The Cultural Evolution
People dressed as fairies, a CEO who dispenses fines, and a tradition of publicizing mistakes. Empower takes its culture very seriously
Let's start with dessert.
So there you are, trying to land a job at Empower Trainers & Consultants (#47), sharing a delicious evening meal with Michael May, the company's chief executive, and his wife, Caroline, who founded the business back in 1990. Sprinkled around the dinner table are a few Empower associates--there are no "employees," as you by now have learned--from the business unit you hope to be joining. So, says the perennially bow-tied May, what'll you have for dessert?
You've been through maybe a dozen interviews over a period of several months, starting with a few basic interrogations, and then moving on to group interviews and a grilling by the company's technology contingent. You've been pelted with queries ranging from "Do you like Taco Bell?" to "If you had a warning label, what would it say?" to "What three things are most important in your job?" You've proved your proficiency with Visual Basic and Windows NT. Even if you've got some doubts--maybe you're not sure how you feel about the raucous Ping-Pong tournaments or the hallway Foosball competitions--you're probably not thinking that everything, everything, depends on how you respond to the dessert issue.
But it does, and you are about to commit a fatal blunder. Oh, you reply with a reflexive pat of the belly, I don't do dessert. Nothing can save you now.
Well, nothing except a quick change of heart. If you're lucky, the neighboring Empower employee--though, for your sake, let's hope you haven't used that label--may turn to you and say, in a stage whisper: We've had 11 interviews--you've come this far, don't blow it! If you're still resistant, perhaps your dessert-friendly significant other will sense the growing tension and order something for the both of you. Maybe, just maybe, you'll get the job after all, making you that rare one out of 250 that actually survives the trek from applicant to new hire. "We've been a lot more aggressive about seeking the applicants we want," says May, 35.
May always seems to know what he wants. The dessert maneuver may sound as flaky as coconut chiffon pie, but like every other company ritual, there are several rationales underlying it. One: It's fun, and fun is strategic at Empower. So it follows that anybody who adores dessert and who will boldly ask for it in the presence of people he or she has just met can't be all bad. Two: Dessert smokes out the real person behind the tailored suit. It's difficult to take yourself too seriously while you're slurping a caramel sundae. Three: There is something indelibly optimistic about the whole idea of dessert that suits a growing company's way of doing things. In his letter to new associates, May advises them to "stay optimistic about the future and, above all, have fun with what you are doing." Last, there's the commonsense kicker: A dessert course buys more time, and--who knows--an extra 20 minutes might make a tremendous difference. Even Empower's sales reps are coached (by May himself, for crying out loud) to order dessert when they take clients to lunch, the better to get to know them.
And the better May knows the job candidates, the easier it is for him to judge whether they will fit into the type of company he's serious about building: smart, productive, and kooky. Not a bad description of May himself, whose previous employment included a stint at Apple Computer Inc., where he made his mark as one of the company's five top salespeople, hitting 225% of his $11-million annual quota. Before that, he served as an electrical engineer at Ross Perot's Electronic Data Systems (EDS), where he helped design and build program systems for 200 robots, 135 automated guided vehicles, and two large automated storage and retrieval systems. "After a while, it got dull," he says. "Robots are neat and interesting, but they always do what you tell them. Boring."
Not that May can't get humans to do what he wants, namely help create "a billion-dollar valuation and a billion-dollar company--an ongoing, living entity that can't be stopped." But it requires all the creativity he can muster. When one of Empower's business units needs an infusion of talent to keep growing, May has been known to offer his own people headhunting incentives in the form of stock options. "We've said, 'Tell us who you know, tell us who's great, and let's see if we can get them here," May explains. More important, he stresses, "we've got the whole organization thinking and attacking this as a group."
That unity of purpose is exactly what Michael May is aiming for, whether he's insisting that someone order dessert or watching as one of his, uh, associates prances around in a fairy costume and sprinkles his or her colleagues with--well, we'll get to that. And when we do, believe it or not, it may actually make sense.
"I just picked up stuff everywhere I went," says May, in what turns out to be his shrewdest dissection of the distinctive culture he's created at the $6.5-million company, which delivers computer training, applications development, and Internet instruction to clients like Saturn, Hallmark, and the city of Overland Park, the leafy suburb of Kansas City where Empower is based. May isn't being wily, nor is he trying to protect some of his sharpest competitive tools from being stolen by someone else. In fact, he'll readily own up to having borrowed some of his favorite ideas from others. He'll even identify them by name: entrepreneur-turned-populist Perot, Visa founder Dee Hock, and the late Ewing Marion Kauffman, who in 1950 founded Marion Labs in Kansas City, and who later bought the Royals and built the team into a baseball powerhouse.
