How Radical Management Ideas (Really) Drive Results

Because it involves those dynamic creatures known as humans, management is an ever-changing process. Schools of thought about how to maximize employee potential come and go as attitudes and lifestyles evolve. It’s true, some ideas crop up that are radical just for the sake of being radical. But too often, companies choose the status quo over new ways of managing that increase employee retention and satisfaction and help the bottom line. We looked at three companies putting innovative management techniques into practice and asked them how it’s working out for them.

Gamification

The company: Clarabridge is a customer experience management company. In business since 2005, the Virginia firm produces sentiment and text analytics software that helps clients understand what their customers are saying about them so that they can provide a better customer experience. Though the company roster is currently at around 120 people, Clarabridge expects to add another 40% this year, making an established system where people can come in and get to know each other quickly a high priority.

The idea: Definitions abound, but generally gamification involves making a game out of an otherwise dull or unexciting experience. It’s not a new concept, not even to the business world. Capitalizing on the human desire for competition and reward has been a staple of marketing and customer engagement for years. However, a company turning the process inward is still a relatively radical technique. For example, a manager turns data entry into a competition for employees.

Clarabridge applies the concept of gamification to its human resources activities and to create a “work hard, play hard” environment. Through the year-old Clarabridge Culture Club (3C), the company has moved from department-level team-building activities to whole-organization networking and get-to-know-you events. All the employees are split into four teams that compete against each other monthly in Just Dance Wii tournaments, Halloween costume and ugly Christmas sweater contests, office decorating competitions, and other games that don’t require special skills or knowledge for participation. Wins earn points toward a prize that’s awarded at the end of the year.

Clarabridge also sets stretch goals for itself, or goals that, as coined by business guru Jack Welch, they don’t know how they’re going to reach. Effectively, they’re a form of gamification. They require outstanding effort and innovation from everyone in the organization. Clarabridge sets a sales goal, asks its employees to “compete” against their own “score” from the previous year and solve the puzzle of how to get to that sales figure, and when it’s met, it provides the reward: a company trip to an exotic locale like Aruba.

The results: Melissa Pippine, vice president of marketing, says of Clarabridge, “We just did an employee survey where we got tremendous feedback on 3C. We’re also in everyone’s annual review cycle right now, and almost every employee has mentioned that they feel the strength among the teams; they don’t feel that morale has ever been this high, which is great. We also have not had any voluntary turnover since we launched 3C. Considering we’re in a fantastic job market and a really high-growth industry, that’s saying a lot.”

Clarabridge is also making a strong case for the efficacy of stretch goals. The company has hit the target four times in the five years it has been setting stretch goals. A company trip to the Dominican Republic is right around the corner for having met last year’s goal.

The future: Despite the wide range of decision-makers who have put gamification into practice in healthcare, education, combat training, finance, and more, many in the business world are still on the fence about whether it will help or hinder productivity. Nevertheless, a recent report by tech research firm Gartner predicted that by 2014, 70% of large companies will gamify at least one business process.

Stretch goals also receive both praise and criticism from business pundits, the former celebrating the way they promote excellence and the latter complaining stretch goals are ill-defined and demotivating. It seems likely that because entrepreneurs and CEOs love them, stretch goals are not going away for the foreseeable future.

Remote work and unlimited vacation

The company: HiringThing is a developer of online software that seeks to streamline the process of finding excellent employees for hiring managers at small and medium businesses, helping them post listings, accept resumes, and sort through piles of applicants. The startup was founded by Josh Siler in January of 2012, and he currently works as the startup’s CTO.

The idea: Telecommuting was going to be the next big thing, the way we do business in the future, all of us waking up, walking over to the computer, and clocking in. Yet, somehow remote working never caught on with the workforce — or more accurately, with employers — the way many expected. Although as many as 13.4 million people were working remotely at least one day a week in 2010, just 2.5% of the American workforce considered home their primary workplace in 2011. Major companies including Yahoo! and Best Buy have been revoking employees’ ability to work from home.

From its inception, HiringThing has been 100% remote. Three times a week, the team of six employees connects for a video chat via HDFaces video conferencing, a version of Citrix Systems’ GoToMeeting software. Once a quarter, the team meets in person for performance reviews and strategic discussions, which Siler considers “things that you really need to do face-to-face.”

The rest of the time, HiringThing keeps productivity up by, first, hiring “more senior” workers who are responsible and self-motivated enough to work remotely. Also, Siler says management has a commitment to monitoring employees’ performance and holding them to account if they’re not performing while they’re telecommuting, because “if you don’t do that the whole system fails.” Finally, management simply trusts employees not to abuse the privilege of flexible work hours.

