These organizations don’t just compete, they dominate with product and service, quality, innovation, execution, and the most important difference isn’t in the quality of their people, it’s their people centric, both employee and customer centric…culture.

Sustainable competitive advantage happens when every person in that culture works from a sense of ownership and stewardship, and embraces a personal sense of the mission. Toyota, Nordstrom and Starbucks don’t just succeed, they dominate their respective industries.

Procter & Gamble acknowledges that the “interests of the Company and its employees are inseparable.” Its culture is based on a well-defined purpose, set of values, and operating principles that wins the hearts, minds, and the loyalty of employees and customers. All great companies winning sustainable competitive advantage follow these five principles.

Always tell the truth: Although Arthur Andersen thought about Enron and whether to maintain them as a client due to questionable practices, they never informed executives or their people about the concerns.

A mission, vision and value statement posted on the wall doesn’t matter unless it is lived up to from the top down. With 52 million of annual consulting fees at stake, there may have been tremendous pressure to avoid the truth.

Take the best path not the easiest: Imagine a governmental culture where everyone is constantly trying to do more, not less. Addison Texas is not a wealthy suburb of Dallas, its citizens have a wide range of incomes but they all enjoy extraordinary services and a tax rate that is one of the lowest in the area.

Most cities seem to teach their employees to say no to their citizens who are actually their tax paying customers. Employees seem to have been taught the rules and regulations that point out what the city can’t do.

In Addison, employees are trained to do everything they can to say yes to citizens. Addison’s culture, where every employee pursues the best over the easiest, pays huge quality of life dividends for everyone.

The power of partnerships: Without a culture that makes employees feel important, it’s impossible to have a culture that makes customers feel that their special.

While United and Delta dismissed almost 50,000 people right after the attacks of September 11, Southwest immediately announced there would be no lay-offs. Their employees responded by volunteering to help save Southwest money by doing things like painting buildings cutting the grass at headquarters.

United and Delta blamed the layoffs on lack of profitability and high overhead. Although partially correct, they failed to mention decades of ignoring partnerships with employees and customers as major contributors to their problems.

Live your values every day: It’s amazing that Wal-Mart has grown from a single store to more than 6,000 superstores in spite of offering no unique product or service. What is the secret?

The answer is a rare ability to consistently live its core values which include, respect for the individual, service to the customer and a commitment to excellence. Wal-Mart knows the value of its values and lives them every day. Wal-Mart’s values based culture is the legacy of Sam Walton.

Be accountable: Accountability is correlated to leadership that encourages people to bring their best to the job. This requires whole-hearted commitment which involves respect, credibility, and trust. Southwest Airs culture is a direct product of its leaders’ commitment to people, both employees and customers.

Herb Kelleher, chairman of Southwest, developed trust by loading bags onto the planes and greeting passengers as they entered. Do what you say you will do and expect others to follow your lead. Accountability is more important than even strategy.

A mediocre strategy that is well-executed usually beats a great strategy that is only implemented half-way. Great strategies fail without the help of great leaders at every level. Leaders shouldn’t expect others to follow unless they themselves commit and take responsibility for their own decisions, actions, promises, and results.

Follow these five steps and get better every day: Making a mistake once is natural but repeating it indicates that a new process needs to be put in place. The culture of competitive advantage solves 100 problems only once while those loosing competitive advantage solve one problem 100 times.

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