Culture as a Marketing Strategy

Have you ignored your greatest untapped marketing asset?

Happy ClientLong ago Peter Drucker made this statement: “Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

The famous management consultant is gone now, of course, but his words remain relevant and profound today – and we would do well to take them to heart. But where does marketing come from as a “distinguishing, unique” function? It doesn’t just materialize at a strategy meeting, and it doesn’t exist in a vacuum. Marketing is necessarily a direct reflection of your organization’s culture.

A culture of exceptional service and creativity represent the preconditions needed for your business’ two basic functions, as identified by Drucker: marketing and innovation. You’ll notice the words “culture” and “cultivation” are closely related. Anyone who wants to grow anything, whether it’s a field of wheat or a successful corporation, has to have all the elements in place first that are conducive to that growth. As you will see, an optimized culture is your marketing strategy.

David Packard of Hewlett-Packard once commented that “marketing is too important to be left to the marketing people.” Lou Gerstner, former chairman and CEO of IBM, said, “Culture isn’t just one aspect of the marketing game, it is the game.”

Build Your Culture Into a Marketing Machine

The Ritz Carlton, Southwest Airlines and Zappos are often used as shining examples of corporate culture focused on service and innovation. They’re considered great places to work and they consistently outperform their direct competition financially year after year. How can you position your company so it rounds out this list? You must transition your existing culture into a marketing machine. Start with these three key adjustments:

  1. Hold your executive team accountable for making your culture a business priority.
  2. Find an external culture change expert to help you in year one.
  3. Formally ask your associates for their input on your current culture. Enable them to identify exactly where your management team should focus its efforts for improvement. This assessment will serve as a baseline to measure progress in the months ahead.

Ted Garnett’s company PS Culture Matters partnered with the Human Capital Institute for a 2013 national research study. The 4,000 HCI members surveyed identified 11 cultural metrics for defining and developing an organization’s culture. Below are the top five:

  1. Leadership (78%)
  2. Communication (52%)
  3. Alignment with organizational values (40%)
  4. Employee engagement (34%)
  5. Accountability (34%)

Garnet’s analysis of the feedback from the survey also demonstrated these five key culture metrics that drive sustainable higher financial performance:

  • Collaboration
  • Job satisfaction
  • Employee engagement
  • Professional growth and development
  • Alignment with organizational values

“Most organizations are currently taking a Culture-By-Default approach with no rigor, culture process, or formal assessment.  That’s NOT how we run any other important part of an organization.  Today a few leaders are taking a proactive approach, putting in a culture initiative and culture measurement so they know what to work on to gain advantages in talent, revenue, and quality.  We expect that in the future if you don’t have a visible culture strategy allowing the voice of your people, your most important asset, to create a culture advantage…then you will be seen as incompetent by stakeholders and customers in your industry.”

Scaffolding

Perhaps the narrowing the gap between your current culture and your company’s potential seems daunting. Dr. Edward Deming has said it can take between four to six years to permanently change a company’s culture. That fact, combined with the preponderance of evidence that your culture must be a primary business concern, should be compelling enough to consider the three key steps I outlined earlier. However, many executives hesitate on number 2: bringing in an external culture expert.

In the book “The Breakthrough Company,” Keith McFarland’s research team analyzed more than 7,000 of America’s fastest growing private and public companies. In addition, they talked to more than 1,500 key executives, and reviewed and cataloged more than 5,600 articles. They discovered the executive teams of the .01% of companies that break through to become the next Nike are “surrounded by a network of outside resources vital to its success.” The book refers to such resources as “scaffolding.” McFarland explains, “like physical scaffolding, they are temporary structures that exist outside of the organization itself and enable the company to get to the next level.”

The Virus Attacking Your Bottom Line

Every culture is a reflection of its leadership. However, your entire management team has created your current culture, whether by design or by luck. Unfortunately, almost every organization has employees who are sour and negative, visiting their bad attitudes on customers and their coworkers. Those individuals will not perform at a high level in an organization. However, they often exert an influence over the culture that is more powerful than that of your positive employees. Such loudly negative employees should be considered a virus and should not remain on payroll, as they’re being paid to take away from your bottom line.

Do you believe the statement that “customers will pay more for exceptional service?” The senior vice president of J.D. Power and Associates does. In the book The Customer Experience Revolution, Gary Tucker says, “Customer experience is a sustainable advantage. If you can build a model around service, hire and train the right people to deliver the right experience, we know from the data that people will pay for it.”

Jeof Bean, author of that book (co-author: Sean Van Tyne), presented his research at the 2011 National JD Powers annual conference, which includes this little gem: “The top ten customer experience leaders generated cumulative total returns that were 41% better than the S & P 500 Index.”

Are You Up to the Task?

At dinner a few months ago, Jeof Bean told me only 20% of CEOs in America have made building a culture of exceptional service by providing a world-class customer experience a business priority. Are you one of the 20% who will recognize the opportunity for your company? Someone in your industry is #1 and more profitable than all the competition. How many culture change experts exist on your staff as you read this article?

In our 2012 national study, which surveyed more than 33,000 executives, more than 56% of respondents said they were less than satisfied with their company’s ability to differentiate itself. Perhaps more disappointing, 56.9% said they were displeased with their company’s master marketing plan and the ability to attract new business.

When executives are asked, their priorities in order are: cash flow, sales, productivity, management, and people. Missing from the list: marketing and innovation. When one considers the trouble that many of our icons have run into in recent years, it becomes obvious Drucker’s advice would have helped management avoid the problems they face today.

Take the steps. Measure your existing culture, then transition it into a marketing machine that attracts and retains customers at a pace that increases your market share.

More About the Author

John can be reached at (888) 730-1950. john@premierexecutiveforums.com

John Lankford

John Lankford was recognized as the 2007-2010 Associate Business Advisor of the Year in North America and brings proven executive experience and best practices to select companies every year. He served 18 years at the Executive Education Center at Ford Motor Company and is former Senior Director of Ascension Health Learning Institute. John has developed top leaders around the world in partnership with the University of Michigan Business School, the Center for Creative Leadership, Comcast University and GE University, to name a few. His business expertise has been tapped by prominent business media such as the New York Times, CBS and Dbusiness magazine and has been a syndicated business columnist. He is the author of The Answer is Leadership and Superstar for life…Career Transitions. John’s keynote speaking has landed him on the elite team that trains and certifies the new Executive Coaches joining the worldwide coaching community. John is also former Chief Executive Officer of the Innisbrook Leadership Institute. Lankford can be reached at john@premierexecutiveforums.com or call (888) 730-1950

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