The
Marketplace Speaks
The marketplace never lies — Results Rule!
It is the standard for measuring success if you are competing
on the tennis court or in the district court; in the classroom
or in the boardroom. And it applies to everyone at every level.
The second place team is never invited to hold the Super
Bowl trophy and make the clichéd comments we hear every
year. That honor goes to the team that delivered the results
on the field. There are five nominees for the Academy Award
for Best Picture each year, but only one movie producer is
interrupted by the orchestra during the usually overlong acceptance
speech.
Wal-Mart became a member of the exclusive club called the
Fortune 1 because of results. Dell was named Fortune’s
Most Admired Company in 2005 because of — you guessed
it — results.
Need more examples? How about these:
-
Toyota: It is the gold — no make
that platinum — standard for manufacturing automobiles
of amazing quality in every price range built in some
of the world’s most efficient manufacturing plants
year after year after year.
-
Nordstrom: Lots of choices and knock-your-socks-off
service in every store every time.
-
Wegmans Food Markets, Publix, and Whole Foods:
Three grocery store chains that prove knowledgeable, caring
people can keep customers coming back over and over again.
And, yes, they are making substantial profits in an industry
where margins are measured in fractions.
-
The Container Store: Enthusiastic people
with a passion to help you organize (and simplify) your
space and growing like crazy.
-
General Electric: Over 100 years of
technological leadership from a global company that continues
to reinvent itself as a leader in sales, profits, and
redefining how organizations operate.
-
Starbucks: Because they enjoy the drinks,
the environment, and the people, over 33 million people
line up each week to pay premium prices for a product
you can make at home for pennies.
What the Best Know and Do
Organizations like these don’t just succeed. They
blow the competition away in terms of service, productivity,
innovation, and execution. Their performance shouts Results
Rule! Their competitive edge is a compelling culture
that wins the hearts, minds, and loyalty of employees and
customers.
That’s it? How about products, services, strategies?
Aren’t they important differentiators?
Maybe, but it’s doubtful.
Coffee, Corn, and You
The days when having a good product or service guaranteed
you at least a minimum level of success are gone. Offering
quality products or services has become the minimum requirement
to enter and stay in the game.
Joe Calloway, author and authority on strategic branding,
puts it this way: “The marketplace has become ‘commoditized.’
Customers see parity everywhere.”2
Customers see parity because there is parity. Your competitors
are only a telephone call or website visit away from offering
customers basically the same product and service features
as you — for a similar or lower price.
And that means in the customer’s eye we are all just
like coffee, corn, and every other commodity traded on the
open markets throughout the world. Our value to the customer
is based solely on supply and demand.
But We Have a Better Strategy
Let’s assume for a moment that your strategy is superior
to your competitors’. How long will it take them to
copy or improve on it? What guarantee do you have that market
conditions won’t change overnight and make your strategy
obsolete or even detrimental to your success?
Even large organizations move at speeds unheard of just a
few years ago. Here is one example: General Electric moved
its source for steel casings for turbines to Mexico because
they were able to manufacture the casings there for 40 percent
less than the cost of making them in the United States. Then
they moved manufacturing from Mexico to Korea where they are
able to make the casings for 40 percent less than in Mexico.
The total time it took to move the operation from Mexico to
Korea was 45 days.
If one of the largest companies in the world can move that
quickly to change its strategy and execution, can you really
believe that whatever you are doing today is immune from becoming
completely obsolete? Perhaps that is why former CEO Jack Welch
noted, “All this crap you planned for is meaningless,
basically. What’s important is that you’re agile,
in your thinking and in your action.”3
You may offer a unique product or service right now, but if
what you are providing has value, sooner or later competition
for your slice of the market will arise. The more people or
companies there are who can compete with you, the closer you
are to becoming an entirely “me too” business
or profession defined by the similarities rather than the
uniqueness of your offering. In an environment where everyone
is doing the same things, culture beats strategy every time.
Years and Counting
Three words come to mind when you ask people about Southwest
Airlines — fun, reliable, and inexpensive. And they
wouldn’t have it any other way. Their mission is “dedication
to the highest quality of Customer Service delivered with
a sense of warmth, friendliness, individual pride, and company
spirit.”
