Culture

“The culture is all important.” Warren Buffett

“Our attitude at Costco is that culture is not the most important thing in a company, it’s the only thing.” Jim Sinegal, Costco

“Our culture is 99.9% of running the business.” Warren Buffett

"Without a doubt, Nucor's culture is its most important source of competitive advantage, and always will be." Ken Iverson, Nucor

“I should say culture is everything at Berkshire.” Warren Buffett

“Above all, do not forget this: Culture rules.” Rajendra Sisodia

“Why is The Home Depot still so successful? It is the culture of the people." Bernie Marcus, Home Depot

“The culture at Berkshire is never going to change. It’s the culture that makes it special.” Greg Abel

“Our culture is what ultimately drives the bottom line.” Laurans Mendelson, Heico

"A strong corporate culture with its own unique personality, on top of the profit-sharing partnership we've created, gives us a pretty sharp competitive edge." Sam Walton, Walmart

‘Culture. To me it is everything.” Satya Nadella, Microsoft

"The culture is everything. It’s the heartbeat we all operate from .. It's the thread that binds us together.” Jim McFarlane, Gallagher

“Sam’s establishment of the Walton culture throughout the company was the key to the whole thing. It’s just incomparable. He is the greatest businessman of the century.” Harry Cunningham, founder K-Mart stores

“Corporate culture is the key to success.” Dieter Brandes, Aldi

"For us, culture is key." Charles Koch, Koch Industries

“Culture works.” Horst Schulze, Ritz-Carlton

“Culture is a huge flywheel.” Bob Chapman, Barry-Wehmiller

“Culture is the fundamental part that makes us successful.” Dick Wood, Wawa

“Nordstrom considers its culture the key element separating it from the competition.” Robert Spector

“Corporate culture is the area that companies need to cultivate if they want to achieve lasting success in the market.” Reinhold Würth

“Our culture is what makes us different, makes us special. Our business is a people business, and our major asset is our people. If you keep your people happy, it's amazing how the rest of things fall in line.” Philip Nastri, Gallagher

“In every long-lasting business, the methods of conducting business may constantly change, but the values, the culture, and the philosophies remain constant.” Yvon Chouinard, Patagonia

“Fedex’s great achievements are the results of the unique corporate culture established many years ago and a corporate philosophy that empowers every level of the organisation.” Roger Frock, Fedex

“The very foundation of Starbucks, our true competitive advantage, is our culture and guiding principles.” Howard Schultz

“Our competitive advantages are driven by our culture.” David O’Reilly, O’Reilly Automotive

“The most important aspect of Wawa’s business is its culture; it is our competitive advantage.” Howard Stoeckel, Wawa

“There is not a firm meeting that we have at KKR where George Roberts or I do not mention our culture or values to everyone in the firm. We repeat it and repeat it because this is what really drives our business.” Henry Kravis

“The company culture is the glue that keeps the organisation together, that makes the company different from all others. It is, quite simply, the soul of the company. To keep it strong, therefore, it has to be integral to everything you do.” Anders Dahlvig, Ikea

“The hardest thing for a competitor to match is your culture and the spirit of your people and their focus on customer service because that isn’t something you can do overnight and it isn’t something that you can do without a great deal of attention every day in a thousand different ways.” Herb Kelleher, Southwest Airlines

“Our most important asset [is] our people. They are the company. You can replace our technology, data, reputation, and clients, but you cannot duplicate the group we've put together and the culture they've developed.” Michael Bloomberg

“The culture of a company is the place where people are front and centre, where the richness and complexity of human beings resides, where your humanity shines through. As such it is the most powerful part of the business. When it is consciously affirmed, nurtured and developed over time, it becomes both a true differentiator and the ultimate competitive weapon.” Walter Robb, Whole Foods Market

“Culture and values are the most important elements that make a business unique and make it different from others competing for the same customer and market. No one can give it to us and no one can take it away.” Peter Schutz, Porsche

“I’m a firm believer that anybody can copy your products. Anybody can copy your hours, your colours and your money handling policies, but they cannot copy your culture because it is the very fabric of who you are and why you are different.” Vernon Hill, Commerce Bank

“With enough money, one can easily replicate the assets of a competitor; but replicating the culture is a much larger challenge and in many cases, impossible. A strong, well-conceived company culture is the competitive edge that can propel your organization to the top of the hill.” Joe Scarlett, Tractor Supply

“Many factors influence a company’s financial results, but the most important ingredient for Watsco’s success is our unique culture. Often underestimated, culture is a powerful driver of performance and results.” Aaron (A.J.) Nahmad

“I've come to realize that culture stands as the linchpin for a business's success - build a good culture and the sky is the limit. Tolerate a bad culture and the future will likely be grim.” Joe Scarlett, Tractor Supply Company

