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News
Born leader puts people first
December 11, 1998: 1:46 p.m. ET

IT startup grows into $54M company by rallying behind its employees
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NEW YORK (CNNfn) - When Rick Born founded Born Information Services Inc. eight years ago, his goal wasn't to be the biggest -- or even the most successful -- IT consulting firm around.
     Tired of corporate politicking and mind-numbing grind, Born and co-founder Dale Holmgren wanted to create a company that was the "very best place to work."
     "When we started this business, we had no assets and no customers," Born said. "When we asked ourselves how we were going to compete, it came down to people. That's all we had."
     So in its very first year, Born and Holmgren decided they would treat their entire staff to a cruise if certain revenue goals were met.
     "It cost half our profits to do that, but it got the wheels turning," Born said, adding that they have sponsored some sort of annual company event every year since.
    
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     Born's commitment to his employees has had a favorable impact on the company's bottom line. What started out as a two-man operation in Wayzata, Minn., has grown into a $54 million business. The firm has nearly 1,000 employees and branches in four cities across the country.
     The company has nearly doubled in size each year, and Born has been named to the Inc. 500 list of the country's fastest-growing companies in three of the last four years.
     The thirty-something consultant-gone-entrepreneur credits high retention rates for his company's success.
     Good workers are "an investment," says Born. "People don't really understand that. Turnover is very expensive in our business and customers don't like it."
     In fact, Born's turnover rate is less than half the average in the otherwise volatile IT consulting industry, and employee satisfaction is 89 percent, 30 points above the national average.
     Happy workers seem to beget happy clients.
     The company's customer satisfaction rate is 92 percent, and a full 97 percent of customers say they would use the company again.
     Born has more than 100 clients, from small startup organizations to well-established corporations, in a wide range of industries, including agriculture, finance and healthcare. Some of the firm's more prominent customers include 3M, Cargill, Medtronic, Ceridian and Wisconsin Electric.
     The IT market is simply "very hot," Born says, acknowledging that success has been prevalent industry-wide.
     But Born boasts his company is "growing faster than average" and has set itself apart by focusing singularly on forward-looking technologies, such as client server applications and Internet and intranet systems. The company doesn't handle any mainframe work.
    
Finding good workers

     So why exactly are Born's employees so unwilling to stray?
     For one, Born makes sure he hires the right people for the right jobs.
     All prospective workers go through a vigorous recruiting process, with a minimum of three and often as many as six interviews. Though the process is extensive, it ensures new hires enter the company fully informed.
     "It's not just an opportunity for us to check them out, but for them to check us out," Born says.
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     Born believes the company has high staff retention because employees have a strong sense of what they are getting themselves into even before their very first day of work.
     "We lose some people because [the process] takes longer… But our view is that good things come to those who wait," he says.
     Those "good things" include a $250 clothing allowance and a low-cost time share program at the company's lake cabins, in addition to the usual health, life and disability benefits offered by most firms. The company also offers tuition reimbursement, stock options and a $750 referral bonus, on the belief that "really good people draw other good people."
     The firm regularly sponsors tickets for sporting events and concerts.
     "We founded the company on what we call CORF -- Challenge, Opportunity, Responsibility and Fun," Born says. "I can't expect anyone to want to come here and want to stay unless it's the very best place. The people in our business can get (new) jobs tomorrow."
     In another twist on traditional incentive plans, annual bonuses at Born are based on more than revenue and profit. Unit turnover and worker and customer satisfaction levels also are also taken into account. Born hires a national firm to survey employees and clients annually to determine satisfaction rates.
    
In the beginning

     Although it's hard to believe Born was ever anything but a local IT heavyweight, the company began as "your typical startup."
     "The phone would ring and we would all jump for it," Born says, likening himself and co-founder Holmgren to the under-worked, overeager characters in the blockbuster film "Ghostbusters."
     Born and Holmgren faced a lot of skepticism when they formed the firm that bears Born's name. But they took risks even though many people deemed their plans, especially those involving employee benefits, unrealistic.
     "I was pretty naive when I started this business," Born admits. "I had never started a business of this magnitude before."
     The entrepreneurs persevered, however, obtaining a $7,000 line of credit after Born, 27 years old at the time, put up $75,000 of his own money, mortgaged his house and cashed in his 401(k) plan.
     Born left behind a lucrative career as a partner at consulting firm Computer Sciences Corp. because going out on his own was something he had always wanted to do.
     "I was making a lot of money, was successful and liked the company… [but] if I didn't do it, I would always have said 'I should have,'" he said.
     Born's vision for the new company, as a place fun to work, was rooted in personal experience.
     His influences include his grandfather, who worked for the St. Paul, Minn.' Railway Express office for most of his life. Born's grandfather was incredibly loyal to his employer, despite his fairly low-level position, because as Born puts its it, "the railroad always took care of him."
     Born also cites his mother, a government employee, who spent a lifetime envious of a friend whose private sector job included free trips as a reward for work well done. Now Born offers that same perk to his entire staff.
     "All too often, you see the sales people getting the trips, but it's more than just the sales team building the company," he says.
     Born's philosophies were put to the test in 1996, when he got a buyout offer from Detroit-based Compuware Corp. Although the $500 million software development firm assured Born the takeover would have no impact on the way the IT firm did business, news of the sale troubled Born's employees, who feared the end of a good thing.
     Born eventually backed out of the deal, which he now describes as a weak moment, as well as an emotional time for the company. One of Born's biggest clients, who called Born "naïve," convinced the CEO that company culture would inevitably change under new ownership.
     "I realized my customers believed in all the things we had been telling them all along. They just never acknowledged it," Born says. That's when he realized the company was way "too good of an asset to sell."
     "Selling was the best thing I never did," he says.
    
Looking ahead

     Now instead of being bought, Born is looking to expand.
     The company has made a few small acquisitions over the past few years, adding about 100 workers to its staff. Born says the "door is open" for additional buyouts, but added he plans on being "very selective."
     Excluding acquisitions, the company anticipates growth rates of 50 to 60 percent this year and in the range of 30 to 40 percent over the course of the next five years.
     Born also is considering taking the company public.
     "We've been in a situation where we could have gone public in the past three years. I'm not opposed, but we don't really need to," Born says. "We'll do it whenever it makes sense."
     A decision to go public would be driven, not surprisingly, by a desire to satisfy his people. Employee stock options would be sharply bolstered by an IPO.
     Born balks at suggestions his employee-friendly approach may not work for other companies, especially those in the people-oriented service sector.
     "Never underestimate what taking care of people will do for you." Back to top
    -- by staff writer Nicole Jacoby

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.