Is culture sustainable? Ask Jim Sinegal who, over 28 years, took Costco from $0 to $78 billion and built it into a global powerhouse without catering to Wall Street—workers have health benefits, margins are 14% (15% for house brands) and the price of a hot dog and drink hasn’t change since 1985. Does it work?

Shares of Costco have risen nearly 40 percent in the past year, whereas Wal-Mart shares are up just 6 percent even though the world’s largest retailer enjoys a gross profit margin of close to 25 percent compared with Costco’s 10.8 percent. Shares of another competitor, BJ’s Wholesale Club Inc (BJ.N), have risen about 21 percent over the last year.

Any day you look you’ll find an account describing problems in the money-losing airline industry. But if you keep looking you’ll also find bright spots, such as Southwest and Jet Blue, whose cultures engage their people’s passion and that translates directly into dollars.

A 2009 study by Gallup found that companies in the top decile for employee engagement boosted earnings per share at nearly four times the rate of companies with lower scores.

What do 3M and Virgin have in common? Cultures that invite, enable and revel in creative employees—intrepreneurs—that drive innovation, profits and keep their new product pipelines packed.

3M is 109 years old, the company continues to churn out new products like a young startup which explains why 31% of 3M’s 2010 revenues came from products that were developed during the past five years.

“Virgin could never have grown into the group of more than 200 companies it is now, were it not for a steady stream of intrapreneurs who looked for and developed opportunities, often leading efforts that went against the grain.” –Sir Richard Branson

Finally, and mostly to give you a laugh, here are the totally obnoxious actions from some of today’s truly monster egos.

Flickr image credit: http://www.flickr.com/photos/pedroelcarvalho/2812091311/

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

A founder recently told me he didn’t have time for culture because he was too busy building an awesome company.

As I said in a post this spring, Culture is the font, the basis, the cause and the reason. It is the Tao.

I said that in response to Culture Trumps Strategy Everytime by Nilofer Merchant, author of The New How (use link above).

Culture doesn’t happen, it stems from your MAP (mindset, attitude, philosophy™) and is propagated through the company as you hire.

At first it’s easy to share your culture because startup founders hire their friends and friends of fiends, which usually means that everyone shares similar values.

But if you don’t think your culture through and then embed it deeply in your company’s soul it won’t stick—to work culture must act like stain not paint.

Perks don’t equal culture; perks are easy, culture takes work,

Your work unless you are comfortable building your company based on someone else’s cultural vision or their interpretation of yours.

Culture is your present and your future; your edge to achieve success and its lack is the first step to failure.

Do you have time for culture?

Option Sanity™ is culture
Come visit Option Sanity for an easy-to-understand, simple-to-implement stock process.  It’s so easy a CEO can do it.

Warning.

Do not attempt to use Option Sanity™ without a strong commitment to business planning, financial controls, honesty, ethics, and “doing the right thing.” Use only as directed.
Users of Option Sanity may experience sudden increases in team cohesion and worker satisfaction. In cases where team productivity, retention and company success is greater than typical, expect media interest and invitations as keynote speaker.

Image credit: kevinspencer

Not all startups are Net startups, even when they do business via the Net.

Recently a client was faced with a dangerous situation well known to entrepreneurs who have enterprise startups or provide services (Net or real-world) and to most sales people; I’ve faced it myself in both roles.

“Lindy” is an entrepreneur and here is what she wrote me,

Good morning! So I finally reached out to my first customer via email and offered to arrange a telephone conversation discussing how their company can best use the platform to communicate with its managers (your advice!!!) – here is the response:

“Thanks for the note. We still intend to use this; however, workload has been exceptionally hectic so I have not had time to work with the site and get our staff involved.

Best intentions though!”

They have over 200,000 employees and it would be huuuge if it works out with them… Fingers crossed… Either way, great learning experience for me.

As you can see, “it” is the opportunity to land a giant account.

• For a salesperson it represents a sizable commission, tons of recognition and a possible promotion.
• For an entrepreneur it means money to move the company forward along with impressive validation that helps land more customers.

So what’s dangerous about it?

• The “egg syndrome” is dangerous to both salespeople and entrepreneurs. It happens when too much time and mental energy is spent thinking about it, strategizing what-if scenarios, daydreaming and waiting for the phone to ring or the email to appear. In short, the sale becomes an egg that is sat on, thought about, coddled and worried over to the point that nothing else gets done.
  The best way to avoid this is to first recognize and admit the symptoms—at least to yourself. Then lay out a battle plan, schedule a set amount of time weekly to follow-up or just day dream, then put it out of your mind and work on other projects/sales. It requires some self-discipline, but if you know what to do and when to do it then you don’t have to think about it and it is easier to focus on other things.
• The “swallow you whole” scenario belongs solely to entrepreneurs. In fact, it is an inherent part of being an entrepreneur and something that you continually face. Large clients require large inputs of effort and can end up utilizing all your time and resources leaving you with no ability to chase the next sale. This one has no easy answer.

Lindy is facing both; she runs her startup herself with certain functions being done by partner companies and the assistance of a few other professionals she knows, but right now it is mainly her. She said her productivity had dropped like a stone because she was “sitting on her egg.” She remedied that with a plan, a schedule and specific tasks to drive the sale forward; otherwise she is forcing herself to ignore it.

The harder decision entrepreneurs face is whether to even pursue that opportunity.

I faced one shortly after I started RampUp Solutions.

An employee met someone from Microsoft at a trade show and the result was an invitation to write for MSDN; the articles focused on hiring skills.

I thought it was a terrific opportunity to get known until I received a call from another Microsoft manager. He said he liked what he read was going to lobby to have me hired to coach MS managers.

That scared me silly; I had no resources, I couldn’t hire trainers, since my approach and philosophy were fairly unique at the time, so there was only me.

While I didn’t refuse, I also didn’t pursue it; with no active follow-up it died a natural death.

Did I make a mistake? Would I have landed the account? Could I have pulled it off?

There’s no way to know.

That is what Lindy is thinking her way through now.

What would you do?

Flickr image credit: Citizen Clark