Does Culture Matter? Ask Talbots
Does culture really matter?
Let’s forget the touchy-feely crap for a minute and look at this from a skeptic’s point of view. Seriously, so what if people hate their company and its poisonous culture? We’re here to make money for our shareholders, not make good times for our workers.
Well, maybe. But… maybe not. I think it best to illustrate with an example.
Several years ago, when Jane and I still lived in Boston, I met a psychologist whose office wasn’t too far from the headquarters of two fairly large companies, Meditech and Talbot’s.
We got to talking about my interest in corporate culture, and he told me something that really made an impression on me:
If every company were like Meditech, we therapists would be out of business. If every company were like Talbot’s? Graduate schools could not produce enough psychologists to keep up with the demand!”
As this Ph.D. explained, Meditech employees really love their company. I’m not endorsing Meditech – I know too little about them to tell you that you would love them, too, or that you should run your company as they do theirs. But I do know a few of their employees, and I can tell you that these individuals are quite happy there. Whatever Meditech does, it works for the employees – and for the owner. He’s a very wealthy man.
Talbot’s? Well, according to my psychologist friend anyway, the employees really dislike their company. He related to me that the culture is dysfunctional; toxic, even.*
Who cares what the employees think, a skeptic might ask. Did they do the work they were paid to do? Then so what?
Let’s fast forward a few years, to this past Friday. The morning news reported that a private equity firm has bought Talbot’s for pennies on the dollar compared to their stock price of five years back.
Hey, times are still tough in a lot of sectors, definitely including retail. And this one-company data point doesn’t “prove” anything, all by itself. But here’s my question for the skeptic: if some retail clothing firms are holding on, and others are thriving, then… well, what sets those apart from the companies that are languishing, such as Talbot’s?
Many things, without question. Talbot’s clothes are expensive and dowdy; neither of those things are very popular these days, and so yes, the new owner would be wise to remedy at least one of those traits, if not both.
But why didn’t current staff take care of that long ago? Could it be culture? Could it be that a toxic culture repelled top talent for years, leaving this company with the leftovers, and setting them up for disaster when hard times struck?
Art by Aagaard