Author: Brenda Sunoo

The following article is meant to be interactive. Feel free to personalize your experience by reading the KEYWORDS in any order you choose.

KEYWORD: New Medium
It’s Thursday night. You’ve got a major decision to make: Tune in to Seinfeld? Or plug in to America Online? For the majority of U.S. households, the former is more likely. But if you’re a human resources executive like Mark Stavish, you might be more wired to doubleclick your way through cyberspace. “Lots of people ask us about Microsoft. It’s a formidable competitor. But if you think about it, our competition is Jerry,” says Stavish, vice president of human resources for Vienna, Virginia-based America Online Inc.

Say what? Think about it. In the 1940s, Americans started watching TV. Now, as we enter the 21st century, newer revolutions are occurring in the world of technology and communications. For example, the online computer industry is a relatively new medium, still dwarfed by broadcast and cable TV. But down the Information Superhighway, companies such as AOL hope to drive online content, multimedia and the Internet in a more engaging way. So when Stavish and AOL’s CEO and president, Steve Case, talk about market potential and competitive edge, they’re talking about how online services and the Internet are changing the way you and I obtain information, seek entertainment, communicate, buy products and learn new things. “Our aim is to build a mass market for interactive services. To do so, we must reach out to the 93% of households that don’t currently subscribe to any online service,” Case has been quoted as saying. “It’s not about technology. It’s about building a community.”

Clearly, AOL and its competitors have a long way to go. But every new frontier has its pathbreakers—and America Online is one of them. In just 10 years, the company has evolved from a tiny start-up in Vienna, known as Quantum Computer Services Inc., to one of the leading and fastest-growing commercial online services in the United States today. Call it hypergrowth. Founded in 1985, AOL recently announced it had more than tripled its community in one year to 3.5 million subscribers—including its trial members. Approximately 79% of all AOL members are male; 71% are between the ages of 18 and 44; and 46% hold executive, management or professional positions. In addition to its impressive growth in members, AOL also has grown in terms of revenues ($358.5 million for fiscal 1995 compared to $165 million in 1994), its strategic alliances and its information data base. Moreover, AOL’s work force more than quadrupled from 500 in 1994 to 2,700 in June, says Stavish.

Why the phenomenal growth? According to a Personnel Journal survey of HR professionals, 97% believe online services will change how they do their jobs. This holds true across the board. Folks are signing up with AOL for a wide variety of features: E-mail, access to the Internet, online conferences, news and magazines, weather, sports, stock quotes, software files, computing support, online classes and much more.

AOL views itself as a guide that provides organized tours of this new electronic frontier. Similarly, the 10-month-old HR department at AOL is carefully guiding a predominantly new and younger work force (many of them are Generation Xers) to meet the subscribers’ increasing demands for superquick, real-time information and customer service. What hypergrowth has meant for Stavish and his staff of 26 is speeding up recruitment and training for cyberspace while building a solid HR infrastructure that will serve AOL’s ever-changing needs and direction, including globalization. “It’s like building an airplane in midflight,” says Stavish. So, fasten your seatbelts, ladies and gentlemen—and prepare for take-off.

KEYWORD: Beginnings
Whenever CEO Steve Case used to hear the word surf, he thought about Hawaii, where he was raised. Little did he realize bigger waves were crashing on the horizon. By the time Case was ready for college, he headed to Williams College in Williamstown, Massachusetts to study political science. Upon graduation, he obtained his first job selling shampoo for Procter & Gamble Co. Then came a stint with PepsiCo Inc. in Kansas, conducting customer surveys and focus groups in the Pizza Hut division. Although his hunger for fast foods waned, his appetite for computer sales grew. In 1982, Case bought his first computer, a Kaypro. He also added a modem and signed on to The Source, an earlier online service. “I thought it [connecting online] was magical then. I still think it’s magical today,” he says.

Later that year, Case decided to get wired full-time. He joined Control Video Corp.—a start-up that provided home video games over the phone. It was there he met Jim Kimsey and Marc Seriff, eventual co-founders of America Online. With Kimsey providing the financial expertise, Seriff the technological expertise and Case the marketing know-how, Quantum was born. The entrepreneurial trio, however, knew from the beginning that their business strategy would require building key alliances. Quantum, therefore, delivered the online service to Commodore International Ltd. users in exchange for the latter company’s agreement to bundle QuantumLink with its computers and modems. Within a couple of years, Quantum’s various offerings were consolidated under the name America Online. Among its competitors today are CompuServe, Prodigy, Microsoft Corp., AT&T—not to mention the Internet, the world’s largest computer network with more than 30 million users.

According to San Francisco-based Odyssey, a marketing research firm, there are approximately 96 million households in the United States. About 27% of these households have personal computers; 63% of those with PCs use them for business; 16% have PCs and modems; and 6% have PCs and CD-ROM drives. But only 7% of PC owners subscribe to an online service. While these figures challenge some of the media’s hype about home-computer sales, AOL and others are still poised to steer the new medium from a niche market to a mass market with a broad consumer appeal.

With the population explosion in subscribers and employees, it’s certainly no wonder that Case hired Stavish in February to build up an HR department from scratch. “Typically, in small technology companies, HR grows up through finance because of the payroll and benefits,” says Stavish. “So when I came to AOL, we had 900 employees, and there was no HR function except for those two areas. With the rapid growth, people were unbelievably stretched. That’s what I inherited.”

KEYWORD: Human Resources
Although the online services industry creates an unprecedented electronic context for AOL’s employees, partners and customers, HR’s mission is universal. Says Stavish: “We need to keep employees’ distractions to a minimum. But we also need to work with our executive team to improve our organizational capability.”

Fortunately, Stavish brings years of HR experience to this new work environment. A graduate of Iowa State University, he received a master’s degree in industrial relations before taking a position in 1978 with Mobil Oil Co. in Fairfax, Virginia, primarily as an HR generalist. After nine years, he left the company to become an employee-relations manager for Pepsi-Cola Company’s bottling operations for western Pennsylvania and West Virginia. From 700 employees, the operations grew overnight through an acquisition to 1,500 employees. “I was immersed in acquisition and integration activities,” he recalls. Later, he moved to Pepsi-Cola’s headquarters in Somers, New York to negotiate contracts nationally for the company and to focus on management development during a major growth spurt and total quality movement.

Stavish wasn’t planning to leave the company when an executive search firm first asked him to consider joining AOL. He knew very little about the company’s services then: “I played around with it a bit, but I didn’t know much about online services,” he says. After considering what seemed like a career opportunity of a lifetime—a fast-growing company in a new market segment—Stavish decided to come aboard.

Within 10 months, Stavish has established an HR department that now includes 13 HR professionals who oversee compensation and benefits, staffing, training and other basic HR functions. Thirteen additional employees provide administrative support for the relatively new department. Most are located at company headquarters in Virginia, but several of the generalists anchor HR functions where AOL has a large concentration of employees—in Tucson, Arizona; Jacksonville, Florida; and Ogden, Utah.

