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July 2006 HR Magazine: AGI Rises to the Top—Again

By Patrick Mirza  7/1/2006
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HR Magazine, July 2006

Vol. 51, No. 7

#1 Medium-Sized Company on the 2006 Best Places to Work List  

Visit Analytical Graphics Inc. (AGI) on a stunning spring day, the kind that tempts workers to head home early, and you’ll likely find 40 or so cars in the employee parking lot as late as 7 p.m.

From the outside, you’ll see employees using the on-site gym and enjoying dinner -- one of three free meals the company provides each day.

What you won’t see as readily is how these perks are seamlessly interwoven with the company’s culture and business needs. The generous extras are not aimed primarily at driving employee behavior but at reinforcing a culture that takes care of employees, provides opportunities for varied and interesting work assignments, and offers flexibility in scheduling, career development opportunities and career paths.

It’s an approach that has helped the firm earn the top ranking for three straight years on the Great Place to Work® Institute’s list of Best Small & Medium Companies to Work for in America. (AGI was named No. 1 among medium-sized companies for 2006 after taking the top spot in the small-company category the previous two years.)

More important, the company’s approach has helped it succeed and grow. To fully appreciate that fact, you have to know a bit about this firm’s history.

AGI was formed in 1989 by three engineers who left General Electric when they came up with a product that didn’t fit the large defense contractor’s business model of fulfilling specific work requests from the federal government. By contrast, AGI produces off-the-shelf software for civilian and military customers. (The software, for example, tracks the courses and attitudes of planes and satellites. It is literally rocket science made simple: Click your mouse and you can see not only where the International Space Station will be at any moment but also if its solar panels will be properly oriented to the sun.)

AGI’s business model, then, is different from -- and riskier than -- other aerospace firms’, says co-founder and CEO Paul Graziani. To properly manage these inherent risks, it needs employees who can understand and anticipate customers’ needs, understand the technology available to meet those needs, and make informed decisions.

The company does its part by providing the gym and free meals that make employees’ lives easier and give them opportunities to mix. But that’s only the start. Open communication is such a key part of this organization’s culture that even the CEO’s office has no door. “There are only about five doors in this building,” notes Adam Gorski, applications engineer, and most of those are reserved for conference rooms or offices—such as those in HR and finance—where privacy is a legal necessity.

To ensure that information flows freely, the company holds annual business review meetings for all employees, quarterly town hall meetings and weekly Story Time meetings each Friday at lunch. Story Time is a chance for different departments to share information on what’s happening around the company. Employees say speakers are quick to praise co-workers who’ve helped them generate a new product or address customer concerns.

Such cooperation is key to an organization that requires flexibility and agility to respond to changing customer needs, and it is underscored by the fact that all employees get the same quarterly bonus percentage, based on the business’s performance. Employees, for their part, seem to understand the distinction between culture and perks. Many like knowing how the business runs, seeing how they contribute to its success and feeling listened to. And while they appreciate the gym and free food, many -- such as applications engineer Bill Bonnell -- say they would work at AGI without them. In fact, all the employees we asked said if they had to choose between the perks and the culture, they would choose the culture.

And that perhaps best illustrates the power of this culture, one that Graziani says evolved over time as the company tried different elements, keeping those that worked and dropping those that didn’t. Through it all, the organization seems to have stayed focused on sharing information, involving employees and treating them well—not as a means to an end, but simply as an end unto itself.

“We don’t serve dinner to get people to stay late,” says Graziani. “We serve dinner because people are staying late. It’s a very critical distinction. I think if you go about this with the wrong motivations, it’s going to be very transparent to everybody, and it’s going to fail. So, we just do whatever we think the right thing is.”

And it works.

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