Culture - Corporate America's unrealized asset

2010-03-21T15:32:00.000-07:00

In today's highly competitive global world, companies need to reach deep into their pockets to stay ahead of their competition. When analyzing companies, analysts typically look at the financial statements, if you like details, you would look at the companies intangible Assets like brand name recognition. However, no one looks at the companies corporate culture as an asset that can give a competitive edge and as some companies have shown even result in making the company an indsutry leader. Southwest is case in point. When Southwest entered the airline industry in 1971, the norm was to cater to the high income & business travellers that could afford to spend the money for a convenient, first-class experience while travelling. The companies serving the elitist included employees of different cultures from blue collared workers that pushed bags to snobish pilots. At this time Southwest was an innovator that built its organization as being different than the snobbish and heirarchial system at other companies. At Southwest, you were part of a family that “enjoyed” being there and serving the customer. People were not hired for their hands but for their minds and their hearts as well. No one was high enough to not help with menial and embarrising tasks like cleaning or baggage handling and everyone had a sense of being the underdog in the industry that resulted in employees sticking together and making sure things got done as planned or their company would seize to exist. People were hired young, trained within the organiation and as their number of years increased were given lucrative stock options that increased their vestment into the company regardless of their job. This culture was the biggest strength and the enabler for the strategy as it allowed for an effeciently ran company with minimal wasted resources a competitive edge that compared to the other airliners was crucuial as Southwest could do what others couldn’t at a much lower cost
Southwest’s culture is due to the “genuine humbleness” and a belief of “their ownership of this company that would otherwise have been eaten up by the jagurnauts present at the time if the employees didn’t get the job done.” From the types of people it hires to the training and the enviroment it creates of family ran fun with a mutual respect for each other where no one is important or high enough not to clean or push baggs and everyone no matter what job is given incentives to stay with the company, make the company better and as a result continue to own more and more stock options securing a very comfotable life for yourself. This has created a system of continued success and no other imitator (Continental, United, etc) has come close to the genuine humbleness of Southwests employees. Other companies has tried to speak of this strategy but not acted it resulting in people in the front not acting or believing it.

Not only should Corporate America figure out a way to use this under utilized and most of the time unrealized Asset, the analysts should also start comparing the companies and their culutre to be able to make educated decisions of where to invest their money. There already exists some companies that are conducting survey's that gauge employee engageement. Companies and investors need to just as close of an eye on the company culutre as they do on company financials.

Business Consulting

Culture - Corporate America's unrealized asset