COMPANY:Open Systems Technologies DE
2015 INC. 5000 RANK: 4539
HEADQUARTERS: Grand Rapids, MI
YEAR FOUNDED: 1998
2014 REVENUE: $107.9 million
If the Inc. 5000 had a Platinum Club, Open Systems Technologies would be a signature member. The Grand Rapids, Mich.-based IT consultancy has been named one of Americ's fastest-growing private companies for seven straight years.
That's not too shabby, and it's also not a fluke. The $77 million OST has been named to the 101 Best and Brightest Companies to Work For in Western Michiganfor three consecutive years, too. What's the secret to its success? OST's employee-centric, family-oriented culture, says marketing manager Mike Lomonaco.
The irony: OST culture has also been responsible for the company’s most formidable challenges along the way to sustained growth. Over the past three years, OST has added a whopping 70 full-timers and expanded to Ann Arbor, Detroit, and Minneapolis. These satellite offices have made it tougher to preserve a close-knit workforce. When everyone’s under one roof, it's easier to bring everyone together for ice-cream socials and parties honoring the company's local ties, as well as for cofounders Dan Behm (president) and Jim VanderMey (chief innovation officer) to attend the events.
Transferring that spirit and cohesion to a second locale -- and then a third and a fourth -- is difficult. And OST learned this the hard way in 2006, when it tried to establish an office just outside of Cleveland. "It was our first time," says COO Meredith Bronk, "and we believed we could simply teach the culture, and that we could expand [it], through periodic presence and messaging without having someone [on-site] who lived it."
The Ohio office lasted only a few years. Bronk calls it "a failure," which she attributes largely to management’s inability to re-create the employee-first, fun-loving culture. The silver lining is that OST came away from the experience with many lessons in cultural preservation, which management has applied in its more recent (and so far, more successful) expansion efforts.
Here’s a brief list of those lessons:
1. Seed new offices with longtime staff who've worked at company headquarters and know the culture.
"You have to have someone in the [new] office shepherding processes who gets the core of why you’re in business," Bronk says. "You have to put someone there who can extend your culture." In Ohio, she says, OST "underestimated the value of continuous presence."
2. Tap the power of books.
To address the challenge of maintaining a culture, the OST senior team read and discussed the principles in Simon Sinek’s Start With Why: How Great Leaders Inspire Everyone to Take Action and Patrick Lencioni’s The Five Dysfunctions of a Team. The books provide reference points and a common vocabulary for the top team as it works to protect and deepen OST’s culture. "Five or six years ago, there were 30 employees," Bronk says. "We didn’t need a book. We will be teaching this to a growing number of employees who may or may not have direct reach to company headquarters."
3. Continue to recruit people who embody the culture.
"How do you make sure you’re protecting what we have? By making sure those you invite are worthy," Bronk says.
In practical terms, OST vets potential hires twice during the recruiting process. First, it reaches out to not only the references provided by job candidates, but also to any relevant contacts with ties to OST. For example, OST scans resumes for past employers with OST connections and notes any familiar names candidates’ mention during interviews.
Second, OST’s two in-house recruiters screen for cultural fit. They ask three or four questions through which they try to gauge whether a candidate’s personality and style will mesh with the company’s culture. They pose these questions not only to candidates, but to anyone else they contact in search of information about candidates.
4. Establish a mentality of employee investment.
Of OST's 120 full-time employees, 37 own a piece of the company. Other employees are able to buy in only when one of those shareholders, all early-stage staffers, wants to sell. The shareholders "all treat this like this is our company," Bronk says. "There's a huge pride in ownership."
In other words, it's not just the top team that's invested in long-term performance and the preservation of the culture. There's an entire cast of veterans who literally have an interest in OST’s future. Which means, when new offices open up, it's senior managers aren't the only ones preaching the gospel to the uninitiated. "This is all about us and our success," Bronk says, "and nothing is going to stop us from growing to be a $1 billion company, if that’s what we want."
5. Screen partners and backers for cultural fit.
About 18 months ago, OST took on a private investor who became the majority partner in the company. It chose an individual investor over an institutional one in an attempt to ensure that the new partner would preserve, protect, and defend the company’s culture.
How did OST come to know and trust this investor? "It was a pretty good feeling from the start," Lomonaco says. “They were very transparent (a key part of our culture is transparency as well) and allowed us to ‘ask anything.’ . . . We wanted to do this with the full confidence that nothing would really change at OST as far as how we approach our employees and our employees-and-families-first culture, as well as how we made day-to-day or even strategic decisions at OST.
"So, once the final decision was made as a company and we started to inform our customers, we told them the same thing we discussed as employees--that nothing would change. Sure, we had some doubters. However, nearly one and a half years later, I believe that everyone would agree that nothing has really changed, and it’s been ‘business and culture as usual’ at OST."
It’s gotten the company this far.