The Top Workplaces Fund was up 12.6% in 2012

We’ve been enjoying tracking the progress of our Top Workplaces Fund over the last few years. The good news is that it continues to perform well.

Review of 2012

The fund raced out of the blocks at the start of 2012, was quiet over the summer and then had a strong end of year. Overall it was 12.6% higher than it started – matching the progress of the S&P 500 index.

There were a couple of stand-out companies:

• Cirrus Logic (CRUS) – Up 83%
  A supplier of high-precision analog and digital signal processing components.
  Cirrus Logic Top Workplaces Profile

• Virtus Investment Partners, Inc. (VRTS) – Up 59%
  A diversified investment management company.
  Virtus Investment Partners Top Workplaces profile

Start of 2013

The fund has enjoyed a good start to the year – up 6.3% versus 5.3% for the S&P500 index.

There has been a stellar performance from one company in particular:

• United Community Bancorp – Up 62%
  A local community bank serving southeastern Indiana
  United Community Bancorp Top Workplaces profile

We look forward to seeing how our fund of healthy companies continues to perform over the rest of 2013!

Employee Confidence has trended gradually lower throughout 2012. This is a turnaround from 2011 when Employee Confidence made strong gains. While we haven’t hit the lows of December 2010 when confidence sat at just below 50%, the index finished 2012 at 52.8% – levels that we haven’t seen since March 2011.

The index is based upon over a million survey responses in the US each year, with an average of 85,000 employees responding each month in 2012. It represents opinions across more than 5,000 organizations that have carried out the WorkplaceDynamics employee survey. The level of employee confidence is a 3-month moving average.

The fund is now up 104% over that last four years versus a 53% gain for the S&P500.

The star performers this month were:

• The bank of Kentucky +15.1%
• Viropharma +14.2%
• Higher One +11.6%
• Google +11%

In addition we welcomed Virtus Investment Partners into the fund. They have recently been recognized as a Top Workplace  by the Hartford Courant. You can read their profile at http://www.topworkplaces.com/frontend.php/regional-list/company/courant/virtus-investment-p

The Top Workplaces Fund is comprised of the healthiest public companies that have been surveyed using the WorkplaceDynamics’ employee survey to assess their Organizational Health.

But to hear Tindell talk, his job isn’t about closets at all. It’s about organizing the company he leads to empower and place his people in positions to succeed. Along the way, a funny thing happens: Tindell’s company has succeeded, too.

“As much as I love organizing closets, I really love this stuff,” says Tindell, CEO of the suburban Dallas-based chain. “It starts with having a workplace where employees can be as productive as possible.”

Tindell and crew are doing something right. The Container Store repeatedly has been recognized as one of the best places in America to work and is ranked No. 1 in WorkplaceDynamics’ list of America’s Top Workplaces. In confidential employee surveys administered by WorkplaceDynamics, the country’s largest assessor of employee satisfaction, workers gave The Container Store high marks for providing clear direction, fostering a culture of high execution and creating strong employee connection with the company’s overall mission.

Those three factors are the hallmarks of what WorkplaceDynamics calls Organizational Health, the traits that make up a Top Workplace. Since October 2008, the Top Workplaces fund of publicly traded companies compiled by WorkplaceDynamics has outperformed the benchmark Standard & Poor’s 500 Index by 48 percent.

To Tindell, it’s no mystery. It’s simply about taking good care of the people who work at The Container Store and letting them do the rest.

“We say we put the employee first,” he says. “It’s the employee, not even the customer, who comes first. But if you do that, the employees take better care of the customer. And if those two are ecstatic, then, not surprisingly, your shareholder is, too.”

Tindell is famous for saying he’s willing to pay more—sometimes even twice the going rate—for a top-performing employee. He notes that it’s a bargain if he gets an employee who works three times as hard, as he says his best often do.

But he’s quick to point out that it’s not all about pay—not even mostly about it. The Container Store stresses a culture that provides outcome goals but then lets employees use their judgment—their “creative genius,” as Tindell calls it—to make decisions. This allows them to feel strongly connected to the company and to contribute to an environment in which high execution is the cultural norm.

“The whole concept of a team is one of the best parts of life, particularly when you can really be yourself on that team,” Tindell says. “We allow each employee to achieve the means to the end, but we have agreed on the end. They unleash their creative genius to solve a problem as they see fit. You get much higher productivity. And you hear, ‘I just love it here. They allow me to be me.’ It’s a wonderful thing.”

The approach, he adds, empowers employees to find solutions that a strict set of orders couldn’t possibly envision.

“But you have to provide a workplace where people are not afraid to make mistakes,” Tindell notes. “You have to make sure they are creative and daring enough to use their intuition. When they use their intuition, that is creative genius. If we all recognize that mistakes sometimes happen in the pursuit of creativity, then the company will enjoy much greater productivity.”