But the origin of May's ideas is actually beside the point: suffice it to say that some components were borrowed and tailored to fit, others homemade, and a few key pieces were contributed by outsiders. The trendy words that litter May's conversation--from "neural networking" to the heavily enforced use of "associates"--aren't his invention either. May doesn't pretend they are, which is actually part of the intelligence he brings to maintaining a distinctive, and effective, corporate culture.
To construct such an environment, May seems to be saying, what matters isn't each individual strand; too many CEOs get hung up trying to be unique, along the way losing track of any meaningful end result. May's astounding originality is in how he works to weave each strand together, ensuring that together those strands reinforce the kind of company he wants Empower to be. He's earnest about it, but not serious. Everyone at Empower can recite the company's 21-word mission statement: "To become number one or number three in all markets we serve and to make this company fun, fast, and fulfilling." Ask May why number one or three, rather than one or two, the way General Electric CEO Jack Welch, from whom he borrowed the idea, wrote it, and he'll tell you: Because you should never settle for second best. And besides, you need a place to sit when you're getting ready to go after number one.
May can readily explain Empower's many rituals, even the strangest ones, because he's thought it all through. More typically, a CEO might decide that teamwork matters most (this week anyway) and then search for a way to give it top billing. That can work as long as the person on top keeps pushing, perhaps at the expense of previously established priorities. (Some CEOs even import a culture wholesale; see "Outsourcing Your Company's Persona," below.) May, on the other hand, owns the culture at Empower in a way few CEOs could, simply by knowing exactly what he needs it for.
Borrowing language he learned from Visa's Hock, among others, May wants Empower to be a "neural networked" organization--a fancy way of describing a flat, fast entity that mimics the brain, receiving information from everywhere in the system, with no clunky hierarchy interfering. That is why no business unit can grow larger than 50 people; if it does, it splits. Business-unit leaders are encouraged to build leadership depth fast; they can earn bonuses for nurturing associates who can then create new businesses.
May has been collecting cultural string for a long time. While he worked for Perot, for instance, he learned to dress for success, EDS-style, in a whiter-than-white shirt that was starched within an inch of its life. He loved bow ties. And he never dreamed of getting up from his desk unless he was wearing a coat. Still, "I respected the organization Ross built. He was very smart, he picked bright people, and then trained the crud out of them" in a boot-camp program that lasted four to six weeks. He admired the way Perot took training seriously.
There's one role model May hoists above even the Jug-Eared One. It's Kauffman ("Mr. K" to you and me), whose Marion Labs grew to become a $3-billion health-care-products company named Marion Merrell Dow. (Now called Hoechst Marion Roussel, it's one of Empower's customers.) Mr. K liked to create "happy commotion" around his company, as detailed in his biography, Prescription for Success. May regards the tome as must-reading.
Kauffman would likely feel very at home at Empower. Marion Labs had associates, not employees (who toil in a depressing superior-subordinate relationship). There was also a pay-for-performance plan, through which many of the early associates dedicated their time in exchange for Mr. K's promise that they would eventually be rewarded handsomely through profit sharing and stock options.
Another key part of the Marion culture was quarterly all-associate communication forums, called "Marion on the Move." At Mr. K's last one, more than 2,500 associates showed up at the Kansas City Municipal Auditorium. May, too, holds massive Q&A sessions, offering to answer any question, no matter how personal. "I like it when people don't sugarcoat stuff and just tell us what they're worried about," insists May, who figures his personal life is grist for the mill because he and Caroline own 97% of the company's stock. Once, when Empower OD'd on meetings, the company experimented with skipping the sessions. When they started up again, the first one lasted five hours.
In addition to Kauffman's techniques, May added to the mix something he'd picked up on his first job as an engineer at a company called Sunrise Systems. As a specialist in robotics and plant automation, May once supervised a machine that made cardboard lids for ice- cream cartons. "It ran 'em off so fast," he recalls, "it blew them all over the floor; we had to go run and pick 'em up. But I absolutely loved those days; we built fun, fun systems."
Lesson learned: To be successful, first and foremost, business should be fun.
Everybody agrees that sparkle debuted during a meeting at Lake Tahoe about five years ago, when there were only 22 associates. They'd hit a significant revenue target, and to celebrate they trekked west to the Sierra Nevadas and took a breather.
The company had been growing at such speed--from $55,000 in 1991 to $207,000 in 1992 to $655,000 in 1993--that people were particularly worried about losing what made Empower distinctive and successful.
