Culture critical to success, satisfaction

TRAVERSE CITY, Mich.—Every company has a culture, but whether or not that culture is attractive to prospective employees is another matter.

That was the underlying theme of a panel Aug. 2 at the Center for Automotive Research's Management Briefing Seminars that focused on culture and talent retention. Jason Slusher, executive culture consultant at the Great Place to Work Institute, said the key for companies isn't just to have a culture, but to have an intentional culture.

“All of your companies have a culture,” Slusher said. “It may not be the one you want; it may be unintentional, but you have one. What you want to do is create an intentional culture. You want to be intentional about who it is you want to be, how you behave, the values you want and the trust you want, and you want that to drive your business strategy.

“I know companies that get rid of people because they're not the right cultural fit. They're not speaking to people the right way. They're not creating that team atmosphere or that family feeling.”

And it has to start at the top. Slusher said culture isn't something a company can outsource to another department. If the top leaders aren't on board, the culture won't be there.

Fortunately for Cooper Standard Automotive Inc., its leadership team understands this. Chairman and CEO Jeff Edwards talked at length about how his executive team helped define the company's mission statement, values and its culture when he took over in 2013. And he stressed that the need to stand out among increasing competition with other industries for top talent is critical.

“I think we all agree, from an automotive industry point of view, this particular topic is near and dear to our hearts because we've all grown up in the industry,” Edwards said. “We feel passionate about its success, but when you stop and think about competition within the industry, that's one dimension. The other dimension that we all deal with is the competition across different industries.”

Edwards and his top executives first crafted the company's mission statement, and they didn't aim low. The executive wants Cooper Standard to be among the top 30 automotive suppliers in revenue—which at $3.34 billion in original equipment automotive parts sales in 2015 ranked it 61st on Automotive News' Top Suppliers ranking—and top five in return on invested capital. According to its website, the company is aiming for $7 billion in sales with a return on invested capital of 14 percent. It operates in 20 countries with 30,000 employees.

Slusher added that companies on the Great Place to Work Institute's Best 100 Places to Work list generally perform better than those that aren't. Building trust and a strong culture leads to better recruitment, lower turnover, more loyal customers, higher productivity, stronger revenues and higher stock price, he said.

In 2016, companies on the list had less turnover compared to the industry average by about half compared to those not on the list. According to Slusher, if one had invested solely in companies that made the list from 1998 until 2015, that investor would have doubled the S&P Index.

While Cooper Standard didn't make the list, it has made significant progress since January 2013. Edwards said Cooper Standard has seen an 87 percent improvement in quality, 8 percent in employee engagement, 32 percent in revenue, 136 percent in stock price, given $6 million in charitable contributions—including $3 million in employee contributions—and achieved $170 million in cost reductions through operational efficiencies.

And a business doesn't have to be a global behemoth like Cooper Standard to exper-ience similar results. Slusher said smaller companies have an advantage in establishing a good culture because leadership can establish a better connection with employees. The largest percentage of companies on the Best 100 Places to Work list is among the 1,000-2,000 employee range.

Edwards said Cooper Standard identified four areas—customer focus, superior products, engaged work force and world class operations.

“We only have 30 or so customers in the world,” Edwards said. “We should know them all and we should have a level of customer intimacy that separates us from our competition. We believe that is extremely important. As we go to work every day, we try to understand what our customers' needs are strategically and make sure that our strategies are appropriately lined up with theirs so we're creating value every day for our customers.”

He added that innovation is critical to success. Cooper's i3—imagine, initiate and innovate—process has helped develop some strong new products over the years. The program established an internal portal where every employee in the company—from plant-level associates to senior level executives—could participate. Ideas are then evaluated by a global technology council and either rejected or accepted. The council also can accelerate the idea to a dedicated innovation team if it feels it could be a game changer.

Cooper Standard expanded its global engineering capabilities to offer cost effective R&D centers in key markets and helped make operations more efficient by standardizing product and process specification for core product lines, he said.

“We continue to optimize our performance in this area,” Edwards said. “When you have as many facilities as we do, it's critical that as you do things well, you capture those best practices and transfer them from one facility to the other. Our customers don't care if we're doing business for them in India or Indiana; they expect the level of performance inside Cooper Standard to be equal.”

But arguably the most important metric is employee engagement. Edwards said the firm sent out its first employee engagement survey in 2013 and just completed its second in 2016. The results improved in a number of metrics, but the number he was most proud of was 86—the percent of respondents out of its entire work force, or roughly 25,800.

“That's the first step in any process to getting better,” Edwards said. “Our scores went up considerably in that three-year period. People like to understand what's important and where we're going. In our case it's worked extremely well.

“When you're in 20 countries around the world, you don't have the option to rely on how everyone was raised,” Edwards said. “You don't know what the dining room table was every night as those 30,000 employees went from their childhood to working with your company, so you take on the responsibility to describe in very clear detail what is important and who we are.”

Slusher said while it's important to show that companies with a stronger culture get results, it's also the right thing to do. Edwards agreed, quoting a famous Michigan football coach, that in life and in business there's only two grades for integrity—an A and an F.

“We believe that acting with integrity is something that is not an option,” Edwards said. “We all have to get A's.”