How Culture Influences the Long-Term Success of a Company

On August 20 Tom Georgens participated in a Churchill Club event addressing how CEOs and companies succeed through tough economic environments, growth and leadership successions.  In addition to Tom, the panel titled Masterful Leadership: Standing the Test of Time, included Greg Becker, CEO of Silicon Valley Bank and Maynard Webb Chairman of LiveOps and Acting Chairman of Yahoo! 


Throughout the insightful panel discussion the three visionary leaders, and moderator Rich Karlgaard of Forbes Magazine, discussed the importance of culture and organizational values in driving the long-term success of a company.   Rich Karlgaard described this as “soft skills of business” – the attributes of an organization that create meaning and inspire trust and motivate employees.  Leaders need to excel at getting the number right, but that’s not enough to stay on top. In order to stand the test of time, they also need to establish a strong culture fueled by an impactful set of values.


The following summarizes the key points made throughout the discussion. 


The Importance of Culture


Georgens emphasized that while strategies evolve and technology changes, the culture of an organization is a long-term differentiator over time.  Companies with a strong culture react more quickly to change and deal more readily with setbacks. 

This was important to the founders of the company and is foundational to NetApp.


When asked about being recognized as a great place to work, Georgens talked about how the recognition is great, but the greatest benefit is measuring the health of the culture.  The Great Places to Work (GPTW) employee survey allows NetApp to benchmark the culture against the best companies in the world.


Georgens was quoted, “Culture is the reason why NetApp is here 20 years later.” 


Becker addressed the strength of culture when times are tough.  It is during the hard times that an organizational culture is the strongest. During the two economic downturns, he had the deepest connection to employees at Silicon Valley Bank.  It is during these challenging times that the values of a company and trust among employees, really came into play.


Investing in Culture


Georgen’s imparted that NetApp’s No. 1 job is to bring value to its shareholders.  He addressed how investing in the culture of an organization is tied to shareholder value.  The things that happen everyday at the company are about people and the products and innovations they are driving.   Without people there is no product.  By fostering a strong culture, NetApp is inspiring and motivating employees, and in-turn shareholders benefit from that. 


Georgen’s was quoted, "NetApp’s culture enables us to win, but winning sustains the culture. No company was a Great Place To Work the day they went out of business.”  


Customers Influencing Culture


Webb discussed a cultural shift at Ebay when the company put a laser focus on the community’s needs. When the site was having outage issues, the management team put everything on hold and required every employee to reach out to a community member and apologize.  Additionally, the company became very transparent with their community about outages and proactively published outages on their site. As a result, the team was motivated and made fixing outages a priority. 


Becker commented on how the culture of innovation among his clients has “rubbed-off” or influenced the culture of Silicon Valley Bank.    Silicon Valley Bank has acquired a sense of urgency with their clients, to be responsive, and go above and beyond. 


How Acquisitions Impact Culture


All three panelists agreed that there is no fixed playbook on how to integrate the cultures of two companies.  One of the hardest challenges a company culture can face is integrating another company after a merger.   Becker commented that this was particularly true when the company in question is more about people and relationship than technology.


Webb discussed how acquisitions were challenging because often the biggest concerns among employees were things management had not thought through.  Webb gave the example of Ebay’s acquisitions of PayPal and Skype.  In one case employees got free food but eBay employees did not.  They decided to offer food across both companies to ensure employees were receptive to the new developments. 


Corporate Social Responsibility


The panelists agreed that companies should enable and encourage employees to give back, rather than mandate it.   Becker explained that at one point Silicon Valley Bank mandated a program and tracked progress.  The program failed and employees became resentful. 


Georgen’s discussed how enabling philanthropy helps attract passionate people to the company.  NetApp provides employees 5 paid days to volunteer to the cause of their choice.  The program attracts people who are passionate and committed and Georgens believes that transfers to the work they’re doing for NetApp as well. 


Webb commented that it is crucial for companies to “have a heart,” by providing opportunities for employees to choose for themselves on how they can give back to their communities.


You can watch a Video on Demand of the session and see the on-going thread of comments and quotes from the August 20 event on NetApp’s Twitter feed at:   #churchillclub.