What Makes Companies Well-loved

April 1, 1998
A few months ago, Fortune featured its inaugural The 100 Best Companies to Work For in America. The list was based on more than 20,000 questionnaires filled out by employees at 238 companies. Authors Milton Moskowitz and Robert Levering, who have been tracking the most-favored companies since 1981, compiled the Fortune list. What intrigued me was a companion piece entitled "Why Employees Love These Companies" by Ronald Lieber. It described the three key corporate traits employees identify as qualities that make their companies so great. These traits are: Inspiring Leadership, Sense of Purpose and Knockout Facilities. In contemplating how HR could directly benefit from this information, the following questions arose: How well does your company perform in these areas? And, in carrying that thought further and deeper, how do you measure and assess yourself and your HR department?

To illustrate this human resources perspective, Workforce interviewed two HR executives who work for companies that appeared on the Fortune list and that are known for inspirational leadership and sense of purpose (Mary Kay Inc. and Medtronic Inc.). The third interview focused on knockout facilities and was conducted with Northern Telecom Ltd. (Nortel).

Inspiring Leadership. Riz Chand, senior vice president of HR and administration at Dallas-based Mary Kay Inc. (No. 82 on Fortune’s list) spoke about his company’s inspiring leadership. The company, he explained, was founded essentially on the principle of empowerment. According to legend, Mary Kay Ash was pushed to the sidelines by her male superiors in the 1950s. Undaunted, she quit her job as a saleswoman and went on to build a sales organization that today boasts 475,000 women who sell her products. The company’s human resources department comprises 47 employees. One of the best examples of inspired leadership is the company’s CEO, who first joined the company as the senior vice president of human resources before rising to her current executive position.

Chand says that HR also inspires leadership by frequently recognizing employees’ good work and deeds. For example, at Mary Kay Inc., employees convene periodically at a central location where individuals are publicly recognized for their good deeds. "One security employee was driving home one evening and noticed a sales rep’s car on the side of the road. He stopped, took her back to the office, went back to her car, changed the tire and got the leaking one repaired. Then, he went back to the office, picked her up and drove the co-worker home." Going that extra mile, he says, exemplifies the notion of leading by inspiration.

Another example of how HR inspires leadership is Chand’s commitment to review any case of an employee forced to leave the company. If he and the CEO can turn an employee around, they’ll try to place him or her in a different job before considering termination.

Handwritten notes of praise also go a long way in inspiring employees to keep up the good work, he says.

Sense of Purpose. Janet Fiola is senior vice president of human resources at Medtronic Inc. (No. 47 on the Fortune list), a medical products company based in Minneapolis. Every December, her company sponsors a holiday party where patients, their families and doctors are flown in to tell their survival stories. Improving human health gives Medtronic’s employees a deep sense of purpose, says Fiola. "We enhance and improve people’s lives." That mission, she adds, was articulated by the company’s founder 40 years ago in a statement called "Toward Full Life."

How this quality translates into human resources, she says, is that her department consciously tries to attract candidates who have a strong sense of purpose or value system aligned with the company’s mission. It begins in the interview process. And all of the company’s recruitment material is geared to attract those believing in full life and good health.

HR staff reinforce the company’s mission in several ways—at employee orientations and weeklong leadership courses for the company’s vice presidents and directors. And how do they measure HR’s impact? They conduct a biennial employee-attitude survey called "Global Voices" in which employees answer questions pertaining to job satisfaction. "In the last survey, 94 percent of employees said they understood the company’s mission," says Fiola.

Knockout Facilities. Inspiration and purpose are clearly the foundation upon which employees chart their course. But working at a cool facility can’t hurt.

At Northern Telecom Ltd.’s Brampton Center in Brampton, Ontario, the senior vice president of HR worked with the chief architect and planner to move 3,000 employees from office towers into a single-floor retrofitted factory. "We took an old manufacturing facility (one million square feet) and turned it into corporate headquarters," says Rosemary McCarney, vice president of employee value research and strategy. "There are no elevators. It feels like a city, so there’s lots of opportunity to bump into people and have quick meetings over coffee."

In the past, Nortel’s employees were compartmentalized by floors. But with a team-based philosophy, the physical environment had to be an enabler of the process. "A great workplace should honor the workforce and create conditions for full potential performance," she says.

According to an article that appeared in Business Week last year, Nortel turned to Houston’s Hellmuth, Obata & Kassabaum (HOK) to transform the factory into a horizontal 50-story office building. HOK analysts studied how the work units functioned—the levels and kinds of interaction, mobility, travel and tools used by employees. Today, there are "neighborhoods" for different operations connected by designated boulevards, streets and alleys marked by color-coded signs and banners.

McCarney admits being a disbeliever early on. She couldn’t envision how several thousand employees could work on one floor and not become discontented. "I was wrong. The facility is fantastic and there’s a strong sense of team mixed with high industry—all at once."

And how about you? After looking at one’s HR department, the next step is to look within oneself, which is where the deepest level of understanding can be developed. Ask yourself: Do I inspire me? Am I willing to be inspired? Have I developed a sense of passion around my work that engulfs me so others want to be around me and to follow my lead? After all, the true key to one’s happiness and security is understanding oneself. If you’re willing to review your company, HR department and your own actions and beliefs, perhaps the Fortune article will inspire you to become the best you can be. It’s nice to know it’s all within your power to make it so.

Workforce, April 1998, Vol. 77, No. 4. pp. 125-126.