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/

Silos kill, no question about it.

They kill innovation, retard product development, and encourage reinvention of the wheel.

Some companies encourage silos; some have no clue on how to break them down; and a very few don’t have them.

Instead, they have collaboration across not only departments, but also divisions.

3M is such a company, with collaboration embedded deep within its DNA.

3M is one of the few companies in private industry that is still active in basic research; it pays off because the results are immediately available to the R&D groups.

What’s the secret to fostering this kind of culture; to getting disparate individuals and organizations working together?

Collaboration doesn’t happen by accident.

• The company maintains a “…database of technical reports written by the more than 7,000 scientists at the company. Those scientists are spread between a corporate lab devoted to basic research, 40 division labs that essentially form a bridge between that basic science and the market, and 35 international labs.”
• It enables “TechForum, an employee-run organization designed to foster communications between scientists in different labs or divisions.”
• “Three years ago, 3M also created the “R&D Workcenter” networking Web site, which Mitra describes as a “LinkedIn for 3M scientists.”

But 3M knows that all the technology, all the meet-ups and all the talk aren’t always enough—the wrong kind of competition will quickly kill collaboration.

“Such sharing of resources is almost impossible when different units of a company feel they are competing against each other to deliver better financial results or the next breakthrough technology. But at 3M, employees are expected to collaborate—and are evaluated on their success.”

3M clearly tells its employees at all levels that they are expected to share across all boundaries, but just telling people doesn’t always work. It’s easy to share information without the added intelligence that makes the information truly valuable.

So they measure the success of the effort, not just the act. That is very different—it puts the money where the mouth is and taps into employees’ vested self-interest.

Image credit: Wesley Fryer on flickr