Why Culture is Important

Tom Long recently had a client that asked why culture is so important. Specifically, they wanted examples of organizations that were suffering because of their culture. Immediately, I thought of Home Depot and their former CEO Bob Nardelli.

During his tenure – or his reign of terror – the stock went sideways and they lost market share to LOWES. He cut out recognition, railed on his employees, and slashed expenses in every direction. At the same time, they lost huge talent (100% of 100+ leaders left), and they started having trouble recruiting new talent. In the end, Bob’s efforts to cut costs really wiped out morale, engagement, and retention. Their reputation got out in the market and qualified people stayed away.

When he was fired, Newsweek magazine reported that employees were cheering in the stores. Since his departure, the new CEO has reinstituted many recognition efforts (including hand written thank you cards to store employees).

In the aftermath of this whole snafu, Inc magazine (April 2007) asked a panel of experts the following question:

“Bob Nardelli’s departure left customers, shareholders, and employees of the Atlanta-based retail chain wondering whether it will ever recapture the entrepreneurial zeal that the co-founders Bernie Marcus and Arthur Blank worked so hard to develop. How can the company go about refurbishing its good name?”

Tom Sternberg, the founder and former CEO of Staples and a partner at Highland Capital in Boston answered by saying:

“First thing the company has to do is hang Bernie Marcus’s and Arthur Blank’s pictures in the lobby. They’re the two greatest entrepreneurs in American business history. They built the single best CULTURE of any business that I’m familiar with, and they built an extremely people-focused business in regard to both Home Depot’s customers and, even more important, its employees. Now you have Nardelli, this brash, abrasive egomaniac who destroyed the terrific culture in the name of efficiency, and that’s going to take decades to fix. I would try to hire back many of the phenomenal business leaders that Home Depot lost because of Nardelli. These are the folks who made Home Depot such a unique brand. I’d ask them to help put back in place the people-focused culture in order to get the company back to its prior standard of operating excellence.”

We all know that culture is important, and that is exactly why our business is so critical. Recognition drives cultures of excellence, and provides opportunities for people to appreciate one another. When you think of the havoc Bob created at Home Depot, it is easy to see how recognition is a crucial component in building a people-focused culture that really produces results.

Are their costs associated with supporting a people-focused / recognition culture? Of course! Are their costs for destroying a culture? Ask Bob Nardelli or the hundreds of people he ran out of the company. Which strategy actually gets results? Is there any question?

Hope . . . or the lack of it.

Lately, I've been reflecting on why I get such varied responses from different audiences. Why is it that some audiences respond with a standing ovation while others sit there wondering how they will ever be able to act on the presentation material?

My guess is that there are some organizations that simply don't have much hope. Their culture is one of repression and criticism -- a place where employees are unsettled or even afraid. It is amazing how the heavy burden of the culture floods over me as soon as I walk into the building of such an organization. Not surprisingly, I find that most of the employees are very candid, yet unhappy, about their situation -- even informing me that they are always looking for the next opportunity to leave the organization -- ouch! Sadly, they often seem overwhelmed after a presentation since it seems so hard to recognize successes in such an environment.

On the flipside, when I walk into an organization full of hope (NOTE: I did not say a perfect company -- just a company full of hope), I sense a great deal of optimism -- even in the face of adversity, pressing deadlines, and the inevitable people issues. At such a place, they cheer and smile at the end of a presentation. They know there will be challenges ahead, but they face them head on and look forward to finding creative ways to recognize their colleagues.

Does your organization feel like there is hope inside? One way to to tell is to examine what the language is like in the place. What words are being used? How do people respond to clients, customers, or even to one another?

Did you know that being positive and taking time to appreciate your life & others is actually good for your health?

How do you create hope?

High performing employees want great managers

After speaking at a large organization (the 3rd city and 4th presentation this week), an audience member came up to tell me that they refused a promotion because they didn't want to risk getting a bad manager. "I know that I am very fortunate to have the boss I have," she said, "and I don't want to lose that."

Have you ever left a bad boss or stayed with a good one? What makes them so good / bad?

If you could offer one piece of advice, what would you say managers should do to be more effective?

Our adult waking hours . . .

Where are most of your adult waking hours spent? For most of us, it is work. So why is it that so many people are unsatisfied with their current work lives? Why is it that a book called, "The Purpose Driven Life" was the best seller of the decade? How do we find meaning and purpose in the work that we do? Does it make a difference?

Do you work harder when you enjoy the work you do?