Trust explains why HiringThing has also jumped on board with a recent tie-in to telecommuting: unlimited vacation days. Tech companies like Netflix and Evernote have led the way with this new policy, which holds that if employees are getting their work done, managers don’t care how much time they take off, as long as they give adequate notice. (Employers get the added bonus of not having to pay the expenses of tracking vacation time or unused PTO.) Siler says, “We want to encourage people to take time out to recharge and not overwork because we think we’ll get better results out of them if we give them that freedom.”

The results: Because they’ve been remote from the start, pre- and post-radical policy implementation is impossible. What is clear is that HiringThing is steadily growing and that remote work seems to suit its business model perfectly. Siler says the company is doubling its customer base every quarter and estimates at least doubling the staff by the end of 2014. Employee retention is 100%, which for a startup is impressive, even for one as small and young as HiringThing.

Siler says, “I think (telecommuting) certainly has proven itself to work. I don’t know a lot about what Yahoo was facing, but I can certainly see how if an abusive environment developed where people weren’t being held accountable for their productivity, that it could be a detriment.”

The future: Given the low cost of the technology that enables remote work, and the high amount of savings companies stand to enjoy by foregoing a central office with its rent, utilities, maintenance, and other expenses, it seems counter-intuitive that more are not doing like HiringThing and going remote. For their part, employees think telecommuting has merit and will probably continue to push for at least some time each week in which to work remotely. Unlimited vacation time is catching on in Silicon Valley, and other parts of the country where remote work is feasible are likely to follow suit.

Siler says, “I definitely think (flexibility) is the future. I have a lot of colleagues in the high-tech industry and I hear more and more about companies offering flexible work and work-from-home arrangements.”

Napping

The company: Yarde Metals is a broker of aluminum, stainless, carbon steel, brass, and copper in specialty sizes and formats. Now in its fifth decade of operation, the company has 10 service centers on the East Coast and has a thriving international business. In 2006, the company was acquired by Reliance Steel and Aluminum.

The idea: Researchers have known for years that sleeping as little as 20 minutes in the afternoon can have a myriad of benefits. No less an illustrious organization than NASA found 26-minute naps can improve performance 34% and alertness 100%. Dr. Sara C. Mednick , author of Take a Nap! Change Your Life found naps also have positive effects on memory and learning new skills. Rather than have employees’ work get progressively poorer as the hours go by toward quitting time (as proven by a Harvard study), managers install nap rooms for restoring and revitalizing catnaps.

Yarde Metals founder Craig Yarde hit on the idea of a nap room in the ’90s when he began to notice employees napping at the 24-hour facility. So when the company expanded into a new space in 1995, he had a literal rest room included.

Susan Schipke, sales support supervisor at the corporate headquarters, tells us, “The nap room is available to anyone, no matter what they do here, as long as it is not a hardship to their department for any length of time. If anybody needs the nap room because they’re not feeling well or because they just really need to take a nap, they’re permitted to do it.”

The results: Today, Yarde Metals employs over 650 people at 18 branch locations, including China and South Korea, and brings in revenue in the area of $350 million. But instead of leaving its nap policy behind with its former, small office spaces, the company has maintained the policy and integrated it into its operations as a major company. In 2011, Yarde told Inc. Magazine that “without question, (naps) improve productivity.”

As Schipke said, a number of the employees who take advantage of the nap room do it when they aren’t feeling well. “ather than give up and go home, they go spend 10 or 15 minutes in the nap room and often come out refreshed and feeling a little better and stick it out for the rest of the day. So it does pay off.” She made it clear that the nap room was just one of the ways the company shows its appreciation for its human resources, saying Yarde Metals also has a gym and a private chef for reasonably-priced breakfasts and lunches.

The future: Yarde was well ahead of his time with his truly radical management idea; in fact, when he first enacted it, even his workers told him he was crazy. And though we now know much more about the potential of a good nap, many companies still cling to the image of an employee napping at his desk as the embodiment of dead weight. Of course, notable examples exist. Giants of enterprise on the West Coast like Nike, Google, and Zappos famously allow their employees to enjoy naps while at work, and startups are generally open to the freedom to nap, if needed. But in most of the heartland, a company making the call to allow naps is still a newsworthy event.

Whether they’re taking 40 winks, dressing up like the Gangnam Style guy, or working in their pajamas from their living rooms, employees are happier under these management styles. And employee happiness in itself has been proven to lead to better margins and higher productivity. Firms that demonstrate appreciation for employees receive triple the return on investment compared to those that don’t. Dissatisfied employees cost an estimated $300 billion in lost productivity every year. It’s something of a depressing comment on the working world that methods that make employees happier are considered radical. Hopefully companies like Clarabridge, HiringThing, and Yarde Metals will become the rule, rather than the exception, in the near future.