For Tindell, the approach goes beyond The Container Store to a broader approach to business and life.

“I have a friend who says, ‘It’s not what you sell, it’s what you stand for,’” Tindell says. “For us, it’s about standing for something more than just making money. But ironically, you make it better for the shareholders when you do that, too.”

With clear direction, a culture of high execution and strong employee connection, the Organizational Health trifecta is working for The Container Store. The chain is expanding and producing strong earnings. It also boasts an employee turnover rate in the single digits, amazing for a large retailer. It didn’t lay off anyone during the Great Recession.

“I think it starts with a realization that if you’re lucky enough to be someone’s employer, you have a moral obligation to make sure those employees want to get out of bed and come to work every day,” Tindell says. “I love the idea of having employees who love to come to work every day.”

They were one of the organized labor groups at one of my former newspapers, and their name hardly described what they did. They routed papers coming off the press through machines that inserted coupons and other preprinted materials, and then they bundled and loaded the copies into delivery trucks.

Theirs was back-breaking labor but work in which they took pride—and work they performed with aplomb. Though their contribution to what we called the “daily miracle” of the daily newspaper was not the most glamorous part, we considered the Mailers the best union at our paper. They worked hard, loved their jobs, policed themselves and felt a commitment to what our company did every day.

You might say this little work group was a healthy workplace. Indeed, they were, and they succeeded because of it. Among all of the unions at the newspaper, the Mailers were the best at flexing, bending and working with other unions as well as the management team. They started and finished negotiations on their labor contracts first and showed the most insight into a changing industry. They were compensated well because they did such a great job and because they helped the organization solve problems.

When we talk in business about Organizational Health and what it takes to be a Top Workplace, it’s easy to think of big companies. And some big companies have created amazing cultures within multinational organizations. But the concept of what it takes to be a healthy workplace ultimately comes down to what this small group of Mailers had and what they did—and what all of us can learn from them.

The union demonstrated all of the fundamentals of what WorkplaceDynamics calls Organizational Health:

• Direction. The team knew where they were going and what they had to do every day. Critically, they also understood direction in a larger context, including their role in a changing newspaper environment, where fewer copies were printed and more complexity had been added to each of their jobs.
• Execution. There was no room for slackers here. The Mailers took pride in their work and wouldn’t stand for new hires who didn’t get with the program quickly. The management team never worried about productivity among the Mailers.
• Connection. They were the workhorses, not the show horses, but the Mailers understood their role and responsibility in producing the paper every day. One winter when a blizzard threatened to keep us from producing and delivering an edition, a full team of Mailers reported to work despite the snow. One Mailer even plowed out the alley with his pickup so the delivery truck could reach the loading dock.

Organizational Health doesn’t require an antiseptically clean modern building with the latest ergonomic furniture. It can and does develop as well in scruffy newspaper mail rooms and on busy factory floors. Organizational Health and a Top Workplace can reside anywhere people feel in harmony with their company and their colleagues and work hard because of it.

Is your workplace like that of the Mailers? Maybe it’s time to contact WorkplaceDynamics to find out.

That’s one of the findings from surveys of millions of employees at companies across the U.S. by WorkplaceDynamics. The company, the largest surveyor of employee satisfaction in the country, considers the three pillars of Organizational Health to be a strong company direction, a culture of high execution and employee feelings of connection to the overall mission.

When the three come together, companies achieve a level of Organizational Health that not only serves them well in current conditions but that also helps them find their way and zoom ahead during times of challenge and change.

Why is this so?

A company with a clear direction knows where it’s going and can stay the course, even when inevitable doubts cloud the horizon. Workers also execute at a high level, allowing the firm to avoid performance dips that can raise uncertainty in the first place. And perhaps most important, healthy companies with workers who feel a connection to the overall mission can turn on the power of their intuition to find new approaches, new techniques and new directions when they’re needed most.

“When you have a healthy organization, it’s clear where the company is going,” says Al Taylor, a research partner with WorkplaceDynamics. “But it’s also clear that the company can re-invent itself and keep going.”

Says Kip Tindell, CEO of The Container Store, ranked by WorkplaceDynamics as No. 1 on the national Top Workplaces list: “We have to let our people be creative and daring enough to use their intuition. When they use their intuition, that’s them using their creative genius.”

When workers turn their creative genius against a problem, there aren’t many obstacles they can’t overcome.

So how’s your company doing on unleashing creative genius? Maybe it’s time to contact WorkplaceDynamics to find out.

That’s the overwhelming finding from surveys of millions of employees at companies across the U.S. by research firm WorkplaceDynamics. When employees find deeper connection to what they do at work, they are more motivated, more likely to work harder and more likely to rate their company as a Top Workplace, WorkplaceDynamics has found. That’s why creating strong connections at work is one of the fundamentals for creating a workplace that is organizationally healthy.

