In spite of the fact that selling out seemed contradictory to all Sterling represented, it consistently emerged as Wolfe's best choice. Austin was hot, his company was hot, and acquisitions in the industry were reaching a fever pitch. "All the factors said go," recalls Wolfe, who had managed to keep his decision from everyone, including Thibodeau. ("Shock, surprise, and concern. That was my reaction," recalls Thibodeau. But since Thibodeau possessed only 10% of the stock, the decision was clearly Wolfe's to make.)
On December 13, 1996, the Sterling Information Group became a wholly owned subsidiary of Renaissance World Wide, a $600-million information-technology consulting firm based in Newton, Mass. (Under its former name, the Registry, it made the Inc. 500 three times.) Wolfe sold Sterling for $8 million--$7.5 million in cash and a $500,000 "earn-out" if the company met certain defined milestones. Although nearly everyone at the company worried that a merger would crush Sterling's unique culture, "it was a relief in some ways," recalls Janet Gilmore. "Now we wouldn't need to constantly deal with the overhead issues, and we would be able to grow faster."
In hindsight, Wolfe's struggle to create a truly 9-to-5 company is a telling example of the inherent difficulties in the task. But for all the head scratching, agonizing, and frustrating decisions, and for all the conflicts caused by a desire to balance growth against the Sterling corporate culture, Wolfe believes he made the right decision. And he still believes it's less of a challenge to run a 9-to-5 company than one in which employees work round the clock--and inevitably burn out and move on. "It's far easier to be fair and generous to employees than to deal with 20% to 30% turnover," says Wolfe. "In the Sterling model, everybody wins. I didn't work 80 hours a week, and my net worth still grew dramatically. My employees had time for their families. The community had people with time to volunteer and give back. And the clients received excellent work. All the stakeholders in the corporation came out looking pretty good, in my mind."
Epilogue
Under Haney's continued leadership--and with Renaissance's much-needed capital injections--Sterling has grown from about 70 employees to more than 100 since the acquisition and now supports new offices in Dallas and Denver.
Drew Conway, Renaissance's CEO, continues to offer Sterling employees an hourly wage, a practice radically different from any other branch of his organization; however, Conway wasted little time dismantling Wolfe's bonus plan. "Before, the incentive was to save," says Conway. "Now the incentive is to grow." Today, Sterling's consultants receive a bonus that's directly tied to the growth of the company's profits.
Like most of the consultants, Gilmore had her doubts and concerns at the time of the sale, fearing that Sterling would no longer be, well, Sterling. But she has maintained her 40-hour workweek quota and continues to see her musician husband on the road. "We are still working to keep people at 40 hours a week," says Gilmore, who keeps her finger on the pulse of the company through her role as ombudsperson. Whether Sterling's prized culture can survive the tumult of hypergrowth remains a question. If not, it might be remembered just as a noble experiment.
Joshua Macht is an associate editor at Inc.
From Compaq to 9-to-5 start-up?
Nine-to-five fever isn't just a service-economy phenomenon. After nine years as a rising-star vice-president at Compaq Computer, Doug Johns was fatigued and burned out, so he chucked it all--including millions in future options--only to plunge back into business in 1995 with an ambitious start-up: Monorail Computer Corp., an Atlanta-area computer manufacturer. Johns desired a company that did more than pay lip service to the idea of family values. "We don't want to be a company that tolerates family values," says Johns. "We celebrate them."
To keep his life and his employees' lives under control, Johns devised a business structure built on a far-reaching outsourcing strategy. Virtually the entire operation depends on outside vendors. The computers are manufactured by several contractors and shipped by Federal Express. SunTrust bank takes care of all the billing, and Sykes Enterprises handles all the customer-service phone calls. Johns and his team focus on design, sales and marketing, and strategic planning.
Johns rarely stays at work past 6:30 p.m., and he strongly suggests that his employees follow suit. He also closes the doors early for more than just the standard evening before Christmas and Thanksgiving. Last Halloween, for example, when the Atlanta highways were jammed with cars, Johns dismissed his 50-odd employees so they could get home to their families. And he constantly encourages his top executives to put their families first, work efficiently, and stick to regular hours.
Though it's still too early to tell whether Monorail will be successful with its formula, Johns and his team say they're trying to hold fast to their priorities--even though the turbulent, fast-changing computer industry has greatly tested their resolve. The company is currently in a bloody battle for shelf space in the $999-to-$1,799-computer market against Johns's old friends at Compaq, and he admits that it's hard not to regress back to his old work habits: "I'm a recovering workaholic, and sometimes I fall off the wagon."
