Power Point assignment/management

Andrea Hall

MGT500

Milestone 1

01/21/2023

Hello Fresh: Culture

Back in 2011, former students of Otto Beisheim Graduate School of Management at Wissenschaftliche Hochschule fur Unternehmensfuhrung (1.) teamed up and had a brilliant idea for a meal delivery service. Dominik Richter and Thomas Griesel founded Hello Fresh in Germany, with healthy eating in mind and a way to break into the “food at home” market. They began operating in 2012 and targeting high density populations in Berlin, Amsterdam and London. They were quickly becoming an in-demand service in Europe which forced them to expand and become available nationwide. They were not able to do this alone, they had the help of many investors and at times it seemed a bit rocky.

Hello Fresh was growing, growing, growing! By 2022, Hello Fresh was established in 19 different countries and were buying out the competitors left and right. They have bought Green Chef, EveryPlate, Chef’s Plate, Factor, and YouFoodz. You hear about them on the radio, tv, almost every social media platform and through their brand ambassadors. With 2021 being their best year in revenue to date (2022 data not yet available) and 2021 being the height of the pandemic, will data for 2022 be as promising or will we start to see a decline in revenue with the pandemic slowly coming to a halt (2.).

When it comes to culture, Hello Fresh has had some negative light shed on the company. Richter and Griesel were known for not communicating with their employees and keeping a social distance. They acted as “execution machines” and expected the same from the other offices, managers and employees. Turnover rates were high and there were lawsuits on the horizon. This was the culture of the company. When an ex-CEO of the US division was asked to comment on an intern who was suing the company, he replied with, “ If he's complaining about work conditions, I'll show you the Rocket office in Southeast Asia that we were running," he says. He slid the device across the table, revealing a photo of a sweaty, crowded workroom. "That's 320 people in a 60-people room. And, yes, I was working there too (3)."

By early June 2015, five of the American ops managers, including the chief operating officer, had quit. "It was hard to see the vision anymore," the first manager says. It was a literal revolving door at Hello Fresh across all the centers. There seemed to lack structure, morals, ethics, and even common sense. Morale was on the decline and it created a sense of lawlessness. Employees would arrive to work late, or not at all. When they did come, they would be intoxicated or noticeably on drugs. When management did try and step in, there were reports of slashed tires, threats, calls to the police etc. Customer service/retention was an entirely different but still as alarming environment. Employees were told to be aggressive, more aggressive than bill collectors. It was considered to be along the lines of harassment, stalker behavior. With Hello Fresh having such a high churn rate, it is no wonder they are pulling out all the stops. Fully 83% of HelloFresh's customers churn out after six months (4).

The more research I do on Hello Fresh, the more it is changing my perspective on the company. There seem to be more negative articles, publications and records than there is good. One former CEO had shed light on how he was instructed to hide numbers from reports, exclude certain data sets etc all so the investors wouldn’t back out. While Hello Fresh denies this, it is starting to become clear that this company will go to any length to keep its funding and status. I strongly feel the entire company needs an overhaul on all management and leadership positions. When it comes down to it, businesses cannot operate with employees doing their job. Let’s start with vetting the right people for the job. Train them and then train them again. Establish a coaching system, where help is available if it is needed. Mandatory leadership classes for everyone in a management position.

Having structure is important in running a successful business. When you think about your business model, you also need to think of how you are going to achieve that. The ethics and culture of your company is a major part to growth and inclusivity. Ultimately, if your employees are satisfied, your business will run more efficiently and effectively. Let’s reduce the turnover rate and have lasting employees who will help you grow your business. Furthermore, I would not support a company who did not support me. We are not living in the “olden days” where we were treated poorly, verbally abused and in other scenarios, sexually harassed. We are the future of companies and how we run them is going to determine their success.

References

1. (n.d.). History of Hello Fresh. Cleverism. https://www.cleverism.com/company/hellofresh/

2. (2021, November 26). 10 Years HelloFresh: From Start-up to Scale-up. Hello Fresh Group. https://www.hellofreshgroup.com/en/newsroom/stories/10-years-hellofresh-from-start-up-to-scale-up/

3. Helm, B. (n.d.). The World's Most Ruthless Food Startup: The Inside Story of How HelloFresh Clawed Its Way to the Top. INC.COM. https://www.inc.com/magazine/201808/burt-helm/hellofresh.html

4. McCarthy, D. (2017, October 14). The World's Most Ruthless Food Startup: The Inside Story of How HelloFresh Clawed Its Way to the Top. LinkedIn. https://www.linkedin.com/pulse/hellofresh-has-bigger-customer-retention-problem-than-daniel-mccarthy