But it is no longer a small growth company. With sales exceeding $120 million, customers in 30 countries, and more than 600 employees in Atlanta, London, and Hong Kong, the challenges are different. Teamwork is still the order of the day, president Hayes says, but it has to be managed. While everyone is still expected to worry about quality and response time, he now has to make sure people have the tools and systems they need to get results. With that in mind, he has set up a quality-improvement process in the company, under which employees form into special QIP teams as they are required.
"It's not really a big change for us; it's more a formalization of the things we were already doing," Hayes says. There's a six-month training program, in which new employees learn a W. Edwards Deming inspired eight-step method of statistical process control and get a heavy dose of group dynamics. After that, they are expected to take responsibility for their own work and are rewarded accordingly.
Today the company moves faster than ever. Hayes has kept the organization flat, with only two levels of management between him and the line engineers. He's also created what he calls the OFI -- short for opportunity for improvement -- a suggestion program for employees, who are guaranteed a response within 24 hours. "We've worked hard to empower employees," he says. "We can't afford to lose it with the sluggishness and inattention that come from hierarchical management." The same goes for customer service. Though the stated goal is to have malfunctioning products repaired and out of the service department within 72 hours, 90% of all service requests are expedited in just one day. Hayes has worked hard to keep up the pace on the product-development side as well. In 1984, when the company first began exporting, it took a year to modify the domestic product for use abroad. Now it builds a basic, modular international model from the start. With this approach, the company was ready to ship the U.K. version of its most recent product 30 days after introducing it in the United States.
Hayes is typical of the successful survivors from 1983's top 100. They may call what they do empowerment or teamwork, partnership or sharing, but the goal is the same: to keep the virtues of smallness intact no matter how big the companies grow. Most survivors, like Hayes, have redefined their own roles in the process, focusing now on strategic planning, keeping the company flat and decentralized, and finding new markets and new people to take charge of them. The CEOs spread equity as they spread responsibility, giving employees control over their own jobs, along with a piece of the profits.
After finishing college, Rick Inatome started putting together computer kits with his dad. Today Inacomp Computer Centers (#38) is a $500-million, publicly owned operation with more than 1,400 employees. It has retail franchises serving corporate accounts, and computer rental and leasing operations. Inatome has had to change. "At $500 million the business can no longer be an extension of my personality," he says. "From a kid with passion and a dream, I've become a business manager, managing through organization."
Paul Woodruff's consulting firm in Exton, Pa., had 8 employees and $318,000 in sales in 1978, its first year in business. Environmental Resources Management (#88) now has 1,350 employees and $131 million in sales, with offices in Toronto, Vancouver, London, Brussels, Milan, and Hong Kong -- a group of 32 companies altogether, offering everything from construction services to computer software. "We've gone through a continual metamorphosis of structure, but we've always stayed decentralized," Woodruff says. "When we start a business, we do it by hiring people who are knowledgeable in their field. The mind-set is an old-fashioned one of partnership. Whatever your share may be, this is your business and you can make a difference, both in the company's destiny and in your own."
"This is an ongoing process -- it lasts forever," Hayes agrees. "Usually you mess it up for a while. Then you fix it. But the important thing is human excitement. You have to empower employees, create an environment where they want to come to work."
No other CEO from the '83 group has changed company structure more dramatically than Lawrence Ellison of Oracle, the $1-billion database-management software company, now publicly owned. When sales hit $500 million two years ago, he began a radical process of decentralization. "We wanted to cut the bureaucracy and response time," Ellison explains, "and we thought we could grow 10 $50-million companies better than one $500-million company."
First, the central product division was carved into 15 business units, each serving a different hardware system or producing a different product. The corporate offices handled packaging and distribution, provided legal help and human resources personnel, and offered marketing consultation free of charge. But each production unit was responsible for developing and marketing its own product and had authority over budgets, hiring, and accounting. Individual bonuses were based on the unit's bottom line.
Last June, though, Ellison established Oracle USA, which took over the marketing budgets of the 15 domestic small business units (SBUs). Each SBU is responsible for producing its products and for helping the marketing units in countries outside the United States. Inside the country, however, success depends on teamwork: although each unit has an individual revenue quota, the quotas for the sales reps of Oracle USA are not product based, forcing each SBU to work with the salespeople to develop products that both sales and production believe they can sell.
