Success rarely happens with one major breakthrough. Sometimes it seems like that to outsiders, but most great successes are a result of many steps, practice and making a lot of mistakes. The Beatles, for instance, played in front of live audiences for hundreds of hours six nights a week before their “overnight” success. Successful organizations are not much different from successful people. Both must continue to try things, learn from failures, and adapt and change as needs or markets change.
This article is about two organizations that have prospered and grown over many years in spite of the typical setbacks and failures. What both have in common is a culture that stands by the values of its founders, and a practice of rewarding small improvements over time in pursuit of a larger goal or ideal. Though both companies are vastly different (consumer products vs. healthcare), there are some common characteristics responsible for their long track records of success:
- Deep knowledge of customers and their priorities,
- A strong mission with emotional appeal,
- Innovation and risk taking,
- Culture of inclusion,
- Rewarding continuous improvements.
Before talking about some aspects of their cultures that make them both successful, let’s look at some background on the two organizations.
Nestle Purina PetCare Co.: “Purity is Paramount”
Purina founder William Danforth made a name for his company by manufacturing nutritious food for animals that contained quality ingredients. In fact the company’s first slogan was “Purity is Paramount.” In 1898, the company entered the cereal manufacturing business with the endorsement of Dr. Ralston to create the Ralston Purina Company. Danforth was not only a visionary businessman, but was an author and activist in human motivation. Danforth’s book I Dare You: Four-Fold Development—Stand Tall, Think Tall, Smile Tall, and Live Tall remains in print to this day and still is the foundation of the culture at Purina.
Purina today is over $8.2 billion in sales in the Americas and has double the market share of any competitor in the pet food industry. Brands like Beneful, Fancy Feast, Dog Chow and Tidy Cat are leaders in their product categories and emulated by competitors. Purina not only enjoys business success, it is also recognized as a great place to work with 97% employee satisfaction, when the “best” employers in the U.S. typically get about 80% satisfaction.
AltaMed: Quality Care without Exception
AltaMed was founded in 1969 as a storefront East Los Angeles Free Clinic. In 1977, when current CEO Castulo de la Rocha joined as one of only three paid employees, his vision was to provide access to quality healthcare for all people, regardless of culture or ability to pay, and to “shorten the line” that formed around the block each day at the clinic.
Today AltaMed is the largest Federally Qualified Health Center (FQHC) in California, with over a million patient visits a year and 1600 employees, including 82 physicians, and clinics all over Los Angeles and Orange County. AltaMed has expanded its offerings to more than just primary care clinics with a number of senior care centers, and a network of affiliated healthcare providers and partners.
Really Listening to the Voice of the Customer
One area where both companies excel is deep knowledge of customers and their needs. Pet owners used to be categorized according to whether they were dog people or cat people. Some are both, but most fall into one category or the other. It turns out that whether they own a dog or cat is not the important variable. What’s more important in learning how to market pet food is to categorize consumers based on the relationship they have with the pet.
For some families the pet is more functional than a member of the family. The dog is a burglar alarm and the cat is a mouse catcher. For these families, pet food is not their highest priority and they are unlikely to purchase premium brands. For other pet owners, the dog or cat is more important than human family members.
Healthcare consumers want different things as well. Working with AltaMed, Purina organizational psychologists helped them segment their patients according to common priorities and needs. AltaMed decided to seek Purina’s help because both companies follow the Baldrige model and Purina has a reputation for having an innovative approach to market research.
The traditional way to segment patients is by age group, sex and conditions (e.g., diabetic, obese, etc.). After interviewing hundreds of patients of AltaMed and other healthcare providers, the company learned that it made more sense to segment customers according to different priorities. For example, one segment is most concerned with receiving good service, such as last-minute appointments, friendly front desk staff, and short wait times to see the doctor. Another patient segment is less concerned with customer service and is more focused on managing and living with one or more chronic conditions. For a third segment, the relationship they have with their doctor is more important than anything else. These patients will put up with bad service, long waits and other inconveniences to stay with the same doctor.
It turns out that all customers want basic things from any product or service they purchase. However, beyond getting the basics right, there are big differences in what separates them. Learning what is important and how to segment customers is a prerequisite to developing better products and services that address real needs. This knowledge of customers also sends a message that products and services need to be tailored to each segment.
Strong Mission with Emotional Appeal
In the 1970s, when AltaMed CEO Castulo de la Rocha was at Berkley Law School, he developed a strong belief in the importance of social justice for those that did not have a voice. This passion led him to his first job at what was then AltaMed. His vision of providing healthcare to those who could not afford it inspired him to grow the organization to what it is today.
In the early days, most patients were Hispanic and this group still is the largest segment of AltaMed patients. However, over the years, they have expanded to provide healthcare for other underserved populations such as the large group of Vietnamese people in Orange County. Doctors and staff are hired who share this passion for social justice and can relate to the never-ending mission of “shortening the line.” Working for an organization whose mission you are passionate about is a huge variable in the satisfaction of AltaMed staff and the service they deliver to patients.
It’s easy to understand the emotional appeal of helping sick people or providing healthcare to those who cannot afford it. But how does one get passionate about dog food? Well, it turns out that feeding dogs and cats and keeping them healthy is pretty important to many people as well.