Launching an HR department at AOL, he says, has been similar to introducing online services to new consumers. At Pepsi-Cola, the HR functions had credibility. The company had tradition, a reputation and industrywide respect. But when you work at a company that never had an HR department, “You have to sell the function and educate people around you about how you can help them. You have to build your own credibility,” he says. That means assembling a new HR team and developing a strong management team that will in turn unleash the company’s energetic work force.

Says Kathy Ryan, vice president of AOL Productions, the content creation studio for America Online: “The scope of what HR needs to do for us is so much broader than before. We don’t just need to have a group that processes paychecks. HR needs to help us figure out ways to communicate between our different [divisions]; keep us working together; manage new employees and incorporate them efficiently into the organization. HR is an extremely important area.”

As vice president of HR, Stavish also has been given responsibility to work with AOL’s executive team to strengthen the company’s culture and core values, organizational capacity and work processes. America Online’s executive team currently is organized into three main operating divisions headed by senior-level vice presidents: AOL Technologies; AOL Services and AOL Enterprises. In addition, the senior vice presidents of AOL International, Corporate Development, and Finance and Administration (where HR resides) also report directly to the CEO.

In an earlier discussion with Stavish, Case expressed his concern about employee respect. “[Case] has a highly evolved sense of right and wrong. He wants to make sure our employees are treated right at AOL.” The company’s working environment has been described as fun and informal—although quite demanding. “We can’t afford to have a high turnover rate at our call centers. Otherwise, our members get poor service,” he says. And in the world of online services, too many busy signals, frozen screens and generic advise (“Ma’am, try reinstalling your software…”) certainly will perforate an ulcer. So clearly, online customer service begins with hiring the right online employees.

KEYWORD: Recruitment
Most of AOL’s employees fall into three basic categories: call-center representatives, content producers (the cool guys) and computer programmers—the ones who integrate the content with AOL’s program system. In terms of numbers, the greatest employment need is for the call centers, according to Dan Gillick, director of staffing for AOL Technologies, AOL Services and AOL Enterprises. He explains, “We have a continuous need for very qualified Member Services employees.”

Imagine you’ve signed on—your screen name is HRboss and your password is turnip. Once you’ve made your online connection, you see or hear the message, “Welcome, you’ve got mail!” Your face lights up as you discover seven messages awaiting you—including a greeting from an overseas colleague in London. So far, so good. Then you successfully download the attached file (your colleague’s monthly expense report, including several high-tea meetings). But when you click Download, the screen freezes, and your stomach tightens. At this point, most users would click Member Services and pursue one of three options: Dial an 800 toll-free number; send an E-mail to AOL; or simply go to Tech Live for instant advice online. This is where Member Services representatives step in.

Call-center representatives are divided into two groups. One group answers the toll-free telephone calls for free software, pricing, billing and other general questions. The second group offers the technical support for those who have already installed the software, but have technical problems as new users. Half of this second group responds to E-mail requests, and the other half provides the live interactive assistance known as Tech Live.

At Goodyear Tire and Rubber Co., benchmarking is well entrenched in the corporate psyche. And human resources is no exception, says Mike Burns, vice president of HR and Total Quality Culture at the Akron, Ohio-based company. “It’s about learning and sharing ideas so everyone can benefit,” he says.

So when Stan Gault, chairman and CEO, joined Goodyear in 1981, he established his early commitment to a total-quality culture process. That process, says Burns, became the vehicle to raise the benchmarking bar at the North American division, which employs a work force of 45,000.

Human resources, he says, was involved from the beginning. Under Gault’s direction, a leadership team was formed, which included the CEO, the president and COO and a cross section of leaders from different business functions—including HR. “In the beginning, we had about 20 leaders, but it quickly cascaded as we moved the process down to all parts of the company,” says Burns. “The more involvement and input you get, the better decisions you’ll make.”

As HR began to benchmark its own practices, it examined a wide range of practices, including leadership development, succession planning, benefits and employee safety. But one area that received considerable attention was compensation. Goodyear wanted to begin tying employee compensation to individual performance and the company’s overall financial accomplishments. “We asked, ‘How do we make compensation reward top performance and bring it more in line with the company’s goals of improving customer service and shareholders’ satisfaction?'”

Hence, Goodyear benchmarked the HR practices of several Fortune 100 companies. “It gives you a way to expand your horizons and think about how you’re conducting your business,” he says. After about six months of in-depth research, human resources made several changes, including the way it approached its compensation program. The company concluded that in order to remain competitive and provide quality customer service, it should better define the employee-performance appraisal process and tie it to the company’s business objectives. “That meant [articulating] what each position was expected to contribute and what the responsibilities were,” says Burns. As a result, even part of the chairman’s compensation is now at risk based on the company’s financial performance, he adds.

As Burns sees it, Goodyear not only improved the specific HR practices it re-examined, but learned a more fundamental lesson about benchmarking. It’s a process that never stops. And it doesn’t give you all the answers, either. If your goal is continuous improvement, says Burns, your company will always want to learn what other companies are doing. “And it’s important for HR to be aligned with the corporate strategy and [recognized] as a valuable resource for change,” he says. Much like a set of realigned tires that keeps your car moving in the right direction.

When John C. Schnatter was a child, he used to cry whenever he lost at Wiffle™ ball. His mother worried about her son’s competitive streak, he recalls with humor. But during the summer, the youth and his brother also learned to work hard and use the best tools available. “We had to grease and sharpen the blades before mowing my grandfather’s lawn,” says Schnatter, founder and CEO of Louisville, Kentucky-based Papa John’s International, Inc. Years later, at age 21, after graduating from Ball State University with a business degree, Schnatter helped run his dad’s tavern in Jeffersonville, Indiana. Not only did he want to quickly apply his college education, he wanted to become rich as well. So one day, the entrepreneurial lad knocked out the broom closet at Mick’s Lounge, installed an oven and began selling pizzas.

From its grassroots beginnings in June 1985, Papa John’s has since become one of the fastest-growing pizza chains in the nation. In an industry already overcrowded with 60,000 pizzerias nationwide, Papa John’s is gaining visibility. Last year, Papa John’s was #1 on Business Week’s list of 100 Best Small Companies in America-based on its three-year results in sales growth, earnings growth and return on invested capital. Wall Street analysts and other business magazines, such as Forbes, Fortune and Inc., also have taken notice. According to the company’s annual report, Papa John’s total revenue increased to $161.5 million in 1994 from $89.2 million in 1993. In other words, the delivery and carry-out chain keeps rolling out dough faster than Pizza Hut, Domino’s and Little Caesar’s can shout pepperoncini. Most of Papa John’s 751 stores are located in 20 Midwestern, Mid-Atlantic and Southern states. More than 500 are franchise operations.

