“Creativity is especially important to SAS because software is a product of the mind. As such, 95% of my assets drive out the gate every evening. It’s my job to maintain a work environment that keeps those people coming back every morning. The creativity they bring to SAS is a competitive advantage for us” (Goodnight, 2010). That statement is one indicator of what Jim Goodnight, CEO of SAS, considers to be important in the success of the company. He further states: “Employees don’t leave companies, they leave managers” (Lauchlan, 2007). Goodnight cofounded SAS, the world’s largest privately held software company and, with John Sall, continues to fully own the company so that the two can think long term and do what it takes to take care of their employees and their customers. With a 98% customer renewal rate, global sales of $1.34 billion (Bisoux, 2004), and a turnover of around 4% compared to 20% in the industry (Goodnight, 2010), SAS is doing something right. Goodnight is the public face of the company and deserves much credit for that success. SAS has kept its workforce happy by giving its employees challenging work, letting them enjoy a 35 hour workweek, free on-site day care, health care, an extensive fitness center, car dealing, discounts to country club memberships and free M&M’s one day a week. Although the candy costs the company $45,000 a year, Goodnight believes it is a small price to show appreciation for his employees and is an indicator of the organization’s friendly culture (Bisoux, 2004).
Goodnight believes that when the company removes day-to-day challenges, people can focus on their jobs. He tells his managers, “If you treat people like they make a difference, then they will make a difference” (Lauchlan, 2007). For him, it is about giving people a chance to prove themselves. Valuing employees is as important to him as keeping his customers happy. Goodnight states, “I simply wanted to create a company where I would want to work. Over the years, I’ve learned how employee loyalty leads to customer loyalty, increased innovation and high-quality software” (Faiola, 2006). He considers his employees and his customers the building blocks of the success of his organization (Goodnight, 2005). During his speech after being named as the year’s top executive in 2005, Goodnight echoed this theme: “I simply facilitate a creative environment where people can create great software and foster long-term relationships with our customers” (Stevie, 20004). While he stays involved in the daily operations, he has the opportunity to stay close to both employees and customers and hear firsthand about ideas and challenges SAS may face. His formula for success is simple: “Keep your customers happy. Value your employees … while you may not grow your profits every quarter, you will grow your business over time” (Bisoux, 2004:20).
Analysis
Demonstrate your understanding of the integrative relationships among industry environment, corporate strategy, corporate structure, corporate culture and corporate leadership, demonstrate your understanding of the role of corporate leaders in ensuring goal achievement, smooth internal processes and external adaptability, and finally, drill down to analyze CEO leadership qualities and style. Research, analyze and discuss the following:
Industry environment: The global statistical software industry (min. 300 words).
Corporate strategy: The corporate strategy of SAS (min. 300 words).