What do employees mean when they say it’s important for them to connect to a greater purpose at work? Listen to some recent responses from WorkplaceDynamics employee surveys.

“I believe we’re building the best company in America,” said one employee. “Our approach to doing business is unmatched. We treat our employees with sincere respect and encourage them to achieve their personal best. We help improve the lives of our customers and our vendors. It doesn’t get any better than this!”

Said another, “I feel like I am contributing to something great.”

Part of achieving a deeper connection is employees feeling that they are part of something purposeful through their work—and that they belong.

“I feel like I am a part of something bigger,” said one employee, “that we are all a team working towards one common goal.”

Added another, “I am able to help others develop in a fun, exciting atmosphere. I am able to manage values and attitudes of great people who care about what we’re trying to accomplish and who want to improve daily.”

And this from an employee describing what he encounters every day at the office: “It’s a community. We actually care about one another here.”

When employees feel connection to the work they do, the place they do it and the people with whom they interact, they dedicate themselves more deeply and work harder.

“My job satisfaction is what motivates me to want to come to work every day,” said one employee. “I feel I make a difference.”

Hardly.

Surveys of millions of employees at companies across the U.S. by research firm WorkplaceDynamics clearly show this: Employees want to work in a culture that expects and even demands high performance. Employees overwhelmingly want to work at a company with high standards and where outcomes matter.

WorkplaceDynamics calls this element of the workplace culture “execution” and considers it to be one of the critical pieces for a company to become organizationally healthy. Firms that score well on organizational health rank consistently high in WorkplaceDynamics surveys of Top Workplaces.

What do employees say about working in a firm that insists on high levels of execution?

“I love that we hold one another accountable and that we all strive to do our best,” said one worker.

“We always do the right thing,” said another. “We don’t cut corners and will not compromise our principals to get more business. We earn the business from our producers, but we want them doing business the right way, and we expect them to conduct their business in a moral and ethical way. If they do not, then we would end the relationship.”

Still another said one of the best parts of working for the company was “high standards and high achievement of goals.”

It sure doesn’t sound like employees who crave easy, cushy jobs.

On the contrary, employees say they value when their company culture and leadership stress high standards and outcomes. They take pride in working for a firm that does it right. They say they want to be part of continuing that tradition.

“The value of having good character is not taken lightly here,” said one employee, adding that the firm “doesn’t jump into a business practice just to earn money. We actually think about the impact it may have on the company and its customers.”

Said another, “There is a push to behave ethically and with integrity by example and through the corporate culture. Even so, there is balance so that this doesn’t appear preachy or stuffy and so that we can relax and be ourselves.”

A strong focus on execution at high levels gave one employee a simple but important confidence.

“We will be around,” this employee said, “for a very long time.”

Like the family in the car headed off on vacation, it’s a critical question for the workplace “family”—from the top managers to the line employees. How uniformly and positively the workplace family answers that question largely determines the degree to which the workplace is organizationally healthy, the most important aspect to becoming a Top Workplace, research firm WorkplaceDynamics has found in surveying millions of employees at companies across the United States.

Nearly 70 percent of the time when employees in WorkplaceDynamics surveys responded positively to this question, “I believe this company is going in the right direction,” they also rated their companies as top workplaces.

So what do employees who believe their companies are headed in the right direction sound like? Listen to comments from employees at the firms that made up the nation’s top 10 workplaces in the past 12 months of WorkplaceDynamics surveys.

“There is a vision and a strategy here that is real and embraced by all associates,” said one employee.

“It seems like every month something new and exciting is happening here,” said another. “When these new events take place, each and every employee is well informed and encouraged to participate and do our part.”

The ability of company leaders to chart direction and then communicate where the company is headed is vital for employees to believe that their workplaces are healthy and headed in the right direction, employees say consistently in the surveys.

“The leadership builds a strategy, communicates the strategy, and then the strategy gets executed,” said one. “This has been consistently demonstrated at this company, even through a CEO changeover.”

Said another of the CEO, “He lets people do what they do best. He does provide direction, but then he gets out of the way of letting people do what they need to do.”

Yet another said the management team “ensures we are pulling in the same direction.”

An organizationally healthy company is one that not only can thrive only in the moment but that also has employees who are confident it can respond and adjust to inevitable changes on the business horizon—and thrive still. It must have a culture that embraces change.

“We’re growing, that’s for sure, and that will create change,” said one employee. “But change inspires me. I love the challenge. And I’m sure we’ll be seeing plenty of change in the next five years.”

Confronted with change, another employee chose to view it this way: “There will be new opportunities to explore.”