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The Algebra of Culture

A perspective on how investment in a positive and mindful management style can generate high returns on culture.


It has been said that culture eats strategy for breakfast – while that is somewhat of a platitude, increasingly it’sbecoming a tangible, measurable, and critical component of how managers operate and lead companies.

Investing in a company’s culture – doubling down on the things that matter to staff, to their families and to those in the community around the company – generates a return-on-culture (ROC), not dissimilar to ROI, and should be taken just as seriously by investors today.

How did we get here? The great resignation was gearing up well before the 2020 pandemic. Prior to the pandemic, a 2018 study noted nearly half of the job seekers counted culture as an important component of their career considerations; with 15% saying they turned down work because they felt the company’s culture wasn’t appropriate for them. A separate study, assembled by Grant Thornton and Oxford Economics, focused on corporate culture and its impact, noted that public companies with extremely healthy cultures are 2.5 times more likely to enjoy a substantial increase in stock price, and 1.5 times more likely to report average revenue growth of more than 15% over a relevant timeframe.

Even before the pandemic, the trend of companies’ key staffers setting out on their own was apparent. Digital creators launched YouTube channels; 21st century market participants launched Coinbase, Robinhood and NFT trading accounts; gig economy participants flocked to apps including Etsy, StockX, GrubHub and Uber to support income. The evolution of what it is to do work, and where, is shifting – and increasingly, between rising wages and retiring senior managers, the workforce is changing.

This has management facing a challenge: they must show people they genuinely care about each of them individually, as well as their families. At the same time, the same managers need to deliver for their shareholders. The all-encompassing term covering how to make a better workplace and provide better conditions to staff is easily categorized as “culture,” but what goes into that is so much more.

Culture has become a much loved and often used word, especially in the last few years. What does culture mean in the context of managing a company? A poor culture is one that manages with fear, silos, ego and negativity. A positive culture is one of warmth, positivity, inclusivity, absence of ego, mutual respect and trust. The former will today have workers running for the exits while the latter can become the adhesive that will bind genuine teams who, in lock-step and arm-in-arm, will walk through walls together.

The resulting formula can be expressed as Positivity – Ego = Trust (P-E=T)

We have seen it.

With each of our companies, as we develop the platforms Traub Capital Partners (TCP) runs, a cross-functional approach to leadership is essential. At the same time, we had to adapt to 21st century challenges when we assumed charge of Signature Brands in 2018; among them, a business with tremendous potential and team members who felt they worked on a rudderless, captain-less ship.

MANA Products, our New York based manufacturer of prestige beauty products, saw a different challenge. The passing of an owner whose leadership had steadied the company for years plunged it into uncertainty – amid the pandemic – and we had to work to quickly demonstrate the firm’s success would continue with new leadership. This meant TCP had to be physically present, collaborative, and implementing coaching and team building initiatives.

With both Signature Brands, and MANA Products, we granted equity to two tiers of management to foster a true sense of partnership, resulting in common alignment, focus and delivery of bottom-line results ahead of plan. We redesigned offices, to make a more open and attractive work environment to foster communication and collaboration. We invested in each community, not simply the companies, by supporting local causes favored by the teams.

As investors, TCP’s return on culture materialized not only in the accelerated EBITDA targets that Signature Brands achieved, but as importantly, the passionate and empowered team that would ensure the sustainability of their shared momentum. Transforming, Signature, a now market leader from a corporate orphan that was once separated by an ocean from its former owner; or a hub and spoke management team separated from its founder at MANA, we took a few early steps ensuring that both the companies we partnered with had not just adequate resources to continue to operate, but the internal environment that would support both organizations.

As outlined in The Six Return on Culture Components: communication is critical.

Upon arrival, for both the platforms we developed, we reassured the team that we were going to be the air force to their infantry – not two teams, but one. Once again, we did this with genuine positivity and the elimination of all ego which forges deep trust. Second, we executed on transition management where we are omnipresent. With Signature Brands, TCP Managing Partner Geoff Lurie went in as CEO for a span of several months until we could find permanent leadership for the company. There are few warmer, more approachable, and caring humans. At Signature Brands and MANA, our CEOs Jared Konstanty and Bob Jaegly respectively proved they would be able to permanently lead with TCP’s unyielding belief in the transformational possibilities of forging a positive culture.

We see there is a tangible output too. The companies with better culture experience low management and leadership churn; the efficiency of happy, empowered colleagues results in greater efficiency. Cross-functional creativity drives innovation, in turn spawning new products and approaches driving a resulting lift in revenue.

Culture is not a buzz word – it is an investment. It drives returns. It is a series of shared ideas and resulting behaviors that binds a group of humans together. The investors that succeed in the 21st Century will be those that lean in on positive cultural dynamics with one team and not two.


About Traub Capital Partners: Traub Capital Partners is a New York-based private equity firm that specializes in building value in consumer companies. The firm's differentiated approach integrates deep consumer-focused operating experience within the investment process to unlock opportunities and apply tactical resources to execute them for the benefit of our investors. The fund targets investments in companies with revenue between $50 and $250 million. To learn more about Traub Capital Partners, visit

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