Chip Wolfe, founder of Sterling Information Group, Inc., wanted his company to adhere to a 40-hour work-week for all employees. Can a fast-growing start-up thrive on a 9-to-5 schedule?
Who ever heard of a start-up team working a 40-hour week? At Chip Wolfe's company, that wasn't just a goal, it was a bedrock principle. Nice concept, but watch what happens when you try to grow a business that way
As Chip Wolfe strolled from the West Lynn Cafe, in Austin, Tex., an idea began to crystallize in his mind. Wolfe had traveled to his favorite haunt one sunny January day in 1995 with his trusted colleague Dan Thibodeau, hoping to answer a nagging question: How could he free some of his cash from Sterling Information Group Inc., the then $3.5-million software-consulting business he had launched 10 years earlier? After mulling over the options, from employee ownership to a public offering, Wolfe was still stumped. But he tacitly agreed with Thibodeau, who owned a minority stake in Sterling, on one point: selling to a large company was strictly out of bounds. "We took it off the table pretty quickly," recalls Wolfe.
From the company's earliest hours, the cofounders had preached the benefits of an even-keeled life. In a fast-paced industry known for long days and grueling travel schedules, Wolfe and Thibodeau expected just 40 hours a week from employees--any more than that was actively discouraged. "We had never heard of a company with our unique policies and culture," says Thibodeau, "so we assumed that an acquisition would surely destroy what we had built."
That night Wolfe slept restlessly. This wasn't the first gut-wrenching business quandary he'd faced. Not by a long shot. But it was the most agonizing--a final decision that he would conceal until the moment he was prepared to act. How could he cash out and still position his company for further growth, while preserving the 9-to-5 culture he had struggled to create?
For many, the 40-hour workweek is considered to be an ideal standard, something akin to absolute zero: we know it exists, but we can never reach it. Still, more and more company owners are wrestling with the question of how to create a balanced life for themselves and their employees while maintaining a satisfying professional life. Wolfe had started with a novel working hypothesis: a healthy, growing company should retain satisfied employees who have ample time for their families, hobbies, and communities.
But it wasn't simple. At virtually every corner there were sacrifices, headaches, and hidden barriers to growth for Wolfe and his company. Which begs the question, Is it even possible to build and maintain a thriving company on just 40 hours a week?
"If I Ran the Zoo..."
Wolfe didn't start out with the specific goal of creating a 9-to-5 start-up. Things just developed that way. He first set up shop as a sole consultant in 1985, after a stint in a research-and-development arm of Datapoint Corp., a computer-data design and integration company. "I always wanted to make a living," says Wolfe, "but I also wanted to build something different from the traditional sorts of companies I had worked for." After a year on his own, he hooked up with Thibodeau, a computer enthusiast and fellow University of Texas graduate, who had been working at the Austin office of Digital Research, based in Monterey, Calif., until the company closed its doors in Austin, in 1985.
In spite of his background, Thibodeau wasn't inclined to grab the typical fast-paced high-tech job. He was more concerned with life at home. Since his first son had been born with cerebral palsy, in January 1985, Thibodeau had dedicated the better part of his time to helping to care for his child. "We were the perfect fit," explains Wolfe. "Dan couldn't work very much, and I didn't have very much work to give him."
But just a year later, Wolfe turned a corner when he landed the heavyweight Motorola as a client. Suddenly, there was enough cash in the till to fuel growth, and by the end of 1989 Sterling had 12 employees. It didn't take a lot of money; by this time Wolfe was a fairly proficient bootstrapper. He had no secretarial staff or bookkeeper, and he managed the payroll on his own.
Neither Wolfe nor Thibodeau wanted to devote his entire life to work, and as the company expanded the two sought ways to infuse the organization with that sentiment. "The goal was to maximize people's quality of life and at the same time create a growing business," Wolfe says. He attributes his maverick attitude to the wisdom found in If I Ran the Zoo, by Dr. Seuss. "'But if I ran the zoo,' said young Gerald McGrew, 'I'd make a few changes. That's just what I'd do," says Wolfe, gleefully quoting a few lines of verse. "We finally had our own zoo, and we weren't about to take the old ways for granted."
The trouble was that even though the 9-to-5 culture might keep employees happy, Wolfe recognized that it could also be perceived as a liability in attracting customers. From his vantage point, Sterling consultants could satisfactorily serve any customer on the company's 9-to-5 schedule, but he feared that some might perceive Sterling to be a "slacker" company. So he avoided mentioning the 40-hour workweek to prospective clients, instead talking generally about Sterling's family-friendly culture. "If it did come up, I assured them that I would place more people on a project to get the hours needed if there was a problem," says Wolfe, who admits that some clients may have been turned off by that alternative.
But enough customers apparently either didn't know or didn't care--at least as long as the job was done to their satisfaction. Carl Morris has worked with Sterling since the company's earliest days, first when he was at Motorola and now at Whole Foods Market Inc., based in Austin, where he's the chief information officer. For him, the Sterling hours have been "totally unnoticeable." He adds, "As long as a consultant lives up to the commitment, you don't really care if they're working 32 hours or 50 hours."
"Sterling's work hours have been transparent to us," says longtime customer William Haskell, who himself often puts in 60 hours a week as the manufacturing manager for one of Motorola's Austin facilities, where semiconductor packaging is produced. "I ask for something to get done and I know that it will get done right." But Haskell admits that other customers may not necessarily share his view. "I could see in some old-world hierarchical structures where people are fighting fires all the time that they might have a problem with a company that encouraged the 40-hour workweek," he says.
