Do people say that about your company? Better hope so

Here's how to land a job in Massachusetts: walk in the door of the first business establishment you see. If you can cast a shadow, you're hired.

Granted, the Bay State's 3.5% unemployment rate is among the nation's lowest, just as the number of Help Wanted signs in shop windows must be among the highest. But New York, New Jersey, and North Carolina all report less than 4% unemployment, and the national rate re- cently hit 5.3%, its lowest point since mid-1974.

In this respect Massachusetts and similar locales may be a harbinger of what's to come elsewhere. Overall unemployment rates, of course, will always vary with the business cycle. But the baby-boom generation is no longer entering the labor force -- it's all in -- and such economists as Thomas A. Gray of the Small Business Administration are forecasting chronic labor shortages for the remainder of the century. Unless the economy turns sharply downward, says Gray, finding and keeping qualified workers will be the biggest single challenge facing small companies.

Traditionally, employers have coped with tight labor markets by paying higher wages. Newer companies have always found that difficult -- it's tough to raise wages when your margins are negative -- but these days it's harder than ever, thanks to foreign competition. "You can chase the help with dollars if you want to," says one Massachusetts manufacturer, "but you'll price yourself right out of the market." The alternative is to create an atmosphere that makes people want to work at a company -- and once there to stay on. Which is why you should promptly read Robert Levering's A Great Place to Work: What Makes Some Employers So Good (and Most So Bad) (Random House, 1988).

At the heart of Levering's new book is an insight that has escaped generations of consultants, human-relations experts, and (yes) chief executive officers. Sure, any company hoping for satisfied employees has to pay them decently and treat them with respect. And yes, small companies have often pioneered in offering their workers nice noncash extras, from stock options to Friday beer parties. But great workplaces -- the kind where applicants line up at the door before you even advertise a position -- are defined not so much by wages and working conditions as by feelings, attitudes, and relationships.

What are these feelings? Employees define them with such phrases as "It's just like family," or "It's more than a job," or "We're all in it together." Levering, who heard these and similar statements repeatedly when researching an earlier book (The 100 Best Companies to Work for in America, written with Milton Moskowitz and Michael Katz), traces them to a fundamental sense of trust between employee and employer. Workers who are most satisfied with their companies believe not only that they're being treated fairly, but that managers or owners are paying attention to employees' full range of concerns. And they know that those concerns are high on the bosses' scale of priorities.

Trust of this sort can't be bought, either with money or with structural gimmicks. Quality circles won't do the trick. Neither will bonus plans, employee stock ownership plans, or a decision to get rid of executive parking spaces. For every great workplace that implements such measures -- and many do -- Levering (or I) could show you a company in which exactly the same steps are regarded by employees with cynicism or contempt. Conversely, some CEOs can create great workplaces with scarcely any of the usual trappings. Don Oberg of Oberg Industries Inc. runs a tight, traditional ship, with an atmosphere reminiscent of the military. Never mind: in one recent year he had 1,600 applicants for 30 jobs, mostly because of the company's reputation for loyalty to workers (``The Lord of Discipline," November 1985).

What's a company owner to do? One reaction is to throw up your hands and ascribe it all to charisma, the magical personal chemistry that allows some CEOs to psych up employees with impassioned speeches or unexpected pats on the back. Certainly some of the workplace gurus held up as exemplars in INC. and elsewhere -- Tom Melohn of North American Tool & Die Inc., Harry Quadracci of Quad/Graphics Inc. -- rely mightily on the force of their personalities. But Levering's book suggests at least three lessons for transforming the workplace that require no charisma at all.

One: Move employees up on your own list of priorities. In most growing companies, the CEO thinks about marketing first and finance second (maybe vice versa), then about operations and business strategy. Employees? That's the job of the human-relations vice-president, who probably wears three other hats as well. Compare that typical situation with a company such as Comsonics Inc., an $8-million cable-television supply business in Harrisonburg, Va. Founder and CEO Warren Braun has for years had an ESOP; he has established shop-floor groups to discuss workplace concerns; and he encourages employees to take courses (at company expense) upgrading their skills. The specifics aren't as significant as what they all add up to -- an unambiguous statement that employees are important.

Two: Explain and defend your decisions to employees, in public. Of course you'll find it uncomfortable. But how else can you expect intelligent people to understand and buy into your goals for the company? At giant Pitney Bowes Inc., the annual shareholders' meeting is complemented by a series of jobholders' meetings, in which management must justify its actions to groups of 200 or 300 workers. Workers may pose questions orally or in writing (management doesn't get to look at the written ones in advance); and those who submit the best questions are rewarded with $50 savings bonds. "There's an underlying tension at the meeting," acknowledges Levering, who attended one, and there's a sense "that the management has to prove itself." But the employees at Pitney Bowes seem to believe that "management is working for them and not the other way around." Can you put a price tag on an attitude like that?