Papa John’s creates HR department in 1993.
As the company celebrates its 10th anniversary, Schnatter, 33, still sticks to the same values he embraced as a child. He’s still competitive, bets on his dreams and never compromises his tools. Just as it takes fresh ingredients and expertise to roll out the perfect pizza, it takes a fresh human resources leader and department to roll out a first-class pizza operation. “You need good people to hire good people,” he says.

And according to Gerry Durnell, publisher and editor of “Pizza Today,” the $30 billion-a-year industry faces stiff competition for quality personnel, products and services. So when Papa John’s made its initial public stock offering in June 1993, Schnatter added another key ingredient to his winning corporate recipe. He hired Carole A. Trask, the company’s first vice president of human resources. “Our culture to reward contributions and performance was already here,” says Schnatter. “What Carole did was to identify all of the elements, put them into a package and give it a [marketable] presentation. Today, with our culture and financial success, it’s easier to recruit great people,” he says. But Trask is the first to admit that HR faced a tough beginning. “You don’t just come into an entrepreneurial company that has all these fast horses out there and just pull them in with a whole bunch of policies,” she says. “It would be an absolute conflict with the culture.” Building an HR department from scratch has required as much care as “delivering the perfect pizza” (the company’s slogan). Within two years, Trask and her team of seven HR personnel have standardized Papa John’s culture, benefits, recruitment and retention efforts to keep the company on the fast track. In an industry also known for high rates of turnover—up to 200%—HR at Papa John’s must help store managers recruit thousands of part-time employees at low cost while also trying to retain them and other full-time employees as long-term investments for the company. (Of the 20,000 Papa John’s employees, most are part-time drivers and in-store workers who answer the phones and prepare the pizzas.)

Commitment to Papa John’s begins with its mission statement. Employees are expected “to deliver the Perfect Pizza by exceeding the needs and expectations of our customers, franchise family and employees.” The company’s core values include honesty, character, cleanliness, safety and competence. Papa John’s corporate beliefs also call for employees’ ongoing education and personal development, recognition of great performance and product focus. “The main thing is to keep the main thing the main thing,” Schnatter has been quoted as saying. Unlike its competitors, Papa John’s eschews additional food items, such as submarine sandwiches, chicken wings or salads. The menu is simple—pizza, breadsticks, cheesesticks and canned soft drinks. (And don’t forget the small tub of garlic sauce and two pepperoncinis that are added to each order.)

It was these values, Trask says, that attracted her to Papa John’s in the spring of 1993. Previously, she’d worked as an assistant HR director at Fort Collins, Colorado-based Poudre Valley Hospital. As manager of 10 HR employees, Trask was accustomed to the strict organizational rules and regulations that characterize most health-care institutions. There, she was well-known and well-respected. Hospital employees knew what to expect from a human resources department. Nevertheless, Trask wanted to move on. Fortunately, a friend told her that Papa John’s was searching for a human resources executive. Although Schnatter had built his company for eight years without an HR department, he recognized the need to standardize the company’s culture, recruitment efforts and benefits system. “As Papa John’s grew, I realized I needed a specialized group to help with hiring the right people to fit into the company culture,” he says. After her interview in April, Trask was hired in June 1993—the day before the company went public. She welcomed the challenge of building an HR department from ground zero. “I wanted to be part of a company that was entrepreneurial in spirit and which shared values similar to my own,” she says.

Standardize the corporate culture.
Although Trask was new to Papa John’s, she was no stranger to HR management. At Poudre, she’d already managed compensation and benefits programs, employee orientations, recruitment, retention and employee relations. But it was probably her earlier experiences as a Russian interpreter in Moscow and Siberia that most heavily influenced her approach to her new colleagues: Treat them with respect, and do a lot of listening. “When I first came, I asked key people, ‘What do you know about HR, and what would you like to see happen here? What are your list of priorities?'” Back then, Papa John’s provided a health plan managed by an insurance coordinator. The employee handbook was compiled by outside consultants. And store managers were responsible for processing new-hire paperwork and performance evaluations. “We didn’t have a whole lot of established guidelines and protocol,” she says. If a store wanted to hire someone, a manager might take out an ad in the local newspaper. Or the manager might ask around for recommendations. The hiring practices were decentralized and casual.

Schnatter also required Trask to attend orientation training that included learning about the company’s culture, its store operations, its business strategy and how the food commissaries were run. She even learned the art of slapping dough. By experiencing and observing the basic mechanics of operating a Papa John’s, Trask was able to strategically position HR to support the stores’ needs.

One of her first goals was to revise the employee handbook. Because Papa John’s believes its employees should actively participate in the culture, Trask incorporated the mission statement and corporate beliefs into the guide. She also added information about short-term and long-term disability, and tuition reimbursements. To make the handbook sound less contractual, she says, some of the language was changed. Before, the handbook didn’t include an effective date. Now, it does. She also updated Schnatter’s CEO’s message to employees and polished up the cover to make it more appealing to read. Although the original handbook included a general harassment policy, the revised version includes a written policy and procedure for handling sexual harassment, in particular. Basically, it encourages victims of sexual harassment to report any incident to their immediate supervisor unless that individual was the perpetrator. Employees now are instructed to proceed up the chain of command or request HR’s intervention until their complaints are resolved.

Trask also assessed the need to standardize performance appraisals. Since Papa John’s had gone public and offered stock options, “we needed something to demonstrate that an individual was performing according to the rules of good conduct. We’re still in the process of revising it,” she says. Before, managers in corporate-owned stores used their own forms. Some didn’t use them at all. “It was hit or miss. If a manager didn’t use one, there were no consequences,” she explains. Until it streamlined these employment procedures, Papa John’s wouldn’t be able to ensure a consistent business standard throughout its chain.

As HR’s direction became clearer, Trask eventually hired her first two HR employees between October 1993 and January 1994. One of them was Vickie Carey (now employment coordinator), who first came on board as an HR assistant to centralize employee data: resumes, terminations, applications, reference checks and other related information. Basically, new-hire packets were transferred from payroll to human resources. Carey assisted Trask in standardizing employees’ salaries. HR was then able to establish a pay-grade system that also allowed for flexibility, given the different regional markets. For example, if a store manager in Nashville couldn’t hire a driver for less than $6 an hour, he or she would have to pay $6. The pay-grade scales also provided a guide for franchisees, although they aren’t obligated to follow them. HR, however, does offer consultation services and training to any franchisee who requests its assistance, she says. After setting up the pay-grade system, Trask turned her attention to benefits.

Benefits vary for different levels of employees.
By 1994, Papa John’s was positioned for a major growth spurt—in restaurants, sales and earnings. The company began the year with 400 restaurants. By June, it celebrated the opening, in Atlanta, of its 500th store—a significant milestone for the rising pizza company. At year’s end, Papa John’s boasted 632 restaurants—of which 133 were company-owned and 499 franchised. Most of the expansion occurred in six markets: Baltimore, Charlotte, Ft. Lauderdale/Miami, Gainesville, Orlando and St. Louis.

