The Smartest Little Company in America

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But on Highsmith's organizational chart, which is prominently displayed outside the lunchroom, the library sits on the same line as marketing, human resources, accounting and finance, business-systems development, and--perhaps most sweetly--information systems. Each year the company budgets $185,000 for the library, a figure that covers Guedea CarreÑo's compensation as well as that of her staff, printed and electronic information sources, and library-support software, in addition to things like copyright-license agreements and travel expenses incurred when staff members attend conferences and seminars. The CEO even designed corporate headquarters so that the library sits dead center. It is the Rome all roads lead to.

Presiding at that crossroads is Guedea CarreÑo. The librarian sits in a small, bright office, surrounded by stacks of things: things she's reading, things she's putting aside for people, things that make her think. Immediately outside her office is the library itself, which includes more than 2,500 books, thousands of magazines (the library receives more than 700 subscriptions), and a PC for accessing CD-ROMs and certain databases. Beyond that is the rest of the company, and beyond that, the rest of the world.

Guedea CarreÑo and her crew are responsible for all of it.

Based in Fort Atkinson, Wis., Highsmith is a hive of cogitation surrounded by rural serenity: cornfields, tobacco-drying sheds, cornfields, a stand of maples just beginning to blush, cornfields. A walking trail entwines the low-slung brick building, and by 9 a.m. workers--alone and in pairs--have begun their perambulations, striding across the wooden bridge, past the gazebo, and out into a field where wildflowers seeded by the company grow. The trail is just one element of a much-lauded wellness program that rewards the pursuit of health with reduced insurance premiums.

Besides enjoying flat stomachs, Highsmith employees partake in a flat organization in which self-directed teams, a continuous-learning program, flextime, and other popular management theories are made manifest. Such progessiveness seems a tad incongruous, given the company's geographic isolation and humble origins: Highsmith began life as, among other things, a seller of agricultural implements and publisher of a farm magazine. Early on, the company operated from a family farm. "We had an English receptionist, which was the vogue after World War II, and when a customer would call from New York she would go outside and turn on this powerful light above the building," recalls Hugh Highsmith, who is the company's founder and who--at 84--is still the acting chairman. "We'd see it from the fields and come in to take the call."

The company's current culture evolved under Hugh's middle son, Duncan Highsmith, a fine-arts-student-turned-radical-press-publisher- turned-Japanese-sculptor's-apprentice-turned- architecture-student who vowed never to work for his father's company and who became its CEO and president in 1987. Highsmith's interest in librarians as more than just a market for his company's products emerged early in the decade, when he was the executive vice-president and chief operating officer of the then $16-million company. The company had engaged some consultants in projects involving warehouse expansion, software development, and catalog design, but the results weren't satisfactory. Highsmith concluded that "we had sought out consultants not because they had skills we didn't have but because they had access to information we didn't have. And I hypothesized that if we could get access to that information, we could make those decisions and recommendations ourselves and do it more to our satisfaction."

At the same time, Highsmith was trying to build an organization rich in human potential in an area poor in actual humans. "We have a very limited labor market, so I wanted to make the most of the people we had by helping them become decision makers, by providing them with information and the context to make good decisions," he says. The idea was to create an environment in which warehouse workers, for example, could resolve issues as small as what kind of packing material to use by reading news articles about environmentally sound alternatives, and as large as how their duties should be structured in a flat organization by reading case studies in business books.

Much of the information his employees would need, Highsmith believed, was the nonquantitative, nonformatted, nonobvious stuff floating around outside the company's walls and, consequently, outside the reach of its data-processing systems. So in 1988 he hired a professional librarian who would report directly to him--his only direct report aside from the vice-presidents. (The librarian has reported to the executive vice-president since Highsmith gave up some administrative duties in 1992.)

Although she resembles China Beach star Dana Delany, it would be difficult to mistake Guedea CarreÑo for anything but a librarian. She avoids using the word Listserv in conversation because it is trademarked. Articles passed on by her often arrive accompanied by a quote pulled from the text. When she describes a recent indexing project--Guedea CarreÑo creates indexes for all the company's catalogs--her words come a little more quickly, and her eyes grow brighter. (For more on indexes and other secret loves of librarians, see the "Think Like a Librarian" boxes below.)

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Leigh Buchanan

Leigh Buchanan is an editor at large for Inc. Magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture, and she contributes Inc.'s capsule book reviews, "A Skimmer's Guide to the Latest Business Books."

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