The other word you should associate with Southwest is profitable.
At the time of this writing, Southwest Airlines has delivered
over 32 years of consistent quarterly profits in an industry
where many players haven’t had 32 weeks of consistent
profit.
So what makes Southwest different?
People point to their route structure, low operating costs,
no meal service, and the fact that they only fly one type
of airplane, thereby saving on maintenance and training expense.
Those are certainly factors, but it doesn’t explain
why no one has been able to copy Southwest’s success
despite repeated attempts to replicate their strategy. The
answer lies in the culture.
Chairman and former CEO Herb Kelleher said, “You can
get airplanes, you can get ticket counter space, you can get
tugs, you can get baggage conveyors. But the spirit of Southwest
is the most difficult thing to emulate.”4
Southwest knows that having a procedure stating airplanes
will be turned in 20 minutes between trips is much less important
than having a culture where it is expected and every employee
takes meeting that expectation personally. The same can be
said of their commitment to fun, service, and cost efficiency.
Does Your Culture Make a Financial Difference?
That is the question I posed to CEOs in a variety of industries.
Their response was a unanimous, Yes!
SmithBucklin is the largest association management company
in the world. Its clients include the Pet Food Institute,
Society for Information Management, and National Association
of Orthopedic Nurses. Henry Givray, who had previously worked
at the company from 1983 to 1988, returned in 2002 as its
President and CEO. Most CEOs work on strategy, sales, operational
efficiencies, or the like. The first thing Henry worked on
was the culture. He was so focused on the issue that several
senior leaders wondered if he really knew what he was doing.
Henry put it this way, “I never heard people talking
about organizational culture when I went to work in the 1980s.
But over the years, I’ve concluded that if an authentic
organizational culture that gives guidance and inspires can
be articulated, aligned, reinforced, and preserved, it will
mean the difference between having a good year and building
an enduring company. So I made culture the first thing I worked
on with the leadership team.”
Realizing that several of you might write off Henry’s
statement as an example of corporate psychobabble, I asked
him if he could quantify his love affair with culture. His
response proves his point:
In the three years since we began focusing on SmithBucklin
culture, we’ve shattered every performance record from
the previous 50 years. Growth, client acquisition, profitability,
employee satisfaction — all of them.
Pretty impressive, huh?
Henry’s comments were echoed by leaders in all types
of industries. Gary Nelon, CEO of First Texas Bancorp said,
“Our business model is people — rather than product
— centric. We know that our culture promotes long-term
relationships with our employees, our employees develop long-term
relationships with the communities we serve, and we make more
money.”
It’s Always Been That Way
Thomas Watson Jr., CEO of International Business Machines
from 1956 to 1971, said, “the basic philosophy, spirit,
and drive of an organization have far more to do with its
relative achievements then do technological or economic resources,
organizational structure, innovation, and timing.”5
Those are strong words from the person who decided to launch
a new line of mainframe computers in 1964 in a move Fortune
magazine called “IBM’s $5 Billion Gamble.”6
Watson’s belief in the power of the IBM culture permeated
the organization and contributed to the company’s market
dominance for generations.
Procter & Gamble (P&G), based on its more than 150
years of success, also qualifies as an organization that believes
Results Rule! William Procter and John Gamble entered
the highly competitive soap and candle industry in 1837. That
might not sound like a growth industry now, but remember candles
and soap were important products at that time. There were
14 other direct competitors in Cincinnati, Ohio, alone.
Many people know P&G as the creator of legendary brands
such as Ivory Soap, Tide, and Crest. Some will recognize its
leadership in marketing and market research. Harley Procter,
William’s son, was one of the first businessmen to experience
success with display ads. The company founded its own market
research group in 1924 and was a leading sponsor of the early
soap opera.
Few people know, however, that William Cooper Procter, grandson
of the founder, revised the company’s articles of incorporation
to read the, “interests of the Company and its employees
are inseparable.”
P&G’s brands are legendary. My mother never sent
me to the store to purchase laundry detergent. I was instructed
to go pick up some Tide. She didn’t cook with oil. She
always cooked with Crisco. Today, my wife’s grocery
list will say “Ivory” and not bath soap. And while
the company has always been an innovative and consistent advertiser,
its reputation is built on performance.