Three: Assume that your employees are partners rather than hired hands. That doesn't mean just being nice to them, it means treating them the way you would a business partner. Partners expect to have access to information about the company, and to take part in decisions that affect their work lives. They expect to make sacrifices when business is bad and to share in the rewards when business is good.

Utopian? Tell it to Mike Cudahy and Warren Cozzens, founders of fast-growing Marquette Electronics Inc., in Milwaukee. There, employees get the company's financials every quarter -- and aren't shy about challenging expenditures they don't approve of. (They once voted down a Cudahy-sponsored plan for a million-dollar health center.) Or tell it to Jack Stack of Springfield Remanufacturing Center Corp. (SRC), who not only lets his employees know every day how the company is doing, but also asked them to decide, in a recent crisis, whether anyone should be laid off (``Crisis Management by Committee," May). SRC not only weathered the loss of a mammoth order, it even grew 5%.

Levering's book has its weaknesses. Its reporting is at times uneven. Its discussion of management theorists such as Peter Drucker and Tom Peters is shallow, even petty. And INC. readers will wish the author spent more time at smaller companies, which are often more imaginative about employee motivation than the larger corporations he focuses on. Still, a book that provides so much insight into so difficult a problem -- a problem that's likely to get worse rather than better in the years to come -- can be allowed a few failings. You can ignore Levering's lessons if you want to. But you do so at your peril.

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Books from our writers

The Third Century: America's Resurgence in the Asian Era, by INC. West Coast editor Joel Kotkin and Yoriko Kishimoto, is being published this month by Crown Publishers. (See [Article link] for an excerpt.)


Suddenly trust is more important than ever

In the computerized pulp and paper mills studied by Harvard Business School professor Shoshana Zuboff, managers didn't like to see control-room workers leaning back in their chairs with their feet on the desks. "We have created a lazier operator," said one, ignoring the fact that the operator's work no longer involved walking around the production facility. When the job is monitoring computer screens, "work" is what takes place inside the operator's head.

The transformation of work by computers is the subject of Zuboff's wide-ranging new book, In the Age of the Smart Machine (Basic, 1988). Information technology, she argues, allows two essentially different managerial strategies. Managers can use computers to tighten their control over workers, counting keystrokes and otherwise monitoring effort to the point at which workers become demoralized, form a union, or quit. Or they can use computers to "informate" their organizations. The word is a Zuboff coinage; it means giving frontline employees access to the information they need to control their work and learn new responsibilities.

Put so starkly, the choice seems obvious. But Zuboff found plenty of situations in which managers were too shortsighted or too threatened to use computers for anything but ever-tighter control. "We have not given the operators the skills they need to exercise . . . judgment," admitted one, "because we don't trust them." If they have their feet up, they must not be working.

To her credit, Zuboff doesn't simply criticize: she analyzes why managers frequently feel threatened by computers (and why workers themselves are uncomfortable with them). She also describes instances in which computers really did expand employees' jobs, to the company's benefit. Another paper mill, for example, instituted a computerized cost-monitoring system that allowed operators to modify production variables on an hour-by-hour basis. In the first year the system saved $456,000.

Like most academics, Zuboff has a fondness for ten-dollar words when two-dollar ones would do, and now and then she ascends into a fantasyland of philosophizing. Still, this is a book that's rich with the insights of history, psychology, and sociology -- and that has immediate relevance for managers coping with the introduction of new technology.


The one that got away

In June we surveyed available books on how to take your company public. You missed one, some callers told us: it's Going Public, by Martin Weiss (Liberty House, 1988) -- which, as it happens, was published shortly after our review appeared.

Is it the book we were looking for? Not exactly. There are only 87 pages of text, and the author (a former chief financial officer of Kulicke & Soffa Industries Inc., a semiconductor equipment manufacturer), devotes many of them to such matters as how to calculate earnings per share. He is also careful to define all his terms -- including stock analyst, investment banker, and over-the-counter market.

Most CEOs, in short, will find it pretty elementary, though if you've never had a lick of financial education you may want to start with this one and go on to some of the Big Eight booklets we recommended in June. One word of warning: Weiss makes four separate plugs for hiring a financial consultant to help you pick an investment banker. And what does Weiss do now? He "owns and operates a consulting firm specializing in identifying and solving business problems in the areas of finance. . . . '

Contributor: Paul B. Brown