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By John Izzo

Herb Kelleher, former CEO of Southwest Airlines, once said (with more colour), “Corporate culture is hard to define, but without it, you ain’t got nothing.”

If you want to know if working on corporate culture matters as much as working on the traditional levers that business leaders use to make a business successful (such as products, services, technologies, etc.), look no further than the 14 years Darren Entwistle has spent as CEO of TELUS before becoming its executive chairman.

When Entwistle took over TELUS in 2000, it was a good but unspectacular amalgamation of two former telephone utilities in Western Canada. Since then, it has led the world in total shareholder value creation, returning 304 per cent to shareholders and outpacing the second place incumbent telecommunications company (Bezeq out of Israel) by 95 percentage points. It has the lowest customer churn rate in Canada and the top customer satisfaction ratings from JD Powers. The question is: why?

Culture impacts bottom-line success

From the very beginning, Entwistle believed that the culture of the company would be the key driver of long-term success. While many other CEOs focused on the “what” of the business, he relentlessly worked on the very personality of the business. One of his first acts was to involve thousands of TELUS employees in defining the company’s values. What emerged were four core values – passion for growth, courage to innovate, spirited teamwork and embracing change. Having tapped the employees for these values, he then systematically embedded them in everything from hiring and training to compensation and recognition.

In a highly unionized environment, he set out to establish a “business ownership” mindset, aiming to get every person linked to the success of the business. TELUS extended stock options to all employees (which was almost unheard of in a large, unionized workforce) to complement a generous employee share purchase and company-matching program. He knew if you want people to act like owners, make them owners.

Entwistle communicated relentlessly with the thousands of team members, including having issued 347 CEO weekly, and later monthly, letters to the entire TELUS team outlining what was happening in the business. He held regular forums with about 150 frontline employees at a time, accompanied only by his EVP of human resources. Eye to eye with employees, he talked but also listened. He calls what he gets from those sessions “gold dust” because of the ideas he was able to take away from his employees.

He took leadership development very seriously. Not only did he personally author and promote what he called the “ten effective leadership techniques,” but he often talked for a ten-hour day to his entire leadership team about everything from the business to how they were leading. Even in lean times, the top 200 leaders gathered every year for three days, and mostly discussed culture and leadership. They invested millions of dollars in training, including sessions to get frontline team members to engage.

Five years ago, Entwistle determined that the business had two key vulnerabilities – the need to be top in customer service and to be top in employee engagement. Once again, he focused on culture. He implemented a management style called “fair process” to begin to engage employees in decisions that impacted their daily work, which helped catapult them to the best in world employee engagement. He aligned 60 per cent of the bonus pay for all employees with increasing the likelihood of customers to recommend TELUS as a service provider to family and friends. He personally started penning over 180 letters to the entire leadership team escalating particular customer issues to show what must be resolved.

Since pride in your company is a big factor in employee commitment, he consistently made what are typically lower-priority items – like giving back to the community, getting recognized as a leading corporate citizen, creating an environmentally sustainable company, flexible work programs and leading wellness programs – major priorities within the organization.

Products, services, rate plans and technologies can be imitated quickly by your competitors. But corporate culture takes years to build and once created, becomes a competitive advantage difficult to emulate. Waterstone Human Capital, an Canadian executive search and talent management organization, founded and runs Canada’s 10 Most Admired Corporate Cultures. Canada’s 10 recognizes organizations that have cultures that drive performance. TELUS, under Entwistle’s leadership, was recognized four times and in 2013 was honoured further by being inducted into the Canada’s Most Admired Corporate Cultures Hall of Fame.

“[TELUS] created a unique culture that embodies collaboration, ownership of results, innovation and world-leading corporate social responsibility,” said Marty Parker, Waterstone’s CEO. “This not only drove best-in-class shareholder returns, but created a powerful culture of performance and this unique culture became their competitive advantage.”

Dr. John Izzo is the bestselling author of six books and has advised over 500 organizations on their corporate culture, from TELUS to WestJet to Tim Horton’s.

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