Can culture be a competitive differentiator?

In a February 2009 Fortune magazine article, Jim Collins, said: “In times of great duress, tumult, and uncertainty, you have to have moorings. Companies like P&G, GE, J&J, and IBM have an incredible fabric of values, of underlying ideals or principles that explained why is was important that they existed. The more challenged you are, the more you have to have your values. You need to preserve them consistently over time.” Truer words could not have been written.

In working with Noel Tichy over the years, one of the primary principles we teach as part of his seminal work regarding having your own ‘Teachable Point of View’ is the component of ‘values’ within yourself, your team, and your company. An organization’s foundation may be its strategies and goals yet, the cornerstone for any organization or company is its values.

That is what makes up a company’s culture. The values inherent within that company, and more specifically, the way folks get things get done IS a company’s culture.  Frankly, most employees and even the leaders within the company have a hard time putting their finger on how to describe the culture of their company. They may be able to label it with a catch phrase – such as Hewlett-Packard’s “the HP Way” or Southwest Airline’s “Company Spirit.” And yes, they will be able to attest that a ‘good’ company culture can make working there fulfilling to the employees of the company. You will have strong employee retention, good morale, and just a common language, belief and attitude which everyone will march to on a daily basis.

What I want to propose is even greater than that. I believe an organization’s culture is the competitive advantage for these organizations. An organization’s culture is their core. It is ‘how they act in the dark as well as the light.’ It is who they are. Period.  And when this core is solid so are the results in the market.

Is there an easy way to build, improve, or transform an organization’s or a company’s culture?

In a word: no.

It takes time, commitment, and unrelenting desire from the top down through the ranks to make the change. Many books have been written about this phenomenon. Two of my favorites: Awakening the Corporate Soul celebrates its 10 year anniversary printing this year and Corporate Culture Performance by John Kotter is the gold standard around this subject and a ‘must read’ for corporate leaders who are wanting to transform their culture.

So for a full deep dive on cultural transformation:  read, read, read.  Then, consider these three basic foundational steps to move forward.

  1. Learn what reality is in your company. Interview people – from every level within the organization. Face the truth. Look the tiger in the eye. Listen – really listen – to what is being said and also pay attention to the unspoken words, as well. Once you understand what ‘reality’ is then you can understand what is missing, what the gaps are, and determine how to fill those gaps. A key mistake many companies make at this step is they begin to define values as the magic elixir to cure all ills without aligning these values to the behaviors they need and want to see. Values become nothing more than words on a plaque or in the annual report. For example, if your teams don’t know what teamwork looks like, how can they become a good team player? 
  2. Align the values and associated behaviors to the overall corporate vision, direction, goals, and metrics for success. Too often these values stand alone and are not aligned to where you are taking the organization. They need to be fully integrated, incented, and visible to the overall strategies and goals of the organization. When values and behaviors are embraced, they need to be publicly celebrated. Leaders have the opportunity to highlight business successes directly aligned with the new values and associated behaviors.
  3. Finally, continue to evaluate, modify, and tweak  to reflect what leadership is trying to create within the company. Like life, culture is a growing, evolving organism. It takes commitment and ongoing leadership to integrate the values and behaviors throughout the organization. It starts at the top and the senior leaders need to walk the walk. In addition, they need to hold members of their team accountable to these values and behaviors. If there is any deviation within the ranks, the culture is only as strong as their weakest link.

So, can culture really be a competitive differentiator within the company and to its target markets?

Absolutely, Yes!

I will share only one benchmark with which I have personal experience.  I want to give credit to a fellow HP colleague whom I have never met (Ignacio Cantu), yet who recently offered this astute observation of the culture of Hewlett-Packard, its ability to differentiate HP in the market, and his personal experiences while working there for 31 years:

“After 31 years from a start in Palo Alto… I learned the following:

The HP Way is a set of behaviors that result in a company that is better and different than all the others. The basic value is the unique and powerful relationship between the company and its employees that renders championship/winning results for customers. It is based on a deep, sincere trust, positives, and inspiration not dysfunctional directives, fear, and intimidation. It has the following 3 inspiring factors:

  1. Innovation: For market and workplace and makes a fundamental contribution to the marketplace and in the workplace.
  2. Superior Value: For customers – hence, a sustainable profit to the company.
  3. Ethics: Integrity and respect – hence treatment and inclusion for everyone…employees, customers, and partners)

We are different and better than all the others….The HP Way.

Like the constitution of the United States and other great doctrines, it stands the test of time and should not be tossed aside for the latest management fad or trend. Doing this will reduce the company to become the same as all the other brands.

If the employee cannot answer the question “what makes HP better and different than all the other companies?” Then there is no sustainable differentiation in the market or at work. The ability to innovate and win is an emotional, inspirational act that can only be maximized by bringing out the best in every single employee. Leadership is not about directives, caustic behaviors, and spiteful acts of self promotion. Nor is it who talks more than they listen….it’s more about those at the top listening to those closest to the jobs affecting customers the most.

While the HP Way may no longer exist inside HP, it will forever remain in the DNA of those who lived it and will positively affect the companies and people we interact with every single day for the rest of our lives. Thanks Bill….Thanks Dave…

This individual could not have said it more perfectly. Culture can make a company and any organization different. And when a company or any organization really gets it right, it will change the fabric of the individuals within the organization and those with whom it associates for life.

What an imprint. What a ripple effect. And what a way to create a sustainable differentiation in a world crowded with mediocre attempts.