Introduction
Mission
The mission of Honest Company is to produce organic cosmetics that are harmless, hypoallergenic, and environmentally friendly, non-addictive to customers, and closer to nature. The mission of harmlessness assumes that Honest cosmetics do not contain synthetic impurities that are dangerous to health, are entirely absorbed by the body, and do not cause adverse reactions (Honest, 2023). The mission of hyper allergenicity is that Honest natural products do not contain perfumes or dyes; therefore, they are much less likely to cause allergies or skin irritation.
The mission of non-addiction ensures that if the client stops using natural remedies, it will not cause a setback for the worse. Natural masks, scrubs, and Honest oils stimulate the skin’s own processes and do not mask problems with massive doses of substances alien to the body. The mission of proximity to nature aims to make the client feel part of a large and beautiful world in which everyone lives in harmony with nature and with their Self (Honest, 2023). The mission of environmental friendliness is fulfilled by the fact that during the production and application of Honest natural products, no harm is done to the environment.
Strategy
The first point of Honest Company’s eco-friendly strategy is responsible packaging. It recycles plastic collected in the Pacific Ocean and along the coast into containers for its cosmetics. Containers consist of 5% ocean plastic and 95% of other recycled materials, including their own plastic packages (Honest, 2023). Used containers can be handed over in the company’s stores, and they will be sent for recycling. At the same time, the company tries to sell most of its products without packaging.
The second point of the strategy is to care for the planet’s aquatic bodies, as Honest Company strives not only to create eco-packages but also to protect the oceans. The founder of the company, Jessica Alba, strives to reduce the negative impact of flushed cosmetics on the aquatic environment (Honest, 2023). As part of its water protection program, the brand has been raising awareness of ocean pollution for 10 years (Honest, 2023). The company also collaborates with laboratories that study the effects of various cosmetic components on the environment, both in fresh and seawater. As a result, The Honest Company developed sunscreens that do not harm coral reefs.
Another point of Honest Company’s strategy is the preservation of forests worldwide. For every bottle of skin and hair care oil sold, the company undertakes to plant a tree. By 2023, they promise to plant more than 8 million plants, and now almost 7.6 million have been planted (Honest, 2023). At the same time, the packaging for this product is also environmentally friendly. This is a glass bottle with a lid made of oak wood, sourced from renewable forests certified under the PEFC program, which is recognized for its forest certification schemes (Honest, 2023). The newest strategy of Honest Company is to release vegan makeup brushes (Honest, 2023). They contain only synthetic materials and no animal components.
Impact of the Situation
Honest Company has demonstrated cultural intelligence by adjusting its strategy as part of a program to address global warming. Global warming is the gradual increase in the temperatures of the atmosphere and the oceans (Azevedo & Shane, 2019). There are quite a lot of assumptions about why this is happening, and among them are pollution of the world’s oceans and the emission of harmful substances into the atmosphere (Azevedo & Shane, 2019). Therefore, the mission of Honest Company has shifted from caring only about the customer to caring about the planet as well.
The organization has reduced its expenses and risks posed by global warming. Its leaders realized that carbon emissions have already become, or are about to become, a high cost. Honest Company correctly assessed the threats posed by abrupt climate change and partially protected itself by changing its strategy (Wong, 2020).
For example, there were more employees in the delivery department than were required, indicating operational inefficiency. The company’s resources were being wasted, and productivity was falling (Honest, 2023). Similarly, because the volume of exhaust gases released into the atmosphere during the transportation of goods exceeded the norm, Honest Company did not operate efficiently; it wasted resources, and the fee for this inefficiency steadily increased (Azevedo & Shane, 2019). Therefore, as the company strives to remain competitive, it has implemented advanced cost-management technologies to address global warming.
The fee for harmful emissions is not the only cost item that Honest Company has taken into account in its strategy. The company has calculated how it will be affected by all possible consequences of warming, such as power and water supply disruptions, supply chain disruptions, and the spread of infectious diseases (Honest, 2023). The managers assessed the possible risks to understand which can be reduced by changing the organization’s work system, which can be shifted to others through insurance or hedging contracts, and which should be included in the estimate (Wong, 2020). This assessment served as the basis for the new, modified Honest Company strategy.
In this case, climate change has affected not only the financial results but also the strategy of Honest Company. It has strengthened its position and gained a serious competitive advantage by creating eco-friendly cosmetics. The company’s products met the requirements of the time by restructuring production to address climate change and by introducing innovative technologies in areas affected by natural changes (Azevedo & Shane, 2019).
For example, in the delivery of goods, Honest Company began using cars with more economical engines and introduced a new timetable to avoid delays on the road. The strategic approach also implied a complete reorganization of production processes (Wong, 2020). For example, paper versions of technical documentation have been replaced by electronic versions, so there is no need to take them to customers.
Thus, the changes in the Honest Company’s cultural strategy were driven by the need to develop an approach to addressing climate change and to assess the strategic opportunities it presents. The head of the company analyzed the situation from the inside, which allowed understanding how the company’s activities affect the climate (Presbitero & Teng-Calleja, 2019). In addition, when developing the strategy, external analysis was taken into account, and the environment’s impact on the competitive situation was assessed both on its own and through accompanying legislative changes (Paparoidamis et al., 2019). The combination of these internal and external factors has led to an improvement in the culture of Honest Company through a strategic shift.
