The X Factor

What makes a company great. What makes people quit.

April, 2006

It was the day after Christmas when Helen Abe packed her bags for Kansas. The doctors had run some tests on her mother and found lung cancer. To root out the cancer, they would hit it with an aggressive, double shot of chemotherapy and radiation. Abe knew she had to be there for the hospitals trips, for the baffling medical reports, for the exhaustion.

“It was my mother, I had to go,” says Abe, an executive assistant at the Hawaii District Navy Exchange and a single mom with one daughter. Abe had just one week of vacation to burn, then the bills would pile up. That was reason to worry when her mother’s illness was already enough to worry about. But Abe’s employer had a special program for situations like these. Employees at the Navy Exchange can donate their vacation days to co-workers in need, like Abe.

“I have never worked for a company that had that type of thing and I think it’s wonderful, especially when you are in a situation which is pretty sad anyway,” says Abe, 43, who returned to work six weeks later, after her mother completed her round of treatment, without missing a pay check. “It sure takes the burden off.”

Those types of benefits are part of the reason the Navy Exchange ranks No. 5 on Hawaii Business’ Best Places to Work List for large companies. Companies that take care of their people are places people want to work. But the benefits are only the beginning of the story. In interviews with consultants, professors and companies that are getting it right, the road to becoming a Best Place to Work is built on an affirmative, bottom-to-top corporate culture, not benefits.

Whether they work for a real estate firm, a hotel chain, a construction outfit, a school system, a hospital or a jewelry manufacturer/retailer, people want to believe in their company. People want to be supported, they want to grow, they want fairness, they want leaders and they want unity. That’s how we’re hardwired. “You can’t buy your way into a Best Place to Work with benefits,” says Richard Boyer, managing partner of Wilmington, Del.-based ModernThink, which was contracted by The Best Companies Group to compile our Best Places list.

In the following pages, we set out to unlock some of the secrets of being a Best Place to Work, because being a Best Place is not just feel-good rhetoric. The financial rewards are clear: less turnover, better hires and more production. Some methods are straightforward, like continually recognizing good work. Some of it comes down to intangibles, such as buy-in in a company’s mission, such as the characters of its leadership and its employees, what we call the X factor.

At the Navy Exchange, Veronica Manz, human resources manager, says it’s the mission of its retail/service centers – to support the men, women and families of the military – that has electrified the staff. So when Abe needed help when her mother fell ill, even at a large company such as the Navy Exchange, with more than 1,300 part-time and full-time employees, people were ready to help. It’s not the benefit that’s noteworthy, it’s that people were so willing to give for the team.

“They don’t even need to know the person; all they need to know is that they are Navy Exchange,” says Manz.

More Than Words

Boyer, of ModernThink, remembers working with the senior leaders of a $600 million Mainland company a few months back. The executives were all patting each on the back because their staff had all reported they knew the company’s newly adopted mission and values. Boyer asked the leaders to tell him what the values were. “Nine out of 10 went diving for their notes,” he says. “Mission statements need to be more than posters on the wall.”

Boyer says a strong mission or team can be rendered apathetic by floundering or distant leadership, and strong senior leadership can be sunk by a bitter or unqualified supervisor. Leadership and supervisors need to have both the talent and the ability to gain the respect that comes from establishing fairness and openness in the workplace.

Increasingly, as the next generation enters the workplace, more and more emphasis is being placed on what the company can do for the employee, says Boyer. “They want the company to invest in them,” he says.

For Generation Y in particular – often defined as those born between 1980 and 2000 – the job needs to be rewarding, whether it is through career or personal growth or just a clear understanding of each employee’s impact on the mission. Employees want proper training and support, they want constructive feedback and they want to be recognized for their work. They also want their personal lives to be incorporated into the company’s vision, with opportunities such as flextime and telecommuting. It’s not rocket science, nor does it have to cost a company a lot.

Good pay and benefits, such as health plans and 401(k)s, are keys to being competitive, but the overall commitment to workers has to be in place, Boyer says. That’s what makes people love their jobs.

Boyer admits that, to some old-school business thinkers, this might sound like coddling your employees. It’s not. It’s about good business, and, in an increasingly competitive environment for workers today, this is also where business is headed. “That is the reason we are seeing more emphasis on being the employer of choice,” Boyer says. The bigger issue today is how to do it.

