Managing People

How do you build morale and dedication? In surprisingly small ways.

Standing in the kitchen at Eze Castle Software, CEO Sean McLaughlin watches as one of his programmers sets milk and cookies on a table. It's 2:30 on a Wednesday afternoon. "Hang on, Parvathy," McLaughlin says to the employee as he opens the refrigerator door and pulls out an apple pie. "Put this out, too." When Parvathy is done in the kitchen, she flips some switches, and the lights flicker all over the fifth floor. Almost instantly, programmers leave their cubicles and make a beeline for the kitchen.

Then Parvathy jogs up a staircase and flashes the lights on the sixth floor. Account managers, salespeople, and assorted techies come downstairs and join their colleagues in the kitchen. When they arrive, McLaughlin is at the center of the steadily building crowd, dishing out the pie. Around him conversations spring up between colleagues who work in different departments. The topics range from work to social life to politics. Ten minutes later the lights flash again and it's back to work for the 90 employees in the Boston office of Eze.

What's so remarkable about the staff of a developer of securities-trading software with $13 million in revenues taking daily milk-and-cookies breaks? Not much -- until you consider that the practice is part of a cultural shift engineered by the CEO, a shift that has profoundly changed the way he and his employees relate to one another. Perhaps more significant, the changes have affected how employees deal with the myriad little details that keep the six-year-old company grounded.

Eze's transformation began last year, when McLaughlin realized to his chagrin that his once small and collegial company had -- because of accelerated growth -- begun acting like a large corporation. His employees no longer knew one another, and he himself was increasingly vague about who some of the new faces were. "In the early days I could get to know everyone," says McLaughlin.

However, the CEO was most annoyed by the fact that his employees -- both old and new -- were beginning to behave with large-company sloppiness rather than with start-up frugality. "Back when we were small, if someone sent a FedEx, we all knew how much that was costing the company," McLaughlin says. He recalls noticing that things were changing when one employee approved paying a contractor $100 a month to water the company's five plants. Then there were rising charges from the company's Internet service provider because of excessive traffic on the corporate T1 line. The cause? Employees were downloading MP3 files to listen to music during the workday. It frustrated McLaughlin that employees weren't taking responsibility for their actions and for the ways in which those actions affected the company's bottom line.

But last summer two things happened that spurred McLaughlin to make some changes.

First, the Boston office lost both of its administrative assistants. One assistant quit and the other left a few weeks later. The two had stocked the supply room, sorted the mail, and welcomed visitors. The dual departures wreaked havoc. "The kitchen was out of milk, we didn't have any pens in the supply cabinet, the reception area looked like crap," McLaughlin says.

Then came the World Trade Center attacks. Though McLaughlin had long been brooding on how to reverse Eze's fat-cat habits, he had yet to act. He says that 9-11, and the "what are my priorities" thinking it engendered, "created an environment where it was easy for me to initiate a change."

The change he had in mind was inspired by a visit to his daughter's kindergarten class. There he saw how the teacher divided the cleanup tasks among the children by posting a rotating "chore wheel." McLaughlin thought the wheel was just the thing to clean up the mess and teach his employees a little corporate responsibility. But he also wanted to institute something that would help improve camaraderie. That's where another kindergarten institution, the milk-and-cookies breaks, came in. "I wanted to build relationships among the employees, to make them feel more company morale," he says.

Rather than posting an actual wheel in the office, McLaughlin had chief operating officer Tom Gavin post the tasks -- and the names of the employees who were responsible for them -- on the company intranet and on a board in the kitchen. There are eight tasks in all: stocking the kitchen with food and drinks, cleaning and organizing the dishes, maintaining the supply closet, sorting and distributing the mail, tidying the kitchen, overseeing the reception area, arranging and setting up the snack breaks, and acting as ombudsperson. Each employee (plus a backup) is assigned a particular task for a week. Any disputes or questions go to the ombudsperson, who also handles miscellaneous tasks, such as changing lightbulbs and fixing the printer.

In explaining the system to his crew, McLaughlin faced an uphill battle. Many employees were already putting in 12-hour days. "Everyone here is so driven, so consumed with what they do," says Kristine O'Brien, a marketing-department staffer. "My first reaction was, 'I have to do all this stuff plus the dishes?"

To gain buy-in, McLaughlin himself did kitchen cleanup during the first week. Gavin took supply-closet duty. McLaughlin then announced that of the $100,000 he saved in salaries and benefits by not replacing either of the administrative assistants, $20,000 would go to the employees. A portion of the money would go to the food fund. Another portion would finance the activities of two committees to be staffed by volunteers: one devoted to internal culture and the other to community service.

When he first gathered the employees together to explain the chore system, McLaughlin told them: "There's not one person here, including myself, who doesn't spend 20 to 30 minutes a day messing around on the Internet. Just give us back half that time every few months." Sure enough, employees found that the tasks were welcome breaks that took fewer than 15 minutes a day. And dividing eight tasks among 90 employees meant that each person had only one assignment every three months.

Results came quickly. Programmer Matt Taylor, the first ombudsperson, suddenly became the name on everyone's lips. He requested a replacement for the company's outdated elevator certificate and changed lightbulbs. "People came looking for me who normally would never have come to find me," he says. The assignment system, it turned out, was great for what business-school professors call "team building." O'Brien built a rapport with Amish Patel in IT because he served as her backup one week on milk-and-cookies duty. Now they both have one more person to talk to each day at 2:30.

Eze's spending habits have also improved. The electric bill, which had skyrocketed to $4,000 a month, is down to $1,000, mainly because employees were reminded that their actions, no matter how small -- including turning off computers and lights when they left for the night -- could have a profound impact on company expenses. And the supply cabinet is back in order.

The two committees, for their part, have already fostered a sense of community. The internal-culture group is considering turning Eze's large fourth-floor storage area into a weight room or a band practice area. Meanwhile, two programmers who are amateur photographers dipped into the group's funds to frame some of their work. Today the pictures are displayed on Eze's sixth floor. Not long ago the community-service committee conducted a food drive for Boston's homeless shelters. The committee persuaded Gavin to match every item it collected, can for can.

Visitors to Eze's headquarters will notice that the reception area features an empty desk where one of the administrative assistants used to sit. On the wall behind the desk hangs an American flag. Taken together, the flag and the empty desk symbolize the state of the nation to a tee. But they also symbolize the state of a company where, through tough times, employees have gained a newfound feeling of corporate citizenship.

Ilan Mochari is a staff writer at Inc.

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