I was having some food the other night with my good friend Geoff Storm and he got talking to me about how cool the tour at the New Belgium brewery in Colorado was. What impressed him the most was how they try to help employees be more green, and have built a really cool corporate culture (see the video below for some context). And they’re not afraid to show that culture off to visitors.
Things like flexible hours, bringing pets to work, video games- all those things you used to hear about the way Google and a lot of other silicon valley startups operated were the stuff of legend. But is it also good for business?
I think the argument is two-fold. First, businesses do have an enormous amount of control over their own culture – and investing in that culture can go a long way towards attracting candidates that are the best and the brightest. I’m not saying that every company needs a pinball machine or nap time – but what I am saying is that in addition to building the mechanisms for making cash, businesses also need to invest (there’s that word again) in things or policies that will also get them kick-ass employees who WANT to come to work every day and make the business as successful as it can be. From Geoff’s story, I think that New Belgium is pretty big on fun – but I’d also guess that translates into lower turnover and a more enthusiastic workforce.
The second part of this argument is just as important. See what Geoff just did for New Belgium? They shared some of their culture with every person taking a tour, every hour of every day. And many of those people I’m sure are impressed . They come back to wherever they are from and tell the story of the tour to their friends. Not only that, maybe they identify just a bit more with the company and that, my friends, can have a huge impact on purchasing decisions.
You have to wonder what the marketing value of those shared experiences are. What essentially is happening is New Belgium just got someone from upstate NY to indirectly endorse their product, not based on what it is, but based on the story behind it. That has value.
Corporate culture can also be a secondary source of revenue. Look at the amazing streams of revenue that companies like 37 Signals and Zappos have built through their seminars, books and consulting gigs – all based around talking to people about how they run their businesses – about their culture.
The door swings both ways though, and cultural perceptions spread like wildfire through social media channels now. I’d bet you could not only name 3 companies that have a culture that you’d like to be a part of. I’d also bet that you could name a lot more that you’d never want to be a part of. Is one of them YOUR business? Let me know in the comments! What’s the company out there that you think has the most amazing corporate culture – and what’s the one with the worst?
A great topic Miller (one of my favorites) and one that is likely headed for some interesting turns going forward. In an incredibly difficult economy, how many companies are going to pull back on perks that define a culture 1) because they have to or 2) just because they can. As a retention/promotional tool, I think metrics are tough to track. Yes, there are always benefits, but whether the cost is worth what you get back, or whether the costs are worth simply accepting regardless of what you get back are really important issues now.
That is, as a promotional tool, spending what is necessary to have a great culture can get you noticed. It can get people talking about you. But unless you’re somehow surveying your new customers/employees on how they first heard about the company, I wonder if you can ever really tell how well this pays off from the perspective of gaining new clients or workers. Sounds good in theory, but I’m betting HR managers have a hell of a time convincing top managers that such efforts are worth it.
As for gaining or retaining employees, a better culture can certainly lead to a good quality of work life, but I wonder two things here. 1) Will companies stick with this when they don’t have to….when the economy is so bad that people are just happy to have jobs and the labor market is giving us thousands of laid off professionals willing to do work at lower pay and perhaps without the perks, will the bottom line focus win out and companies scale back on their expenditures on creating a unique culture?
And 2) I think culture can only go so far…that is…you still need to pony up and pay people what they need, whether it is because quality of life at work only matters unless you’re happy with quality of your home life, or because your competitors may create the same cool culture, leading you to get back to compensation basics (see Google’s recent response to losing ee’s to facebook: raising salaries).
I remember studying Nucor steel back in college, and their efforts at creating a unique culture that gave all levels employees a strong voice and opportunities for extremely high performance based compensation helped them get through some very tough times in that industry. The same could be said about Southwest and other companies (firms that prove to last through industry/economic storms better than their peers who do not spend as much time and money on good cultures).
So, I guess my point is, the benefits of culture:
For the people… always good, so long as you are firing on all cylinders, keep up with your competitors if not stay ahead of them, and make sure that you stick to your values and culture, even when it might be tough to do so (don’t rip away yoga time and free coffee the second things get rough). This can lead to great long term benefits for the company.
For the firm itself…it might be a bit harder to determine the true worth of these efforts and expenditures. I’m not sure what the research out there says, but I imagine the more employees and consumers act together in valuing companies that handle this well, the easier it will be to convince all companies that creating a great work environment is worth it, even if it still remains a bit difficult to prove this with employee/customer surveys.
Ian,
Wow! Awesome comment – thanks for your thoughts. I do think that the metrics are difficult to track for sure. I think you bring up a really good point about the economy – will companies stick with these ‘cultural initiatives’ when they really don’t have to. I think that here is where you get into seeing where the values of executives / owners come into play. And you’re right about not ripping out the yoga as soon as things get tough – if a firm really wants to focus on creating a unique culture, it has to be a long term strategy – that goes hand in hand with giving people the standard compensation that they expect or require.
Thanks again for your thoughts! Hope things are well for you.
So cool! I toured the New Belgium brewery about 2 1/2 years ago (give or take) and it was definitely the coolest work environment I’ve seen. I love the custom bikes for their employees! In fact, Fort Collins (the town that New Belgium resides in) has a bike library, which is a great concept. As a tourist (or resident) you can ditch the car and get around on your free, fully restored bike for up to five days, FOR NOTHING! It’s a great place.
Very cool! Thanks for the comment, Dan. Seems like that whole area has it going on with alternative transportation. Damn fine idea if you ask me.
Community! It’s a good idea and since it’s part of my mantra all the time I thought I’d weigh in as briefly as it’s possible for me to do. 🙂
I think that many work places are currently having something I like to call an ‘investment deficit’- that’s what I say about the law firm where I work. Some of the staff here are invested in the practice, the clients, the files. Some are not. Because we are in the trenches doing the grunt work so to speak, it’s essential that there be some dedication to follow through and making sure what needs to get done gets done. If there isn’t, then each attorney has to micromanage their staff person and that doesn’t appropriately free up their time to do what they went to school for 7 years to do. They need to be able to trust that we can look up an address, that we will follow through with sending out mail in a timely manner, can speak somewhat intelligently to clients, etc. I think that this applies to other types of work places as well. And really, the only thing besides a strong personal work ethic that can foster an attitude of investment and involvement and responsibility is a sense of community at work. If you have a personal issue, and the office cuts you slack or stands by you, it contributes to that. If you’re allowed to have some fun and if management is able to discern the difference between an upbeat attitude with staff getting along and someone goofing off and not working, that fosters a community. You feel valued and accepted and a part of a team.
So, Google and the New Belgium brewery are on to something. I bet the places that nurture this type of attitude have much better employee retention and harder working employees in general. Plus, from a purely pragmatic standpoint, if you create a valuable and fun place to work, people will want to work there. Therefore, if someone is under performing or not assisting the team, there would be a much better pool of applicants to pull from in replacing that person.
Very interesting and I like that overall, this type of work place construct is so much better for the ‘peons’ on the bottom. A little respect and consideration goes a long way for morale!
Melissa,
Completely agree on the building of a community. It has to happen and I think that’s good for the bottom line. We might not like to think about replacing under performers who are part of that community but I agree that having a great corporate culture contributes to a better hiring pool. Thanks for taking the time to comment.
Ever heard of Palantir? They’re a valley company that’s been doing a lot of work for the government in data analytics. And they have an AWESOME corp culture. I think they actually have a personal catering company that services individual menu requests from every employee. Super cool people too.