Monday, July 18, 2005

tapping into creative people

Harvard Business Review ran a feature recently on SAS, a privately held business software company that has revenues in excess of $1 billion, 3-5% employment turnover, sells its products to 90% of the Fortune 500 & has a 98% subscription renewal rate

The article tells us that SAS is successul mainly because:

a. it makes an effort to nurture creativity of its employees, from programmers to sales support to managers (sounds like an oxymoron, "creative managers" ;) by providing an obstacles free environment, and a team of supportive and creative middle and upper-level management

b. and it really focuses on providing the best support as possible to customers by delivering almost bug-free software and quick customer support

Highlights include:

"Help employees do their best work by keeping them intellectually engaged and by removing distractions. Make managers responsible for sparking creativity and eliminate arbitrary distinctions between “suits” and “creatives.” And engage customers as creative partners so you can deliver superior products."

"In all cases, form follows function. As much as leaders at SAS value technology, they strongly believe that it’s people who make technology useful, not the other way around. If a tool is constrictive or makes people change their preferred ways of working, then it gets scrapped. The goal is always the same—to help workers be great. "

"On campus, it has medical facilities for employees and dependents. Additionally, there’s a Montessori day care center, and children are welcome in the company cafeteria, so families can eat lunch together."

"Not only do the benefits make workers more productive, but they also help retain those workers, reducing the company’s expenses for recruitment and replacement. SAS saves about $85 million a year in such costs"

"The corporate philosophy is, if your fifth grader is in his first school play, you should be there to see it. SAS has earned a spot on Working Mother’s list of best companies so many times that professionals are lining up to apply."

"The importance of that point cannot be overstated. Knowing that your boss thoroughly understands and respects the work you do—because he or she has actually done it—has many positive outcomes. In addition to feeling that your contributions are appreciated, you’ll probably be less hesitant to ask questions, because you know your manager “gets it,” and you’ll have more faith in your boss’s decisions. Business life abounds with stories about managers who’ve failed to earn the respect of professional, technical, and other creative employees: the university president with no scholarly credentials, the law school administrator who’s not a member of the bar, the movie studio executive who provokes a rebellion among directors, actors, and other talent."

"That’s not to say that SAS never has difficulties with employees. With its enticing array of benefits, SAS is bound to attract a few people who would rather enjoy the perks than do the work. The company uses rigorous hiring practices to prevent such candidates from getting in the door; applicants may have to wait months for a decision while the company conducts a thorough vetting."

About the customer aspect of the company :

"Day in and day out, SAS gathers—and acts on—customer complaints and suggestions through its Web site and over the phone. The company also solicits feedback once a year through its Web-based SASware Ballot, which asks users about additional features they would like."

"Additionally, SAS collects feedback at an annual users’ conference, which is quite unlike the usual sales-pitch-in-disguise event. Imagine for a moment the vast creative potential of millions of users—highly intelligent professionals hailing from diverse disciplines and 110 countries. According to SAS’s marketing creative director, Steve Benfield, it’s difficult to develop software “when you don’t have some external validation of one particular set of ideas over another…. But finding out what resonates with those beyond the office walls—that’s gold!” "

"In large part, SAS can thank its subscription-plan business model for these regular interactions between employees and customers, and for its relatively stable revenue flows in a volatile industry. Customer loyalty is so high that the company saves money on advertising and other sales efforts. As a result, fully 26% of SAS’s budget gets channeled directly into research and development. The average for high-tech companies is 10%. A well-funded R&D department leads to better products, which leads to happier customers, which leads to—you can see where this is going. "


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