They could feel it happening. In those early days, everybody answered the phone. "We'd do anything to make customers happy. And we were always very energetic when we answered the phone," May says. As the company grew, the newest hire was assigned phone duty. "We kept trying to get people to answer the phone a certain way, and it wasn't working," May says. That's when Susan Burden, the first person to join Empower after Michael and Caroline, dreamed up Sparkle and captured in a single, economical word the sort of persona an Empower associate should always project.
Gussied up as the "Sparkle Fairy," Burden showered her fellow associates with glitter and recited a poem she'd written for the occasion: "This Sparkle Powder I give you today / Will empower you in a special way! / We hope you will always keep this in mind, / To make Empower one of a kind."
Burden is home now with two young children, but the Sparkle tradition endures (along with the fairy costume). Every other Tuesday, from 5 p.m. to 6:30 p.m. at Empower's regular companywide team meeting (which covers "everything from business-unit updates to zany associate antics," according to the Associate Handbook), everyone recites the poem, and the new associates then get sparkled by a full-scale team of Sparkle Fairies and put on a skit of their own. To that eccentric mix May has added a musical twist: Frank Sinatra's rendition of "Young at Heart," which is played at every Sparkle ceremony. "What's interesting," May explains, "is finding Sparkle in somebody who's an SQL 6.5 programmer who's been in a cube somewhere for three years. You've just got to bring that person into a different environment."
What may sound way too strange is nonetheless an enormously important, though grossly undervalued, means to stabilize any company that's growing as fast as Empower. For all its conspicuous poofiness, Sparkle is cultural ballast: it makes tangible--turns into words and deeds that can be nurtured and repeated--the company's uniqueness, thereby boosting the odds that it will stay that way. It's what helps make Empower the kind of company where you might talk ROIs and IPOs one minute (May hopes to take Empower public in 1998) and be chased by a squirt-gun-wielding colleague the next.
And, of course, in the technical-training business, where certain standard content must be covered, success rests on the trainer's sparkly personality and on a learning-is-fun approach that makes students want to come back for more (or not). "People are very scared of computers," May says. "So when they walk into the classroom, the first person who works up the nerve to ask a question is tossed some candy. Everybody goes, 'Hey, I'm gonna ask a question now." Everybody, that is, except students from AT&T, who are left out for occupational safety's sake (AT&T's idea). No airborne Snickers for these low-lying students, but they can and do take advantage of all the fresh-baked (every afternoon in Empower's kitchen) cookies they can whomp down during breaks. In keeping with one of the company's very scarce written policies--and to prevent raids on the refreshments--leftovers only (bagels and doughnuts after 11 a.m., cookies after 4 p.m.) are up for grabs by Empower staff.
Empower's 68-word "Cookie and Bagel/Doughnut Policy" is more than three times as long as its mission statement. That underscores May's message that a company reveals its values not only through its grandest rituals but also in its everyday habits. At Empower, if anyone uses the word employee, boss, or manager, the offender must immediately ante up $5 a word, dropping the cash into a bank shaped like a big yellow crayon. In an average year, May collects about $75 for charity.
May insists that he isn't out to censor anyone. Rather, he wants everyone to remember that Empower has no "employees" because, as he says, the mind-set that goes with that is enfeebling and not well suited to thinking. The company aims to support associates, by contrast, who are fully capable of independent, rational thought and are actually pretty good at it. Issues that affect everyone are put to a majority-rule vote, ranging from removing the limit on sick days (approved), to installing an associate stock purchase plan (more than 90% of the company said yes), to trying a performance-based pay plan (it lost, but May hasn't given up).
May's EDS-bred belief that it's important to look good around customers led to another of the company's very few original policies--a dress code. The issue burned up the floor at several companywide sessions. May pushed: you can't go wrong looking nice in front of clients. Associates pushed back: does the CEO have the right to enforce a dress code? And what about programmers, who need quiet, comfortable environments to be optimally productive? (They'd researched that point and presented their findings at one of the meetings.) And what does it say about a leader who doesn't trust his associates with decisions about their own wardrobes?
Finally, in the summer of 1996, May bowed to the group's authority. "The organization decides what it needs, and it makes that call," he says. But in caving in, he did attach this postscript: "If we don't take our appearance seriously," he warned, "it will cost us a lot in profit sharing and profitability." May knows where his associates live.
