Why is Company Culture Important to Long-Term Success?

I wish you could have been with me in Atlanta last year for our High Performing Culture Summit.  It brought together a very engaged but varied group of over 100 people from around the country.  There were practitioners like PathFinder Group as well as about 30 family businesses all focused on how they could continue to improve at using the tools we’ve given them to create strong cultures aligned with their company missions. 

Their stories were as varied as their businesses and the industries they came from.  There was the insurance agency, the potato chip manufacturer, a healthcare benefits group, a compounding pharmacy chain, and many, many more.  Some have been practicing for years while others are just getting started.

Lack of strong company culture is a problem

There are approximately 150,000,000 Americans in the workforce.  Employee engagement is at an all-time low of between 26%-33%.  That means somewhere between 100,000,000 and 111,000,000 workers would entertain a move under the right circumstances. What is the potential impact to your business of counting these unengaged workers amongst your employees?

Turnover is costly not only in terms of lost returns on the investments you’ve made in recruitment and training or production as positions go unfilled. The greater cost might be the impact on institutional knowledge lost and the advantages that left with it. 

This is why culture may be the most important sustainable competitive advantage you can work on with the highest, albeit difficult to measure, returns on investment.

Strong company culture beats strategy

Summit attendees were bound together in a common belief that culture matters to their businesses, their employees, their customers, and even their suppliers.  They were unified in understanding the role culture has in creating a sustainable competitive advantage.

Pathfinder Group works with small, mostly family businesses to help them accelerate growth through predictable cash flow and profitability. I read the data, study the reports, and believe there is a strong causal connection between behaviors (culture) and successful growth outcomes. 

It’s not that clients don’t recognize the importance of culture in almost everything they do, it is truer that they don’t really know how to go about intentionally developing one that is high performing and adaptable. That is what we do!

I had the opportunity to visit one on one with many of the attendees in both blue-collar and white-collar industries. Company size ranged from 15 to 1000 employees. Each shared the transformative power their intentional and systematic focus on culture has had on their organizations.  The intentional, systematic, and rituals-based approach has made all the difference.

Companies where organizations’ culture makes a difference

Automotive Group Culture

Josh Johnson is the fifth generation to lead Don Johnson Automotive Group. The family’s story is worth reading but it is not too different than that of many family businesses that start with a dream, work hard, make hard choices, and ultimately succeed in breathing life into that dream.

A culture focused healthcare company

Acumen is a very different company focusing on healthcare.  All diagnoses involving testing rely on labs to identify the presence of disease.  They work with hospital labs to ensure high performance and accuracy in those diagnoses.  

Where timing and accuracy are critical, getting it right is a matter of life and death! The company has over 125 employees, works with 150+ health systems, and is distributed over 28 locations nationally.

They lean heavily on a strong culture that rallies around a common set of behaviors that enables it to cultivate strong internal and external bonds.  Their employees are bound by a common glue and their clients get the benefit of a consistent set of behaviors that delivers results over and over again.

Culture made commercial air conditioning company a top performer

I also met Ray the founder of a large successful commercial air conditioning business located in Florida.  Ray was here as a guest taking a look at how improving his culture might ensure the continued success of his business.  His challenge is a concentration of revenue within a very small circle of large customers and the entry of a new player who is poaching his workers. 

This poacher is offering signing bonuses and unsustainable above-market wages which some of his people are leaving for. Culture cannot cure everything but we know from studies that compensation is about 3rd or 4th in the hierarchy of what people seek in a career.

Global Material Handling company’s culture became a competitive advantage

Then there is Tom Albero, President, and CEO of Alliance Material Handling. Alliance has four locations in the Middle Atlantic Region, provides forklift sales and warehouse management services.  Alliance has been in business since 1955 and is absolutely wedded to the idea of culture as a competitive advantage.

Tom told the story of bringing a cash prize to a company event with the intention of sharing it with anyone who was carrying a copy of the company’s fundamentals (behaviors driving the culture).  Expecting to split $2,000 4 or 5 ways, he was overwhelmed when over 500 came up on the dance floor to claim their prize.

Long term ROI and culture

Talk to the folks at Don Johnson Motor Group about how the low, low, low turnover translates into the greater margin and the ability to more effectively compete in a commodity business where customers have all the information they need to purchase at their fingertips.

Acumen will tell you our proprietary process has helped them imbue their distributed workforce with a sense of belonging and purpose that they otherwise would not have (critical in today’s post COVID work environment). It is the “center” around which they have formed a common language and practice a common set of behaviors defining their culture and setting them apart.

Tom is in the 4th year of practicing the fundamentals at Alliance and has been unimaginably successful in driving these important behaviors through the entire organization.  All recruiting is done with an eye towards alignment of a candidate’s values with Alliance’s. The resulting turnover is negligible.  You can get a taste of what those behaviors are by visiting his Research.

Who knows if Ray will view his exposure to this process as part of his long-term solution to competitor poaching?  There is no doubt in my mind that if he spent any time with these and many of the other businesses in attendance and posed the question to them…he will!

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