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Marketing & Organizational Lessons from the WeWork Disaster

The New York Times article on Sunday November 2, 2019 about We Work digs into why WeWork imploded and Adam Neumann’s role.  I got new insight into both the company and founder by applying Moral Foundations Theory.  Here’s the lessons I took away.

 

First, the marketing lesson.  WeWork’s reason for being is community.  As the article stated, WeWork’s IPO filing used the word community 150 times.  And of course, the We part of the name describes the belonging. A clear signal. That is part of the Loyalty Moral Foundation identified by Jonathan Haidt and Jesse Graham. I like a different name better (belonging and community) because I get loyalty confused with loyalty to an authority figure and the name change helps me.  I also like my name better because it opens up space for positive elements of community.  After all, we all need to feel like we belong to something. And that is what WeWork played with, the positive aspects of community.  It was said that with WeLive apartment buildings would drive down suicide rates because no one would feel alone. But the really interesting part of the story is that Liberals place less importance on the belonging and community than conservatives.  So, if you were going with averages, you would never guess that a WeWork type model would work in major cities filled with liberals.  But even though it was unprofitable the way it was configured, WeWork did work for its clients.  It probably worked because the institutions which have been used in our society in the past to provide that sense of belonging have crumbled, leaving room for a new form of community.  If the old institutions had still been active, WeWork might never have come into existence.

The Marketing Lesson:  Even if an area isn’t a strength for a target audience it can still be successful as a positioning if there is a void in the market.

But the focus of the New York Times article is Adam Neumann.  Words used to describe him include visionary, evangelist, dominant, ambitious. This is a classic description of an authority figure.  He inspired loyalty, indeed, he demanded it.  There is one scene depicted in which he demands that others drink a “rank” liquid from an old beer bottle, and they do – all but one and that person is no longer with the company.  This is a fascinating topic, because no one has figured out what causes people who have bought into an authority figure to abandon that loyalty.    There are hints in the article of how this happened.  One hint was when Adam was invited by Mr. Son to sit at his table at a function as the I.P.O. was collapsing, but then Mr. Son was told by someone he trusted that it would look bad, so it never happened. Among employees and investors, Neumann’s ambitions started to wear thin, and some employees found his behavior toxic.  His excesses like his sauna and cold plunge pool, requiring employees to travel to him in the Maldives so he could catch a wave, and leasing a Gulfstream started to rub people that wrong way. Is this the key to breaking the hold that an authority figure has on their followers?  Or did this only happen because Neumann’s followers were liberals and so had a weaker gravitational pull towards Neumann than a conservative follower base might have had.  Followership literature stresses the need for the match between leaders and followers.    

I contrast the WeWork Adam Neumann story with a 2017 New York Times article about the change in leadership at Etsy from a collaborative leader to one who dictated which resulted in wholesale defections.  And with the reports of the lack of leadership for the 99% movement. Both are consistent with a liberal culture with low desire for or respect for authority.

Organizational Lesson: The lower respect for authority among liberals doesn’t mean they have no authority figures, but they may be more open to challenges than conservatives.

I’d love to hear what you think.  Did I get it right? Email me with your thoughts.

 

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Karen Tibbals @KarenTibbals

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