Pfizer and Sports Direct: A lesson in culture to capital

This week in the news two companies, Pfizer and Sports Direct, have shown us how a harmful culture can damage your business, through fines, loss of reputation and loss of staff. These stories show it’s vitally important to look at how you do business not just how much business you do.

We’re not suggesting you shouldn’t care how much you’re making. It’s clearly important that businesses are commercially successful. However, by making sure you’re doing so in an ethical manner, your results will be sustainable in the long term. This was the key theme from the Financial Reporting Council’s report earlier in the year, and the subsequent conference, ‘Culture to Capital’.

When we play these challenges against our Parameters of Belonging, they fall across three areas: Accountability, Leadership and Interactions (via your process of decision-making). A big part of the challenges bought up by Pfizer and Sports Direct is unethical decision-making. Your process for making decisions is formed by the style of leadership and accountability that you experience. If your boss tells you that ethical transgressions are fine so long as your sales numbers are good, and the ends always justifies the means, you’ll think its acceptable to subvert the rules for financial gain. One way to make certain this doesn’t happen in your business is to connect your culture, strategy and governance. If each of these delivers and reinforces the same message there is no room for employees to be misled.

These two headlines must have had a negative affect on the sense of belonging felt by the employees at both companies. Sports Direct, at least at a warehouse level, does not appear to have had the strongest sense of belonging before all this came to light, but it must have an impact on those who were not already part of the issue. What about the Pfizer employees? Their company’s purpose is to “innovate to bring therapies to patients that significantly improve their lives.” That’s a purpose to be proud of. This pride will be hurt reading that their company is potentially preventing the delivery of said therapies to the patients whose lives they’re seeking to improve. This in turn will make attracting and keeping top quality talent much more difficult.

For us this comes down to every employee being able to answer the question (from our online Belonging Space Challenge) “What business would you say no to?”

They should know the answer instinctively as it is directed by the corporate culture they live in and are affected by every day.