With increased recognition in the media, Papa John’s also leveraged its notoriety to continue attracting the best employees as it entered new markets. The limelight boosted its standing in the investment community as well. Papa John’s completed two common stock offerings last year. According to the annual report, the offerings raised $35 million—providing capital to fuel future growth and further strengthen its already solid financial position. As of year-end, Papa John’s balance sheet reflected more than $62 million in stockholders’ equity, and less than $1.3 million of long-term debt. By July 1995, Papa John’s stock closed at $43.37, according to Trask.

What the expansion meant for HR was that with more employees on board, more would be eligible for the company’s benefits programs. (Previously, medical-claims processing was handled by the risk-management department.) By August 1994, Trask brought in another HR specialist, Judy Snider, to administer the benefits programs-health, stock, 401(k), unemployment and tuition reimbursements. In keeping with Papa John’s commitment to professional development, Snider worked part time until she completed her bachelor’s degree in human resources and began full time in January of this year.

Snider explains that Papa John’s benefits program has been designed to accommodate the company’s unique demographics. “We have a plan that’s different for each level of employee,” she says. As a fast-food delivery and carry-out service, the nature of its infrastructure is unique. Typically, a Papa John’s restaurant employs a restaurant manager, two assistant managers and approximately 20 hourly employees, most of whom work part time. In addition, the company employs area supervisors, each of whom assumes responsibility for overseeing three to five company-owned restaurants. Higher up are regional vice presidents and directors who oversee area supervisors and managers within their respective markets.

Under the current plan, corporate employees, area supervisors and in-store personnel—such as full-time managers and manager designates (those in training)—receive medical, dental, company-paid life insurance and short- and long-term disability. Employees who work in the four commissaries (the subsidiary that supplies fresh dough, food and paper products) receive medical and life insurance, according to Snider. Assistant managers, she adds, now receive medical and dental coverage. After 90 days of hire, they become eligible for coverage on the first day of the next month.

Since the HR department was created two years ago, Papa John’s hasn’t only been able to increase insurance coverage, but it has lowered the amount an employee is required to pay out of his or her checks. “The quick-service restaurant industry is very competitive,” says Snider. “We’re up against larger employers who may offer coverage, even to their part-time employees.” Papa John’s, she says, recognizes that in-store employees, such as part-time drivers, pizza makers and telephone personnel, could very easily toss their hats and aprons and drive over to the nearest competitor. “We’re taking a look at offering [benefits] to our part-timers. From the employees’ standpoint, they want something reasonable, and they don’t want to pay for single coverage. Many would like medical and dental coverage offered to them and their family members,” says Snider. Although the bulk of Papa John’s employees are college-aged students, the average age of in-store employees is 27. Many of those employees, she says, want benefits for their dependents. Snider says that from the company point of view, it’s difficult to find programs that accommodate an industry known for its high turnover rates. “We have to look for something that’s reasonable for both employer and employee. There are plenty of companies out there, but some want to charge an employee $200 a month. That’s just too much. So we have to be very cautious,” she says. As Papa John’s continues to grow, however, HR will have to speed up its benchmarking and cost-benefits analysis to set up a benefits program that will attract and retain the best recruits.

One of HR’s best benefits achievements this last year has been to administer a stock-option plan. Stock options are currently granted to store managers and area supervisors after one year of service. It entitles the employee to purchase or exercise a common stock at a set price in the future. Area supervisors can purchase up to 1,000 shares. Employees, says Snider, become vested over a period of five years. For example, Papa John’s granted 1,000 stock options last July 1. After one year—July 1996—an area supervisor may vest 200 shares; then 200 more for a total of 400 in 1997, and so on.

Moreover, eligible employees are given two options—cash purchase or cashless purchase—for acquiring their vested options and paying any taxes they owe. In a cash purchase, employees can elect to purchase the full amount of stock eligible to them by sending a check (payable to Papa John’s). For example, to purchase 50 options at $13 each, a check for $650 would need to be submitted. Then the employee would be mailed a stock certificate indicating the number of stocks purchased. Human resources would inform the employee of the taxes owed so that a second check could be sent to pay for the taxes.

In a cashless purchase, employees who don’t have cash on hand to pay the option-exercise price and taxes can use a broker. The broker will sell a portion of the shares and deduct any taxes that are due as a result of the purchase. The employee will then receive the remaining amount in the form of a cash or stock distribution.

Says Snider: “The program is extremely positive. Our employees are always talking about it. They’re proud to own Papa John’s stock. Our store managers feel more like owners and tend to be more accountable for their profit and losses.”

What else is in the HR hopper? A plan to establish a 401(k) and retirement plan. “Quite a few of our employees have come to us from larger firms that offer bells and whistles,” she says. HR is currently exploring its benefits options, finding out what’s available, the cost to run specific programs and the types of earnings growth the various funds garner. Snider also will consider the demographics of the company’s employees. Papa John’s HR department, for example, will continue to target college students, but the potential employee pool may also include older adults, such as those seeking second jobs, senior citizens, school bus drivers, and parents seeking part-time incomes. And as the pool expands, HR will continue to develop its recruitment and retention strategies.

Recruit and train to improve productivity.
To maximize Papa John’s hiring potential, Trask hired Mike Donnelly as recruitment manager. A former human resources manager for Walt Disney World in Orlando, Donnelly wears two hats—one for recruitment and one for training store managers. When he talks about recruitment, he says that Papa John’s looks primarily for that entrepreneurial sparkle. “It does not matter if you’re older or younger. We look for attitude,” he says. Since the company philosophy is to focus on the store, HR encourages store managers to drive the recruitment efforts. Papa John’s credo is formulated in a curriculum called Building the Perfect Team. It says: “Rest assured that your ability as a restaurant manager to recruit, hire and retain your team will have a direct effect on the success of your store. The people you choose to represent Papa John’s to our customers clearly reflect the standards you have set for your restaurant. You are truly in control of your own destiny.” The program also provides managers with a David Letterman-style list of Top 10 Reasons to Recruit the Perfect Team. It mentions such benefits as shortening one’s work week, making more money and improving the store’s image in the community.

“Our push is to get managers to recruit in different ways,” says Donnelly. Before, Papa John’s managers relied heavily on classified ads. Today, that method doesn’t work, he says. Store managers, therefore, are encouraged to make professional contacts within their own communities—whether it’s with the high-school principal, the college career counselor or the HR manager of a company downsizing next door.

