Published CommPro.biz 2014.01.28

Surprise Surprise

The Great Place to Work® Institute has been creating Fortune magazine’s 100 Best Places to Work list for nearly twenty years. The new list is just out and it’s interesting to note that the 100 companies that make the list share another trait: they make more money than most other companies. Having happy, engaged workers propelled these 100 companies into a growth rate close to five times that of businesses in general over the last two years. Those are the Federal Bureau of Labor Statistics figures. The companies that make their revenue figures public jumped more than 20% in the last two years. 

That may come as a surprise to some; it’s no surprise to us. Happy workers are those who are treated better than their peers in similar jobs. Workers who feel valued are more productive. They stay in their jobs long term. Cut turnover and you build an experienced workforce. It’s a pillar of the ethical business model that marks the firms that stand out even further, firms focused on all the stakeholders that can make or break a company. 

Firms focused on their workers, their customers, their vendors, their community, and on the environment, generate the profits to keep their lenders and investors happy. In their 2007 book, Firms of Endearment, the authors identified a group of companies that met those standards. They earned eight times the S&P Average over the ten years leading up to the research. The levels of growth and revenues gained by the Fortune 100 Best Places companies is impressive, but not close to the earnings of those that made the Firms of Endearment list. It’s no coincidence that companies demonstrating good behavior make more money than their peers. 

However, the ethical business model is not a guarantee. You can treat your workers well, you can follow to the letter the ethical business model and still fail. Any successful enterprise has to have a bit of luck in addition to a lot of hard work and doing the right thing. What we can guarantee is that all things being equal, you are more likely to succeed or to succeed on a larger scale than those who follow a less savory business approach. It’s too bad the bad guys make all the headlines. It’s too bad that sometimes the minority -those bad guys- are seen as the norm.

So it’s no surprise that firms on Fortune magazine’s 100 Best Places to Work list are doing well. As it happens so are most all of the companies on all the lists that document some aspect of good behavior. Surprising to us are the companies that continue to follow the low road in business. While they are a minority, they still are a massive cancer on our economy. Here’s a surprise for those greed centered Wall Street Bankers and corporate executives. They would do better by doing the right thing for all their stakeholders. 

"Am I wrong?"--"Am I crazy?"

"What do you think?"--"Do you agree?"

Published 2012.01.24 in CommPRO.biz 

http://www.commpro.biz/news/thursday-january-24-2013/

Do The Math

Those of us who have spent time in communications, be it journalism or public relations, are familiar with what we call a “Grandstand Move.” That’s when an outfit with a well-deserved lousy image will roll out some event or policy designed to make them look good. With luck they garner a ton of positive media attention. So it is with Walmart. Their latest is a pledge of a job for every returning veteran during their first year out of the service. It got Walmart more positive media than they’ve seen in years. Even we were impressed until we got to thinking about it.

The majority of jobs in the Wonderful World of Walmart are low-wage, part-time with zilch benefits. When you’ve served in the workplace culture prevalent in our military, who wants that kind of job?  Bill Simon, who runs the Walmart stores in the United States, joined the company less than ten years ago. He was paid about $8.5 million last year. Our guess is that not many of the hundred thousand vets Simon estimates Walmart will hire over the next five years will take home even the average US paycheck, let alone much above that figure. A hundred thousand hires over five years is just 20,000 a year, roughly four or five a year per Walmart store. So if you do the math Walmart’s offer to our veterans doesn’t add up to all that much.

Ironically, Bill Simon’s big announcement came just a few days before Fortune magazine rolled out their 2013 listing of the 100 best places in America to work. It’s no surprise that Walmart didn’t make the list. It was dominated at the top by Google and other enterprises that employ mostly high-skill, high-wage people. Except for the one in fifth place, Wegmans, a family owned supermarket chain.

Wegmans is one of only thirteen companies that have been on the Fortune list since its debut. They have more employees than any other company in the top forty on the list, and while they pay well, the majority of their people are not in the upper brackets. The Fortune research model includes a scientific sample drawn from all full-and-part time employees. In Wegmans’ case that includes the young people who round up shopping carts from the icy and snow-covered parking lots in the northeast where their stores are located.

The message is pretty clear, it’s the culture. Walmart can roll out all the PR events and policies they can come up with, it won’t change their culture. Their people on the front line do not create the culture – that comes from the top. Wegmans is in the hands of the fourth and fifth generations of the Wegman family who carefully guard their culture. Walmart is controlled by the Walton family. Their wealth is close to a hundred billion dollars; sadly that’s about all they have to show for it.

Surprise, Surprise 

The Same Great Winners

A nationwide research study by Satmetrix, a West Coast provider of customer experience software, reinforces the ethical business model’s value. By and large it’s no surprise that companies boasting a long history of ethical standards top the Satmetrix Benchmark study. Wegmans, Costco, Apple, Jet Blue, American Express, Virgin America, Amazon, Lowes, Google, all the usual suspects top this  study and when it comes to doing the right thing by all their stakeholders. And guess what? They are leaders when you check their bottom line.

Satmetrix measured the attitudes of 30,000 consumers and used the results to rank 200 brands in 22 industries to create its Net Promoter Scores (NPS®) for each company. People were asked to score the companies they do business with on a zero-to-ten point scale. NPS® scores are based on a customer’s willingness to recommend their company. The percentage of those giving a company a 9 or 10, minus the percentage of those rating them 6 or lower, produces the company’s NPS® score.

Surprisingly, the highest score -an 83% NPS®- was in the banking sector, USAA, an organization that offers a wide range of financial services and insurance to its members - active duty and military veterans. When you look at the broad picture banking had more detractors than supporters. Seven large banks were in negative territory with Wachovia leading the charge to the bottom with a minus 15% NPS® score. Among major credit cards American Express was on top with a 43% NPS®. 

Amazon’s 76% NPS® was a close second to USAA’s overall lead, followed not too far behind by ethically oriented Wegmans and Costco at 73% & 71% respectively. These two perennial poster children for maintaining a healthy bottom line while covering all the ethical bases, manage it in spite of the large number of entry level jobs in their operations. Wegmans also has managed to stay on the Fortune 100 Best Places to Work list ever since it was created. They have been in the top five for eight years running and were ranked number one in 2005. That’s amazing when you consider the benefits and salary levels of companies like Google that they go head-to-head with year after year for the Fortune workplace honor roll.

Costco was on top of the retail pile again this year with a NPS® 71%, Nordstrom and Belk had a very respectable 66%. Once proud and respected Sears is at the bottom of that list with less than half the Costco score, a 35% NPS®. Is it any wonder? Reminiscent of a famous Roman fiddle player, Sears Chairman Edward Lampert is reportedly laying out $40 million for an estate just north of Miami; it’s said to be a record price for a single-family home in Dade County. All this while he is gutting the iconic retailer, selling off and closing Sears stores. Adding a let-them-eat-cake touch, the ethically challenged Lampert’s new digs features a series of “Versailles-Style Reflecting Pools” that will enable them to reflect on all the little folks they crushed so they could enjoy this idyllic setting.