Is Culture a Competitive Advantage?

by Mark Olson on October 17, 2011 · 0 comments

in Business,Management,Marketing,Sales,ScanSource POS & Barcode

Herb Kelleher’s (retired CEO of Southwest Airlines) definition of culture is,

“What the employees are doing when the boss isn’t looking.”

For me, that says it all. What are your organization’s employees doing when the boss isn’t looking? Does their behavior change, or not?

If you’ve read about Southwest Airlines, you’d know they have been an incredibly impressive company. Their financial performance, in a crowded and highly competitive marketplace, has been nothing short of remarkable. Airlines all have fairly similar processes and cost structures (own or lease planes, consume fuel, rent gates at terminals, pay their employees, etc.), and yet Southwest, a low-price leader for years, was highly profitable when most of the other airlines were struggling financially.

What’s the difference?  How do they do it?

In his book, NUTS!, Herb outlines some of the cultural aspects of their organization and how they have created an environment where employees are truly committed to bringing their personal passion and engagement to their jobs every day. Even though many of the jobs and roles are fairly repetitive (baggage handlers, gate agents, flight attendants, etc.), they’ve shaped an environment where employees are allowed to exercise creativity and judgment to consistently make the customer feel special and want to come back. They also often tell all of their friends what a great experience they have had at Southwest.

About a year ago, I had the privilege of visiting the ZAPPOS company (near Las Vegas) during the RSPA RetailNOW (www.goRSPA.org) show. The positive energy I got from just walking through their building, frankly, was exhilarating. The employees all seemed happy, committed, engaged, and highly passionate towards meeting the needs of the customers – who are incredibly loyal. They have also grown revenue rapidly during a difficult economic time. If you are ever in the area, go visit them. Or if you contact them, they will probably send you a book on their company culture – it’s well worth reading.

I think culture can make a HUGE difference in an organization’s success. It’s easy for your competitors to emulate your products, or your service, but it’s very difficult for them to copy an effective company culture.

What’s been your experience? Feel free to share your thoughts with me at molson@apgcd.com, or read more on this at www.cashdrawer.com/blog.

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