Top 10 show culture drives performance

Firms with respected cultures significantly outpace S&P/TSX composite index
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 12/08/2009

Despite the economic downturn, Acklands-Grainger saw its employee engagement rise 200 basis points and participation in the survey rise 600 points in 2009.

“That says our leaders are doing the right thing, living the values, understanding the principles and actually engaging a group of people,” said Sean O’Brien, president of the Richmond Hill, Ont.-based industrial supply company.

As a 120-year-old company with third-generation family members working as employees, Acklands-Grainger has focused on strengthening its corporate culture with five principles: being customer-focused and people-focused, having a winning attitude, acting with a sense of urgency and simplicity, and living the values.

“It’s a compass for our decision-making process and what we do, what we think, how we behave and it’s a key ingredient in the fabric of our culture,” said O’Brien. “All 2,300 team members know them, believe them, see them and truly understand how they are.”

The company’s financial performance has also improved over the past few years and there’s a direct correlation to how someone feels working for an organization — about being valued and believing in how their employer thinks and behaves, he said.

That successful focus on culture was recognized by Waterstone Human Capital in naming Acklands-Grainger one of Canada’s 10 Most Admired Corporate Cultures of 2009. (For a complete list of winners, see sidebar.)

The performance of these companies, in terms of three-year compounded annual revenue growth, has significantly outpaced the S&P/TSX composite index by an average of 300 per cent, said Marty Parker, managing director of Waterstone in Toronto.

“This proves that an outstanding corporate culture has a significant impact on performance and that culture is an incredibly valuable asset,” he said.

The list was compiled from 400 nominations by other companies that also responded to Waterstone’s annual survey. It found 88 per cent of companies said culture is really defined by leadership behaviour and 99 per cent said the number one driver of performance is corporate culture.

“So, by extension, you could say the leadership drives performance,” said Parker. “Much of this pertains to not just what leaders say, that being the values, but how they act and if an organization’s systems, communications, programs and processes are aligned to that behaviour.”

GoodLife shapes up

The great majority of the leadership team at GoodLife started on its fitness centre floors, which really tells you something about the organization, said Parker. It is the only purely Canadian, purely private company on this year’s list.

“Culture is a company personality,” said David Patchell-Evans, GoodLife founder and CEO in London, Ont. “And great personalities attract people, attract success and make a difference in the world — and that’s what we do.”

This year, the chain grew by 40 per cent and also celebrated its 30-year anniversary by treating all employees to a Tragically Hip concert in Toronto. A caring attitude is an integral part of the company’s culture, said Patchell-Evans, and translates to workers being involved, asking the right questions and helping people.

“It’s a culture of acceptance, a culture of empathy, of caring,” he said.

Patchell-Evans said he has seen that work firsthand — having suffered from severe arthritis years ago and in coping with his daughter’s diagnosis of autism — with employees stepping up to fill in while he was away. And if a worker’s parent dies, she can take as much time away as needed, he said.

“That kind of thing creates mutual respect, so you end up with really hard-working, dedicated people who care, and they care about their members,” said Patchell-Evans. “A winning team is often made up out of people who want to win, but it’s only sustainable if you want to win for the right reasons.”

Teamwork brewed at Starbucks

Making Waterstone’s list obviously has benefits internally and externally when it comes to attraction and retention in both recognizing and validating what people know to be true about Starbucks’ culture, said Sara Presutto, director of partner resources at Starbucks in Toronto. That means the 15,000 employees treat each other with respect and dignity, along with a day-to-day focus on teamwork, collaboration, feedback and recognition.

“Our culture really is our people,” she said, citing a monthly breakfast that’s held with newly promoted managers and assistant managers, where 99 per cent said it’s the people at the company who have made them join or stay. The most recent employee engagement survey also showed Starbucks’ “partners” continue to feel connected to the company’s brand and their workgroups.

“Because of that strong connection, you can only expect high performance, high dedication,” she said. “We have to have a strong culture for us to get to performance.”

The coffee retailer also believes every employee is a leader, a philosophy talked about in training and messaging, so everyone has a responsibility to walk the talk when it comes to the culture and values. And senior leadership’s responsibility is to provide clear direction, strong communication, role-modelling and recognition and to value the work of the partners.

“We all need to support each other and coach each other to make sure we’re living up to those values,” said Presutto. “If we’re not, we need to provide feedback about where we need to make improvements.”

Canada’s 10 Most Admired Corporate Cultures of 2009 also recognized four organizations for exceptional performance in their respective sectors — Mount Sinai Hospital (public sector), Enbridge (energy and natural resources), Workopolis (best emerging organization) and Whole Foods Market (the green award).

Top 10 list

Best corporate cultures in Canada

Canada’s 10 Most Admired Corporate Cultures of 2009, in alphabetical order, are:

• Acklands-Grainger

• Aviva Insurance Company of Canada

• Ceridian Canada

• Corus Entertainment

• Fairmont Hotels and Resorts

•GoodLife Fitness

• Medavie Blue Cross

• Starbucks Coffee Canada

• Telus

•Wal-Mart Canada

Source: Waterstone Human Capital

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