College students, however, still comprise the largest segment of Papa John’s part-time employees. Many of the stores are located near college campuses, but Donnelly doesn’t depend solely on incoming foot traffic. By the end of the year, Papa John’s is scheduled to launch a Web site on the Internet. “We know that one big market for us are the college students who are surfing the Net,” he says. “If you’re sitting there eating a Papa John’s pizza in your dorm and thinking you’re short on money [while cruising the Web site], you might go down and fill out an application with one of our store managers.” Unlike one competitor that set up a site to sell pizzas, Papa John’s hopes to use the Internet to beef up its recruitment efforts. Donnelly is working with Videobred—a Louisville-based video production facility and Internet consultant—to define the Web site’s elements. Like most Web sites, it will offer a combination of information, education and entertainment to enhance the user’s familiarity with Papa John’s. According to Bob Arvin, one of Videobred’s computer animators, Papa John’s could conceivably receive several thousand hits a day. “But one problem is that you don’t know who these people are. They could be a potential employee. [They also could be seeking something other than a job lead.] You don’t know.” But the gains far outweigh the disadvantages. “Everyone seems to be jumping on the bandwagon,” he says. “I think the greatest advantage for Papa John’s is recruitment. Once you get your feet wet recruiting that way, you can move on to bigger and better things.”

No one can argue against the Internet’s high visibility and image-building features. But Donnelly also knows that Papa John’s image in the community will largely be determined by its employees’ actual customer service and safety practices. That’s why HR provides its drivers with the necessary training in customer service and safety. Employee-training programs for the company and its franchisees are conducted at 10 regional training centers. The drivers are instructed on proper delivery procedures, such as “Greet the customer with a smile and by their name. Make change quickly and efficiently. Count back out loud to the customer.” They also are trained to drive under conditions of fog, rain, sleet or snow. If there’s an emergency, drivers should know how to minimize a skid and avoid hitting another vehicle; they should also know how to handle minimal security risks and learn what to do if a robbery occurs. In fact, Papa John’s director of safety and security and its director of risk management have developed what’s known as Operation Perfect Score “O”—a program implemented this year to reduce the number of workplace injuries and increase the safety and security of employees and customers.

Promote from within.
As the HR recruitment manager, Donnelly also looks at ways in which Papa John’s can retain its employees. He and Trask hope to slash the company’s turnover rate of 150% by 30%. A big challenge, given the ever-changing population of part-timers. “There are plenty of positions available,” he says. “The place is exploding. If I had my way, I’d try to take everyone and give them the opportunity to move along or stay in their position, if they’re happy.” Papa John’s, therefore, tries to retain its employees by promoting from within and by rewarding performance goals.

Take Shelli Johnson, an area supervisor for Papa John’s in southern Indiana. In 1989, she read an advertisement in a local newspaper that said a driver could make between $8 and $10 an hour. “You get in your car, drive around the city all night. How much easier can it get?” she’d thought at the time. With that incentive, Johnson started out as a part-time driver. After six months, she quit her other job as a florist to drive full time. “The best characteristic of that job is the flexibility,” she says. “The money was good because I got salary, tips and mileage.” Three months later, she became a shift leader for two weeks. Showing promise, her area supervisor offered her a position as an assistant manager. She assumed that position for nine months before becoming a manager-designate and store manager for two years. As an area supervisor during the last two years, Johnson has trained four store managers to run all aspects of their operations—focusing largely on the financial end of their businesses.

As she reflects on her ascension into management, she credits her previous supervisors who offered their encouragement and praise. Meeting Schnatter and the company president, Daniel Holland, also helped. “I remember John coming into the store. Shaking his hand made a difference,” she recalls.

Now that Johnson is part of the management team, she shares HR’s commitment of recognizing performance goals. Rewards foster stability, loyalty and retention. For example, once a driver has completed 1,000 hours in safe-driving time, he or she may be given a VCR, a set of tires or a vacation. “The longer you’re here, the better the reward,” says Trask. Drivers also are offered Papa’s Perks—discounts with a company, such as Firestone, to obtain $60 worth of automotive services for $20. Another perk is a cellular phone at lower-than-retail prices. “Our goal is for them to become safe, reliable drivers, not fast drivers,” she says. In fact, fast got one competitor into trouble when one of its drivers hit a pedestrian while trying to meet its promise of a 30-minute turnaround. That’s why Papa John’s safety record is as important to its image as making perfect pizzas and hiring the best qualified employees.

Make HR an internal consultant.
As Papa John’s first decade comes to a close, Schnatter says he will continue seeking the highest calibre of employees and managers. For example, many of his executives are veterans of the food and financial industries. Among his higher-ranking cadre are a senior vice president of marketing (formerly with Wendy’s and McDonald’s), a corporate controller (formerly with Ernst & Young) and a vice president of information systems (formerly with Boston Chicken). And in terms of human resources, Trask already has formulated a game plan to expand the company’s HR department as well. If Papa John’s continues to expand nationwide—and it will—HR will clearly have to keep pace. Today, Trask manages seven HR personnel. Within two years, she hopes to more than double her ranks to 18, including herself. That would mean adding another administrative assistant, an events coordinator, an HR director, an employee relations manager and additional benefits specialists. When Trask attended a national human resources convention earlier this year, she says she learned more about positioning the HR function as a strategic partner within a company. “We’ve come a long way,” says Trask, who is one of the company officers and part of the senior management team. (She is one of two female vice presidents at the company.) Human resources, she says, has evolved in much the same way as its entrepreneurial Papa. “We’re not very bureaucratic in our processes. We don’t want to be just a policy creator. We’re like a mega-amoeba that has to meander through whatever issues and topics there are,” says Trask. “HR has to be looked at as a resource, like internal consultants who can turn out well-rounded managers.” Much like a perfect pizza.

Look! Up in the sky! It’s a bird. It’s a plane. It’s… Shamu? Sound crazy? If you’ve ever flown on Southwest Airlines, nothing seems more natural than munching peanuts inside a black-and-white painted killer whale. There’s more: Imagine sitting in an aisle seat. Just as you lay your head back, a bunny-eared flight attendant pops out of the overhead bin and yells, “Su-u-r-prise!” Or at the end of a trip, your flight attendant requests: “Please pass all the plastic cups to the center aisle so we can wash them out and use them for the next group of passengers.”

Still sound crazy? Only if you haven’t heard about Southwest’s president and CEO, Herbert D. Kelleher—dubbed by Fortune magazine as the “High Priest of Ha-Ha.” “What we are looking for, first and foremost, is a sense of humor,” Kelleher has been quoted as saying. “We look for attitudes. We’ll train you on whatever you need to do, but the one thing we can’t do is change inherent attitudes in people.”

Fun pays off.
At Southwest Airlines Co., the corporate culture makes the airline unique, says Elizabeth Pedrick Sartain, a longtime employee who was named vice president of the People Department three months ago. “We feel this fun atmosphere builds a strong sense of community. It also counter-balances the stress of hard work and competition.” Indeed, SWA is one of the growing number of American companies that recognize how humor enhances employee management, customer service and profits.

