Making Culture a Competitive Advantage

Making Culture a Competitive Advantage

Patrick and Mark discuss Mark’s approach to building company culture, measuring it, and sustaining it to create a competitive advantage in the manufacturing industry. Mark Kaiser is the president and CEO of Lindquist Machine Corporation, a custom machine manufacturer based in Green Bay, Wisconsin, that builds machines for the automation, converting, food processing, packaging, paper, oil and gas, pharmaceutical, plastics, printing, nuclear energy, and wind energy industries.


Pat: Mark Kaiser, Lindquist Machine, welcome to Coffee & CEOs.
Mark: What we’ve done is been very intentional about defining what our culture is. It’s a sustainable competitive advantage versus a non-sustainable one.
Pat: How do you describe your culture? If you’re going to tell somebody about what it is, how would you describe it?
Mark: Ok, so there’s a lot of different philosophies on culture out there and I would say the one that closest aligns with us, not perfectly, but closest, is probably this whole idea of servant leadership. I mean, that’s where, we started with that is we went out and looked at what kinds of cultures are out there? Which one fits what we think? And we really took the servant leadership piece as kind of the foundation and I went a little bit further and …
Pat: Can I just ask you, did you guys choose that because it matched up with who you were at the time, or what you wanted to be?
Mark: Where I wanted to be. And we took it a little further, and, you ever heard of John Maxwell? So Maxwell’s got his five levels of leadership, right? Which is really—and it’s all based on that servant leadership philosophy. And we’re a technical company. We love to measure things. And so to be able to have leadership levels that you could measure and have five levels and work toward, was very attractive to us.
Pat: You put a lot of emphasis on that and it’s different than a lot of manufacturers that I’ve talked to. There’s always a certain amount of attention paid to culture, but you guys really have it at the forefront since your time there.
Mark: Yeah, and we do. And the reason is because leadership starts with culture, all right? So the challenge we have as manufacturers is we don’t have, there’s not the labor force. There’s not enough people available that have the skill sets that we need—whether it’s machining, or welding, or electromechanical assembly, or engineering—that we need to grow our businesses. So this is a huge challenge that we have. But for us it’s even a little harder because not only are we looking for a certain sort of technical skills, we’re looking for a certain set of cultural skills.
Pat: Yeah, the soft skills.
Mark: Yeah, or the innovation skills. Right? And so what we’ve done is been very intentional about defining what our culture is. Very intentional. So we have it defined. We have the key behaviors with definitions. And then we built, actually, behavioral models that would reflect how we’re going to live this culture. But that’s really hard to do, and then we measure it.
Pat: What types of things do you measure?
Mark: Behaviors. So, you know, culture is all about behaviors. So we actually, once a quarter, we have each associate determine how are they doing on a scale of one to ten, it’s very simple, one to ten, how are they doing in exhibiting these cultural behaviors and how do they feel the organization is doing overall in exhibiting—and that gives us the gap. Now it’s hard because we don’t always live those behaviors, we aren’t always behaving in the way that we’ve all agreed that we wanted to and basically what we are saying is, “Hey, here’s the behaviors we want and I’m now giving everybody permission to hold me accountable to those behaviors.” That’s really hard to do.
Pat: I know a lot of people put that at the bottom of the list when they’re looking at what kind of investments they are going to make. Have you seen that payoff with it?
Mark: Yeah, I mean it’s a sustainable competitive advantage versus a non-sustainable one. Having a great CNC machine tool that holds really tight precision that costs a half a million bucks, that will be a competitive advantage for a period of time. And then the next guy’s going to buy one, right? And then the price is going to drop in the marketplace. But if we have a culture that allows us to innovate on a regular and consistent basis, and we can make that investment to do that—and it’s expensive—that’s sustainable.
Pat: But it’s an expense that pays off rather than just going out the door. You know, so much of the hit that companies like ours take is, “Hey, I got to spend money on marketing.” Most people will view it as an expense that “you got to go out and do this thing and if I didn’t have to do it, I wouldn’t.” We tell our customers that if they do the things that you’re doing, they’ll spend less on marketing in the end.
Mark: Exactly. That’s my belief and my justification for making this investment is that if we do this, and we do this well, a) it’ll be sustainable and very few companies are going to want to try to duplicate what we’re doing, but we’re going to spend less money on all the other pieces, the marketing and the sales. Because we’ll have such a great point of differentiation … customers are going to want to come to us, right? That’s the whole idea.
Pat: Exactly, exactly.
Mark: Instead of me going to get them, they’re going to want to do business with us.
Pat: Your best marketing is word of mouth. If you can get there.
Mark: Yup, yup.

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