Let’s say there are two companies you are considering investing in and that besides the differences described below they are identical:
Company X:
- exceptional products, marketing and execution
- unhealthy company culture, which is failing to attract and retain exceptional talent (employees)
Company Y:
- average products, marketing and execution
- exceptional company culture, which is attracting and retaining exceptional talent
I would put my money on Company Y. Subpar products, marketing and execution can be corrected if the company is attracting and retaining exceptional talent.
Company X’s unhealthy culture and the resulting talent drain are more difficult to correct. Without talented, motivated and engaged employees, Company X will struggle to innovate, penetrate new markets and execute in changing business climates.
Would you invest in Company X or Y? Share your answer and reason why in the comment section below.
2 Comments
I assume you are talking about a private investment in a small company. Without specific knowledge of the leadership for a large company (NYSE, etc) you are several degrees removed and would mostly be leaning heavily on the corporate culture image created by their media team. Either way I would always take the more talented team because as you stated, the only constant in business is change, I would rather bet on a talented team making the necessary changes to win long term.
It is hard to see through the PR veneer of public companies, though I think best companies to work for lists along with customer and employee review sites like http://www.yelp.com and http://www.glassdoor.com help you get a more accurate sense of how companies really operate.