The P&G culture is based on a defined purpose, set of
values, and operating principles. The company is disciplined,
customer focused, and proactive. Its values talk about a passion
for winning, leadership at all levels, integrity, trust, and
a sense of personal ownership.
I witnessed the P&G culture in action some years ago as
a consultant working with the soap plant in St. Louis, Missouri,
to design and implement a new employee discipline process.
I had read about the company’s focus on strategic thinking
and fact-based decision making before beginning the project,
but that did not prepare me for the way in which those principles
were institutionalized in the culture.
The first time I answered a question with the words “I
think,” there was a slight and simultaneous grimace
on the 12 or so faces on our design team. The second time
I said “I think” it was challenged. And, fortunately,
my key contact gave me some valuable advice at break. At P&G
a better response is, “our experience shows,”
or “our statistics indicate.”
Culture Is More Than Feeling Good
I always feel a moment of apprehension when the person sitting
next to me on an airplane asks, “So what do you do.”
The anxiety increases exponentially when you are not seated
on the aisle where you can make a fast getaway.
Nevertheless, I found myself in exactly that situation a
few months back. I gave my standard response, “I help
leaders and organizations create cultures focused on results.”
My neighbor’s response captured my attention: “Oh,
we don’t do that stuff.”
I recognize a marketing opportunity as readily as the next
person, and I inquired, “What parts of it don’t
you do?”
“Oh,” the individual continued, “culture
is about making everyone feel good, and being nice to people,
and stuff like that. We don’t do that stuff. We are
all about the numbers.”
So are the folks at Procter & Gamble, and most people
would agree that their culture is a vital part of their success.
Tom Peters and Bob Waterman included Procter & Gamble
in their 1982 book, In Search of Excellence. James
Collins and Jerry Porras highlighted P&G in their book
Built To Last. You don’t become an enduring
company simply because you make people feel good. People’s
Express Airlines made people feel good, and it lasted only
about six years.
Six years versus over 150 years. You do the math. You can’t
deliver results without a great culture, but a great culture
without results has no value.
Your organization’s culture is about much, much more
than making people feel good. Engaging people is a big part
of it, but engagement without execution is a recipe for extinction.
Everyone Has a Culture
I like the definition of culture from the MSN Encarta Dictionary
as well as any I have seen: Culture is, “the patterns
of behavior and thinking that people living in social groups
learn, create, and share.”
An organization’s culture includes its beliefs, expectations,
rules of behavior, language, rituals, symbols, technology,
styles of dress, ways of interacting, processes for communicating
and maintaining power, and methods for reinforcing and modifying
behavior and performance.
The guy sitting next to me on the airplane had it wrong —
or at the very least not all correct. His company did have
a culture, although you will not be seeing it listed by name
as a positive example. Every organization has a culture that
contributes to or detracts from its ability to deliver results
in today’s marketplace. Your objective is to determine
the type of culture you need to deliver results.
A Results Rule! Culture
Results Rule! cultures are defined by the following:
- A set of organizational beliefs, assumptions, and values
supporting a commitment to results, relationships both externally
and internally, and accountability.
- Consistent achievement of desired results that set the
organization apart in the minds of customers, employees,
and stakeholders.
- People who do what they say they will do and make choices
based on an attitude of stewardship and ownership.
- Mutual respect, cooperation, and a high degree of trust
between individuals and their managers, teams, and departments.
- Alignment of individual, team, and departmental performance
with the organization’s strategic business objectives.
- Continuous improvement and innovation — both large
and small — at every level of the organization to
improve effectiveness and efficiency.
- An environment that attracts and retains top talent who
value the opportunity to contribute.
Your Culture Will Be Unique
The First Texas Bancorp culture is different from that of
SmithBucklin. SmithBucklin’s is different than that
of P&G. And P&G’s is different from that of
Southwest Airlines.
For your culture to become your competitive edge, it must
be based on your realities and decisions. It is doubtful you
would see the CEO at Procter & Gamble show up for Halloween
dressed as a member of the 1970s rock group KISS. Yet, that
is a perfect fit for Southwest Airlines CEO Gary Kelly.