Although SWA reported a 72% drop in profits during this year’s first quarter (due in part to its acquisition of Salt Lake City-based Morris Air in December 1993), it has remained consistently profitable throughout its 24-year history. Between 1990 and 1993, the industry lost $4 billion, and last year earned only $100 million on revenues of $54 billion—barely two cents for every $10 in revenues, according to industry analysts. In 1994, SWA earned $179 million, and its competitors haven’t been able to match the airline’s 7-cents-a-mile operating costs.

In an industry dinged by labor-management battles, changes in executive nameplates, layoffs, fare wars and increasing operating costs, Southwest’s success has gained much attention. Besides a no-frills approach to running operations, Kelleher’s creative vision fuels the company’s methods of managing, recruiting and training its 83% unionized work force. According to Jim F. Parker, SWA’s vice president-general counsel, the airline has been able to maintain cooperative labor relations in a couple of ways: SWA encourages union members and negotiators to research their pressing issues and to conduct employee surveys before each contract negotiation. For example, when SWA negotiated with the Southwest Airlines Pilots’ Association (SWAPA)—a company union that represents 2,000 pilots—it proposed a 10-year contract with stock options in lieu of guaranteed pay increases over the first five years. “Like most things, [the agreement] emerged from a series of discussions and exchanges. Herb wanted to find a structure that would give the pilots a long enough time to hold the stock options and exercise them,” says Parker. The pilots, he adds, retained their own outside experts to give advice on investment issues so they could make a fully informed decision. “They approved the contract,” he says. Adds Sartain: “If we treat employees the right way, they’ll naturally treat our customers the right way.”

Last year, for example, Dallas-based Southwest Airlines won the U.S. Department of Transportation’s Triple Crown award for the third consecutive year. Based on statistics published in the DOT Air Travel Consumer Reports, Southwest achieved the highest ratings for on-time performance, baggage handling and fewest customer complaints. As other airlines plan to jettison their workers to drive down costs per seat-mile, Southwest hasn’t laid off an employee since its inauguration in 1971. After acquiring Morris Air, Southwest added seven new cities and hired more than half of the smaller airline’s 2,000-plus former employees. It also provided employment-seeking classes for those who weren’t retained.

Today, SWA’s merry band of 18,000 belongs to the sixth largest U.S. airline—the United States’ only major shorthaul, low-fare, high-frequency, point-to-point carrier. Southwest operates a fleet of 203 Boeing 737s in 45 cities and 22 states nationwide—cruising at a speed of 564 miles per hour while serving 62 million bags of peanuts annually.

Southwest’s customer-driven values have in part been attributed to Kelleher’s personal history. He didn’t evolve as one of America’s most notable CEOs by just impersonating Elvis or Ethel Merman—antics that have brought him much attention. No, Kelleher remembers sweating six summers on the factory floor at Camden, New Jersey-based Campbell Soup Co., where his father was general manager. It was there, he says, he learned the basics of industrial management. After college, Kelleher pursued law and later moved from his home state of New Jersey to San Antonio, Texas. By the 1960s, the entrepreneurial lawyer began searching for new business opportunities.

In 1966, Rollin W. King, a banker client, suggested that Texas could benefit from a short-haul commuter airline similar to Pacific Southwest Airlines—then a major player in California. The two drew up plans for a low-cost carrier that would serve Houston and San Antonio from Love Field, near downtown Dallas. On June 18, 1971, SWA launched its operations with three aircraft and a crew of bouncy flight attendants wrapped in hot pants. The fleet made six round trips between Dallas and San Antonio, and 12 round trips between Dallas and Houston—for as little as $20 one way—and without a single tray of food. Within two years, the airline was out of the red and has remained profitable every year since—an unrivaled achievement in the U.S. airline industry.

Sartain, known by her colleagues as Libby, remembers what it was like when she first arrived at SWA. She was initially hired in 1988 as director of compensation and benefits. “We had a traditional personnel department for a number of years,” says Sartain, who had previously worked in human resources for Dallas-based Mary Kay Cosmetics, Inc. and National Sharedata Corp. Soon after her arrival, Southwest began to grow and change from a company that served fewer cities and employed a work force about one-third of its current size. “Even though we were becoming a larger company, we wanted to still maintain that special environment unique to us,” she says. Six years ago, Southwest made two decisions to ensure that the corporate values of employee satisfaction and customer service remained intact: First, it created the position of “executive vice president of Customers” to oversee the human resources functions, marketing, customer relations and public affairs. Then, the company changed the personnel department’s name. “We agonized over what to call it. We considered changing it to human resources,” she says. Then someone suggested People Department. At first, her staff laughed at the idea. Then it stuck. “[Our employees] aren’t just resources. They’re real people. Since then, I’ve been shocked by how many other companies have changed their [human resources department] names. We didn’t realize we were setting a trend. We were just doing something that fit into our culture,” says Sartain, who reports directly to Colleen Barrett, SWA’s executive vice president of Customers and corporate secretary. The People Department—located at the Dallas headquarters—employs a staff of 157 who manage recruitment, People Services (affirmative action and EEOC charges), learning and development, and compensation and benefits.

Recruitment takes off.
Unlike many other U.S. companies, Southwest doesn’t have to rely on headhunters and employment agencies for job candidates. For example, last year, Southwest received more than 126,000 applications for a variety of positions: flight attendants, pilots, reservation agents and mechanics. “A lot of times, people will come in and say, ‘I want to work for Southwest because it’s so much fun.’ So sometimes we have to downplay the [image] by saying there’s a lot of hard work,” she says. Warnings don’t keep the applicants away. Last year, for example, the People Department interviewed more than 35,000 individuals for 4,500 positions. In just the first two months of this year, Southwest hired 1,200 new employees. “We’re growing extremely rapidly. I don’t think anyone else is hiring like that,” says Sartain. “The real key to me is to get the right people into the right jobs,” she says.

Because SWA prefers to stay ahead of the curve, the company accepts applications all year round—except for the position of pilot, which requires greater selectivity, according to Sherry Phelps, director of employment in the People Department. One of Southwest’s original employees, Phelps began working for the airline in 1972 as an administrative assistant for the vice president of marketing. Utilizing her experience in marketing, Phelps oversees a multipronged approach toward recruitment for the entire company. It includes ads, jobs fairs, even online promotions on the Internet. “Every person who interviews for Southwest goes through this department,” she says. Adds Sartain: “We have a very unique process. Each group we hire requires a different approach.”

Take the pilots, for example. Southwest usually announces its openings once a year in professional publications. “It’s the only area where we restrict the number to 1,000,” says Phelps. The reason for the quota is that once an applicant has met SWA’s minimum requirements (a required number of flight-time hours in a jet aircraft and piloting command hours), the candidate is promised an interview. That’s not the case for those applying for ground operation positions—as reservation agents, mechanics, fuelers, luggage handlers—or as flight attendants. SWA accepts those applications all year long.

