Research Also Finds Canadian Senior Executives Recognizing Critical Role of Corporate Culture in Business Performance

TORONTO - WestJet Airlines has topped the annual list of Canada's 10 Most Admired Corporate Cultures of 2007, as announced today by Waterstone Human Capital. This year's study also found Canadian senior executives increasingly sensitive to the key role corporate culture plays in business performance.

WestJet has held the number one position on Canada's 10 Most Admired Corporate Cultures for the three years since the inception of the awards, testament to the company's singular focus on culture. This year's list also includes four new top performers: Boston Pizza, Maple Leaf Foods, Purolator Courier, and TD Bank Financial Group.

"Progressive Canadian companies have connected the dots between corporate culture and business performance," commented Marty Parker, Managing Director, Waterstone Human Capital. "Corporate culture drives employee values. Employee values drive behaviour. And behaviour is critical to delivering on business plans and reaching goals. These ten companies are recognized by other Canadian business executives for their mastery of this dynamic."

<< Canada's 10 Most Admired Corporate Cultures 2007:

1. WestJet Airlines (headquartered in Calgary, Alberta)
2. Four Seasons Hotels and Resorts (Toronto, Ont.)
3. Boston Pizza (Richmond, B.C.)
4. Royal Bank of Canada (Toronto, Ont.)
5. Yellow Pages Group (Montreal, Que.)
6. Maple Leaf Foods Inc. (Toronto, Ont.)
7. Manulife Financial (Toronto, Ont.)
8. Purolator Courier Ltd. (Mississauga, Ont.)
9. The TDL Group/Tim Hortons (Oakville, Ont.)
10. TD Bank Financial Group (Toronto, Ont.) >>

Co-Relation Between Culture and Financial Performance

The proof of the power of corporate culture is in the numbers. This year's 10 Most Admired companies average three-year revenue growth of 56 per cent; outpacing the S&P/TSX 60 Index's of 16 per cent. Three-year asset growth for the ten companies averages 63 per cent, well-ahead of the S&P/TSX 60 at 13 per cent.

As part of the process to determine the winners, Waterstone Human Capital completed one-to-one interviews with 185 senior Canadian executives. "While Canadian executives have evolved to understand the important role of culture as a potential competitive advantage, many still don't know how to foster or manage culture," said Parker. "For example, 93 per cent of the senior executives we interviewed saw the correlation between their corporate culture and corporate performance; that's leapt up from just 14 per cent in 2005. Yet, only 43 per cent even attempt to measure corporate culture. That's just the first step to mastering your culture."

Corporate Culture and the Impending Business Leadership Vacuum

With 40 per cent of the North American workforce reaching retirement age by 2010, Canadian businesses are on a desperate search for the next generation of corporate leaders. And according to Waterstone's research, companies are focusing their recruitment strategies on candidates with a cultural fit for their companies rather than specific skills.

Eighty-six per cent of the research participants said that cultural fit was more important than skills when assessing executive-level candidates. Just 10 per cent said skills came first and five per cent said both were equally important. The emphasis on fit is up from just a year ago, when Waterstone Human Capital found that 76 per cent of executives identified fit as most important.

"We're peering over the edge of a leadership chasm," said Parker, whose firm specializes in executive recruitment. "Due to Baby Boom demographics, a big generation of business executives is getting ready to hand off the baton. They need new leaders who can mesh with and enhance their current corporate cultures. They're desperately seeking that perfect fit."

Fit with culture is important because of the tangible impact on the success of organizations. The vast majority of Canadian executives said that corporate culture impacts corporate performance and 80 per cent said it impacts the ability to retain top talent. But only half (50 per cent) said that they had a process to integrate new leaders into their corporate culture.

"Canadian businesses can see the need to manage culture but they're just starting to figure out how to do it. This will be a predominant business priority for the rest of this decade," concludes Parker.

Methodology

Canada's 10 Most Admired Corporate Cultures are selected via a two-stage process. First Waterstone Human Capital professionals interviewed 185 senior Canadian executives from across Canada's largest 1000 companies. They named the corporate cultures they admire. The short list of 50 most referenced companies were invited to submit information which was reviewed by a Canada's 10 Most Admired Corporate Cultures Board of Governors. Final selection of the 10 Most Admired was based on frequency of nominations and the Board's determinations against the criteria of: vision and leadership; cultural alignment, measurement and sustainability; rewards, recognition and innovative business achievement; corporate performance; and corporate social responsibility.