This article first appeared in the July, 2005 edition of the Jacksonville Business Journal
Culture is the combination of values, beliefs, and informal rules that describe "how things really work around here" and every organization has one. Cultures are not taught.they are caught. And once caught they are one of the most powerful tools for shaping and guiding behavior.
What Really Works
In a recent book entitled "What Really Works," authors Joyce and Nohria researched more than 160 companies over a ten year period. They analyzed companies based on Total Shareholder Return over a decade. They learned that four attributes are universally common among every single "winner" company: strategy, execution, organization, and culture. This is the first validation that culture is a mandatory ingredient in the creation of long-term shareholder value.
Through their further analysis culture, Joyce and Nohria identified the two common components of a successful culture: high performance and customer focus.
A High Performance Culture
High performance organizations do three things very consistently. First, they acknowledge, recognize and reward their high performers. Second, they identify and deal with low performers head-on; they do not tolerate sustained mediocrity. Third, they raise the performance bar every single year.
I experienced a living example of the performance culture difference recently with two clients in different market segments of the same industry. These companies are about the same size with comparable work loads. When I entered first company it was abuzz with activity. Lots of projects underway, people hurrying, a sense of urgency everywhere, yet also a sense of purpose, accomplishment and people having fun. It was an exciting environment.
The next week I was in the second company. Here the environment was tense. People approached their work with grim determination and I didn't see a smile in the place. When I asked several employees how they were doing they responded exactly the same way: "surviving."
In the first company high performance is expected and rewarded, poor performers are not retained, and the company sets new challenges every year. In the second company mediocre performance is tolerated, seniority and loyalty is rewarded more highly than performance, and "good enough" is an acceptable standard for results.
Does this matter? The first company has about triple the profitability of the second one - in the same industry on about the same revenue base. Not surprisingly, the first company also has a very high level of customer satisfaction, while the second company is bereft with client issues, conflict, and employee morale problems.
Yet both companies have committed, hard-working, talented employees trying their best to do a good job, serve their clients and achieve good results for their organizations. The difference is the organizational culture.
A Customer-Focused Culture
Customer-focused organizations live by one guiding principle. Every employee's main job is to serve the customer or to support a fellow employee who serves the customer. All systems and processes are designed to create customer satisfaction.
Research has proven that the way employees treat customers is a direct reflection of the way they feel they are treated by their own management. Customer-focused companies know that a positive work environment creates motivated employees who care about their customers.
Nordstrom is a great example of a Department store with a service culture. As soon as you walk into the store a customer service person will greet you and ask if they can be of help. If you are looking for something they will know where it is, and then walk you to it. Are they following the company rules? Sure they are.but they are also doing this because this is "the Nordstrom way."
The opposite is just as true. My wife and I went into Sears a few weeks ago looking for tennis apparel. We sought out a customer service person (no one came to us) and asked whether they carried tennis apparel. The customer service rep said "I'm not sure. I don't think so. But if we did have any it would be down there." She then pointed in one direction while she walked away in another direction. We shook our heads as we turned around and left the store. Not an uncommon experience, and just as representative of a different culture at work.
Cultures are real and tangible. Companies that build cultures driven by high performance and customer focus are establishing formidable competitive advantage. Can leaders at all levels create the culture for their own organization? Absolutely.as long as they are consistent between what they say and what they do.
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