College of Business News

By: Jon Baker

Warren Buffett says a leader’s ability to focus on the right things is possibly the most important key to success in business. Two indicators tell us how a business is doing: lagging and leading indicators.

Lagging indicators are metrics like profit and customer satisfaction scores. Leading indicators are what you can control upstream and might include business practices like recruiting processes, training, tracking on-time deliveries and culture management systems that drive end results. Which do you focus on daily?

One of the most important, controllable drivers for high-performance companies is the design and implementation of a formal culture management system. In a study by Kotter/HBS, over an 11-year period companies with this competency generated growth almost seven times faster than those with loosely defined culturesand had corresponding net profit growth. These companies have cultures that create a synergy where productivity and teamwork flourish.

So how do leaders build and sustain a high-performance culture? Corporate values are certainly a key part of a culture management system but there is much more. First and foremost, corporate culture is the responsibility of the leader. They must define, live, teach, model, recognize, reward and constantly talk about the values and tools put in place.

It sounds simple but getting a team of people to live the right behaviors daily is a task that requires a methodology and a management team that knows how to use culture coaching tools properly. It’s a system to keep people focused on and accountable to what is important. It’s the internal brand personality of the company which affects how customers and suppliers view their business partner.

Companies with a formal culture management system perform well over a long period of time. We have two great examples in Springfield: SRC Corporation with its Great Game concept and O’Reilly Automotive with its deep-rooted “Live Green” values and culture grid concept. Their focus on leading indicators has paid off big time for stakeholders.

Greg Henslee, CEO of O’Reilly, said it best when we talked one time, “The asset with the greatest impact on our business is our people and the culture we have built which allows us to perform at a maximum level as one team.”

Throughout my career as a leader, our managers have developed culture management systems around five key points:

1. The right vision and unique ways to constantly reinforce why we do what we do.

2. Simple focus systems like focus scorecards to align key managers.

3. Reward systems that drive the right behaviors.

4. Effective coaching tools that help associates live the values and get results.

5. Constant process improvement.

In summary, follow a systematic process, have a passion for improving to meet the changing needs of your customers and ensure the engagement of your employees. You will find the results are rewarding.

Jon Baker has been a CEO, COO and founder in a diversity of industries. Most recently he was COO of Wiese USA and currently serves on their board and three other corporate boards. He has spoken to over 150 CEO groups and corporate meetings on the subject of leadership and culture management.

This article appeared in the April 2, 2017 edition of The News-Leader and can be accessed online here.