Culture – A Sustainable Competitive Advantage
Boomer Consulting has written numerous articles over the years and most have stressed, in some way, the importance of people and culture. Looking back on my MBA education at the University of Texas at Austin, I read nearly 200 case studies and can assure you this is not just a bunch of “touchy feely” rhetoric without merit. At the heart of every issue addressed were people and culture.
The shortage of qualified employees in the CPA industry only highlights the importance of these issues. The level of attention firms dedicate to people and culture will certainly impact the rewards or consequences they face in coming years. With an aging workforce of baby boomers, nearly 75% of the industry’s top leaders will be retiring during the next 15 years. Coupled with the fact that U.S. graduation rates are down considerably relative to the 1990’s, the result is a highly competitive environment for talent and tomorrow’s leaders. While money certainly talks and higher compensation will likely be required, the firms that will excel at attracting top talent are those that develop a culture that gives people a reason beyond money to aspire to work there.
Two of the more successful companies I analyzed through my MBA studies – Southwest Airlines and SAS – apparently understand the importance of people and culture. Both have built a sustainable competitive advantage by placing people and culture at the core of their value systems.
Southwest Airlines has become the most profitable, productive and cost-efficient company in its industry by focusing on its culture. The company demands a very high level of productivity from its people. And, although they pay at or above the industry average, employees are likely not going to become millionaires from working at Southwest. So why is there an enormous backlog of qualified applicants that want to work for the company? Because Southwest has developed a culture where going to work is rewarding, fun and employee input is encouraged and valued. The people that value this type of desirable work environment (over padding their wallets) are exactly the people management wants to attract.
SAS, a world leader in business analytics software, has a developed a culture focused on employees. The underlying motto for the company is, “If you treat employees as if they make a difference to the company, they will make a difference to the company.” By focusing on providing opportunities for a balanced work-life, SAS has created a dedicated and loyal workforce. In an industry known for long hours, SAS encourages employees to have lunch with their kids, offers unlimited sick days and the gates to the campus close at 6 p.m. The SAS culture, similar to Southwest’s, has resulted in a long-line of talented people hoping for the chance to work for the company.
So what does an airline and software development company have to do with the success of a CPA firm? Simple—the success stories of these two companies emphasize that culture can become a sustainable competitive advantage over competitors that is difficult to replicate. It will also provide your firm with an edge in attracting and retaining talent.
Some of the steps to get started are:
1. Develop a communicable strategic plan with employee involvement and participation.
2. Develop a list of business principles that integrate with the firm’s core values.
3. Require each employee to utilize a 90 Day Game Plan that integrates with the firm’s strategic plan.
4. Hold people accountable, including the owners, with 90 Day Accountability Reviews.
As Jim Collins writes in Good to Great, management must focus on “who” before they can figure out “what.” Start by developing an appealing culture in your firm that allows you to build a team of all-stars, and then watch as solutions to tactical challenges appear more quickly and smoothly than you ever imagined.
