Human Capital: Employee Recruitment, Retention, and Organizational Culture Stephon A. Jackson, CFA P

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Human CapitalEmployee Recruitment, Retention,
and Organizational CultureStephon A. Jackson,
CFAPortfolio ManagerBrown Capital Management
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HOW WE THINK ABOUT STOCK PICKING
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STOCK IDEAS!
FUNDAMENTALS
VALUATION


Value Proposition
Macro Environment
The Economy
Competitive Threats and Opportunities
Leadership
Operational Excellence
Barriers to Market Activity
Implementation of Growth Strategy
Capacity of Managers to Execute
Capacity of Fixed Assets
Buyer Power
Ability of Managers and/or Corporate Culture to M
otivate and Retain
Productive Employees
Seller Power
Rivalry Amongst Competitors
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What Makes A Company Visionary?

• Core Values-Centric Approach To Running The
  Business
  
• A Disciplined and Consistent Mission
• Learning From Mistakes
• Being Flexible About Method
• A Business Architecture That Embodies The Core
  Values
  
• A Cult-like Culture
• Good Enough Never Is
• Try Lots of Stuff and Keep What Works
• More Than Profits

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Visionary Companies from Built To Last

• 3M
• American Express
• Boeing
• Citicorp
• Ford
• GE
• Hewlett Packard
• IBM
• Johnson Johnson

• Marriott
• Merck
• Motorola
• Nordstrom
• Philip Morris
• Proctor Gamble
• Sony
• Wal-Mart
• Disney
• Source Built to Last by Jim Collins and Jerry
  Porras

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Brown Capital Management Outstanding Companies

• Apollo Group
• Carnival Corp.
• Coach
• EBay
• Electronic Arts
• Tiffany
• Goldman Sachs
• T. Rowe Price
• Amgen
• Pfizer

• Illinois Toolworks
• Cisco
• Intuit
• Cheesecake Factory
• Dicks Sporting Goods
• Williams-Sonoma
• Fastenal
• Genzyme
• Whole Foods
• CostCo Wholesale

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• Known for carrying top quality national and
  regional brands, with 100 satisfaction
  guaranteed, at prices consistently below
  traditional wholesale or retail outlets.
• "Costco is able to offer lower prices and better
  values by eliminating virtually all the frills
  and costs historically associated with
  conventional wholesalers and retailers, including
  salespeople, fancy buildings, delivery, billing
  and accounts receivable. We run a tight operation
  with extremely low overhead which enables us to
  pass on dramatic savings to our members."
• Jim Sinegal, the President and Chief
  Executive Officer
  
• Management Compensation Kept at 7X The Average
  Employee
  
• No Golden Parachutes
• Great Employee Training Has Kept Shrink To
  Industry Low Levels
  
• Employee Compensation and Benefits Are Great
• A Fun Shopping And Working Environment

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• Whole Foods Market is a dynamic leader in the
  quality food business. We are a mission-driven
  company that aims to set the standards of
  excellence for food retailers. We are building a
  business in which high standards permeate all
  aspects of our company. Quality is a state of
  mind at Whole Foods Market.
• Our motto Whole Foods, Whole People, Whole
  Planet emphasizes that our vision reaches far
  beyond just being a food retailer. Our success in
  fulfilling our vision is measured by customer
  satisfaction, Team Member excellence and
  happiness, return on capital investment,
  improvement in the state of the environment, and
  local and larger community support.
• Our ability Instilling a clear sense of
  interdependence among our various stakeholders
  (the people who are interested and benefit from
  the success of our company) is contingent upon
  our efforts to communicate more often, more
  openly, and more compassionately. Better
  communication equals better understanding and
  more trust.

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Competitive Advantages

• Business Model
• Stakeholder Philosophy
• Focused on Continual Improvement
• Generates Strong Consistent Returns
• Corporate Culture
• Based on Empowerment
• 100 Non-union
• 85 Full-time Team Members
• Team Members are 2 Stakeholder

• Perishables Execution
• 65 of Sales
• Ensuring Quality Supply Through Procurement and
  Distribution
  
• Unparalleled Execution
• Brand
• Unique Among Food Retailers
• Mission
• Quality Standards
• Authentic Advantage

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• Only Entertainment Company Recognized in Fortune
  Magazine Annual 100 Best Companies to Work For
  Poll.
  
• At EA, were the worlds leading developer and
  publisher of interactive entertainment the
  software that breathes life into the hardware.
  Our global scale and reach, our ability to adapt
  and plan, our commitment to empower the very best
  people with the very best place to work, keep us
  on a path to our ultimate goal To be the
  greatest entertainment companyever!
• Larry F. Probst III, CEO Electronic Arts
• A Culture Based on Fun and Success.
• Major Options Grants to Employees.
• A Reputation for Meeting Creative-types Career
  Aspirations.
  
• Work Play Are Balanced to Promote Happiness.

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What Makes a Good Brown Capital Stock?

• Distinctly Architected Cultures
• Mission Statement Congruent with Employee
  Aspirations
  
• Training, Training, Training
• High Quality Management
• Companies That Can Become Icons
• Companies With Big Goals!
• No Fear of Innovation
• Companies That Benchmark Against Excellence
• More Than Profits!
• Source Brown Capital Management