Your family, the school you attended, and every organization each has a culture. You could come up with phrases or adjectives that describe what it was like to grow up in your family, what your high school was like or what it was like to work at a particular company or organization. But very few organizations take the time to commit to writing what their culture comprises.
I spent the lion’s share of my career at Cintas, a uniform rental company, and we realized the need to define our culture when we lost a few management people. When we met to discuss why each one left the company or was let go, we realized that most of them weren’t a good culture fit for a variety of reasons. Maybe their work ethic wasn’t the same as ours. Or they lacked the honesty and integrity we expected from all of our people. That led us to write a booklet entitled “The Spirit Is the Difference,” which described our corporate culture along with a brief history of the company.
Our corporate culture consisted of three elements — our principal objective, our corporate character and our management system. To build a great organization, you need to first determine your principal objective — your reason for being, or your mission. Unified by that guiding mission, you can foster a culture dedicated to excellence, customer satisfaction and employee engagement. At Cintas, our principal objective was: “We will exceed our customer expectations to maximize the long-term value of Cintas for its shareholders and working partners (employees).”
An example of this was a situation I faced in Houston, Texas. The circumstance arose out of a need for growth. Our founder, Dick Farmer and I, had many conversations about the optimal size of a plant. When we began outgrowing a plant — meaning demand was exceeding capacity — we’d have discussions about where to locate another plant that could relieve the pressure on the existing plant. Dick had originally argued in favor of building bigger plants, what he called “megaplants,” but after talking through the advantages and disadvantages of a huge plant versus multiple smaller plants, he was in favor of more, smaller plants. The advantage was that most plant managers could get to know up to 200 people under their roof, but growing beyond 200 partners it became nearly impossible. Consequently, we put a ceiling of 200 employees on our plants.
When we reached maximum capacity at our plant in Houston many years ago, I approached the manager there for his advice on where we should locate a second plant. He was dead set against the idea. “I don’t think this is the right thing to do,” he told me. “I helped build this company. I took it from a very small company, and now we’re doing $20 million at this location. And you want to split it in half, and I can run only half of it? I just don’t think that’s right.” I explained all the reasons we needed a second location, which included being more centrally located for the customer base around it, being able to staff it with partners who knew the local customer base and providing additional production capability. He still didn’t think it was fair to him. So I pulled out our principal objective and asked him to read it. “Do you see your name in there anywhere?” I asked him. There was dead silence for 30 seconds as he pondered the question while looking at the sheet of paper. “Look, we’re not making these decisions based on what’s best for you or what’s best for me or even what’s best for our founder,” I told him. “We’re making these decisions based on what’s best for all of our customers, all of our shareholders and all of our employees, which is what this principal objective says.”
Having a principal objective simplified our decision making. Rather than considering multiple factors and weighing many potential outcomes, we only had to consider which approach would result in exceeding customer expectations and maximizing long-term value for our shareholders and employees, whom we called “partners.”
The second part of our culture was our corporate character — several adjectives and phrases that described what we stood for, how we wanted to be perceived and how we went about accomplishing our principal objective. In short, it was to be professional in every way: how we dressed, how our facilities and vehicles looked, how we carried ourselves and how we dealt with our customers and partners (employees).
The third part of our corporate culture was our management system. This included documenting the best solution to recurring issues in the form of a policy or procedure. Operations manuals were created with our policies and procedures that gave guidance on how we should function to achieve our principal objective.
Together, those elements shaped our organization’s external reputation and drove how we were perceived based on how we treated partners, suppliers, customers and our communities. We committed all this to writing and taught it regularly. We lived it every day, and we expected new people who joined Cintas either through acquisitions or new hires to learn our culture and, in time, become compatible with it. With the vast majority of our people conducting themselves in harmony with a clear understood value system, it became an awesome force and that was difficult to emulate by our competitors. We called it the “ultimate competitive advantage.”
We were also very deliberate about evaluating potential new partners regarding their compatibility with our culture. It was critical to be sure new people were compatible with our value system before we hired them. They wouldn’t survive in a new orientation if their values and beliefs were different than our own.
For a lesson in what can happen when culture isn’t instilled throughout an organization, you need only look at Chrysler and Lee Iacocca. When Lee Iacocca took over as CEO at Chrysler in 1978, the Detroit automaker was hemorrhaging cash and on the verge of going under. Recalls of the Dodge Aspen and Plymouth Volare had cost Chrysler billions, and within his first year at the helm Iacocca had to turn to the U.S. government to request a $1.5-billion bailout in the form of loan guarantees in order to stay in business. He also took the symbolic step of cutting his salary to $1. That got the public’s attention, sparking a shift in attitude toward Chrysler that brought out support across the board for him and for the company. Everyone, from celebrities to local politicians to union bosses, was suddenly rooting for Chrysler’s success. Iacocca also put himself on the front line by appearing in Chrysler’s commercials, reassuring America and Chrysler workers that “the pride is back.”
As pride of workmanship returned, that message shifted to “If you can find a better car, buy it.” Iacocca had effectively installed himself as Chrysler’s figurehead. Behind the scenes, he was hard at work, too, however. He quickly fired 33 of the company’s 35 vice presidents and brought in his own, albeit leaner, team. He righted the auto design process, starting with asking dealers what buyers wanted, rather than throwing cars together in the hopes that drivers would buy. This helped earn back the trust of its dealer network. And he directed attention to improving the company’s poor production reputation.
The results were almost immediate. Chrysler released the first of its bestselling K-car line in 1981, kicking off several years of rising sales, and this made it possible for the company to pay off its government loan seven years early. Chrysler was back as a major auto manufacturer. Iacocca was respected internally and externally as a man of character, a trustworthy leader who meant what he said. His influence at Chrysler was transformative, overhauling morale from negativity to hope and corporate culture from shame and derision to dignity and self-respect.
When he stepped down in 1992, Chrysler was on solid footing. Unfortunately, that footing started to give way not long after Iacocca’s departure. The Chrysler corporate culture was so focused on him as president and CEO that when he left the culture effectively evaporated. It ceased to exist. Without Lee Iacocca, the pride was gone. Within a matter of years, Chrysler had slid back into its old ways. Chrysler’s story illustrates both the power of culture and the importance of infusing it throughout an organization so that it permeates all levels of workers.
A company’s culture must be enduring in order to stand the test of time. The culture must be institutionalized by making it the organization’s culture, as opposed to the culture of an individual. We accomplished that at Cintas by writing it down, teaching it and reinforcing it every single day.
