A Strategy Map: Competing Through Culture

Roundtable session at the New York Stock Exchange With the economy rebounding at a snail’s pace and companies already operating [...]

March 20 2012 by CJ Prince


Roundtable session at the New York Stock Exchange

Roundtable session at the New York Stock Exchange

With the economy rebounding at a snail’s pace and companies already operating as lean and mean as they can, CEOs have to get creative about achieving growth. Those hoping to increase share of market in the current environment need to find ways to exploit their company’s hidden potential and find that unique edge to propel them ahead of competitors. A company’s culture and values can be that secret weapon, enabling it to delight customers and inspire loyalty, and ultimately differentiate itself in a competitive field.

The trick is finding and then honing that unique culture and uniting the organization, with all its far-flung, siloed units, around a common set of values and principles. That magic act can only start with the company’s chief, said Tom Saporito, chairman and CEO of RHR International, speaking to participants gathered for a discussion on Competing Through Culture, held in partnership with global business services company, FedEx. “Culture is a byproduct of philosophy, it’s a byproduct of passion, and it really does start at the top. If you have someone at the top who is thoughtful and passionate and concerned about culture, that’s an essential ingredient.”

Cary Pappas, president and COO of FedEx TechConnect, the company’s customer service organization, pointed to his chairman and CEO as a prime example. “Fred Smith is an employee zealot; he’s a customer zealot. He leads in a manner that our customers and our employees come first and he operates with the highest level of integrity, which I believe makes a huge difference and it just resonates throughout the company,” he said.

RHR’s Tom Saporito, FedEx’s Cary Pappas, New World Van Lines’ David Marx

RHR’s Tom Saporito, FedEx’s Cary Pappas, New World Van Lines’ David Marx

Ullman launched a training program to help managers construct an inspiring vision for their teams as part of the larger entity, and to develop their own communication and leadership skills so that their teams would follow and deliver. “Engendering trust is all about character of a leader, competence of a leader, all the various components of leadership. People work for people, not for companies, and no one wants to work for somebody they don’t respect,” he said.

Six years into Ullman’s tenure, employee survey numbers revealed people were starting to believe. In 2010, 93 percent of employees participated in the poll, compared with 60 percent the year Ullman started. “That means they know that whatever we learn in the survey, we’re going to do something about it.”

Arise Virtual’s Angela Seldin, The Bradbury Co.’s David Cox, The Lee Company’s Bill Lee, Covanta’s Tony Orlando

Arise Virtual’s Angela Seldin, The Bradbury Co.’s David Cox, The Lee Company’s Bill Lee, Covanta’s Tony Orlando

No culture change can take root without buy-in from employees, who need to feel like they’re a part of something bigger, says Angela Selden, co-chairman of Arise Virtual Solutions, a virtual business services firm. That wasn’t easy for Arise, which employs 18,000 telecommuters. To keep people feeling part of a team, the company has invested heavily in social networking, using virtual town halls to bring people together. “People are still people, and they need that connection,” says Selden. Six years ago, Selden and her leadership team began to build a common culture and direction by establishing a set of four values—competence, confidence, consideration and innovation—transparently sharing both the goals and the results of the company, and rewarding innovation with a monthly award. “If you can actually set the vision and then establish the corporate values, and you live them every day and your whole strategy is oriented around those, it can really mobilize and rally your team around where you want to take the company,” she said. “And if you can get them energized about where you’re taking the company, they’ll follow along.”

Ken Howard recalled facing the challenge of bringing employees along when his photography company, Splendid Portraits, embarked on the major transition from film to digital. In order to keep folks on track during a tumultuous time, Howard spelled out the company’s top five priorities for the next 90 days and then each employee had a copy of those goals along with three specific tasks he or she would complete in order to help meet them. “I started to actually codify what my expectations were, because sometimes they literally don’t know what you’re expecting. You think they know, but they don’t,” he said.

Clear, simple language and compensation that’s aligned with goals can speed up culture adoption, noted Tony Orlando, president and CEO of Covanta Energy, which converts ordinary household trash into electricity at 50 facilities around the world. “We know that safe and superior performance at our facilities translates into more efficiency,” he said. “If we can squeeze an extra one percent out of our facilities, that drives top line growth for us.” So the company laid out its goals for dramatic improvement in safety and environmental performance. “And then oh, by the way, half of your bonus is tied to safety and environmental [goals]. It’s not just about financial results,” he noted.

The company’s leadership must be ready to walk that talk, noted Ron Alvestetter, president of Service Express, who recalled a recent situation in which a top-performing sales rep was sabotaging the performance of another rep. The saboteur was fired. “The message that sends to the company is that culture is non-negotiable,” he said.

FedEx’s Cary Pappas

FedEx’s Cary Pappas

Having a hard line on culture also can help acclimate newcomers to the organization, who may not have seen good behavior values at previous employers, said Pappas. “It’s like adopting a kid from a family that’s been abusive. You try to show them love and they’re not used to it and they resist at first,” he said. “You’ve got to sit down and have lots of conversation, understand where they’re coming from and what baggage they’re bringing. But if they’re the right person and they have the right beliefs underneath, you can bring that out.”