I went to a couple annual meetings recently that got me thinking a lot about how important company culture is. Specifically, what an advantage it is to have employees that are passionate about what the company is trying to accomplish.
Trupanion (TRUP) is a pet health insurance company that I’ve spent a lot of time on recently, including a ride-along with one of their territory partners and the annual meeting at their headquarters in Seattle. The first thing that’s obvious about the employees I met are how much they love that their work goes towards saving pet’s lives. I can’t blame them: saving pet’s lives is a pretty kick-ass corporate mission that a lot of people would love to be a part of. The employees are also nearly all pet owners themselves who get to bring their furry little friends into the office with them everyday.
At the Where Food Comes From (WFCF) annual meeting, I thought the most notable part was when Leann Saunders, the COO, talked about the new magazine they’re about to start publishing. She got visibly excited talking about it and said something along the lines of “Teaching consumers about where their food comes from is all I’ve wanted to do since starting this company” and she thinks the magazine is a step in that direction. She said she cried when she received the first printed copy of the magazine.
Those two annual meetings prompted me to learn about other great corporate cultures. So in that vein I started reading NUTS!, which is the book about Southwest Airlines (LUV) and the unique culture Herb Kelleher created there. From the beginning, it’s been Kelleher’s mission to make flying fun and affordable for more Americans and he’s found thousands of employees who buy into that mission. If you fly very often you’ve probably noticed the difference between Southwest and all other airlines. Just last week I was waiting for my plane when the Southwest gate attendant started calling at people walking by and asking them to come sing on the mic (I was shocked how many people she convinced to sing!). At one point almost everyone in the gate area was standing up and cheering the singers on. Not an hour later during the flight, a flight attendant called a girl to the front of the plane and had the entire plane sing her happy birthday. I’ve never seen either of those things happen when I fly Delta or United, that’s for sure.
My girlfriend works at Facebook (FB) and I’ve noticed the same thing among her co-workers. They’re almost all Millennials, they love Facebook and Instagram, and they’re passionate about the overall mission of the company (connecting the world). The Trupanion office actually reminded me a lot of the Facebook office (in Austin at least)—super casual, very LGBT friendly, lots of diversity, and no shortage of tattoos and brightly colored hair.
I doubt it’s a coincidence that three of the above companies are still led by their founders and the other (Southwest) had a company culture ingrained from its founder over a 40-year span. Just as important, all of these founders instilled clear missions that involved making the world a better place. John Mackey, founder and CEO of Whole Foods (WFM), would call this conscious capitalism—companies that care about all shareholders (society, the environment, etc) as opposed to just stockholders.
A non-obvious benefit of these types of companies is that they self-select for the type of employees I would want in a company. I doubt Exxon employees are as passionate about oil and polluting the Earth as Trupanion employees are about saving a pet’s life. That’s one of those things that doesn’t show up in any financials, but my hunch is that it’s very important. I’ve already written and spoken about my preference for founder-led companies many times, but I really like the idea of founder-led companies that have clear missions that involve making the world a better place. I’d bet those companies are correlated with good company cultures, low employee turnover, and excess shareholder returns.
As of this writing, Wiedower Capital owns shares in WFCF. This is subject to change.