“The senior [management] team began exploring the concept of defining what it was that made the company special and different. It's culture.” Keith Davies, The Fisher & Paykel Story

“At the end of the day, what is most distinct about Reckitt Benckiser is its people and culture. I can tell in three minutes if someone would be a good fit for our company. We’d rather have a position open for a long time, if necessary, than put the wrong person in place. It’s that important.” Bart Becht, Reckitt Benckiser

“The culture and atmosphere of your business may ultimately be even more important than your product.” Barnett Helzberg, Helzberg Diamonds [a BRK Company]

“Obviously, our corporate culture is not for everyone. But it’s what keeps us alive.” John Mars

“The excellent companies are marked by very strong cultures, so strong that you either buy into their norms or get out.” Tom Peters, ‘In Search of Excellence’

“A strong culture increases net income 756 percent over eleven years, according to a Harvard study of more than two hundred companies.” Daniel Coyle, ‘Culture Code’

“Members of the executive staff of ‘Firm’s of Endearment’ do not cite ‘product superiority,’ ‘value,’ ‘service,’ or any other mundane reason when asked about their company’s chief competitive advantage. They almost invariably say it is the company culture.” Rajendra Sisodia

“To me culture is everything. It’s the glue that holds people in the firm together and it also provides the vision for all the people in the firm to know just what they’re driving to. Culture is really important. Tone at the top matters a lot. No one person can drive or create that culture, it’s more like a Oiji board where a lot of people have a handle on it, but what comes out of it is very important.” Jim Tisch, Loews Corporation

“The ultimate advantage is a strong culture.” Jim Weber, CEO Brooks Running Company

“In some cases the most valuable asset of all is a company’s culture: a set of routines, priorities and commitments that have been internalised by the workforce. It can’t always be written down. You cannot easily enter a number for it into a spreadsheet. But it can be of huge value all the same.” The Economist

“Every company has its own history, its own traditions, and its own unique culture. A healthy corporate culture can be a magic intangible that makes the difference between a winner and a loser.” Walter Scott Jr, Kiewit Corporation

“Our culture, without a doubt, is our most important competitive advantage. Competitors can copy our sales material, our products & even some of our systems, but they cannot copy our culture. It is invisible to the outside world & therefore impossible to replicate.’ Richard Farmer, Founder, Cintas

“The one idea our customers value the most cannot be copied: the consistent quality of our exceptional service. That is based on a corporate culture & a culture cannot be mandated as a policy. It must grow from within, based on the actions of people over a long period of time.” Isadore Sharp, Four Seasons

“In my experience, a high-morale group, properly motivated and incentivised, can out-perform a low-morale peer group by a factor of 5X or more. The typically untapped, latent potential of human beings is stunning, and can be unleashed by the right cultural framework. Unleashing that latent potential, is how, over three decades, Nucor and Glenair have respectively posted seemingly impossible compounded returns of 17% and 18%, with no losses or layoffs.” Peter D Kaufman

“A small company with a great culture and values can beat much bigger companies that are flush with money and resources. It's the strength of the weak.” Jim Koch, founder & brewer Samuel Adams

"Part of the success of a company like Costco — and it's been amazing that one little company, starting up not all that many decades ago could become as big as Costco did as fast as Costco did. And part of the reason for that was cultural. They have created a strong culture of fanaticism about cost and quality and so forth, and efficiency and honor, all the good things. And of course, it's all worked. And so, of course culture is very important." Charlie Munger

“All the business tactics we’ve deployed, every line of code we’ve written, and every marketing campaign we’ve dreamed up over the years are, in the end, ephemeral. Each one could be discarded and replaced at any moment as the world around us changes. It’s out culture’s ability to evolve with the pace of change, to live and breathe on it’s own, to be both familiar and dynamic, that really drives us forward. For businesses that want to have any hope of thriving in the future, culture - and the values that define it - is what will drive financial success.” Marc Benioff, Salesforce

“Corporate culture is the single most important distinguishing factor between greatness and mediocrity. It is a major reason Cintas is different from competitors and other companies. It is our ultimate competitive advantage!” Richard Farmer, Founder - Cintas Corporation

“The most important thing there is here at O'Reilly, [is] culture. Here at O'Reilly, everything starts and ends with culture. Our secret sauce is our team and our culture. A lot of you guys that I've talked to on the phone have asked me what separates O'Reilly from everyone else. And I tell you, it's not fancy. It's not a big secret. It's our team and our culture. Before every meeting that we have as an organization, someone is assigned to do culture. And what that means is they have to pick one of our culture values, speak to what that means to them and then speak to how they've seen that culture exhibited within the company.” Mark Merz, O’Reilly Automotive