That same practicality informs his outlook on blunders. "If you're not making seven mistakes a day," May says, "you're just not trying hard enough." In the interest of high-speed learning, the folks who work at Empower are exhorted to post "Today's List of Mistakes," a page with seven numbered blank lines. Those who comply with this corporate challenge record their stumbles and tack them up on the door for all to see. They trust, apparently, that May won't use such data against them (relying perhaps on a slogan promoted by Jay Accurso, Empower's recently arrived president: Assume positive intent). To spread that information speedily, Empower is putting together a sort of doozie database, so that every humiliating goof can become part of the company's learning curve, never to be repeated. "If mistakes are hidden, they remain land mines," May says.
I'm drifting 1,000 feet above Kansas countryside, one of four passengers balanced like bowling pins in a wicker basket hitched to a giant multicolored balloon. When I look down, I see subminiature cows clumped near hay bales the size of sugar cubes.
A couple of years back, May was transfixed by a balloon-festooned picture postcard he saw during a trip to Reno, Nev. Thinking that an Empower balloon sounded like loads of fun, he wrote such a message on the verso of that very postcard, which he duly mailed to Toby Brown, an Empower technical trainer who is also, as it happens, a Federal Aviation Administrationlicensed hot-air-balloon pilot. Now the balloon has not only an aviator but also a couple of official sponsors (Microsoft Corp. and the Weather Channel) that help pay for it. The balloon has even spun off its own corporation, Air Promotions, which at special events flies enormous banners emblazoned with customers' names. There's an Empower Balloon Team that competes in rallies and races; customers and suppliers vie for hourlong rides.
In the hands of another entrepreneur, the balloon-as-corporate-symbol could turn trite fast: we're high-flying, we're independent spirits, we're fearless. But because May owns the company's culture in a way so few entrepreneurs do, none of it--not even the windowless, white-boarded conference room labeled the Aquarium or the regulation Ping-Pong table that sits outside the president's office--seems gimmicky. May counts on Empower's loosely linked, self-managing structure to enable him to get away from the office more than most CEOs would dare. Last year he spent 16 weeks away, 4 of them on a fly-fishing expedition in Siberia.
He seems so genuine about it all, not proud of himself for pulling it off. But as my balloon ride bounces to an end--landing in a grassy, clover-specked field about 30 minutes south of Overland Park--my giddiness succumbs to a need to test him on his own terms. Answering my questions isn't enough.
Then it hits me: the bow tie is a fake. I venture, casual-like, into May's office and ask him point-blank: could he please untie his bow tie (dark green with a fly-fishing motif) and retie it, right this minute, while I'm sitting there? For just a second he stares at me as if I've just come in from Venus on that balloon. But he doesn't flinch. With a little tug, he loosens the bow (no clip on). He begins to retie it, and all the time he's narrating the procedure--place A over B; loop it here, like this; catch B and pull it through--so I'll learn something. After two botched attempts, he prevails. He's managed it without a mirror. "What do you think?" he asks.
When I say it looks pretty darn good to me, I mean it.
Culture in a can: Outsourcing Your Company's Persona
Perhaps every Inc. 500 company should grow its own distinctive culture. But, hey, who has the time?
Not Leonard Pacheco, president and CEO of Excell Data Corp. (#116), a software-services consulting firm based in Bellevue, Wash. Pacheco, whose $24-million company has grown more than 1,600% over the past five years, recognized the need to build the kind of workplace that would attract and keep top-of-the-line talent. But he also recognized that his schedule made him an unlikely candidate for carrying that out. So he outsourced it.
"Having someone come in from the outside speeded things up," Pacheco explains. That someone was Rob Lebow, a consultant and former director of marketing communications at Microsoft Corp. Lebow had devised an eight-pronged "Shared Values Process" as the groundwork for building what he called the "Heroic Environment." If Bill Gates could invent an operating system for personal computers, Lebow had wondered, why not an operating system for people?
In training sessions conducted over 13 weeks, everybody at Excell was taken through the eight core values, a list comprised of guidelines like "Treat others with uncompromising truth" and "Lavish trust on your associates" and "Don't touch dishonest dollars."
Meanwhile, Pacheco says, "we also defined what Excell's unique business value is: We solve problems." At the end of that first module, every employee was issued a "driver's license," a laminated, wallet-sized card with the people values on one side and the company's core business value-- "We solve problems"--on the other.
The company plans to work with Lebow on two more training modules that will complete the construction of its Heroic Environment. The whole process, Pacheco insists, has helped meld a hodgepodge of smart people from wildly different company backgrounds--IBM, DEC, Hewlett-Packard, and Microsoft--and whiz kids who haven't grown up in a culture that makes their behavior consistent, trustworthy, and bankable. "We'd never have found common ground on our own," Pacheco believes. "When your business is exploding, you never have enough time." -- N.K.A.