University of Hawaii business professor Richard Brislin says he’s surprised that more Hawaii companies have not moved in that direction. In Hawaii’s extremely tight labor market, a nurturing corporate culture could easily distinguish a company, he says. Brislin cites unfair promotions and domineering supervisors as two quick ways in which companies create negative environments.

At ALTRES, a staffing and human resource outsourcing company, consultants help clients avoid the pitfalls of becoming places where no one wants to work, says Debbie Padello, director of human resources. Padello agrees that bad promotions and bitter supervisors have lasting negative effects in the workplace, but things like failing to give employees the tools they need or even just the absence of a common goal can also kill morale. The price can be steep.

“Negative morale spreads like cancer. Once employees don’t appreciate where they work, they don’t want to come to work and their productivity decreases. Or they leave,” says Padello, whose company is No. 3 on the small-company list. “Negative morale is easier to foster than positive morale, but if you don’t make it a priority, it will suck you down the tube.”
When Jennifer Rappenecker, the regional director for Edward Jones in Hawaii, gave birth to her son two years ago, here’s what the company did. Edward Jones hired an investment representative from Louisiana to come out to Maui and work her client list during her three-month maternity leave. The idea was to create a situation where Rappenecker would not have to worry about losing clients in her absence. The guy from Louisiana wasn’t going to bring her Hawaii clients back home; so she could give her full attention to the first moments of motherhood.

The X Factor

“That was impressive to me,” Rappenecker says.

All the companies on the Best Places to Work lists have the basics down. But we also found that all these companies had something extra special, some guiding light – a leader, a value or a mission – that tied everything together and took them from being good places to work to great places.

Take Edward Jones; No. 1 on the small-company list. It invests thousands of dollars training an investment representative. Then Edward Jones makes sure it treats them like it wants them around for a long time.

At PM Realty, No. 4 on the small-company list, Corrine Hiromoto, a senior property manager, says trust is the hallmark. “People feel they can grow here,” she says. For herself, it meant everything that, when she was managing two small properties downtown, her boss asked her to take on City Financial Tower on Merchant Street. He recognized Hiromoto had bigger aspirations, gave her the support she needed and gave her the chance to get there. “When someone puts their faith in you, you want to make sure you do it,” says Hiromoto.

At Outrigger Hotels, a locally founded, family-owned business, Hawaiian values are part of every aspect of its operations. Perhaps most of all, the value of ohana is reinforced from top to bottom. “People truly respect each other like family here,” says assistant housekeeper Jo-Ann Yonamine. That is never clearer to Yonamine then when she sees the grandchildren of the founders intern at the company. “They do everything. They come to housekeeping and they make beds and clean toilets. Then they don’t go out and eat lunch, they eat lunch with the housekeepers.” Outrigger ranks No. 2 on the large company list.

At Na Hoku, president and CEO Ed Sultan, says the jewelry manufacturer and retailer has never embraced any textbook management theories on corporate culture. For years, Sultan’s team had just been making decisions according to what was best for business. Now his team has established a straight-shooting style that permits no sacred cows and does absolutely everything it can to give its people the tools to flourish. His people like it. Na Hoku is No. 3 on the large-company list. “People like to be winners and here they can be,” Sultan says.

At Maryl Group Inc., Mark Richards, who owns the company with his wife, Cheryl, says they worked for years to achieve a corporate culture that invigorated people. They did everything by the book, but something was always missing. Then the Richards had an Aha! moment. They not only had to make a workplace that people loved, they had to hire the kind of people who would flourish in it.

“We don’t even look at the resume until we ascertain that applicant’s value structure. Character is the first gate. Then we look at the experience profile and aspirations,” Richards says. “For a long time, we had it wrong. We were looking for intellect, drive, creativity and all that kind of stuff and we were failing.”

Now the development and construction firm is No. 1 on the large-company list. This past year, Maryl recorded its best year in its history, at $115 million, a 30-percent increase over the prior year, without a sizable increase in staff. “People are working harder, but they don’t get the stress factor, because they enjoy what they do,” Richards says. “It is a wonderful thing to behold.”


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