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Implementing a Values-Driven Culture to Achieve Measurable Cost Savings in the Logistics Industry

Wednesday, July 1, 2009

By: Ron Cain, Chairman and CEO, TMSi Logistics
In a tight economy, businesses are increasingly critical of extraneous costs and expenses that can mean the difference between ending the year in the red or black. While fixating on line-by-line budget items may seem like the only way to stay afloat, it is important to look at the greater organizational picture. Attracting and retaining talented people is a key component in achieving financial success, and doing this is dependent on whether a company’s corporate culture is such that it attracts the right people to make efficiency, quality, and sustainability possible for future growth and financial success.

Supporting personal and professional growth is a critical component for companies that wish to attract the type of professionals. According to Richard Barrett, author of Liberating the Corporate Soul,

Companies around the world are increasingly focusing on building their Cultural Capital. They are attempting to create vision-guided, values-driven organizations that focus on employee fulfillment, customer care and leadership development. Not only are these companies attracting and retaining the best people, they are also outstripping their competitors in building shareholder value. The main reason for this is that 60% - 80% of shareholder value is based on intangibles, the most significant of which is cultural capital.

With qualified executives and employees looking for more than dollar signs in their employment agreements, companies are being challenged to create corporate cultures conducive to the needs of this new generation of professionals. Creating a values-driven culture, focused on sustainable development and social responsibility, is rapidly becoming the focus for companies looking to weather the economic storm.

Implementing a values-driven culture can seem a daunting task to any management team already tasked with ensuring that day to day operations are functioning efficiently and profitably. Seeking the help of a qualified third party is often a wise decision for companies looking to make a corporate culture change, but unsure where to begin.

Preparation for creating the right corporate culture begins with a thorough values and business operations assessment. It is important to engage every member of staff in the initial assessment process, from the top executives to the frontline employees. According to Barrett, “When values are conscious and discussed, it is likely that they are shared and lived. In this case, there is a stronger possibility that that there is an alignment between employees’ personal values and the organization’s values.” Proven methods for these initial self assessments make for a clear and honest evaluation of the company as a whole, and can lead any company through the process with little or no disruption in daily operations.

Results from business and values assessments can then be utilized to determine a vision statement and mission statement that reflect the unified corporate purpose. The vision statement should express the greater purpose of the company. The mission statement should be focused and direct, clearing iterating tangible goals that are achievable within an identifiable timeframe. For example, a Fortune 500 appliance manufacturer may determine that their vision is to “improve the lives of American families by producing and delivering the highest quality appliances.” This company’s mission statement may then be “to create the best possible products and provide the highest service levels while enhancing the lives of our employees and the values of our company through a solid foundation of social responsibility.” Once identified, the vision and mission statements should be adopted and honored by every member of the company.

The next step is choosing what behaviors will make putting the values into practice possible, and creating a balanced needs scorecard that reflects the company’s desired cultural landscape. It is imperative for the corporate team to take this opportunity to carefully assess the existing culture, and develop compelling reasons for the culture change that will resonate with both internal and external audiences. Once a communication strategy is clearly defined, and implementation plan must be meticulously outlined. Explicit objectives and key performance indicators will be crucial tools in company-wide buy in and should also be developed at this stage in the cultural transition.

The final phase of any cultural change is execution and maintenance, which requires complete commitment by the leadership team. This phase will include coaching, action plans, and alignment programs for executives and group cohesion programs for sub-teams or other organizational unit. An ongoing values awareness program is also necessary to ensure that changes are made and sustained for the duration of the company’s operations

Translating intangible values into tangible results for both the business and the community is a critical indicator of a successful values-based culture. The development and encouragement of leaders at all levels of a company is essential to building financial sustainability, and in attracting and retaining the right people to carry a company through any economic downturn.

A balanced business is a successful business, and the best way of achieving this balance is through the management of KPIs and ensuring that the implementation of a values-driven culture is both profitable and enjoyable. Values-driven organizations achieve improved service levels, greater sustainability, lower costs, and continued growth. When leaders commit, their staff is more likely to become involved and make a difference within the company and the community. The company can improve performance while establishing a legacy that supports and empowers their staff today while laying the foundation to impact generations to come.

“Living our legacy includes those actions driving what we value and live out each day. As we change from “Self-Driven” leaders to community-focused leaders our new skills will create a new set of experiences between us and our community… And as we exercise our new lifestyle, over time, it will have written itself into the lives of others.”

– Ken Porter, Chief Learning Officer, TMSi Logistics


Ron Cain, author of Implementing a Values-Driven Culture to Achieve Measurable Cost Savings in the Logistics Industry is the Chairman and CEO of TMSi Logistics with offices in Florida and New Hampshire and can be reached at 603/373-7233 or at ronc@tmsilog.com.

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