It is the people in a company that make business work. Great
strategies fail without a culture focused on and committed
to delivering results that matter in your situation.
Terrence Deal and Allan Kennedy identified a number of elements
determining an organization’s culture in their book
Corporate Cultures: The Rites and Rituals of
Corporate Life. They include the following:
- Business environment — Sales-driven
organizations often have a different culture than research
or service-driven groups.
- Values — The basic concepts and
beliefs on which the organization is built. Some groups
state them as dreams and aspirations. Others define them
quite literally as the standards by which everyone operates.
- Heroes — These are the role models
(sanctioned or nonsanctioned) that let people know what
the organization really values. In the best organizations,
heroes display the organization’s stated values.
- Rites and ritual — The routines
of daily life that provide visible and powerful messages
about the way things really work.
- Cultural network — The communication
network that carries the values, beliefs, assumptions, and
expectations.
We Want to Be Them
“We want to be the Southwest Airlines of our industry.”
I found the comment from this prospective client interesting
and decided to dig a little deeper: “Why is that important
to you?”
“Because if we have a culture like Southwest’s,
we will be able to perform like Southwest.”
We all know what happened prior to this conversation. Someone
read an article or attended a presentation about Southwest
Airlines’ wonderful culture. And this client’s
take-away lesson was that every problem would be solved if
they could just instill that culture in their organization.
It is a tempting thought — get a new culture and watch
performance improve and results shoot through the roof. Unfortunately,
it doesn’t work that way. Your organization’s
culture is not a piece of software that can be downloaded
and launched. It must be guided, influenced, and reinforced
over time.
Organizational DNA
Great, enduring organizations shout Results Rule!
through their performance. It is part of their DNA. Not DNA
in a biological sense, but DNA in a business sense. This DNA
is learned and honed over time. DNA stands for Discipline,
Nature, and Attitude.
Results Rule! organizations have the discipline
to stay focused and execute flawlessly. They have a nature
of stewardship, service, and integrity that leads to partnerships
both internally and externally. Individuals in these organizations
have an attitude of accountability and passion for achieving
results that set them apart from those who merely talk a great
game and then fail to deliver. They don’t make excuses.
They learn from mistakes and move on.
Just as human DNA automatically transmits an individual’s
genetic code — everything that individual is —
to the next generation, business DNA transmits your message
to the customer or client. The discipline, nature, and attitudes
evident in your organization contribute to the overall culture
— from the importance of honoring commitments to how
customers and employees are treated.
Results Rule! organizations use this dynamic to
their advantage. While technology, value chains, distribution
models, and even strategic plans have their place, they are
not what make an enduring organization. Positioning the culture
of your organization as the DNA that drives results engages
people and allows you to instill a level of commitment at
every level. It enables you to be efficient, effective, and
unique — to separate yourself from the competition.
Here’s the difference between humans and organizations
— organizations can choose to change their genetic makeup.
It’s not easy, and it takes a while. But it can be done.
Change Performance to Change the Culture
I have read many purpose and values statements while working
with different organizations. Not a single one of them says,
“We exist to alienate our customers and abuse our employees.”
But that is what often happens in real life. And like the
prospect mentioned earlier in this chapter, there is a wish
to change the culture as a means to improving the performance.
Leaders and organizations with this mindset have it backward.
You change the performance to change the culture.
Assumptions, beliefs, and values drive behavior and performance.
Performance and behavior demonstrated over time become habit.
And habits define the culture of your organization.
To build a Results Rule! culture, you must first
build the habits that make you perform and behave like the
purpose and values you hang on the wall.
Your Culture in Trouble?
I have always appreciated comedian Jeff Foxworthy’s,
“You know you are a redneck if . . .” bits. This
model can easily be applied to an organization’s culture:
You know your culture is the factor limiting your results
if you see:
- High turnover and low morale. Good employees
decide to pursue other opportunities. Individuals remaining
with the organization become demoralized and lethargic in
the performance of their duties.
- On-going inconsistency. Everyone has
an off-day occasionally. Performance that continually gyrates
all over the map is a reflection on the culture. Consistency
is one mark of a Results Rule! organization.
