There is no such thing as a free lunch, so the saying goes, and there is no such thing as free workstyle either. Without question, it costs additional money to run a company the way the workstylists do. But figuring out how much it costs (and how much you get in return) is something else again, the sort of exercise that sends accountants into apoplexy.
Part of the problem is that the expense often takes the form of dollars unearned, rather than dollars spent -- the revenue forgone, for instance, when Jim Pinto, president of Action Instruments Inc., spends hours on frequent and detailed evaluations of his employees at every level of the company.Or when Telecalc Inc. closes down in mid-afternoon so that everyone can watch a human-potential videotape. Or when the managers of Data Design take 10 days off to go backpacking with Outward Bound in the Rocky Mountains.
Granted, some workstyle expenses can be quantified: the dollar value of the individuals' time; the cost of the videotapes, the travel expenses to and from Colorado, and the fee paid to Outward Bound. But then you run into the problem of gauging the returns, and here, workstylists rely more on faith and intuition than on accounting procedures. As Pinto says, "How do you measure the value of being nice to someone?"
Of course, that's a fine attitude for a CEO, but what about investors and lenders? Oddly enough, the practitioners of workstyle claim to have little trouble justifying their workstyle expenses to suppliers of capital.
The issue aid not even come up when Tom Ferrante, CEO of Intertec Components Inc., approached his banker for a loan to build a facility to house the company's racquetball court, among other things. "I just told him that I wanted the money to build a building," says Ferrante. The banker didn't ask about the building's purpose. "What he wanted to see were numbers: how the company had been doing, what kind of debt we had, what we were projecting and on what grounds, what kind of collateral we could offer." The banker got his numbers; Ferrante got his loan. "My banker visits the company; he's seen the racquetball court. He's never said a thing about it." Perhaps that's because he's also seen timely payments.
Apparently stockholders have a similar attitude. "I've never had a problem justifying my philosophy to our stockholders," says Psarouthakis," and as long as the company is doing this well, I never will. Their dividends tell them everything they want to hear." Nor do the stockholders of AST Research Inc. complain about the company's workstyle expenses, though they range from $5,000 to $50,000 for such events as barbecues, breakfasts, and trips to Disneyland. Then again, as human resources chief Howard Derman points out, what is there to complain about? Practicing workstyle, AST had 1985 revenues of $139 million, up from $71,000 in start-up year 1981.
As for venture capitalists, workstylists tend to be rather selective about whom they let in. "A venture capital fellow said to me once, 'If Action Instruments were in trouble, the first thing to go would be your infocenter," says Jim Pinto, Referring to the center where the company's financial information is regularly posted. "Well, that is a very juvenile reaction, and the person who said it is a twit. I think I told him so. An attitude like that is one reason he will never be allowed to invest in this company."
In the final analysis, there probably is no accounting for workstyle -- a fact that practitioners seem content with. "The costs are minimal," says Irwin Mintz of JBM Electronics Co. "A few cents here, a few cents there. It isn't worth counting. If I didn't run the company this way, the cost would be much higher -- in turnover, in dissatisfaction, in inefficiency."
"I think [spending money on workstyle] is pretty easy to justify," agrees Michael Bledsoe of Telecalc. "If you don't take time for the important things, the time you put in on the unimportant ones just isn't going to help you very much."