AS IT SEE IT: Could the criticisms aimed at the brewing group prompt a change of management, asks TERRY MURDEN
What a difference a tweet makes. Scottish brewer and pubs group BrewDog felt the full force of a social media storm after a group of employees decided it was time to blow the whistle on its cult status and let us all in on what it is really like to work for one of Scotland’s most successful companies.
Within hours of the ‘open letter’ appearing on Twitter criticising the Ellon company’s management style, it had descended from star enterprise to virtual pariah. Until yesterday co-founder James Watt only had to post a message that he’d got out of bed to induce thousands of fans into a frenzy of likes and shares. Well, it turns out he’s not the messiah, he’s just a very naughty boy.
The next few days will be crucial in the life of James if he and his business partner Martin Dickie are to salvage the reputation of the company that – it has to be said – is a remarkable growth story.
I recall first meeting Dickie in about 2007 after an awards ceremony at a London hotel where he was introduced to me as one of Scotland’s ones to watch. They had just launched the company in a secondhand shipping container and he told me that night without any hesitation that BrewDog would become the biggest brewer in Scotland. I have to admit that I felt he was more bark than bite. How wrong I was.
BrewDog is now an international business with 2,000 employees, annual sales of £215m, and more than 100 bars, a growing chain of innovative hotels and an ambitious plan for a huge Scottish forest. It has achieved unicorn status – valued at more than $1 billion – and is about to create a flagship outlet on a Las Vegas rooftop.
Unfortunately, some of this has been too much for the disgruntled former employees who accuse the firm of engaging in vanity projects, of hypocrisy over their eco-credentials and creating a management style that encourages a culture of fear. Some of those erstwhile fans who bought into the craft beer pioneer have quickly turned against the self-styled business anti-heroes, even describing the ‘punk’ company ethos as cringeworthy and its regular proclamations of togetherness as being hollow and false.
Watt has engaged in a round of interviews to own up to his and the company’s failings, though the allegations made should not come as too much of a surprise. There have been regular complaints about its practices, from the Advertising Standards Authority over its controversial marketing, to the treatment of interview candidates and branding experts. Nor should the latest criticisms come as any surprise. Just ask employment lawyers how often they’ve had to deal with claims against the company.
Watt has apologised and promised to learn from the fall-out with its staff, though he may also have a battle on his hands with customers, some of whom have publicly disowned the company and its brands. And let’s not forget, that he is regularly called upon to lecture other wanna-be entrepreneurs on how to grow a business. Of course, he doesn’t dwell on the bad bits he’s now accused of, and he’ll no doubt be seeking to apply some of his own advice on how to put things right.
That may start with some serious thinking about his role and the future shape of the company. Watt has an army of equity punks, but their investments are not easily tradable. There has been talk of a flotation for some years that would put the company on a more traditional shareholder footing. Would it be a good time to float a business whose reputation has been put through the wringer? It would require the mother of all PR campaigns, and cosying up to those in the City who were subject to one its stunts when Watt and Dickie thought it a good idea to fly over London and drop taxidermy ‘fat cats’ from a helicopter to show they could raise money without their help.
They now find they need all the friends they can muster and the equity punks may not be so starry-eyed when the next ‘annual general mayhem’ takes place. Is this an opportunity just to sell up and call it a day? Watt’s own management style may be in question, but the company’s assets mean he could at least walk away a very rich man.
Terry Murden formerly held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business