SAS Institute - More than Gravy

The success experienced by the SAS Institute is absolutely a result of their unique practices of compensation, personnel management and the culture fostered since the company’s inception in the higher education community. True, SAS has numerous competitive advantages that would be extremely difficult to duplicate or imitate, but they also do many important small things that validate the sincerity of management’s policies and rhetoric and that other companies in any industry can learn from to improve the job satisfaction of their own employees. SAS being privately held is a huge determining factor in all the strategy and policy they utilize, allowing great amounts of freedom for management to focus on long-term goals without the pressure of immediately pleasing stockholders and a board of directors. Obviously this is a factor not enjoyed by most of SAS’s competition, but the way SAS treats its employees is crucial to its sustained success and continuous innovation in an extremely competitive marketplace. SAS enacts a few very key benefits for its employees including a health center, day care, employer funded retirement, bonuses, task autonomy, and a touted health care plan. Combine these factors with the personal contact initiated by the upper management with their front line employees and it results in a family-like work environment where everyone has pride in their personal accomplishments and in turn the achievements of the company as a whole. On their website SAS states “If you treat employees as if they make a difference to the company, they will make a difference to the company.”
The success at SAS begins at the top. The upper management sets the tone for the entire company and not just through their rhetoric but through their actions as well. The company regards its employees as internal customers, and similar to their external customers when a request is made management takes it seriously and does their absolute most to satisfy that request. Having a CEO who is also the majority owner creates positive feelings in the employees at SAS because they realize that the company is the CEO’s baby and every decision he makes will be for the benefit of that baby providing a reassurance and stability unique to employees in the volatile software industry. SAS’s CEO, Jim Goodnight, also demonstrates his commitment to the company’s success through his actions of internalizing health care, providing day care, and adopting a hands-on approach to managing all aspects of his business. Goodnight states, “If you want something done right, own it and control it.” Therefore to provide his people with the best he chooses to outsource almost nothing. Goodnight commits also to reinvesting large percentages of earnings back into research and development pursuits to keep SAS on the cutting edge. As majority stockholder Goodnight could theoretically pay himself enormous dividends, take huge portions of these earnings and put them straight into his personal bank account, but he doesn’t. These actions prove to his people that he truly cares about the company’s mission and future. And it isn’t just Goodnight. SAS has the practice that senior managers run portions of their new employee trainings, so right off the bat front-line people have personal contact with upper management, further building that stability and trust relationship throughout the company. That way lower level employees’ trust that their superiors are making the right decisions, and management can be assured their employees are working their hardest to meet their obligations. Their CEO states, when discussing performance management, that “it should be a relationship instead of an infrastructure.” These relationships allow SAS to employ far fewer testers of their programming, relative to competitors, because of the rarity of mistakes made resulting in another advantage for SAS.
In any industry where brain-power is highly valued, as it is in the software industry, companies will recruit the most intelligent and accomplished minds they can as that individual could be responsible for the company’s next multi-million dollar product development. As we have previously examined intelligent people can be extremely difficult to manage. The commitment that SAS makes to giving its employees task autonomy is a very attractive work environment for an accomplished person. Importantly here too, SAS does not just use rhetoric, they take actions like providing every employee with their own private office. SAS believes strongly in intrinsic motivation, and this is where that comes into play. They allow their employees to motivate themselves they just provide them with the tools to make that possible. Also SAS allows their employees to move sideways through departments to amend their responsibilities, sometimes radically. Employees at SAS could theoretically move from the technical support department to research and development or sales. This has to be attractive to intelligent motivated people that often have many facets to their interests and skills. This practice would also cut down on burnout and complacency, both of which lead to the withdrawal behaviors of absenteeism and turnover, again saving the company in cost, but also increasing that intangible value of employee job satisfaction that drives performance. As a self-proclaimed intelligent person, I have experienced the burnout associated with the pressure of a sales position and would have welcomed the opportunity to flex different muscles in a product development capacity for a time. This flexibility demonstrated by SAS allows them to utilize every aspect of each employee to best impact the organization. I believe these two aspects of the culture at SAS are crucial to their employees’ happiness because all the rest of the benefits, i.e. health club, day care etc., are just gravy if the employee is not engaged in an activity they enjoy with the independence many adults require. And gravy, though yummy and requisite on certain dishes, is not very nutritious and is certainly not sustaining.
SAS can be compared further to a heaping plate of Thanksgiving dishes. The turkey, the real substance, comes from the private ownership since the company’s inception. The turkey is the reason for the holiday, just as the private ownership provides the means for SAS’s unique existence. On the side as the dressing is the CEO Goodnight, who must be stuffed in the bird to taste right, and you couldn’t wholly separate one from the other, ever. And also symbolizes the reinvestment of revenue into the company. You got mashed potatoes representing the company’s product which in the marketplace is not entirely unique, but for every person there is really one style they like the best, and SAS makes some pretty tasty mashed potatoes. Then you have the tangy cranberry sauce, representing the human resources practices, and since cranberry sauce must be eaten with every bite on the plate it is the glue that ties the dish together, and gives the cook (SAS) another opportunity for uniqueness. Finally, of course you have the gravy, all the perks, and at SAS that plate is smothered gravy. Conclusively it all sounds really tasty, and also like something one could eat repeatedly.