Corporate Culture

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The Barroom Production Meeting. Visual In-Seitz, in Rochester, N.Y., creates business presentations for companies such as Xerox and Kodak. "Timelines are very short and client demands very high," says CEO Charles Engler, "which equals stress." How to vent it? Hold Thursday-afternoon production meetings off-site--at a bar. Employees share problems and tips, track performance, and voice complaints that (they hope) clients will never, ever hear. The message: we see the pressure you're under, and we value how you handle it; let's devote time to fixing snafus here, so our customers never experience them.

The Customers-Only Hiring Policy. How does Black Diamond Equipment, in Salt Lake City, keep ahead of its rivals in the trendy rock-climbing-equipment industry? By filling its workforce with the sport's enthusiasts--the users of its products--and capitalizing on their passion. "We breathe it, live it, think about it constantly," says human-resources vice-president Meredith Saarinen, "which makes the whole company a marketing and design resource. It kills complacency." The messages: 1) What we do here makes possible a sport so devotion-worthy that people build their lives around it; what work could be more important? 2) You and your coworkers are our ideal customers, so satisfy one another and yourselves. "It's not that our employees can make suggestions," adds Saarinen, "but that they have the duty to make them."

Saarinen's insistence may come as close as any comment yet to describing the business condition that makes company culture more important today than ever. At Black Diamond, where competitive advantage depends on every employee's doing product research and development; at Zingerman's, where frontline service will make or break the business; at GSD&M, where small teams must hoist customers to their goals; and throughout the new economy at businesses both high-culture and low-, real responsibility for company success has been spread to every employee in the organization.

Confronted by today's unprecedented customer expectations of perfect quality, errorless service, and tailored-to-their-needs relationships, every employee is making key judgment calls--whether when moving a product down an assembly line or handling a client's complaint. Whole companies are only as strong as their weakest links. Employees in networks, teams, or flat organizations (remember, all the middle managers were fired) must make good choices on the fly, without being told how. They need help, and it can't come from supervisors. They need a set of overarching beliefs that serve as powerful guides for everyday action. They need a culture.

Companies with such strong corporate cultures have an almost unfair competitive head start. The work they do is invested with meaning. Their employees have reasons to care about how they perform. Even the challenges presented by mind-bending change--whether imposed by the marketplace or necessitated by internal growth--are easier to handle because a stable culture begets a fast-moving, flexible company.

Companies these days have to change all the time. They find new customers, develop new product lines, enter new markets, introduce new technology. Employees in conventional companies find all those moves unsettling, even unnerving. They worry about their jobs and about their futures. A strong, distinctive culture, however, offers a fixed reference point--and means that change is that much less threatening. "A strong culture is sort of an anchor for letting people loose to create a lot of change," not to impede it, says Rosabeth Moss Kanter of Harvard Business School.

AGI's Richard Block and his peers already know that. Better still, they know that culture has made their companies the kind that every CEO dreams of growing: the kind nobody wants to compete with. "If you were a customer and you came here," he says, "and then you went to all your other suppliers, I guarantee you that the place you'd enjoy most--the place you'd want to do business with--is this one. Just because of how it feels.

"And though that's a competitive advantage that isn't patentable," he adds, "it's also one that nobody can steal."

Vera Gibbons, Phaedra Hise, and Mike Hofman contributed to the reporting of this article.