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Eyes on the Prize
You May Already Be a Winner!
Bill Bartmann, founder of Commercial Financial Services, subscribes to the Publishers Clearing House school of management: he systematically commits random acts of generosity. After one new hire sang a show-stopping rendition of Kenny Rogers's "Lady" at a talent contest, Bartmann ponied up $35,000 for him to record an album. When another employee said she'd always dreamed of working with Mother Teresa, off she went to Calcutta for two weeks. He's also funded honeymoons and sponsored an employee who aspires to be an Olympic athlete. Indulgent? "I get my money back," Bartmann says. "We take care of them, they take of us."
The Next Management Fad?
Dernab Has Left the Building
Old Style: Hire for attitude, train for skill
Bold Style: Train skillfully, with attitude
PhotoDisc boasts its own "university" presided over by a fictitious "dean," Dernab Schwarneb (an actor), who has become a company Elvis of sorts, complete with rumored sightings. "Creativity comes from humor," explains president Mark Torrance.
I Believe That Brothers Are Our Future
Among the 16% of company founders who received help from their families is John Houston. Houston turned to his sister when he was struggling to make ends meet. "My sister helped me out a little bit, and I worked with her for a while," says the founder of Houston Associates. Houston's sister, Whitney, just happens to be the world's reigning pop diva, having sold more than 100 million records.
As a professional race-car driver, CEO Henry Camferdam Jr. claims that Support Net's accelerated growth is directly tied to his hobby: the resellers who buy from him have no problem distinguishing Support Net from the 15 other IBM distributors. As part of an annual incentive program, about 20 clients and eight employees attend driver-training school. Camferdam took up racing a decade ago.
To Russia, with Luck
Starting out, Charles Ballantyne thought he knew the potential customers for the tentlike enclosures made by Universal Fabric Structures: large trade shows. But most of his business ended up coming from a wholly different quarter: the U.S. Air Force, which needed portable hangars for its F16s. (When left naked in the desert during the Gulf War, planes tended to get mucked up in all that sand.) Then, just when Ballantyne thought he had finally nailed his customer base, his buildings became fashionable as indoor tennis courts among high-ranking Russian officials. Even President Boris Yeltsin had one erected at his Black Sea dacha.
This New House
No, George Jetson isn't running Global Management Systems. But he'd certainly feel comfortable as the CEO's houseguest. Meet Hilton H. Augustine Jr., an electrical engineer by trade who has transformed his home into an Epcot-like network of timed, infrared, and sound-activated systems. Everything is wired: the lights, the TV, the dishwasher--the entire house even shuts itself off at 11 p.m. Why go to such extremes? "Laziness," Augustine offers. "It--and not necessity--is the mother of invention."
Strife with Father
CEO Ben Chase is a confident salesman and former college decathlete now running a fast-track company. His vice-president, Mike Chase, has similar qualities, probably because he's Ben's father. With the two of them around, CableLink has been the scene of some heated--make that scorching--disputes: "shut-the-door, pictures-falling-off-the-walls shouting matches," says Ben. "A couple of times he'd grab his keys and say, 'I'm leaving.' And I'd grab my keys and say, 'You can have this damn company." Ethel Chase, Ben's mom, is the official peacemaker.
The Next Management Fad?
A Fair Hearing
Old Style: In-house newsletter
Bold Style: In-transit radio show
Eager to "touch our employees in a reasonably personal way," Paranet president Michael Holthouse provides them with Radio Paranet, a professionally produced audiocassette that sounds like an FM morning drive-time show. Hosted by two employees and produced every six weeks, the show includes segments such as "recruiter world," which is kicked off by a Wayne's Worldstyle chant. A recent episode included a profile of Paranet's Chicago branch--whose members explained why they call themselves the Flying Musk Oxen--and an interview with two employees who couldn't fly home because a catering truck had impaled itself on their plane's wing at takeoff.
Many CEOs find themselves in court, but few see their cases adjudicated by the likes of Supreme Court Justice Sandra Day O'Connor. Brad Templeton's on-line news service, ClariNet Communications, was one of 20 plaintiffs that challenged the 1996 Communications Decency Act, a controversial law that barred "indecent" on-line communications, in order to protect children from pornography. The Court declared the law unconstitutional in a landmark 7-2 decision last June. So, does Templeton consider himself a serious free-speech crusader on par with, oh, Larry Flynt? Well, no. Templeton joined this specific suit, he says, simply because he thought the law impractical and unnecessary. "The Internet can change more in a long lunch hour than some industries can change in a century," he says, suggesting that parents instead closely monitor the material their children view.
During the early start-up days of Rumarson Technologies, Paul Baum's cramped office space--a storage area in the basement of a Hoboken, N.J., town house--doubled as his home. He slept on the office sofa and showered at a nearby gym. "I laugh about it now," he says, "but at the time it was extremely tough." Baum now lives in a high-rise apartment building. "I've moved on up," he says, "like The Jeffersons."
