Understanding Corporate Culture is Key to Profitability

Prospective clients sometimes confide that their past recruiting efforts have not always been successful in that the people they hired did not fit with their distinctive corporate culture and left after a brief tenure. A kind of double jeopardy is at work when this happens: not only does the company lose its considerable investment in time, money and lost opportunity—it has to start the recruiting process all over again.

Consumer icon or unknown start-up, every organization's culture is unique. Their distinctive shapes are not punched out of a mold but evolve over time. Once formed, many companies invest significant thought and expense maintaining the culture. Classic examples include IBM, long the epitome of formal corporate structure, and more recently, Southwest Airlines, famous for its khaki-clad informality, cheap fares, on time arrivals and profitability.

Although very different, like virtually all company cultures these two spring from their founders' vision and the core values of top management. In building IBM into the world's first data processing giant, for example, Thomas Watson, Sr. expanded production during the depths of the Depression, created the company's famed R&D department and reputedlynever laid off a single employee.

In going against the grain—businesses were shedding employees like flies in the 1930s to stay alive—Watson was demonstrating (at great financial risk) his commitment to loyalty, a core value promoted since the early 1900s in company songbooks: "We're Watson's great crew, we're loyal and true/We're proud of our job and we never feel blue." No wonder being an "IBM-er" once was synonymous with employment for life.

Southwest founder Herb Kelleher has declared, "Culture is one of the most precious things a company has, so you must work harder on it than anything else. How do you build the culture of commitment and performance when the notion of loyalty—on the part of customers, employees and employers—seems like a quaint anachronism? I can answer basically in two words: be yourself.

"We're not looking for blind obedience," says Kelleher. "We're looking for people who on their own initiative want to be doing what they're doing because they consider it to be a worthy objective."

Being loyal at IBM or being yourself at Southwest, both vividly illustrate the point management expert Stewart Douglas makes that corporate culture is "all about profitability." "Research into organizational productivity indicates that the equation goes like this: work culture = productivity = profitability. The quality of the work culture and the quality of employee performance go hand-in-hand."

No one knew this better than the late Sam Walton, who built Wal-Mart into the world's largest retailer (a position it has held since 1990) based on his ten rules for success:

1. Commit to the business
2. Share the profits
3. Motivate your partners, vendors and suppliers
4. Communicate everything about the business to everyone in the company
5. Appreciate the associates and let them know they are appreciated
6. Celebrate success
7. Listen to everyone
8. Exceed expectations
9. Control expenses
10. Swim upstream

As Wal-Mart continues to demonstrate, numerous tools are available, from day-to-day pats on the back to formal incentives and awards, to recognize employee behavior that exemplifies and reinforces the corporate culture you are seeking to build. To recruit executives who will successfully fit into your corporate culture, you have to know the behaviors that will strengthen it and deliberately select for them.

Our accumulated evidence from recruiting top executives for hundreds of companies in the agriculture, food and life sciences sectors supports how important "fitting in" is to long-term success. That is why we pay special attention to the intangibles of corporate culture, which run from the way people dress and talk, to how they communicate, share power, set goals and achieve bottom line results.

Most of our recruiters have held senior management positions in companies large and small, old and new, and are expert at adapting to different cultures. Because of this, we work very hard to grasp all the nuances of a client's unique culture.

The essential first step for us is to thoroughly understand the corporate structure, business objectives, current needs and complete scope of the position being recruited. We also explore the company's history to understand whether it adheres to its mission and core values or merely pays them lip service.

Only when we are satisfied that we understand its strategic direction and operating style and have listened carefully to the expectations of senior management, do we develop a profile of the ideal candidate. In addition to defining the requisite professional experience, managerial skills and education, the profile describes the behavior, values and motivation which will best align with the company's culture.

Human nature being what it is, however, we also understand that sometimes it is best to trust one's instincts. After you have been around the block a few times, you develop a feel for who will or won't fit in. Going against your gut is a bad idea.

For more information about Kincannon & Reed, please link to krcontact@krsearch.net.