Culture > Strategy
Culture is often misunderstood and discounted as a touchy-feely component that is not as important as hard and solid strategy. But Peter Drucker, the father of modern management practice, is credited with saying, “Culture eats strategy for breakfast.”
Edgar Schein, MIT professor emeritus who has done groundbreaking work on organizational culture, describes culture as the rules, perceptions, language, history, and the like that set the values and beliefs of an organization. Workplace culture decides the way individuals interact with each other and behave with people outside the company. An enabling organizational culture touches employees on a deeper level and unites them to execute complex strategies.
Culture is at the core of Jennifer Smith’s tenure at Innovative Office Solutions, one of the largest companies in the Midwest in its niche, with $141 million in 2018 sales and over 295 employees. She has achieved consistent double-digit growth, while the established office products industry, as a whole, is in decline.
It all started when she was 12, helping customers select the right ink cartridges at her father’s office products business in Northfield. After college, she worked her way into her dream job at Dayton’s as a shoe buyer. Six years later, when her mother got sick, she returned home to Northfield and purchased her father’s company. With the skills she learned at Dayton’s and the application of technology, the company grew from $1 million to $12 million in sales in 18 months. In under three years she sold the company to a big-box store in 1997. For a short period, she worked there, then she took a break from the office products business for a few years.
During her tenure at the big-box store, she saw firsthand the woes caused by the lack of a defined culture; a sale was just another transaction. That lack not only depressed sales but was also demoralizing her former employees. She saw an opportunity to install a trusting, high-performing culture to provide exceptional customer service.
In June 2001, she jumped back in and founded Innovative.
Innovative’s distinguishing cultural design includes everything from the physical layout, to the manner in which customers are greeted, to how people communicate and the feel of the place. Other manifestations include offering a very broad range of products and support for going the extra mile to provide the customer with the right solution.
Innovative’s early years, selling undifferentiated commodity products, were trying. Smith recalibrated to a three-pronged strategy: customer service, technology, and diversified offerings. This meant providing a wide range of products—anything imaginable that goes into a workplace. It introduced greater complexity, but empowered and trained employees helped customers navigate the maze of options that served their personalized needs.
The company’s marketing budget was limited compared to bigger competitors, so Smith partnered with Minnesota sports teams to build effective programs working closely with their charities, building a brand by linking marketing and charitable giving.
This strategy, with an empowered culture, has been a proven growth formula and earned Smith numerous honors, including the 2017 EY Entrepreneur of the Year award for the Upper Midwest, 2018 Most Admired CEO, Fast 50 Honoree, and the one she is most proud of, Minnesota Business magazine’s 100 Best Companies to Work For seven years running.
You can feel the culture as soon as you step into an Innovative showroom. Its “culture book,” originally meant for internal distribution, is routinely picked up by customers. Everyone on the team knows the business’s purpose and vision: “Inspire people to love what they do and who they do it with.” Hiring is focused on putting the right people in the right roles toward a focused plan. Relationships are valued—with customers, vendors, and employees. Turnover is low; of 21 initial employees, 14 are still there.
Everyone on the team knows the business’s purpose and vision: “Inspire people to love what they do and who they do it with.”
The company last year completed a major acquisition of Brown & Sanger, another office products dealer. The most critical task was to mold the culture of the acquired business to fit the existing one.
This culture has been cultivated and maintained even with rapid growth. “We hire, fire, and make decisions daily to keep our culture alive,” Smith says. It can be challenging as the business grows in multiple locations.
Innovative recently added office space in downtown Minneapolis with up-to-the-minute design. However, it has reused the mismatched flooring from its past. It’s Smith’s reminder to her team that even the forward-looking concepts are built on age-old truisms.
Rajiv Tandon is executive director of the Institute for Innovators and Entrepreneurs and an advocate for the future of entrepreneurship in Minnesota. He facilitates peer groups of Minnesota CEOs. He can be reached at email@example.com.