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A company’s culture is impossible to fake

By Randall Smith

When I was a young business editor in the 1980s, Ewing Kauffman invited me to his Kansas City office for a chat.

Google offices

Large boards are everywhere at Google because 'ideas don't always come when seated.' Photo by TechnoBuzz

Kauffman, who made billions in the pharmacy business and was founder of the Kansas City Royals, said he wanted to get to know me. When I entered his office, I was surprised to see him making coffee.

“Have a seat,” he said. “Do you like your coffee black or with crème.”

What followed was a 90-minute conversation that was interspersed by breaks, at least on two occasions, when Kauffman noticed that I needed more coffee.  He’d get up, bring over the coffee beaker and fill both of our cups.

During our talk, I learned how he’d built a business empire that would eventually fund two of Kansas City’s largest foundations.  Kauffman also learned my plans to raise the level of business journalism at the newspaper.

There remains a key lesson in that 25-year-old exchange: Companies are more than products and quarterly reports. More importantly, companies succeed or fail because of the people who run them.

COMPELLING TEAM IS WHAT MATTERS

Last spring, a Pittsburgh venture capitalist, Alan Veeck, spoke to my Missouri University class about what is the most important part of a business. Students had lots of important thoughts: A great product. A large market size. Strong industry dynamics. A plan that demonstrated how to really make money.

All are good answers, but not the most important, said Veeck.

“A compelling team,” he said, “is what matters most.”

So as we look at companies as business journalists, it’s important that we get to know the dynamics behind them. Listen to some of the nation’s best business journalists.

“My goal, when I’m writing, is to tell a story that people will find interesting and, with luck, that will help them understand what’s going on in the world,” said Allan Sloan, a seven-time winner of the Gerald Loeb Award and Fortune’s senior editor at large. “So I almost never write about companies as companies – I write about an aspect of them that makes a point, tells a story, or contains a moral.”

PERSONAL VALUES/ PUBLIC INTEREST

Such was the case with Sloan’s stories about the late George Steinbrenner in the early 1990s.

“When Steinbrenner and 11 other investors bought the Yankees for $10 million from CBS in 1973, the shipbuilding business was Steinbrenner’s major source of wealth,” Sloan wrote. “The Yankees were a toy.

“These days,” Sloan continued, ”the Yankees are Steinbrenner’s major source of wealth, and American Ship is his indulgence. American Ship hasn’t made money since 1986 and hasn’t paid a dividend since mid-1987.”

IBM Mega Team

This international group was dubbed a Mega Team by IBM in 2005

Sloan went on to paint a picture of Steinbrenner’s finances. He was using the Yankees to salvage the struggling family business at a time when the baseball team needed cash to sign some much sought-after hitting talent.

As a Kansas City Royals fan, I’ve never cried about the Yankees’ difficulties. But Sloan’s reporting shows how a business leader’s personal values can sometimes be at odds with the public’s interest.

PUTTING A HUMAN FACE ON BANKERS

David Cay Johnston, who won a Pulitzer in 2001 for his tax reporting at The New York Times, said that some of the best reporting that he’s seen recently has been National Public Radio’s work on the home mortgage crisis.

Specifically, Johnston is referring to “This American Life’s” series that put human faces on the bankers who were lending $500,000 to borrowers who did not have jobs or an income stream. Take a listen: The Giant Pool of Money.

Many years ago, one particular business owner used to stop by my office early in the morning whenever he was angry about a story. It happened so frequently that I wondered how he treated his subordinates.

The answer came rather quickly. Over the years, we reported the firing of one trusted senior executive after another.

On the positive side, I once spent about an hour recruiting journalists to the McClatchy Company with Gary Pruitt, the president and chief executive officer. His comments to students were uplifting and his answers to tough questions revealed a deep knowledge of the business.  Pruitt is one reason that I’m optimistic that McClatchy will survive the current economic downturn.

IMPOSSIBLE TO FAKE

Barney Calame, who was deputy managing editor at The Wall Street Journal and the public editor at The New York Times, said a company’s culture is “almost impossible to fake.”

The culture of the best companies and employees “has to include a deep and embedded commitment to being more than the product being sold,” said Calame, a past president of the Society of American Business Editors and Writers. “And that can take extra resources and effort to build that kind of culture; it can’t be done on the cheap.”

Any doctor will tell you that the most important examination in a physical is the blood test. When looking at a company, carefully look beyond the product. Examine those who are in charge, the culture and the industry dynamics.

That is the lifeblood.

Randall Smith is the Reynolds Endowed Chair in Business Journalism at the University of Missouri School of Journalism in Columbia.

In Biz Journalism Professors, Featured, Networking.

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