Remember when business was good, the economy was strong, the housing market was healthy, and building material dealers were, for the most part, profitable? During those times I watched some competitors remain average while others become highly profitable and very dynamic, with stellar reputations in the marketplace. What separated the average from the dynamic? There are obviously many reasons, but the consistent factor present in the top-performing companies was a strong company culture.
Business is human. It's not buildings, equipment, strategic plans, and budgets. Most all companies in our industry have strong management teams and excellent business plans. They are run by smart people who know how to control expenses, foster strong relationships with their customers, and grow sales. Yet some of these companies excel while others do not. What sets them apart is their culture. If the culture is weak and disjointed, almost without fail, the company is average at best.
So what constitutes a strong company culture and what makes it important? In a strong culture, great emphasis is placed on values. Values determine how you are going to conduct your business and what you stand for. These values are shared with all employees and are woven into the fabric of your company. In a strong and cohesive culture, every employee knows the values your company extols. They share in those values and believe in them.
Take this test: If I walked out to your warehouse and asked your employees what your company values, what would be their response? Hopefully, the answers would be consistent throughout the workforce and would embody what your company stands for.
What gets your employees' loyalty? Are they loyal to other employees, their supervisor, or--ideally--to your company and its culture? In a weak culture, employees are chronically unhappy and mistrust their employer. In a strong culture, work has meaning beyond a paycheck, everyone works as a team, and employees know they're part of something special. Some of the tangible benefits will be greater productivity, greater ingenuity, less inventory shrinkage, and fewer workers' compensation claims.
How do you get a strong and cohesive culture and how do you maintain it? I'll explore that in part two of this feature, when I detail what we did to change the culture at Florida's Dunn Lumber. And in part three, I'll tell you the results.
Gary Farber is the former CEO of Dunn Lumber, Daytona Beach, Fla. Contact him at email@example.com.