May 31, 2017 By FTI Consulting
Crate & Barrel recently announced the appointment of Neela Montgomery, its third CEO in recent history. The move caps a tumultuous five-year period belabored by executive-level turnover and steep competition, including a high-profile lawsuit which accused the company of stealing trade secrets.
For employees, Crate & Barrel likely bears little resemblance to the home furnishings company that co-founders Gordon and Carole Segal led for nearly 50 years. Known for decades-long employees and “remarkable continuity in its management ranks”– two attributes rare in the retail industry – its success upheld Gordon Segal’s long-held belief that the tightly knit corporate culture was integral to operations.
That was then. Today, the current owners, Germany-based Otto Group, and the newly installed CEO seek to revitalize the business strategy amid a rapidly changing retail environment, citing e-commerce, product innovation and brand modernization as areas of focus moving forward. In her first statement as CEO, Montgomery acknowledged the valuable assets already in place: “Crate and Barrel is a strong brand, a great company and a team of wonderful people.”
However, any company that experiences a significant level of transformation across its leadership, strategy or vision (and in the case of Crate & Barrel, all three) will be affected culturally. The question, then, is whether the current culture is equipped to deliver on the strategy and vision of its leadership.
According to the FTI Global Employee Confidence Study conducted in January 2016, less than one third of employees (28 percent) who have experienced a culture change are very confident* in their current organization’s ability to deliver ongoing changes. However, the same study demonstrated that effective communication throughout the organization gives employees the tools to adapt to new challenges more quickly (95 percent) by establishing a clear vision for the future and ensuring that the experience matches expectations. Simultaneously, effective communication throughout a culture change increases employee confidence in future successes for the organization (90 percent) and increases motivation to deliver the best results (88 percent).
These are significant findings that should not be ignored. From an organizational standpoint, the company and its environment must be designed and developed to optimize employee efficiency, agility and talent.
Creating change is an important part of business, but it is imperative that this process empowers employees and the organization focuses on creating a consistent, transparent and dynamic experience. Ultimately, Crate & Barrel needs to develop a culture that is appropriate to the new strategy and vision in order to best position the company to achieve its business results and objectives.
*Confidence was measured on a 4-point scale: very confident, slightly confident, not confident and not applicable.
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