THE SAS INSTITUTE
Succeeding with old-fashioned values in a new industry 1 (revised September 2010)
Adapted by CH Besseyre des Horts from C.A. O'Reilly III & J. Pfeffer (2000) : Hidden Value, how great companies achieve extraordinary results with ordinary people, Harvard Business School Press, pp. 99-117. 1
THE SAS INSTITUTE : Succeeding with old-fashioned values in a new industry TREATING PEOPLE DIFFERENTLY (and better) than they expect to be treated, and differently than other companies in the industry treat them, is not something that only works in retailing. Even in the world of high technology and software development, there is a case to be made for being different. And few companies in this industry are as different as the one described in this chapter : SAS Institute that was ranked in 2010 the #1 Best Company to Work For in the USA 2 , # 10 in India 3 and among the 25 Top Employers in China 4 . SAS Institute, the largest privately owned software company in the world, is an anachronism. "In an era of relentless pressure, this place is an oasis of calm. In an age of frantic competition, this place is methodical and clearheaded. In a world of free agency, signing bonuses, and stock options, this is a place where loyalty matters more than money." In a world of outsourcing and contracting out, SAS Institute outsources and contracts out almost nothing. Day care workers, onsite health professionals, food service workers, and even most security guards are all SAS Institute employees. In an era of managed care, SAS offers a full indemnity health plan with low deductibles. In almost every respect, SAS Institute seems like a throwback to an earlier era, to a time when there were long-term attachments between companies and their people, and large, progressive organizations such as Eastman Kodak, S. C. Johnson, and Sears offered generous, inclusive benefits in an effort to enhance the welfare of their workforce. Not all observers seem to approve of this form of employment relationship. Some people say that SAS Institute reeks of paternalism or a plantation mentality in a world otherwise dominated by market like labor market transactions. For instance, an article in Forbes stated, "More than one observer calls James Goodnight's SAS Institute, Inc., 'the Stepford software company"' after the movie The Stepford Wives. In the movie, people were almost robot-like in their behavior, apparently under the control of some outside force. Another article noted, "The place can come across as being a bit too perfect, as if working there might mean surrendering some of your personality." Of course, no one is forced to work at the company, and there are many nearby opportunities available. SAS Institute is so inclusive and comprehensive in what it does for its people that it makes some observers, more accustomed to the arm's-length, occasionally adversarial relationship between employers and employees now so typical in organizations, uncomfortable. Certainly, aspects of the company's generous benefits, spacious, campus-like grounds, and concern for the total welfare of all of its people seem out of place in contemporary management practice. What a puzzle! How can a company that operates like firms did fifty years ago succeed in today's economy-not only that, but succeed in one of the most high-technology sectors of that economy, software? SAS Institute poses a second mystery. The conventional wisdom is that turnover is endemic and inevitable in high technology in general and software in particular. In these industries 2 3
http://money.cnn.com/magazines/fortune/bestcompanies/2010/full_list/ http://www.greatplacetowork.in/best/list-in.htm 4 http://www.topemployers.com.cn/en/employers/OurProjects/ChinasTopEmployers2010/CertifiedorganisationsA Z.aspx
there is a tremendous shortage of people, and job hopping is an accepted and even expected part of people's career strategy. But SAS Institute, with...