Purina has made some major changes in its recruiting strategies over the years and only hires people that are passionate about pets. In fact, their slogan is: “Your pet, our passion.” Not everyone is an animal lover, but those that are find a welcome home at Purina. In fact, you can even bring your cat or dog to work with you, and many employees do.
Innovation and Risk Taking
From the very beginning, both of these companies have been big innovators. AltaMed pioneered the concept of the senior adult daycare center that has been duplicated around the country and is commonplace today as an alternative to 24-hour nursing homes. AltaMed buses pick up seniors at their homes each morning and take them to the centers, where they enjoy social activities, therapy, education sessions and lunch. This model, which AltaMed began in the basement of a church, allows seniors to stay in their own homes and have a rich social and intellectual life that has recently been a proven link to longevity.
Another AltaMed innovation has been installing pharmacies in their clinics so patients can see the doctor and get prescriptions filled with one visit. They were also one of the first FQHCs to open HIV clinics and offer dental care in their primary care locations.
Since the beginning, AltaMed has been a pioneer in trying out new things and coming up with innovative solutions to health issues. Partnering with a pet food company to do market research on customer needs is another great example of innovation. Healthcare organizations tend to just talk to other healthcare organizations. AltaMed has a strong belief that sometimes the best lessons are learned in unlikely places. Both companies have won the coveted Baldrige Award for Performance Excellence. Purina won the national award and AltaMed won a Silver Award in the California version of the same award. Part of the criteria for earning the award focuses on innovation, and winners tend to be pioneers in their industries.
Culture of Inclusion
Having a “culture of inclusion” is the kind of thing that you hear a lot of organizations talk about or find on the brass plaque of values in the lobby but few really practice it. What this means is that anyone at any level feels comfortable contributing ideas for improvements or new products/services. In many large organizations, people have to go through the long chain of command to get anything done or even talk to someone about an improvement idea. The CEO and his/her fellow executives have closed-door meetings and make decisions without seeking input from others. People learn to keep their heads down and get their work done, and would not even think about requesting a meeting with someone a few layers above them. Not at these two companies.
One of the things that makes their cultures unique is that hundreds of people get the chance to work directly with the CEO and other leaders. Castulo participates in many teams and task forces focused on new ideas and process improvements so employees at many levels get a chance to work directly with the CEO. He and his staff also make a point of visiting AltaMed clinics and facilities on a regular basis, talking with frontline staff and soliciting ideas.
Even though they are a much larger company, Purina also has a culture of inclusion, and leaders work with people at many levels of the company. This was mentioned as one of the factors that had a big impact on high levels of employee satisfaction. Many people I spoke with told stories of getting the chance to work with high-level executives on important projects. According to Purina’s current VP of procurement and logistics, “As a young person coming into this organization there was never a command and control ethic. I have always felt that I could come up with an idea, that I was part of a team—and that management would always listen. I always feel like I could make a contribution.”
Slow Steady Progress Done Quickly
The culture of many of today’s organizations rewards people for big breakthroughs—landing the big new account, introducing a game-changer new product, or completely re-thinking how a work process is done. In both Purina and AltaMed, success is more focused on hundreds of tiny improvements that have a huge impact. When I did work with Toyota, that was their philosophy. Employees looked for ways to save 5 cents here and 10 cents there and all these efforts added up to big money.
At AltaMed, most of what eventually became new service areas or breakthroughs started with an idea, a grant and a pilot test. Many employees have come up with new ideas, others found a way to get grant money to test out the idea, and within a short period of time, new services or processes were introduced that improved service to patients or increased efficiency. A current effort is examining a completely new staffing and physical layout of primary care clinics. The new “clinic of the future” model incorporates many different ideas and approaches that so far look very promising.
Improvements at Purina are the result of teaching employees a variety of different analysis and problem-solving methods such as “go-see-think-do,” DMAIC/Six Sigma, and the 5 Whys. The company also makes extensive use of predictive analytics to forecast future performance and consumer buying behavior. According to Purina’s VP of manufacturing, “Each year became a little bit better with 85% one year, 86% the next, and so on. What was also transformational was focusing on the goal of zero safety incidents and zero waste. Zero waste refers not only to materials, but also to human time, energy, machine capability, energy consumption, water, emissions, inventories and a host of other ways in which organizations waste. It is a powerful and daunting idea.”
A Great Culture Does Not Ensure the Success of a Stupid Strategy
Don’t get me wrong, culture is important. It would be naïve to think that the great cultures of both of these organizations are responsible for their success. Even more important is having a clear strategy and niche for your products and services. No one is better at providing healthcare to the underserved populations of California than AltaMed, and no one is better at pet food than Purina.
A solid strategy is the foundation of success, however, and most organizations fail to execute on their strategy. They know what they want to achieve but can’t seem to get there. Bad people, values, processes and culture can thwart execution and often do. Much can be learned from studying these two organizations about how to create and maintain a wonderful culture that maximizes the potential of each and every employee and ensures their job satisfaction.
Mark Graham Brown has been consulting with organizations all over the world for over 30 years and is the author of many books on measuring and managing performance, including most recently Killer Analytics: Top 20 Metrics Missing From Your Balance Sheet (Wiley, 2013). He is currently working on a new book with Ken Dean titled Reverb: Getting the Voice of Your Customers REALLY HEARD, in every office, waiting room and factory floor.