Not surprisingly, many of the applicants are Southwest customers who’ve picked up an inflight magazine or have come across an ad like the one that featured Kelleher dressed as the King of Rock. It read: “Work In A Place Where Elvis Has Been Spotted… The qualifications? It helps to be outgoing. Maybe even a bit off-center. And be prepared to stay awhile. After all, we have the lowest employee turnover rate in the industry. If this sounds good to you, just phone our jobline or send your resume. Attention: Elvis.” Phelps says that a small number of people may scoff or question why SWA indulges in such showy activities. They wonder how an airline can treat its jobs so lightly. Her answer? “We do take our work seriously. It’s ourselves that we don’t.”

Besides answering ads, there are other ways applicants can board Southwest’s job ramp. With the recent opening of two more reservation centers in Little Rock, Arkansas, and Oklahoma City, Oklahoma, Southwest was able to attract local residents through its successful job fairs. After the airline issued a public announcement about the Oklahoma City reservation center, more than 9,000 people attended the four-day event. “We held it in a location close to where the center was built,” says Sartain. This month, about 1,000 new employees are scheduled to open up the newest of SWA’s nine reservation centers.

As if reaching thousands at a time wasn’t enough, Southwest also jetted into cyberspace last March. Its Web site debuted as “Southwest Airlines Home Gate—Our Home Away From Home On the Internet,” (http://www.iflyswa.com). According to Kevin Krone, SWA senior marketing analyst, the company established its presence online in order to reach a significant portion of the 30 million current Internet users worldwide. “What’s more staggering is that the number is growing by 10% each month,” says Krone. “We felt it [the Internet] was an attractive medium in which to tell the Southwest story.” Although the main purpose is to attract more airline customers, one of the project’s other goals is to keep Southwest’s culture in the mind’s of potential applicants. With a simple click, users can hop from a choice of 29 topics, a photo gallery, flight schedules, the company’s annual report and, of course, a welcome from Herb—which says: “Greetings from our wild and crazy CEO.” “Folks can also read or download information about the open positions in our system,” he says. SWA’s homepage receives thousands of hits per day. “There’s been a tremendous response,” he says.

Once the applications are received, they’re turned over to Phelps’ department for further processing. Southwest manually processed the myriad applications until two years ago. Every single one. “It wasn’t fun,” says Phelps. Now, data-entry clerks key in basic information, such as name, address, phone and education. The computer program allows recruiters to sort by any field, such as job category or city. If a recruiter is searching for a ramp agent in Chicago, for example, he or she can specify that geographically specific need. “You can put in any conditions you want. It’ll narrow down the field,” she says. Then the recruiters can go back to the applications to review a candidate’s employment history.

The initial screening process for some job categories differs, however. Applicants for flight attendant must first appear before a group panel that represents the People Department and Inflight Department. Candidates are given the opportunity to share their backgrounds in an informal, conversational setting. “We want to see how they perform in front of a group because that’s the way they do their business,” says Phelps. After passing the group interview, a flight attendant candidate—like all other candidates—must complete three one-on-one interviews, conducted by a recruiter, a supervisor from the hiring department and a peer. “You get three different perspectives on one individual.” Next, the three interviewers determine their separate ratings. Once they reach a consensus, they either recommend or drop the candidate.

Targeted Selection® finds the right people for the right job.
Most employment specialists will agree that a company will save more money and reap greater levels of productivity when it hires smart. The basic hiring approach that Southwest uses was developed by Pittsburgh, Pennsylvania-based Development Dimensions International, Inc. (DDI). Known as Targeted Selection, the system is more than an interviewing technique; it has aided SWA’s human resources professionals to develop a comprehensive approach toward hiring:

• Use past behavior to predict future behavior
• Identify the critical job requirements (target dimensions) for the position
• Organize selection elements into a comprehensive system
• Apply effective interviewing skills and techniques
• Involve several interviewers in organized data-exchange discussions
• Augment interview with observations from behavioral simulations.

Southwest, Phelps says, doesn’t use personality tests as some companies do. It places more emphasis on an applicant’s previous history through the Targeted Selection process. According to DDI, many interviewers commonly fail to seek behavioral information about an applicant. Instead, they ask theoretical questions about what the applicant would or should do. A misplaced focus forces interviewers to interpret or be persuaded by an applicant’s ability to sell him or herself.

The employment staff at Southwest, therefore, conducts a job analysis for each category, identifying specific job dimensions. (Dimensions are the behaviors, knowledge and motivations needed to be successful in a job.) “Typically, we end up with a long list. But those are narrowed down to the top ten because that’s what’s most practical in an interview,” she says. Clearly, one dimension that’s important for flight attendants and pilots is judgment. Several questions might be asked to find out how they made a decision in another job situation. Another job dimension is teamwork—an important attribute for any job category at Southwest. Interviewers might say, “Tell me about a time in one of your prior jobs where you went above and beyond to assist a co-worker.” Or, putting it another way: “Tell me about a time when you had a conflict with a co-worker.” By allowing the applicant to talk about his or her previous experiences, interviewers are less likely to be subjective in their appraisals.

Another common error that interviewers often make is what DDI refers to as the halo effect. That’s when interviewers permit one dimension—favorable or unfavorable—to influence their judgment on other dimensions. Oral communication is a good example. Although being a good speaker doesn’t necessarily indicate managerial ability, research skill, decision-making ability or other talents, interviewers sometimes relate skill in oral communication to those areas.

Or how many times have you seen an interviewer make snap decisions about an applicant? Many interviewers decide for or against an applicant as a result of information provided early in the interview. Their decisions, according to DDI, are based on initial positive or negative information such as a review of the individual’s application, a first impression or even a handshake. Whatever the basis for the decision, the interview is similarly affected; accuracy is decreased because the interviewer doesn’t objectively seek additional facts. Moreover, after an interviewer has made a judgment, he or she tends to seek more information to confirm his or her thinking. By learning better interviewing techniques, SWA recruiters have been able to improve their employee selection process.

According to Phelps, although Southwest adopted the general principles of Targeted Selection, it tailored the method to fit its own unique corporate culture—mostly because of SWA’s priority on attitude. It’s what the People Department and Kelleher call the Southwest Spirit—sprinting that extra mile. “Our fares can be matched; our airplanes and routes can be copied. But we pride ourselves on our customer service,” she says. That’s why SWA looks for candidates who generate enthusiasm and leans toward extroverted personalities. “We’re not trying to clone people, but we encourage the unique things that every individual brings. The person who’s not a comedian by nature isn’t going to be told to stand up and do a routine. But those that can are free to do that,” says Phelps.