The Next Management Fad?
Old Style: Teach the newcomer
Bold Style: Learn from the newcomer
Most Fridays Deborah Williams, CEO of Black Cat Computer Wholesale, holds an informal Q&A session. At one, a young sprite in shipping pointed out that the sales of one product seemed to be lagging, something he noticed when he was checking orders going out the door. The insight prompted Williams to lower prices, boosting sales by 7%. "It's something that just dropped through the cracks," she says. "It was just a little piece of what we sell, but now it's an important chunk of our business." P.S.: That new fellow is now a manager.
Play's the Thing
"We appreciate you!" That's the message behind Campbell Software's "stress-free zone," where employees are asked not to talk about work, says Jeannette DiGiulio, director of human resources. Among the sanctioned activities: playing with the rotating inventory of toys, like squirt guns and Velcro darts. "It gives people a place to go to decompress," says DiGiulio.
Eyes on the Prize
Hurt on the Street
It takes, well, cojones to be a door-to-door salesperson. Eclipse Marketing CEO Brent Bingham recognizes that, which is why he created an award in honor of salesman Nathan Berrett, who suffered an unfortunate injury inflicted by a German shepherd. The prize, a replica of an Oscar in an athletic supporter, is bestowed each year "for giving your all and then some." (Clue: the jock is a reference to Berrett's injury.) Winners are chosen at the year-end meeting, at which candidates recount harrowing sales experiences. "It creates lore and legend within the company," says Bingham. Berrett, now recovered, presents the award.
It is, by now, almost a cultural clichÃ©: a mother of three small children starts a business at the kitchen table, only to discover she's a more-than-capable entrepreneur. But it did indeed happen to Elayne Morris, who began Friends Assisting Seniors & Families in 1989, at an oval pine "country-kitchen" table in her Lake Worth, Fla., home. But when her home-health-care business moved out of the kitchen and into commercial space in West Palm Beach, Morris couldn't bear to leave the furniture behind. So she's made it an integral part of the company. All new customers sit at the table when they visit the offices, and companywide meetings are still held around it, as if it were only a few paces from the fridge. Everyone knows its significance. "With all the changes in the health-care industry," says Morris, "it's nice for families to see that this is truly a family-oriented company."
Drinking: A Love Story
CEO Greg Johnson knew he was thirsty, and from that he built a business. In his previous life, as an engineer doing oil-well analysis, Johnson made countless stops at convenience stores for meals--which resulted in a pretty awful diet. Coke and Pepsi offered empty calories, Johnson soon concluded, and were also doing a number on his digestive tract. His entrepreneurial instincts had found an outlet: create a nutritious frozen- fruit beverage to be sold alongside the others. "I realized there was a lot of opportunity for fruit beverages in this market," says the founder of Parrot Ice Drink Products of America. Best of all, he was able to gain distribution at the gas-station convenience stores he once frequented.
Play's the Thing
Microbar maintains an exercise room with up-to-date equipment, volleyball and basketball courts, and locker rooms and showers. Employees play in several sports leagues, and a group of experienced jocks runs a training and fitness program for beginners. Roughly half of Microbar's 120 employees use the facility. "People who normally don't interact during the day are interacting in the exercise room, or on our volleyball courts, or on a softball or soccer team," crows CEO Bruce Juhola. "Right now, all of this is an investment, but it'll continue to yield a return down the road."
Ray Crouch, 62, enjoys his job, but he'd like to quit. "I keep trying to retire, but Tim won't let me," he says. Tim is his boss, the CEO of Arizona Gazebos. He's also Ray's son. "He has the experience that I don't," the junior Crouch explains. Crouch the younger grew up working at his father's day-care center, and he cites his father as an entrepreneurial mentor. He coaxed his father into working for the $2.3-million company, first as a part-time consultant and eventually as a full-time employee. Now he's loath to let him go. Of course, many other employees side with Tim--but then, they're relatives, too. Nearly a third of the Crouches' 30 coworkers are family members.
Say Good-Bye to Hollywood
Say Sylvester Stallone's name and what first comes to mind is one word: Nighthawks. Similarly, Billy Crystal can never get away from the dramatic role he played--as a radar specialist aboard the plane that dropped the atomic bomb--in the 1980 made-for-TV melodrama Enola Gay. Well, at least in Neal Rabin's mind. Before starting Miramar Systems, Rabin spent three years trying to make it in Hollywood. Production jobs on those films ultimately helped dissuade him. "It's a disgusting business," says Rabin, who also wrote for TV shows like Cheers and The Love Boat. "It's harsh, and it doesn't reward creativity."
A Honda Accord
In 1992 profits from Sonia Flores's parking garage needed a financial jump start. Then a Japanese student from a nearby language school mistook her lot for a car-rental dealership. "He didn't speak English, but he had a lot of traveler's checks," says Flores. She offered him her own burgundy Honda for $100 a day. That's how Flores crashed into the niche that Red & Blue Auto Rental now occupies: long-term rentals for students.