“An institution is the lengthened shadow of one man.” Ralph Waldo Emerson

“I like to think that the C in CEO stands for culture. The CEO is the curator of an organization's culture. Anything is possible for a company when its culture is about listening, learning, and harnessing individual passions and talents to the company's mission.” Satya Nadella, Microsoft

“When one encounters a large organisation with a committed team of brand champions, it’s instinctive to look for the sophisticated strategy behind the culture. It’s often more instructive, however, to look to the company’s founding, and it’s founder. In many cases, possibly most, the seeds were present at the beginning.” S. Robson Walton

“The existence and deliberate transmission of values and beliefs that form a strong corporate culture is considered a key survival factor by the Century Club companies. In many these values were developed by the founder and passed on through the generations.” Vicki Tenhaken, ‘Lessons from the Century Club Companies’

“The excellent companies seem to have developed cultures that have incorporated the values and practices of the great leaders and thus those shared values can be seen to survive for decades after passing of the original guru.” Tom Peters, In Search of Excellence

“The things that are done at Publix ‘flow from the character’ of George W. Jenkins. He built Publix entirely on his own personality.” Pat Watters, Publix

"Strong cultures drive performance. Performance since companies that are united by purpose has been proven to outperform the general market 15 to 1.” Rosalind Brewer, Walgreens Boots Alliance

“To succeed for generations takes a company that is really rooted in the values that mark its culture because nothing else lasts as long. Products become obsolete. The initial products and executives go away. The initial customers go away. The initial brands usually change. The only things that endure are the culture and values of the company.” Scott Cook, Intuit

“A home has a culture. A business has a culture. To some extent, a country can have a culture. And we try to do everything that’s consistent with that. We try to do nothing that is inconsistent with that.” Warren Buffett

“Culture – and that includes your attraction for great people – is the only alpha.” David Krakauer, President Santa Fe Institute

"As much as half the difference in operating profit between organisations can be attributed to effective cultures." James Heskett

“Culture is a huge differentiator between successful organisations and unsuccessful organisations.” Kurt Winrich

“Factors such as culture, because they are hard to quantify, often go undervalued by investors.” Nick Sleep

“An organisation’s culture can be its best competitive weapon. Effective cultures operate below competitor’s radar screens. They are hard to replicate without a wide-ranging set of changes in a competitor’s internal strategy. Best of all, in today’s interactive, interlinked, internet-driven competitive world, unlike information of a strategic nature, they can’t be hacked.” James Heskett

“A strong corporate culture constitutes an intangible asset, potentially as valuable as a high profile brand or network of customer relationships.” Marathon Asset Management

“[We] pay close attention to leadership and company culture as a source of competitive advantage.” Jake Rosser

"Your competitors can copy everything but they cannot copy your culture no matter how much they try." Mohnish Pabrai

“Culture can be a moat itself if it is virtuous, impacts return on invested capital, and is not easily replicable within its industry.” Todd Wenning

“Culture is king.” Sam Zell

“Culture is truly the most vital ingredient in business. People are the most important asset in every business and the primary determinant of success or failure.” Richard Handler

“The culture of a company is one of the major keys to its success.” Stephen Errico

“Understanding culture before we acquire a business could be the most important thing we do. And it’s been one of the hardest things to do. You have to talk to the employees, customers, and suppliers. You learn a lot about how the company treats them.” Steve Feilmeier, Koch

“A great organisation has both great people and a great culture. Companies that get progressively better over time have both. Nothing is more important or more difficult than to get the culture and the people right.” Ray Dalio

“You know your culture is an asset when the competition knows what you are doing, how you are doing it, and they still can’t duplicate it.” Ian Cassell

“Companies are only as strong as their cultures, which are only as strong as their leaders and how they prepare for and behave in tough times.” Josh Wolfe

“Corporate culture, a key focus for the WCM investment team, is an example of long-term knowledge. Understanding a company’s culture is information that doesn’t expire. If you understand a company’s culture today, that information is still useful, one, five or even ten years from today.” Paul Black

“The real glue of investing is understanding what the cultures are in the businesses.” Thomas Russo

“Quality is really linked to culture. It’s so important to focus on great management. It’s not easy because it’s a little more subjective than just looking at numbers, but numbers are important of course, but they mostly reflect the past. So when you’re buying shares, you’re buying the future, so you want to be sure that not only does the company have a great past, but also that the management in place is building a great future for your ownership of the business.” Francois Rochion

“A corporate culture that extols greed cannot, in the end, protect itself against its own employees.” John Kay

“[I learnt] to look at culture and understand what makes a good culture and what doesn't make a good culture.” Steve Mandel

