What happens when business cultures clash

A long, long time ago, there was a UK company called BIBA: established by Barbara Hulaniky and her husband Fitz. My brother worked for them for many years and over Christmas he related a very interesting tale that highlights what can go wrong when corporate cultures are not taken into consideration during a take-over.

BIBA developed what was then an extremely innovative market led product strategy. Using lipstick as an example: BIBA would order sample stocks of a large number of colours: possibly as few as 10 in each colour. These would then be stocked in the shop.

Hourly sales figures were then collated and additional quantities ordered for those colours that were actually selling. Orders would be placed on a daily basis: maybe even several times a day.

This approach: small batch sizes and real-time (for the early 1970's) sales figures, meant that BIBA was able to tie up the absolute minimum cash in stock.

BIBA could do this because they had a very small, nimble and flat organisation structure and just the one store. Nobody had job titles: they did whatever job was next on the list. Alan, my brother, was recruited to match colours so that a red lipstick looked the same as a red dress as a red poster etc. In fact he did just about everything at one time or other.

Contrast this with the way many other retailers worked. They would decide on the colour range (based no doubt on exhaustive market research) and then order as many lipsticks as they could, in order to reduce the per-unit cost. These were then all stored centrally and sent out to the stores as and when required. Too bad if you got the colours wrong !

The crunch came when BIBA was bought by Dorothy Perkins. DP had the more conventional organisation structure, many stores and a purchasing approach that optimised unit pricing rather than sales volume.

Needless to say: it all ended in tears.