Whether you are an importer, distributor or producer of alcoholic beverages, nurturing a vibrant community within your company is one of the most important parts to ensuring sustainable long term growth.  USA Trade Tasting sat down with business veteran and USATT speaker Darryl Rosen to explore the importance of business culture.  Here is what he had to say:

Why do you think business culture is so important for beverage businesses that are in the midst of growing their companies?

Every day I speak to the owners of emerging businesses. Many speak in glowing terms of the culture they’ve designed or cultivated within their growing organizations. When I press for the secret sauce to learn exactly how they create an environment where everyone is rowing in the same direction, I get generalities. “It just feels right!” or “Everybody is just dialed in on making good beer or exquisite wines or dynamic widgits.” I imagine that, in their spare time, these leaders read the surveys, just as I do. Recently, I read a Booz Allen study sharing that, and it got me thinking about how we really quantify how our business culture is growing. Despite these studies and numerous others just like it, many of the leaders I speak to feel that the concept is still a bit nebulous – so they share anecdotes. Which brings me to my first point, “You don’t measure your cholesterol anecdotally!”

That's a great metaphor, but what exactly do you mean by this?

Absent real data, many emerging business owners rely on anecdotal evidence. They tell stories. They make assumptions. They use buzzwords like communication and innovation. They speak of Google, Apple, Zappos and others. My argument here isn’t that these entrepreneurs are wrong, but I’ve learned over time that they’re not always right. Their views aren’t analytical. Their insights rely on subjective insights. I’m reminded of my days as a successful business owner and I remember how difficult it was to look at my own business objectively. You may want to believe that trust is a cultural value, but if the rank and file doesn’t concur…well, that indicates trust is NOT a cultural value. (The same could be said for collaboration, or continuous improvement or vision, etc.)

So, how can business owners objectively study how their business culture is doing?

Here’s what I tell business owners. You don’t measure your cholesterol anecdotally, you go and get it checked by a Physician. I don’t tell the wife, as she reminds me about my yearly physical, that the good cholesterol just feels right or I feel that my enzymes are all rowing in the same direction. While not as important as the health of your arteries, the culture at your company should be measured in the same vein. I have three major points I want to convey:

1) Culture eats strategy for breakfast You know this famous Peter Drucker quote. Right now, you may be occupied with distribution and yeast levels and FTB labels. All important areas to be sure; but in the hustle and the bustle of the “go to market: strategy conversations”, culture often gets taken for granted. From the same Booz Allen study I referenced earlier, 86% of C-Suite executives believe that their culture is critical to business success. And if you’ve read this far I’m sure you’re in that group. So, you think about it, but is that enough? Financially it just makes sense because...

2) …Companies that consider the needs of all parties to be equal just perform better John Kotter and James Heskett have studied culture in their ground breaking research. Their work shows that whether it’s revenue growth or stock price growth or increasing net income, companies with performance-enhancing cultures achieve far better financial returns. Similarly, financial returns of companies that consider customer and employee needs to be equal are more than five times higher than the S&P 500 average over a 10-year period, according to Rajendra S. Sisodia and Jagdish N. Sheth in Firms of Endearment: How World-Class Companies Profit From Passion And Purpose. I could go on and on, but, at the end of the day…

3) …You’re not going to be hip and new forever Sure, you may get snapped up like the folks at Ballast Brewing for 10 times revenues! Yes, Constellation Brands swooped in and created a few multi-multi-millionaires in the process; but that’s more the exception than the norm – despite a recent spate of big brewer strategic acquisitions. (Four Peaks, Breckenridge, etc.)

The Craft Brewers Association reports that there are over 4,000 craft breweries with nearly 2,000 more on the way. Most of these entrepreneurs will have to create actual businesses and, even if they’re fortunate enough to experience significant growth at first they may stifle in secondary markets. The same can be said for the popular wine and craft spirit trends – these don't last for ever! It WILL get more challenging. You will not be the hip, new, flavor of the day forever. However, if you generate a strong community around you and your brand, then your team's enthusiasm will help you bridge the gaps between high and low seasons.

At that critical point when you are facing increased competition and shrinking market share, teams, systems and sales processes will rise to the top. And CULTURE. You’ll realize that every business has ways they can improve and identifying these opportunities using data. You’ll realize that analyzing data on your culture requires data from your people and it is these individuals who are responsible for creating solutions. You’ll realize that this is how your business will stay viable.

Event Producer: Beverage Trade Network

USA Trade Tasting is brought to you by Beverage Trade Network, the leading online platform dedicated to connecting the global beverage industry. Beverage Trade Network (BTN) successfully connects wineries, breweries, distilleries and brand owners with international importers, distributors, brokers and beverage industry professionals on a daily basis. Strong partnerships with international and US organizations have helped BTN establish USA Trade Tasting as a premiere sales and marketing event committed to connecting the beverage industry.