Corporate Cultures

THE PROFITS OF CULTURE

by Ray Knight and Rob Sanders

What exactly is your corporate culture? What effect is it having on your success -- or lack of it?  If you're at a loss for answers, you've got a lot of company. 

More and more casino executives are becoming aware that corporate culture somehow figures into whether they win or lose in the long run, yet only a few clearly understand it. For many, corporate culture remains a mystery, a buzz term that is useful for boardroom banter and cocktail party babble. Asked to describe their own culture, most gaming executives will probably tell you the characteristics they would like to have, but when pressed, confess they don't actually know what their culture is or how it affects the bottom line. Even more mystifying to them is what to do about it and how to change it if necessary. 

However, for a relatively small but growing number of gaming executives, corporate culture and the management of it is as important as quarterly profit figures, and integrally linked to them.  These visionaries know that the gaming product is a commodity; the offerings are pretty much the same wherever you go. How do you stand out from the crowd? You can build a bigger, better mousetrap, as is the trend in Las Vegas these days. But once people have seen it, they've seen it. Getting them to stay and play and to come back again takes something more. 

Bill Harrah knew long ago what it took. He built his empire on customer service, on creating an environment that made customers feel so good they wanted to come back again and again. He built a corporate culture (before it was called that) that attracted the right kind of people and unlocked the best in them, stimulating them to reach their highest potential. 

His legacy endures at present-day Harrah's, carried on by people like Jay Sevigny, general manager of Harrah's Kansas City. Like most of his contemporaries in the Harrah's management ranks, Sevigny can recite the company's vision without hesitation: "Offer exciting environments and be legendary at creating smiles, laughter, and lasting memories with every guest we entertain." 

"There is a significant relationship between employee retention and customer retention," says Sevigny. He underscores the key ingredient in Harrah's culture: getting the right people to begin with. "We can teach you how to deal cards, but we can't teach you how to like people." Sevigny says employees have to feel the desire to please customers in their hearts; there are some people who should not be in this type of work. 

Once selected, Harrah's employees are then exposed to the values of Harrah's in a continuing bombardment that reinforces the cultural ideals of the company. From the first days of orientation, employees continually learn who Harrah's is, how Harrah's does things, and how each employee fits into the Harrah's legend. Constant pressure is kept on cultural reinforcement, according to Sevigny. "It's like a jet airplane. It needs constant thrust. As soon as you pull back on the throttle, it drops like a rock." 

"We're not perfect in our execution, " Sevigny says, "but we're doing a good job of staying close to it [the culture], providing listening posts, continuing to communicate values to employees and customers. The company that does this will separate itself from the other companies who don't have as deeply-held or effectively-communicated values." 

Why bother? What's this got to do with making money? "It always translates to the bottom line," explains Sevigny. He describes the relationship of corporate culture to the profit picture in terms of The Service-Profit Chain -- "If you take care of the employees, they will take care of the customers, and the profits will take care of themselves." 

What if you're too new to have a culture yet? Emerging gaming brings new blood into the business, new companies spawned outside the mainstream of traditional gaming. These companies start fresh with a blank page. 

For Kevin Larson, President of Indiana Blue Chip Enterprises, it is an opportunity to build a corporate culture from the ground up, without the baggage of historical habit or the impediments of institutionalized biases. He will put his theory into action next year with a new riverboat casino in Michigan City, Indiana. 

Like Sevigny, Larson believes there is a direct correlation between corporate culture and bottom line performance. From experience, he has seen the results in average-handle-per-patron. When customers are happy, they come more often and spend more money, Larson says. It's a simple equation. The main reason customers stay happy, Larson believes, is not because of the decor or the buffet or the table stakes. It's because of the way they are treated by the employees. 

Larson plans to start building the Blue Chip Casino corporate culture even before the boat sails. He has already conducted a job fair in the area to stimulate interest in the local labor pool and to communicate what kind of company he's bringing to town. Even before they fill out an application, prospective employees are getting a taste of the Blue Chip culture. 

"I want them to know that the culture is theirs to build. They will be in on the ground floor to create the culture of this company with me," says Larson. The appeal, he thinks, is that the employees who are among the Founding Four Hundred will become the heroes and write the legends that define the culture for those who will follow. There is a pioneering, first-in-line appeal to this line of reasoning that may resonate well among the hardy Midwesterners who will fill the ranks of the new venture. The key ingredients of the Blue Chip Casino culture will be integrity, caring, and respect -- universal qualities that could well serve any company, gaming or otherwise. 

Larson expects that there will be barriers to building the culture. The greatest problem will be overcoming bad experiences employees have had with other employers that lacked values or, almost worse, professed to have them but acted in contradictory ways. That kind of hypocrisy is, in many ways, far more damaging because of shattered expectations, says Larson. The only way to counteract past experience is to prove good intentions by actions, consistently and continually, he says. "You have to walk the walk and practice what you preach." 

Harrah's Sevigny agrees. "It depends a lot more on what you do than what you say," he says. 

Building a corporate culture involves a great deal more than ivory-tower declarations. It takes thought, planning, and action. The payoff is on the bottom line.

(This article appeared in the December 1996 issue.)


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