As the economy continues to slowly rebuild, I’ve been struck by the culture rebound several companies seem to be experiencing. During the recession, many business leaders chose to cut back on their culture in order to focus on other efforts. In a few companies, executives choose to continue to invest in their culture and they’re starting to see the pay off.
For example, NetApp chose to continue its efforts to be a top employer, citing it as a key business strategy. Now, the company is experiencing gains in market share and record setting stock performance. Along similar lines, Baird continued to invest in its culture while a number of a number of its competitors significantly reduced their workforce or downsized operations. As a result, Baird has been able to open 20 new locations and increased employment by 10% over the past three years. CarMax is experiencing a rebound of its own, enjoying several record setting quarters and a 20% gain in revenue. It’s particularly impressive given how hard hit the automotive industry was over the past few years.
These cases aren’t exceptions either. The publically held companies on the “100 Best” list experienced a 23% gain in 2010. In comparison, the S&P 500 gained 15%.
While the choice to invest in culture during the recession was tough and uncommon, those companies that made it are starting to see the financial benefit.
Marcus Erb is a Senior Research Partner and Senior Consultant with Great Place to Work® Institute and author of a monthly column on creating great workplaces in small businesses for Entrepreneur magazine.