Minister of culture Featured

8:00pm EDT July 26, 2005
From the outside, Hyland Software doesn’t look much different from any other suburban company; its brick-and-tinted-glass headquarters fits in well in the wooded industrial park in Westlake and doesn’t stand out.

But it’s what’s inside that matters.

Inside, you’ll find an atmosphere that’s part shopping mall, part playground and part university. An enclosed silver-tube slide slants over the main entry, polished concrete floors reach out to walls of glass and exposed metal trusses run across the ceiling. You’ll notice a giant guitar from Guitar Mania here and there.

“There is no doubt that people around here work their tails off,” says A.J. Hyland, 33, who took over as CEO after buying the company from his brother, Packy Jr., in 2001. “They go above and beyond for customers, so I think it’s important to have an environment that supports them from the business side, but to also have a place that when it’s time to play, there’s some stuff to do.

Continuing through the building, you’ll find a full-service diner decked out in a polished metal-and-black color scheme, complete with tables, booths and daily specials. There’s a hair salon, a masseuse is in two days a week, and a state-licensed Montessori-based childcare center operates in the back building, staffed by caregivers who are Hyland employees.

A mezzanine encircles an open common area where, every Monday, Hyland gives an update on the progress of Hyland and rewards employees for excellent service by giving them a spin of a prize wheel. Prizes range from a $25 gift card to $400 in cash.

And if you need to get to the ground floor from the mezzanine in a hurry, just take the twisting red plastic slide that drops you off near the entrance to the diner — a good way to be first in line at lunch time.

Show up at Hyland on a special event day, such as the company’s recent milestone of getting its 5,000th customer, and you might find employees racing half-pint battery-powered motorcycles in the parking lot for prizes — or Hyland racing through the marketing department as he takes one for a test drive inside.

The environment clearly shows that Hyland Software isn’t your average company, and A.J. Hyland isn’t your average CEO. There are no people in suits and ties speaking in whispered tones. Instead, you’ll find people in jeans and casual shirts discussing projects in hallways, conference rooms or over a sandwich in the diner.

But don’t let the atmosphere fool you. The company is not some haven for underperforming reject employees from more straight-laced companies. There’s a lot of work getting done, and the company has the numbers to prove it.

Hyland Software, which produces an Enterprise Content Management product called OnBase, has posted 27 consecutive profitable quarters and is expecting to add 100 employees by the end of the year to the 400 currently employed there to handle its rapid growth.

The environment is set up to take care of and reward people for their hard work.

The concept is simple. Give employees the tools they need to do their jobs, get them to take ownership by showing them the respect they deserve and let them do the rest. By doing so, top employees are attracted to the company, veterans are less likely to leave and everyone has a little fun along the way.

The result is a turnover rate of 9.6 percent — far less than the industry average of around 25 percent — more than $50 million in sales and a 30 percent growth rate over the last five years.

“One of the things I’m most proud of is, as we have grown, we’ve been able to maintain that type of fun feeling,” says Hyland. “It’s easier to do when you have 20 or 30 people. The architecture of the offices contributes to the culture with the openness, and the use of glass walls shows there is no executive ivory tower somewhere where you never see anybody. My office is in the center of the company. It shows we are one team with nothing to hide. We want to grow together and win, and I think that has really permeated this place.

“I think one of the challenges we have is keeping that culture in the company. When you get to this size, you have to start to institutionalize the processes and institutionalize the culture, which is why we have a person in HR focused on events. It’s someone’s full-time job to work with employees and say, ‘Hey, here’s an idea to do a Friday Fun Night.’”

Events are optional, and some are held after hours, while others take place during the work day. The fun coordinator, whose official title is Minister of Culture, works to make sure there is something to appeal to all demographics of the company. “The events build goodwill and camaraderie among the employees,” says Hyland.

In fact, Hyland says the friendships developed among employees at these events helps with retention; it’s harder for someone to walk away from a group of people that he or she considers close friends.

“I would be very comfortable standing in front of a group of shareholders and explaining the money spent on this and what it does from a retention standpoint and as a way to blow off steam,” says Hyland. “It’s intense and ever-changing in our marketplace. We’re in the fire a lot, but we have some fun as well.

“There haven’t been any shareholder questions, but even if there were, we would be able to defend it because you have to make sure you are doing the right thing for your people. We have a great group of people here with a low turnover rate that I credit to the culture.”

The respect factor
Fun is part of the culture of Hyland, but it goes beyond just making sure everyone has a good time now and then. Allowing employees to have fun shows the company respects their abilities, their time management skills and their ability to get the job done on deadline in a way that meets or exceeds customer expectations.

“It’s beyond the fun,” says Hyland. “The fun helps people. It might even be a differentiator for someone choosing between two jobs. I think having this type of atmosphere of openness would help them choose us. I think a fun culture is important, but not as important as having a culture where people are respected, where they can work in a respectful environment and where they see an opportunity for growth; one where they are rewarded fairly for what they do and teammates and managers realize their contributions to the company.

“We’ve grown so fast that one of the things that’s been challenging is to make sure we are working on people’s career paths, showing them where they can go. When you get that step down and add the fun stuff, that’s a powerful combination.”

Despite the potential distractions and the chance of someone abusing their freedom, Hyland says the respect the company shows its employees is reciprocated.

