The first is Quad/Graphics, the Wisconsin-based printer. (Full disclosure: Quad is Inc.'s printer.) Founder Harry Quadracci takes his trust-the-employees culture so seriously that he still runs his annual Quad/University, in which managers literally walk out of the plant for up to three days and leave it in the hands of hourly workers. The second is Southwest Airlines, famous for its wild and woolly--not to say manic--culture. Everybody at Southwest, from CEO Herb Kelleher to the newest gate attendant, pitches in to make sure that customers have a good time and that airplanes get unloaded and reloaded and back in the air fast. The third: Nucor, the steel company, with its austere egalitarianism ("Senior executives do not enjoy any traditional perquisites," proclaims a company document) and day-in, day-out focus on production.
All three companies went from Inc. 500 size to Fortune 500 size in only a few decades, even though they were competing in some of the toughest businesses around. They're growing and thriving today. The graybeards in those industries are still wondering how they do it.
How they do it. the fact is, powerful cultures have powerful effects on how a company's people work together. Look at Southwest. Its strategies are no secret. Other airlines have duplicated its no-frills, point-to-point service. But maybe you remember that Wall Street Journal article a few years ago detailing the intricate, help-each-other-out teamwork necessary for a Southwest ground crew to turn its planes around in one-third the time other airlines require. Reading the article, you could only conclude that those employees wanted to get that plane back up in the air and making money. Somehow it's hard to imagine the workers at American or Delta caring much, one way or the other.
Walk into a high-culture outfit and you feel the difference right away. Earlier this year I spent a day at AES Corp.'s Thames facility, near New London, Conn. Only 15 years old, AES operates electric-power-generating plants in 35 countries. In 1995 it racked up $107 million in earnings on $685 million in revenues. It's a company that does bizarre things like planting millions of trees in Guatemala (to make up for the carbon dioxide produced by its facilities) and asking teams of hourly workers to manage its multimillion-dollar cash-reserve funds. No doubt I sounded a little skeptical when I asked one of the technicians about the latter practice. "Yeah, I was a little nervous at first," he agreed. Then he proceeded to explain how, with just a few phone calls, he had learned to get a good rate on $5 million worth of commercial paper. "It was a lot of fun," he concluded.
In such an outlandish atmosphere, the unusual becomes the usual. At AES, materials-handling technicians negotiate contracts with coal suppliers, thereby reducing the need for high-priced managers. Machine operators order replacement parts themselves, ensuring a minimum of downtime. When plant manager Dan Rothaupt wanted to change the bonus plan, he put it to a vote of the employees. It lost resoundingly--and so no one was left feeling that management had rammed an unwanted compensation system down employees' throats. With such a culture, is it any wonder that AES thrives even in today's competitive environment?
A successful corporate culture, however, is not some kind of black magic. It derives its power not just from abstractions but from specific practices that employees understand as symbolizing and representing the culture. It pays off not because it's some kind of softheaded do-goodism but because it relates to the specific competitive demands of today's marketplace. Consider a handful of mini case studies illustrating the relationship between the practices of culture--the artifacts, so to speak--and how they enable companies to outstrip their competitors.
The White-Paper-Bag Job Application. Remember the challenge Amy Miller faced? Used to be, market niches were safe. All you needed was the best location. Or a distinctive product. Or a capability that no one else had. Today there are no safe niches. Make a little money doing something, and you can bet that competitors--often competitors with deeper pockets than your own--will show up looking for a piece of the action. That's what might have happened to Miller. She started Amy's Ice Creams in 1984. It wasn't long before national companies such as Baskin-Robbins and Steve's were setting up shop close by.
The thing is, as we've said, Miller wasn't just selling ice cream. Anyone can sell ice cream. She was selling entertainment. All that crazy stuff her employees do--the theme nights, the impromptu musical comedies, the costumes, games, and jokes--keeps customers coming back for more. And it keeps Amy's Ice Creams (now at $2.2 million) growing about 20% a year.
Miller sends her cultural message to employees--this is what we value above all, this is what makes us different--from the day they show up looking for a job. Instead of a formal application form, they get a plain white paper bag along with the instructions to do anything they want with it and bring it back in a week. Those who just jot down a phone number will find that "Amy's isn't really for them," says Miller. But an applicant who produces "something unusual from a white paper bag tends to be an amusing person who would fit in with our environment."
Unusual, indeed. Applicants use the bags to create cartoons, board games, works of art, and elaborate parodies ("The Amysburg Address"). One job seeker turned his into an elaborate pop-up jack-in-the-box--and became a scooper at the Westbank Market store. That store's former manager painted an intricate green-and-blue sphere resembling the earth atop a waffle cone on his bag. Later he could be found passing out $5 gift certificates to customers willing to do their best animal impression or otherwise act up in ways that, among the Amy's staff, pass for normal. Like any performers, employees of Amy's can't rest on their laurels. The half a dozen or so white paper bags that applicants turn in during busy weeks remind them that there are plenty of creative people out there--and that creativity, not just ice cream, is what their boss really puts a premium on.
The War Room. Customers used to be less demanding, too. Now their expectations have ratcheted up several notches. Manufacturers have to deliver near-perfect quality. Service companies have to--well, almost set up housekeeping with their customers. Because what the customers expect in today's market isn't just a service, it's a solution to their problems. That's why travel agents have started to offer full travel-management capabilities along with plane tickets and hotel reservations. It's why distributors have begun running clients' inventories instead of just shipping them parts.
