Building a Better Workplace: Culture and commitment

In 1992, Shail and Sucheta Jain launched their software consulting company, Intelligent Information Services (IIS), in Durham, N.C. It wasn’t easy for the couple, who had emigrated from India in 1978, to walk away from secure jobs in a large corporation, especially when they had two young daughters to support. But their six-figure salaries didn’t compensate for the lack of fulfillment they felt; they wanted more from their jobs.

After a decade of working in large companies, the Jains had formed their own ideas about what makes work meaningful and satisfying, and it had everything to do with the business culture. They identified three values that would guide their company’s practices: integrity, innovation and service-mindedness. Those values appear frequently in the mission statements of many companies; the difference was the Jains’ determination to live those values every day.

“My wife and I think long-term,” says Shail. “We want our company to last a hundred years, and having an open and honest culture in which employees can express themselves freely, feel respected and have a say in deciding how to execute and deliver products increases the odds of that happening.”

IIS got off to a rousing start, focusing on helping customers change their computer software systems in preparation for Y2K. By 1999, the company had grown to 200 employees and revenues of $12 million.

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“Shail and Sucheta built a remarkable culture first in the expectation that good things would flow from there—and they have,” says Wayne Rivers, co-founder and president of the Family Business Institute in Raleigh, N.C., who has met the Jains. “This is in stark contrast to my experience with hundreds of others who think building a healthy family business culture is one of those nice things you do after you’re successful.”

IIS’s strong company culture couldn’t protect it from the devastating effects of the dot-com bust of 2001, but the good will the Jains had built up with employees and clients kept IIS afloat while other tech companies sank. “Our long-time customers stayed with us and pulled us through,” says Sucheta. “We were surviving doing small projects, but we weren’t growing.”

Recognizing that they had to reinvent their company quickly, the Jains hired a consultant to work with them on strategic planning. IIS had developed software to help a small county in North Carolina collect property taxes more efficiently, an area the consultant identified as having growth potential. In fact, the state tax assessor was so impressed with IIS’s software that he connected Shail and Sucheta with the Association of County Commissioners to discuss making it available to all the counties in the state.

IIS’s original product had been developed for the needs of one small county. Adapting it to the needs of counties of different sizes would require considerable investments of time and money. “We had some tough years,” recalls Sucheta. “We had to let a lot of employees go and freeze the salaries and cut benefits of those who remained. A few offered to take pay cuts, but we refused.” Within two years, IIS’s revenues had picked up, allowing the company to resume giving salary increases and matching employees’ contributions to 401(k) plans.

Wayne Rivers calls IIS employees’ offers to take pay cuts and take on after-hours projects without compensation as the company charted a new direction “the culture of teams and shared sacrifice that all companies would love to build.” He adds, “Family businesses often give lip service to ‘culture first.’ IIS is rare in implementing it. When the company’s future was murky, employees stayed not only because of personal loyalty to Shail and Sucheta, but because they trusted that they’d be on the ground floor of, and part of, the decision-making apparatus of whatever new opportunities the Jains created.”

Today, the majority of IIS’s clients are municipalities in North Carolina, but the company has also expanded its client base to include insurance, financial and manufacturing companies nationwide. As evidence of its comeback, IIS has averaged revenues of $6 million a year since 2005.

“We are persistent people,” says Sucheta. “We don’t give up easily. We felt such a strong commitment to our employees and customers; we had to give it our all.”

IIS now has 50 employees and a stringent hiring process. Those who pass the written tests and interviews with project managers face the final hurdle—a long, informal conversation with Sucheta. Her skill in recognizing candidates who fit in with and appreciate IIS’s culture is credited as a key factor in the company’s low turnover rate; the average employee stays for eight years.

 

IIS’s encouragement of innovation has allowed creative employees like Jeff McDonald to rise through the ranks. McDonald, who started in sales in 1996, is now vice president of e-Gov Solutions, the largest team in the company. “IIS is a company that couples the values of openness, honesty and service with achievement,” says McDonald. “They don’t always go together in business.”

The Jains’ sense that corporate culture was key to business success was reinforced with the publication of Arie de Geus’s article “The Living Company” in Harvard Business Review and, later, Jim Collins’s book Built to Last. Both continue to inspire and guide the Jains in running their business. Shail believes that IIS survived its lean years by adhering to the four basic principles de Geus identified in “living companies”: having a strong values-based corporate identity, managing finances wisely, being aware of the outside world and being open to new ideas.

“We were lucky that when the dot-com bust occurred, we had no debt,” Shail says. “Our capital was in the relationships we had with employees and customers. We also adapted quickly to changing conditions; now we take on long-term projects that help clients save money, which is the need of the hour. And although our product has changed, our values stayed the same.”

The Jains’ insistence on acting with integrity in every aspect of their business was in part a reaction to watching too many employees in large corporations pretending to be busy or doing just enough work to get the job done.

“We wanted a company that delivered value to our customers,” says Sucheta. “If we bill customers, say, $80 an hour for our services, we want them to feel they got $100 worth. That’s why we ask our project leaders to review their teams’ work before sending out invoices. If they believe that some hours weren’t useful to the customers, they’re authorized to omit them from the billing.”

Shail, 53, and Sucheta, 51, still hold to their dream of IIS lasting a century or longer. Their daughters, now 24 and 20, aren’t interested in working in the business, but the Jains have begun succession planning with trusted employees like Jeff McDonald. “Shail and Sucheta would never sell IIS just for the money,” McDonald says. “They want to ensure it’s in good hands and the culture they created continues as they originally envisioned it.”

Deanne Stone is a business writer based in Berkeley, Calif.

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