- Lack of focus on the external environment. Cultures
in distress look internally at all the things that are going
wrong. Results Rule! cultures focus on serving
the customer. They compete against others in the marketplace
rather than against themselves.
- Short-term thinking. Survival in today’s
competitive marketplace requires constant attention to results.
That, however, should not be an excuse for short-term thinking.
Results Rule! cultures refuse to sacrifice long-term
viability for short-term success. They look for both.
- Rise of destructive subcultures. Pride
in one’s team is admirable. Allowing team pride to
deteriorate into impenetrable organizational silos is a
sure sign of a fractured culture.
- Undermining the success of others. Disagreements
that turn into vendettas. Information purposely withheld.
These are the symptoms of a culture where team is considered
a four-letter word.
- Increased cynicism. Cultures that are
in trouble look at all change — good or bad —
through cynical eyes that assume the worst possible outcome.
Results Rule! cultures take a critical look at
opportunities to improve and embrace those that offer a
satisfactory return on investment and energy.
It’s Never Just One Thing
Building a culture that blows the competition away is a
little like making a really great sauce. Admittedly, I don’t
make a great sauce. In fact, for me, cooking usually involves
mixing salad ingredients or (more likely) using a microwave
oven.
My wife, on the other hand, is an amazing cook who makes
incredible sauces. Over the years, I’ve learned to appreciate
the art, science, and dedication of her expertise. When I
ask her for the three, five, or even seven steps to making
the perfect sauce, she just laughs.
She will spend hours simmering, reducing, and adding just
the right mix of ingredients to create a unique masterpiece.
And the next time out, she will try to improve it.
Leaders who create a compelling culture do basically the
same thing. I have identified, through research and over 20
years of field experience, six things Results Rule! organizations
do differently and/or more often than their competitors. Think
of them as the six choices that distinguish enduring organizations
from their competitors. The chapters to follow address each
of them in more detail.
Results Rule! cultures choose to:
1. Tell themselves the truth and value candor and honesty.
2. Pursue the best over the easiest in every situation.
3. Leverage the power of partnerships both internally and
externally.
4. Focus the energy to make the main things the main thing.
5. Show the courage of accountability.
6. Learn, grow, and improve every day.
There is no one correct formula. The ingredients are mixed
differently in each situation. Some strategies even address
multiple areas. It’s never just one thing.
Everyone Leads
Most leadership development programs miss the point. The
actual program is okay, it’s just that the target audience
is too limited. We assume that the leaders are those with
the term manager or supervisor in their job description and
only those people are responsible for the creation of the
culture. What a terrible waste.
Leadership is the art of influencing the actions and outcomes
of others to deliver results. Using that definition, anyone
can be and everyone is a leader. In my experience, some of
the most influential people in an organization have titles
such as administrative assistant, maintenance mechanic, computer
systems analyst, or customer service representative.
Sure, managers and human resources personnel play an important
role, but a nonmanager talking about how “everything
is screwed up around here” has just as much, if not
more, impact as anything said or done by management.
Your organization’s culture determines how things are
done regardless of any policy, directive, or management initiative.
Experience tells me that there are things going on in your
organization about which the people in charge have no clue.
If you don’t believe me, have an open conversation with
your receptionist or the senior administrative assistant in
your office. You will likely learn a great deal about how
things are really done at your place of business.
Results Rule! organizations refuse to accept that
only the “Suits” or Human Resources have responsibility
for creating and maintaining the culture. It is everyone’s
responsibility because we all create the culture.
Results Rules:
-
A compelling culture is your competitive edge in a world
where products and services are commodities.
-
Every organization has a culture that contributes to
or detracts from its ability to deliver results in today’s
marketplace. Your objective is to determine the type of
culture you need to deliver results.
-
Enduring organizations shout Results Rule!
through their performance. It is part of their business
DNA — Discipline, Nature, and Attitude.
-
If you wait for the culture to change before your performance
changes, nothing will ever happen. Culture change follows
performance change, not the other way around.
-
There is no magic formula for creating a compelling
culture. The ingredients are the same, but they are mixed
differently in each situation. The challenge is to find
the mix that sets you apart.
-
Everyone influences someone. It is your responsibility
to contribute to the culture.
|