Eyes on the Prize
Grow and Think Rich
Robert Baden was so confident that he'd make this year's Inc. 500 that he's already worried about repeating the feat. So the CEO of Rochester Software Associates has offered his 20 employees an incentive: if the company makes next year's Inc. 500, each worker will get $500. Says Baden, "I viewed the bonus as added incentive for next year's sales push and to generate excitement about this particular opportunity."
Companies benchmark innovators all the time: Microsoft, Ben & Jerry's, Toyota, and Southwest Airlines all do it. But Bob Davis, CEO of Davis Cos., has identified a heretofore-overlooked role model: Chevron Chemical, the oil company. That's right, Chevron--the $43-billion giant at which his father worked for 36 years. "It was a style, a mind-set of the people running Chevron," says Davis. "Nobody ever wanted to leave that company. People went to work every day to use their hearts as much as their heads." To that end, Davis holds Chevron-like company retreats, where employees and their families spend three days each year bonding. "My experiences as a child were that my parents worked for people I had an egg toss with, people I was on a first-name basis with," Davis says. Hey, maybe he's onto something: his temporary-staffing company appears on this list for the fourth consecutive year.
The Next Management Fad?
The Plots Thicken
Old Style: Share financials
Bold Style: Share a story
A few months back, a CNN commentator was clinking coffee cups together on the air to simulate the collision of a supply capsule with the Russian space station Mir. Coffee cups hardly look like spacecraft, so Analytical Graphics called up the network and offered to create a real-looking simulation. Engineers worked through the night, and the next day CEO Paul Graziani excitedly recounted the tale to his employees at "storytime." (Yes, that's what it's called.) Each Friday after lunch, employees sit on the floor and listen while Graziani regales them with adventures from the field. Then they join in, telling stories of their own.
Bringing on Baby
Richard Doyle doesn't hire only people who are the youngest children in their families, but he does think they fit in especially well at Mass. Bay Brewing. In fact, seven of the company's eight managers are the youngest or second-youngest in their families. "Younger children are often more able to be risk takers," says CEO Doyle, who is also a youngest. (Surprised?) "They can do something that's off the beaten track."
457, 458, 459
Play's the Thing
Does Anyone on This Page Actually Work?
What these companies share, aside from proximity in this ranking, is a unique approach to rewarding employees. GeoAccess, for example, provides its workers with five fully stocked pantries and has lunch delivered every day. "The payoff is twofold," says Joy Weaver, the company's equivalent of a chief financial officer. (GeoAccess uses no titles.) "First, it keeps people in the office, available for phone calls, and second, it helps develop camaraderie." It also helps with recruiting. For its part, Noble-Met has a 4,000-square-foot "break room," equipped with a dart board, as well as pool, air hockey, Foosball, and Ping-Pong tables. And Bell Oaks, an executive-search firm, rewards its employees with Bell Bucks, which are redeemable during an annual auction. Among past items up for bid: a big-screen TV, a PC, and camping equipment. "It's very motivating to people," says CEO Price Harding, who spent $7,000 on prizes last year. "It facilitates bonding--and an appropriate level of competition."
The Next Management Fad?
Passing the Bucks
Old Style: Employees get bonuses
Bold Style: Employees give bonuses
There are no managers at Entact, and CEO Phil Pisani prefers it that way. But given their absence, Pisani wondered, how could he run a performance-based bonus plan? Pisani's brave solution: let employees award bonuses to one another. Each of Pisani's 50 salaried employees is provided with $500 worth of "Entact Green," with which to recognize valued coworkers, and $300 worth of "Brain Bucks," to reward a colleague for an innovative idea. "When somebody has done something good day in and day out, you can reward them without having to ask for permission," says Pisani. "There are no parameters at all." The company's controller then pays the recipient with real cash.
How the Inc. 500 were selected
Companies must have been independent and privately held through 1996, must have had at least $200,000 in base-year sales, and must have shown a sales increase from 1995 to 1996. In addition, companies must have generated sales revenues for at least six months in fiscal year 1992. Sales figures for agencies (such as advertising agencies) are net sales to the company. Holding companies and regulated banks and utilities are not eligible. We verified information using tax forms and financial statements from certified public accountants and through telephone interviews with company officials. The base-year-sales requirement of $200,000 is adjusted periodically for inflation. The 1997 Inc. 500 list was prepared under the direction of Elyse M. Friedman and Beth Gunn. To request an application for next year's Inc. 500, call 617-248-8484, or send a fax to 800-335-3348.
Stories prepared by the Inc. 500 research team (see below) and Jay Finegan, Mike Hofman, and Jerry Useem.
The Inc. 500 research team members are Douglas Falk, Deanna Zammit, Shane McLaughlin, Lynn Babiarz, Wendy Prygoda, Nancy Simmons, Allison DeNapoli, Sarah Baker, Mike McLoughlin, Nicole Burnham Onsi, and Anthony Azzariti.