At Wayfair, idealism and corporate culture clash
If there’s one lesson that Wayfair executives have learned this week, as the company faced a growing tempest over its contracts with an organization operating detention centers on the southern border, it’s this: When you create a corporate culture that is deferential to the wants and needs of a young, empowered generation, there may be consequences.
Wayfair has built its business by catering to a web-savvy, digital-first audience, and by employing a young, talented crew of employees who are building and supporting the online infrastructure to facilitate its 100,000 daily sales of lamps, area rugs, and throw pillows. But these digital natives increasingly expect corporate entities to take a stand on high-profile public issues. That came to a head this week.
Hundreds of Wayfair employees walked out of their Back Bay offices on Wednesday afternoon to protest, drawing supporters with handmade signs to Copley Square over the lunch hour — a demonstration that drew international attention and the support of politicians including Representative Alexandria Ocasio-Cortez and Senator Elizabeth Warren.
Increasingly, younger generations “want to align their values with who they work with or buy from,” said Dan Schawbel, the research director at Future Workplace, an executive development firm. “When there’s a strike, or a brand is breaking a brand promise, or is not standing up for what’s right in people’s eyes, it’s going to hurt the brand at a much greater rate.”
The controversy over Wayfair selling beds to a government contractor running detention camps for immigrants at the border was especially jarring. Wayfair, based in Boston, has crafted a persona as a fun, youthful brand inside and out. From its goofy commercials to its funky offices, its voice is friendly and accessible. Its customers are people comfortable buying accent chairs after simply scrolling online, and who use the augmented reality in the company’s app to make furniture leap out in 3-D apparitions so they can envision it in their homes. Ask its founders about their path to profitability, and Niraj Shah and Steve Conine will point to the coming millennial wave. If they can be a company with $6.8 billion in annual revenue now, they argue, just wait until the next generation begins outfitting their homes.
“The millennials are about to age into the demographic. That’s part of the big upside,” Shah said in an interview with the Globe last year. “When you start to think about how big the online opportunity is here, it’s huge,” he said.
Shah and Conine have also honed a culture in Wayfair’s offices that is designed to recruit and retain young talent — and with the pace that they’re hiring, it’s a real priority. Shah often talks about how he likes to bring in people at the start of their careers, when they haven’t fully formed a vision of who they are or what they can do.
“I often prefer to hire someone who we think would be good at something but who has never done it because they don’t feel burdened thinking there’s one right way to do something,” he said in a 2016 interview. “I like people who are willing to be creative and think about what is the best idea they can come up with.”
And so the ranks of the company are filled with idealistic go-getters giddy about the promise of building the next Amazon. It goes without saying that the Back Bay offices are well-appointed — they have access to an enormous supply of furniture, after all — plus there are the requisite beer taps, pool tables, and baskets of snacks. And while many are excited about the employee discounts and stock options, Wayfairians, as they’re known internally, also feel empowered to speak up and help shape the company’s priorities and mission. At the heart, that is what’s driving the protest and the ensuing fallout.
“At Wayfair, we believe that ‘everyone should live in a home that they love,’ ” employees wrote in a letter to executives, citing the company’s motto. “Let’s stay true to that message by taking a stand against the reprehensible practice of separating families, which denies them any home at all.”
The backlash was unique in that it wasn’t driven by customer outrage, said Ross Steinman, a psychology professor at Widener University who studies brand transgressions — the moments when corporate entities face blowback.
He said millennials are focused on value systems, the company showed a tone-deafness to that.
“I think Wayfair has been doing everything right and this has caught them off-guard a bit,” Steinman said. “When you look at transgressions, it’s often driven from consumer, but here the employees have brought this to light.”
The result was self-created corporate horror movie playing out in real time: The call was coming from inside the house.
“The employees are on the ground floor and understand the culture, and it sounds like what’s going on is vastly different from the culture that’s cultivated there,” Steinman said.
The actions of the Wayfair staff are emblematic of a new generation of workers, said Eric McNulty, the associate director of the National Preparedness Leadership Initiative at Harvard University.
“Younger workers want their purpose and values to align with the values of the organization,” he said. “To me, the good news is that the employees actually care enough to walk out and protest.”
This was demonstrated at the walkout Wednesday, where the sentiments among employees were steeped in disappointment and hope that the company could do better.
“This is the first time I felt like I needed to hit the streets to make sure I was proud of my company, that I was happy to work for them,” Madeline Howard, a Wayfair product manager, told the crowd. She said she wanted “to make sure that we’re all adhering to those Wayfair values.”
Tom Brown, an engineer for the company, echoed her sentiments. “We have a great team, we hire the best people,” he said to cheers. “And that just so happens to be the people who care the most.”
On Wednesday, Wayfair stock was up nearly 1 percent.
Conine and Shah also wrote a note to employees saying they both “care a great deal about humanitarian issues” and that the company would make a $100,000 donation to the American Red Cross to support “their effort to help those in dire need of basic necessities at the border.”
But Schawbel, of Future Workplace, was skeptical, calling the action a “Band-Aid.” He said he believes Wayfair executives need to act quickly to repair the damage that’s been inflicted on the brand.
“It’s ironic. I think they did a great job by creating a workforce where people feel like they can speak openly,” he added. “But if people are able to speak out, then everyone has an opinion.”