Leadership Style
When changing the strategy, a democratic leadership style was used. The leader constantly sought subordinates’ opinions, consulted with them, and involved them in decision-making. Moreover, this style of leadership behavior is characterized by respect for employees and recognition of their right to have their own way. Communication with the team took place on equal terms, and the appeal was in the form of requests and advice, not orders and demands (Honest, 2023). Instructions were submitted as proposals, and appeals to employees were made in a friendly manner.
Throughout the implementation of the strategy, there was a respectful attitude towards subordinates (Honest, 2023). Orders and prohibitions were carried out through discussion, and praise and censure of employees were conveyed through advice. The leader positioned themselves within the group and asked employees for their opinions on the changes being implemented.
The events were planned not in advance but in a group, and all decisions were made through collegial discussion. All sections of the work were not only proposed but also discussed, and everyone was responsible for implementing the proposals: both the head and subordinates (Honest, 2023). The project leaders’ power was based on trust. The democratic style was applied consistently, and there was no unpredictable transition of the leader from one style to another (Azevedo & Shane, 2019). This is due to the high results achieved and the few conflicts and problems encountered during the implementation of the new strategy.
The democratic leadership style was indeed best suited for a change in strategy. This was achieved through the possibility of sharing experience and knowledge between team members. As a result, the number of errors decreased, as when a question arose, the employee always had the opportunity to consult colleagues or seek help from the boss (Presbitero & Teng-Calleja, 2019).
There was high employee motivation and independence. A high level of trust was maintained in the team, as persuasion rather than coercion was used and requests rather than orders were issued. The team often found creative and non-standard solutions, as creativity was supported and discussed collectively (Honest, 2023). Throughout the implementation of the strategy, there was a strong corporate spirit, trusting relationships, and positive team dynamics.
The key advantages of the democratic management method chosen to change the strategy at Honest Company include reduced workload for the head, high team motivation, and professionalism in decision-making. Due to this, this style was optimal for implementation in the organization (Honest, 2023). This style should be used when subordinates are experts in their field and professionals.
Democratic leadership styles work well when working with domain experts, for example, technologists involved in the manufacture of cosmetics and their packaging, as in this case. For the experienced, professional team at Honest Company, the democratic leadership style brought out the best in them, building on their existing strengths and talents rather than expecting them to follow orders from the top (Honest, 2023). It is these advantages of the democratic style that have made it the most suitable for changing the company’s strategy.
Better Ways to Manage Employees
Among the shortcomings, the decision-making process in a team led by a democratic leader requires time that an employee could otherwise spend on the work. It is pretty evident that the collegial form is not suitable for every decision and will definitely be problematic in a crisis, when the speed of response matters a lot (Azevedo & Shane, 2019). Therefore, one of the conditions for better managing employee performance was a clear definition of the timing of the strategy change stages.
A democratic leadership style can create a culture of pseudo-participation. In situations where the leader does not practice democratic management but only pretends, there may be a serious threat to the formation of a culture of pretense, affectation, and double standards within the team (Presbitero & Teng-Calleja, 2019). Some departments faced this situation, so to better manage employee performance, it was necessary to allow them to provide feedback on their managers.
In a democratic management model, team members function well even without a leader. However, the absence of a leader can lead to opposite results in cases where employees are not accustomed to a participatory style and lack self-organizational skills. This can also happen in cases where they have not yet had time to develop sufficiently mature views and skills in building horizontal connections (Presbitero & Teng-Calleja, 2019). Therefore, it was necessary first to assess the employees and, if necessary, conduct work training with them in a democratic format, which would allow better management of their performance.
Other Ways to Apply Course Concepts
Another topic learned in this course and applicable to explaining the case of changing strategy at Honest Company is charismatic leadership. Jessica Alba’s ideas on sustainability make her a leader whose dominance is based on charisma. She has unusual psychic abilities to attract followers to her organic cosmetics company and manage them (Wong, 2020). Her charismatic leadership is characterized by personal relationships with employees and by supporting the company’s mission to improve the environment.
The mechanism of charismatic leadership is based on the projection of the collective unconscious’s psychic energy onto this leader. Although projection is done consciously, it is an emotional outburst. Therefore, Jessica Alba, as a leader, has become the embodiment of collective feelings and expectations in the fields of ecology and beauty. As a result, a strong emotional bond has been established between the leader and his supporters, attracting new supporters (Paparoidamis et al., 2019).
Jessica Alba, the leader, is not only charged with the psychic energies of her supporters, but also infuses herself with her own energy. Under the influence of a charismatic leader, her employees experience a surge of positive emotions, satisfaction of sensual needs, relief from social frustrations, and reduced feelings of complex emotions (Presbitero & Teng-Calleja, 2019). Therefore, the promotion of the idea of ecology in the beauty industry, in this case, is carried out through the concept of charismatic leadership studied in the course.
References
Azevedo, A., & Shane, M. J. (2019). A new training program in developing cultural intelligence can also improve innovative work behavior and resilience: A longitudinal pilot study of graduate students and professional employees. The International Journal of Management Education, 17(3), 32-47.
Honest. (2023). Honest baby and beauty company.
Paparoidamis, N. G., Tran, T. T., & Leonidou, C. N. (2019). Building customer loyalty in intercultural service encounters: the role of service employees’ cultural intelligence. Journal of International Marketing, 27(2), 56-75.
Presbitero, A., & Teng-Calleja, M. (2019). Ethical leadership, team leader’s cultural intelligence and ethical behavior of team members: Implications for managing human resources in global teams. Personnel Review, 48(5), 1381-1392.
Wong, P. H. (2020). Cultural differences as excuses? Human rights and cultural values in global ethics and governance of AI. Philosophy & Technology, 33(4), 705-715.