To varying degrees, customer service, product quality, attention to detail and pricing set these companies apart. But nothing -- nothing -- distinguishes these and other successful organizations from their rivals more than their cultures.
We may scratch our heads when thousands of Harley riders rumble across the continent for yet another company-organized rally. We may poke fun at the way Wal-Mart stations sexagenarian "greeters" at its doors and reminds its "associates" to "acknowledge any customer within 10 feet" -- an exhortation of founder Sam Walton. We may even cringe when a TGI Friday's posse corners an unsuspecting diner at the next table with a happy birthday serenade.
But these cultural trappings aren't just for show. They create a community spirit that breeds customer loyalty, and they instill employee pride and professionalism. Bottom line: Thriving cultures drive revenue and improve productivity -- especially, as it turns out, among IT-centric companies.
In a study of more than 1,000 large U.S. companies, MIT's Erik Brynjolfsson and the University of Pennsylvania's Lorin Hitt found that companies using IT heavily are likely to be more productive than their less tech-oriented competitors, but only when they do things like communicate and share information openly, distribute decision-making and provide extensive training. The authors also cite "active investment" in cultural processes and values as a key company differentiator.
As for what this investment entails, first a company must build a framework for measuring cultural attributes, like trust and involvement, mostly through employee surveys, says Lou Musante, managing partner of research firm Echo Strategies. Are employees trusted to innovate on their own, or are they micromanaged to mediocrity? Are key stakeholders involved in critical decisions, or is everyone just expected to bow to the powers that be? Once companies get a handle on their cultural strengths and weaknesses, they must reward positive changes. Fannie Mae, for instance, bases managers' compensation in part on their ability to promote a culture where innovation can flourish.
In many respects, technology will drive business goals only so far as the company culture will let it. How many sales-force-automation or knowledge-management software implementations have failed because the companies didn't promote a collaborative, technology-aware culture, so users weren't compelled to share information across departments or they shied away from using the new applications altogether.
Culture is as important to IT organizations as it is to any line of business. While there's no replacement for technical know-how, truly great IT organizations place more value on their teams' ability to share expertise, work with other departments and question conventional wisdom. Brent Zempel, CIO of Life Time Fitness, hires people who are technology generalists and superior communicators. "If their communications skills are solid, that eliminates probably 70 percent of the problems," he says.
Zempel doesn't measure his organization's culture formally, but he's well aware of the importance of an intangible like trust. For instance, the 50 people in Life Time's IT group work in a "no rules" environment, where they come and go as they please (but typically log 50-hour-plus weeks anyway). "A vacation policy is there," Zempel says, "but we would give anybody just about anything they wanted."
This culture works for Life Time, but it may not for your organization. Define what's right for your team, then help manage it. Just don't take culture for granted.
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