I was introduced as the “Culture Guy” at a recent industry event. This description was unsurprising, considering how much I have written and spoken about the impact of organizational culture over the years. Lots of people have heard me identify culture as a primary driver of the success we have enjoyed at Correct Craft, but is that normal? To what extent do great organizational results rely on a strong culture?
Unfortunately, I have seen examples of leaders embracing the power of culture, including the implementation of steps to drive a great culture, and still fail. Does this contradict all I have said about how culture helps drive results? No. Culture is important, and it does help drive great results. However, culture alone does not replace the importance of competency.
Several years ago, a company in our industry hired a CEO whom I considered a good guy. He embraced what I shared about culture and enjoyed telling me about what he was doing to improve it in the company he was leading. He worked hard to create values and inspire his team. From a distance, he seemed to be doing a good job, so I was surprised when he was fired about a year later. The company had organizational culture issues, and my friend was addressing them. However, the company also had other significant issues with its product, marketing, distribution and quality. My friend thought fixing the culture would automatically resolve the other issues, but it didn’t.
Culture is powerful when it is developed simultaneously with other business fundamentals. Culture and implementing good fundamentals are not exclusive to each other; they are importantly connected and complimentary.
The story of my arrival at Correct Craft 18 years ago is well-documented. The company was in big trouble and losing money. It had moved to a new plant, which totally changed the production processes. And right before the company moved, the vice president of production, who was in charge of the transition, died unexpectedly of a heart attack. The company had made changes to products that were not accepted well in the marketplace. It seemed that every dealer had a litany of complaints. From my perspective, almost everything was broken. On top of all that, I was the fifth CEO in five years.
One of the first things I did was counterintuitive. I took a group of employees to Mexico to build a house for a homeless family of five. Given the company’s problems at the time, almost everybody thought the trip was a bad idea. So, what happened? We had a tough week. The temperature was over 110 degrees during the day. We basically slept on the desert floor and bathed by pouring lake water over us, soaping up, then using more lake water to rinse off. The work site was on a ledge near the city sewage collection area, so the smell was terrible. However, we finished the house, and our team was excited to give the previously homeless family keys to their new home.
Arriving back in San Diego before the flight home, our team gathered, and I asked everyone to share their thoughts about their experience. Despite the challenging circumstances, folks responded with such comments as: “Best few days of my life; I have never done something so meaningful,” and, “I cannot wait to do something like this again.”
And it wasn’t just the employees who went on the trip who were impacted. Even the rest of our team who didn’t go with us knew we were putting action to our words about culture. It was clear we were going to use our platform for good, which energized our team to make the business improvements we needed.
Eighteen years later, I often tell people that the Mexico trip was the turning point for Correct Craft, maybe even the catalyst that kept us successfully in business today. At a minimum, it positioned us for explosive growth in the years ahead. Was culture the only reason we turned around our company? Of course not.
Besides developing a great culture, we reorganized our team to ensure we had the right people in place throughout the organization. We surveyed customers, employees, dealers and vendors about ways to improve, and implemented many of their recommendations. We applied new product development processes, including design for manufacturing and assembly, which helped us develop new, market-driving products. Many of our team members started studying and implementing Lean Six Sigma, improving our production efficiency and quality. We also created new strategic plans that would improve every area of our business.
As important as culture is to our organization — and it is critically important — we could not have turned Correct Craft around just with culture. Success requires culture and competency. So what about the opposite? Can an organization be successful with competency alone? It has certainly been tried, and success often depends on how it is measured.
Many companies measure their success solely on financial measures, and that is certainly their prerogative. I have had an up-close view of several that did. One case in our industry regarded a company with a reputation for being highly focused on financial results, often at the expense of other, broader measures. They regularly achieved great financial results, until they didn’t. Their focus on solely short-term financial results resulted in some bad decisions that seriously hurt the company and ultimately forced big changes. Anyone aware of this situation would likely acknowledge that the short-term focus on profits hurt the company in the long run. They were highly competent, but the lack of a great culture that included a higher purpose hurt them.
So how does a leader find the balance between culture and competency? They don’t; they must excel at both. Earlier this year, I spent a week at the London School of Economics in England, studying the connection between profit and purpose. It was an interesting course, and I learned a lot. In short, the research is clear: An organization’s results are much better when it has a strong purpose or culture. Culture drives results.
I can understand why someone would label me the Culture Guy. I have sometimes called myself a Culture Evangelist. I have seen firsthand how a great organizational culture can help a company grow, but culture alone will not make up for incompetency. The importance of competency does not diminish my belief in the power of culture one iota. However, as powerful as culture is, it is important to remember that competency also matters.
Bill Yeargin is president and CEO of Correct Craft, and author of six books, including the best seller Education of a CEO.
