Values-->Employee satisfaction-->Revenue

There are a bunch of studies pointing out that when employee satisfaction is high so is customer retention. It doesn't take a huge logical leap to see, therefore, that it might pay in revenue and reduced marketing costs to make sure that employees are satisfied--and that the right core values might be a big piece of that puzzle. The causal link is straightforward:

The Right Core Value, Driven through the PxP Organization-->Satisfied Employees-->Great Customer Service and CRM--> Customer Retention--> Increased Sales and Less need to Acquire Customers (reduce marketing cost).

While I haven't yet checked it out, I'm told that TARP has studies that indicate this holds true particularly for family-owned businesses, in which the core values are steadfast and honored, and in which the fundamental drive is to create longevity rather than quarter on quarter returns.

M&A and Principle

One of the greatest challenges for principle-powered organizations is the delivery of a consistent culture throughout acquired organizations. If the strategy of the company is based on acquisition, and they are snapping up other companies at any rate, then it will be vital to find ways to evangelize the Powered-by-Principle model. Doing this requires a specific plan that can be rolled out time and time again.

Furthermore, as the organization and its modules expand, they get further and further away from the CEO and his influence--at least on the culture. That means that a special vigilance has to be developed in order to ensure the enfolding of the new company in the culture. I was speaking to a CEO friend yesterday and he was explaining how his acquisitional company does it. Since his core principles revolve largely around the necessity of teamwork, he has developed his pay structure for hourly workers such that without the team succeeding no one can achieve maximal compensation. It isn't just a stick--it has a carrot side too. When the team reaches its goal, everyone gets compensated for it, even those who only reached 70% of their individual goals (of course, there is a cost for them on them on that side).