Being a Great Place to Work
Wednesday, January 31st, 2007 
The value equation for profitable ventures involves intangibles beyond the spreadsheet. A candid breakfast discussion in with some local legends in Dallas this morning, organized by Tad McIntosh at HumCap, gave some unusual insight into what it takes to be a “great place to work” and some bottom line implications.
Stan Richards – Stan quantified the reduced turnover benefit of a good workplace environment – “We get great value from being a great place to work” – one point being, in advertising it is not unusual for a person to have 7 jobs in 10 years… thus that person never really gets to know his clients, perhaps just as he knows them he leaves. As a result, longer tenure at the Richards group leads to greater tenure with the client, leading to greater understanding of the client and what it takes to make their business grow. A flip side to that is not everyone who joins is perfect for his firm. Stan reiterated the challenge of not firing people who are not going to work out soon enough. “Make the call early”. Stan also covered the open culture at the Richards group. This was in line with the overall cross-functional, non-siloed, casual contact across-lines-of-function theme of the breakfast. He said that to operate in an office environment without doors “There are certain things the CEO has to give up. One of them is privacy.” This is because, in his case, “agencies are hotbeds of paranoia” where the rumor of client loss leads to rumors of layoffs, leading to speculation one the part of the employee about their fate, etc. Thus closed door meetings lead to loss of productivity
Ralph Hawkins – Ralph reiterated Stan’s position of having small cross-functional teams rather than building large and separate functional groups (what Stan calls Tribes) to expand. He said his work teams number about 35, and that as a result HKS works like a series of smaller firms, also with an open office layout. Ralph found generational differences - the millennial workforce to be hardworking but very interested in life/work balance. DFW Family magazine has voted HKS the family-friendliest place to work in DFW, based in part on their focus on working mothers.
Conversely, Stan held that “I understand generational differences, I just try not to recognize them”. He said the focus of their culture was that there were no unimportant jobs or people at their organization, that you are critical at the Richards Group no matter what you do. He felt this approach led to the highest possible level of engagement.So what are the quantifiable benefits of this higher level of engagement?
Steve LaMotta- quoted the value of top performers is 2-4x average performer, and that engaged employees perform at a level 20% above the non-engaged, and have lower turnover and related costs, with Bristol Meyers quoted as stating a cost of $500k for each senior executive they lose. These CEO experiences were for classic service businesses, which differ in critical ways from, say, software development. However the focus on communication across disciplinary lines, openness, and cross-disciplinary teams fit any business model. -John Reed