“We’ve never had issues,” says Hyland. “Most are very focused on what they need to do. I think one of the greatest aspects of people here is how much they truly care about the product and care about customers.

“Over 10 years, we’ve had people do things, but that’s a quick conversation to get them back on track. When I talk to employees, I explain the culture is professional, but fun — not the other way around. We have taken care of people and most people get the message and no one really abuses it.”

Other employees are often the first to step in and get someone refocused where they need to be. Anyone that does get out of line is dealt with individually; fun things aren’t taken away from everyone as a result.

“Growing up, I was never a big fan of punishing the whole class for what one person did,” says Hyland. “I try to deal with the individuals and not punish the rest. We’ve had minor incidents but nothing catastrophic.

“One of the elements of a successful company is people that don’t fit the mold or get the message or care about the customer be offered opportunities elsewhere. You owe that to the people that are here rowing hard and working hard. You have to make sure the team around them is quality and isn’t bringing everyone else down.”

Boot camp
If there’s any doubt in any new employee’s mind that work comes before play at Hyland, it’s quickly erased in the first several weeks.

Everybody at Hyland can tell you about its product, OnBase. This is the result of an intensive training period that includes four weeks of learning OnBase, even if the employee will never have contact with the customer or is in a nontechnical position.

This intense training weeds out those who aren’t committed and gives everyone a strong knowledge of what the company is about.

“The fact that even our marketing people know the product, have a knowledge of what we do, how it works and the applications it works in adds credibility when people talk to them,” says Hyland. “They are not going to have the highest technical knowledge of how to set it up on a server, but they know what the benefits of it are and who it is for.

“From a customer service standpoint, Hyland is a highly educated group of people. Getting the job done with a lot of product knowledge is critical to our success. The more they know, the better they will produce for the company and the better they will serve the customer.”

Four instructors staff Hyland University, which also provides ongoing training and refresher courses to veteran employees. Employees are also required to obtain the Computing Technology Industry Association’s CDIA+ certification, the first global standard of competency and professionalism in the document imaging/document management industry. The CDIA+ certificates obtained by employees fill two walls showing the company’s commitment to training and making sure employees have the tools to do their job, which includes a knowledge of the company, its software and the industry. Even one of the chefs in the diner has her certification.

“I think people need to know about the industry and our software,” says Hyland. “I think it would be terrible to send people out there to their jobs and let them flounder for months on end as they try to figure out what the story is. I feel better about them going onto the job knowing about the product.”

Hyland continually fine tunes the training based on feedback and is adding more information on the company history and its strategies to give employees a complete view of Hyland Software.

The combination of a fun and open culture plus a strong knowledge of the product gives Hyland a competitive advantage toward improving the product and the company.

“I think it helps people feel empowered to bring things up they want to see in the software or to be advocates for the customers,” says Hyland. “Almost all of our development is from customer and partner needs. So having a group of employees work with them and communicating with them really helps. They are understanding the customer and what they need.”

Make time for fun
Hyland doesn’t think he’s reinvented the wheel at his company, just made a few changes to a traditional structure and, more important, invested the time and money in employees to make it all work.

“We have the same phone systems and office systems as everyone else, it’s just in a different space,” says Hyland. “In terms of the fun stuff, we put a lot of time into them each month, but it comes back in spades. I think we are the benefactor of being in an industry where it is sort of an accepted trend.

“It would be difficult to have a bank and see them riding around on motorcycles — though I’d probably go out there,” he says with a laugh. “It helps us with retention and attracting employees. Some people are amazed we’ve been able to pull this off for this long period of time.”

He says that the fun doesn’t have to be limited to the software industry.

“Even if you have a more traditional environment, it doesn’t mean you can’t take some time to do more fun stuff with your people after hours. All it takes is taking the time to care about people and making sure you are present. Don’t have a party and not show up. Be there for them and talk to them. Be involved in the fun and the people will follow.”

Hyland takes his own advice to heart and has been mistaken on occasion by new hires for a waiter while serving employees in the company’s diner.

“It’s really about doing the little things,” he says. “It doesn’t mean that I don’t work hard or get on planes and travel, it’s just about taking the time. Good things can happen, as long as management buys into it and understands the importance of it with their own team.”

Hyland knows as the company continues to grow, it will be a challenge to keep the culture as is. It will become harder to find the right kind of employee to fill every opening, and coordinating events that are fun for everyone will become more challenging. He’s already started encouraging his departments to do things on their own as a means of breaking things down into more manageable pieces.

“For example, our quality assurance people went to see Star Wars while on the clock,” says Hyland. “It’s just the little things like that that shows we thought about them. It resonates with the crowd up there. They did it without asking me, they just took it on themselves to do some fun things. That’s the key to all this — realizing that maybe after months of working hard, it’s time to do something fun.”

The company has put together a culture that helps it keep employees and has made Hyland Software a special place to work. Success has followed as a result.

“Could we have been as successful as we are now without this culture? I don’t think so,” says Hyland. “I think we would have had success, but we wouldn’t have been able to retain the type of worker that you need to have at a software company. I don’t think we would have had the same degree of success. One of the things to look at is the turnover rate and what that would have been.

“I do believe this culture has been a major part of our success and will continue to be, and it is important that it does.”

HOW TO REACH: Hyland Software, www.onbase.com or (440) 788-5000