to this day hails itself as the “original social network.”
At each of these key junctions Avon had an opportunity, not only to redefine their business but also dictate the new terms of reference for the entire direct sales industry. They had a chance to lead but their DNA got in the way.
It usually comes down to courage
French author and winner of the 1947 Nobel Prize in literature, Andre Gide once said, “Man cannot discover new oceans unless he has the courage to lose sight of the shore.” Leaving the certainty of the known for the potential of the unknown has never been more important in business than it is today. There simply isn’t time to cling to ideals and defend paradigms.
Businesses today must be constantly looking beyond the comfort of the current market, customer and business model to see what others can’t. It’s no longer optional. Survival depends on it.