“A rotten culture can be a firm’s undoing.” Marathon Asset Management

“It’s hard to change a culture for the worse and hard to change it for the better.” Shad Rowe

“You can’t buy a company that’s got a dishonest culture and turn it into an honest culture." Brad Jacobs

"Deep-seated habits are the result of neurological pathways in one's brain that are extremely difficult to eliminate and replace. That's why culture is so hard to change." Charles Koch

“Corporate culture is difficult to assess – perhaps why it’s often under-analysed. For our part, we put a lot of emphasis on this intangible aspect when researching potential investments. Understanding the corporate culture, combined with our long-term view, helps us to keep faith through the inevitable ups and downs on the road to substantial growth.” Fraser Thomson, Baillie Gifford

“Interpreting the accounting is important in understanding the company culture and how management thinks. You typically don’t get aggressive accounting by conservative management.” Rajiv Jain

"I never owned a share of General Electric because I didn't like the culture, and I was not surprised when it blew up." Charlie Munger

“There is one thing I have been doing for many years now and has in my view been absolutely central to the fund’s performance. I mention it not in the spirit of self-congratulation, but because there is far too little attention paid to it and it would be far better for society, not to mention individual fund’s performance, if this was not the case. I am referring to building an understanding of and conviction around a company manager’s integrity and more broadly speaking a firm’s culture (the two are closely connected as the tone basically comes from the top). Nothing has been more important to managing the fund over the last years than understanding management character.” Robert Vinall

“Culture is the intangible glue which can hold fast-growing businesses together, it is the facilitator which gives space for innovation and the standard behind which companies can emerge stronger from adversity. I believe a strong corporate culture can be the bedrock upon which companies can build a long-lasting and successful business.” Mark Urquart

“We believe that finding companies with a distinctive culture provides us with a source of edge over other US investors. Indeed, in spite of evidence to support the contention that culture is a critical driver of long-term stock returns, it is routinely ignored by most investors.” Gary Robinson

“A business’s product differentiation is not an enduring moat. If the differentiation has any merit, it will eventually be copied and advantages will soon be frittered away. Xerox, Kodak, BlackBerry and countless other businesses once held product dominance and fell to this fate. The only moat that is not fleeting, and conversely the only moat that is truly enduring, is culture.” Christopher Begg

“It’s largely a waste of time to analyse the company’s current products and markets when trying to ascertain the company’s future value. You could have analysed Amazon’s products and markets to death in the early years, and still you would have missed almost everything that makes Amazon valuable today. In fact, when Amazon listed at the height of the dot.com boom in the late 1990s, even the most bullish analysts thought that the total addressable market for Amazon was $26 billion, which equated to the total size of the book market in the US. Why so? Investors failed to appreciate two things: first, how dynamic a market can be during periods of structural change and second, the importance of culture. Culture trumps everything else in the long term. What do I mean by culture? Simplistically, it’s where companies are genuinely run for the long term. These are the exception, rather than the rule. Most companies in America are not run for the long term – they are run to hit short-term earnings targets. We’re looking for companies that are doing the opposite. Companies that are willing to invest for the future, that are unafraid of failure, that embrace change, and in doing so are unconcerned with the short-term quarterly circus of Wall Street.” Helen Xiong

“When you're investing in a business for 10 years, the only things that don't really change are the management teams and the cultures that they've built. So, the question is, where do you find the best management teams and where do you find like the most innovative cultures?” Fred Liu

“We set on a journey to figure out how to have good conversations with companies about their culture. We just talked to lots of folks and built some relationships with people that had spent a lot of time talking about this in the academic community, tested a lot of questions asking CEOs, and ultimately have come up with a series of questions around, one, around alignment because that's a huge piece of it. And then two, around adaptability. That's the other big hallmark of a great culture is one that's adaptable. And so there are certain trappings or things that we look for in adaptable cultures.” Mike Trigg

"When you are trying to assess a culture one of the best things to do is not just talk to the CEO or CFO but it would be to talk to people who have left on good terms. Of course you to talk to suppliers, vendors and competitors to find who do they/don't they respect. If you talk to people who used to work there and left on good terms you usually get a pretty good picture. What you are doing is building a mosaic when you're going after culture. A lot of people don't do it because you can't quantify it, you can't put it in a box and score it, or scale and number ranking. You really have to build a mosaic." Paul Black

Further Reading:
‘The IMportance of Culture,’ Investment Masters Class
‘Cultural Advantage,’ Gary Robinson, Investment Manager. Baillie Gifford. 2018.
‘Growing Cultures,’ Mark Urquhart, Baillie Gifford. 2017.
‘The Culture Cycle,’ James Heskett. 2015.
‘Culture’, Peter D. Kaufman, Columbia University. 2015