A perfect example is Kolette Miller, an SWA flight attendant who celebrated her 12th anniversary this past April. She had just received her bachelor of science degree in business when she decided to apply at Southwest. “It’s one of those careers you grow up with an interest in,” she says. Even 12 years ago, the company was highly recommended to her. “I could foresee an opportunity to grow.” Ask her about the interviewing process, and she’ll tell you how “warmly” she was treated. “They told me, ‘Now, Kolette, we don’t call the CEO Mr. Kelleher. We call him Herb.’ So I thought, ‘This is cool. They’re on a first-name basis.'” (Kelleher, by the way, has been known to remember the names of thousands of his employees.)

Last year, Miller received the President’s Award for her excellent performance as a flight attendant. “It was the highlight of my career,” she says. The award—one of the highest honors an employee can receive—is presented annually to one individual nominated by SWA employees and selected by a group of company executives.

Miller also is known for being playful on the job. “We have a lot of little toys like rubber cockroaches,” she says with a laugh. “If you see someone being a little ornery, you think ‘Oh, he deserves a cockroach in his drink.’ Of course, we don’t let him drink it, but the assumption is that we’re given a lot of flexibility to let our personalities come out and express it to our customers. And they love it,” she says.

Minutes before Miller was about to board a recent flight to San Francisco, she plotted her next gag. Because Southwest passengers aren’t served meals on the flights, Miller loves to rub it in. “When people ask what we’re serving for food, I tear out [magazine] pictures of steak and potatoes and take it up to them,” she says. And what if the humor just doesn’t fly? “You have to judge your crowd because some flights are very calm. But if you’ve got the glory and guts, go for it,” she says.

University of People provides employee training.
With the exception of New-Hire Celebrations, most of SWA’s employee training takes place at Love Field Airport-based University of People. The facility is equipped with four classrooms, a dining room, a reception area and office space for its staff of 12: six full-time instructors, two managers and four administrative support staff. “It’s great to be located in an airport facility. When out-of-town participants arrive, they can walk directly to the University and return to their gates for departure,” says Liz Simmons, director of Corporate Learning and Development—a division of the People Department. The University’s curriculum includes the Frontline Leadership program for all those in supervisory levels or above; the Leading with Integrity program, which trains first-time managers; and the Customer-Care Training program for flight attendants, pilots and other employees so they keep in step with the company’s latest performance standards.

Orientation for new hires, however, begins at the company headquarters in Dallas or at offices located in Phoenix or Chicago, says Simmons, a 16-year employee. Because the airline has been hiring so rapidly, her department conducts between two and five orientations per week. Attendance varies between 20 and 100 participants. But SWA prefers to bring its new employees to the Dallas headquarters because that’s where the show begins.

New hires, for example, embark on a scavenger hunt throughout the building. Given only a time line with specific dates in Southwest’s history, they’re encouraged to view the memorabilia decorating the corridors and badger other employees to fill in the missing details. “[The exercise] gets them out and meeting different people working at headquarters,” says Simmons. That takes about 30 minutes. Then they’re shown a series of three videos. The first is entitled “The Southwest Airlines Shuffle,” which incorporates rap music performed by various employees describing their job functions. Even Herb appears as Big Daddy-O. The second one—called “Graveyard Video”—takes on a more serious tone. It presents an overview of the volatile airline industry and how quickly things can change. It also includes interviews with Southwest employees and customers who share their work and traveling experiences. The last video, “The Spirit Weaver,” honors the past by documenting some of Southwest’s history, but also conveys the belief that “we shouldn’t become so ingrained in traditions that we stifle our growth and productivity,” Simmons says.

New hires also participate in another exercise designed to demonstrate creativity through teamwork. A team of eight is given 12 straws, four strips of masking tape and a raw egg. The objective: to manufacture a device in seven minutes that will keep the egg intact when it’s dropped from a height of 10 feet. “We roll out the plastic, and they have to test their device. There’s exhilaration, disappointment and everything in between.” After each team completes its experiment, the class listens to each team share how it devised the invention. The teams’ success depends on the dynamics. How creative they wanted to be; whose idea they were willing to entertain; how they were able to identify and tap a member’s expertise or idea. “The most important lesson is [forging] teamwork with limited time constraints,” says Simmons. “There’s always one successful team.”

Incoming employees aren’t the only ones who get to play games. Once a year, SWA supervisors, managers and executives attend the two-day Frontline Leadership training program at the University of People. (Kelleher also has been known to pop in.) About eight years ago, Simmons’ department purchased off-the-shelf training devices that would help foster teamwork. Since then, her staff has developed its own curriculum—exercises that better incorporate Southwest’s pert culture. “Our people are active. If they just sat in a classroom, they wouldn’t transfer the learning. [After all], we encourage flight attendants to play harmonicas and sing songs.”

So each year, Simmons’ department selects a new activity that instills an important corporate value such as teamwork, trust, harmony or diversity. In one exercise called “Oz,” managers take a journey to uncover the mysteries behind being an effective employee and leader at Southwest. Some of the stops along the journey include building a network of trust in the workplace and exploring how fear affects that value. In “Crocodile River,” participants are given two-by-fours, which they utilize to cross a simulated river—thereby enhancing teamwork in a perilous situation.

This year, the University will roll out another program called “Harmony” in order to promote more cultural diversity at the workplace. The training will include interactive activities to help managers explore their “personal beliefs and stereotypes of others,” she says. More than 2,000 supervisors and managers will attend 55 sessions that the learning institute will organize. “We’re going out into the field to cover more geographical locations,” says Simmons.

As managers and supervisors become more experienced through these training sessions, they will also be able to spot other potential leaders. Employees, therefore, may be recommended by their managers, or they can apply for openings in their department themselves. Through the Targeted Selection process, the candidates will undergo the same one-on-one interview procedure required when they first applied at SWA. Once an employee is newly appointed to a supervisory or managerial position, he or she must attend a three-day class entitled “Leading with Integrity,” which is currently being revised, according to Simmons. The program’s objective is to further develop positive communication and leadership skills. Guest speakers often lecture on the operational aspects of the company:

• Basic principles of SWA leadership
• Giving constructive feedback
• Enhancing communication skills
• Interviewing techniques
• Giving employees effective performance appraisals
• Introduction to EEOC, Affirmative Action and ADA policies
• Employee-Assistance Program
• Southwest Airlines Drug-Testing Policy.

Those who are considered for managerial positions at larger operations, such as a reservation center, attend a special program called “The Up and Coming Leader.” Instead of a two-day session, individuals undergo training for six months. During that period, the employee maintains his or her current position, but also receives training in every department within the company. At the conclusion of the program, the candidate is provided with 360-degree performance feedback from the various department heads, peers and subordinates. “[He or she] receives information about how to become a better leader,” says Phelps. Once the feedback is evaluated, the People Department decides upon the assignment at one of the larger facilities. Clearly, the company’s practice of hiring from within has benefited both sides of the labor-management team. Those who have risen from the ranks are most likely to gain the respect of one’s fellow peers and managers.

Culture Committee ensures Positively Outrageous Service.
As the airline industry slowly picks up, other airlines may begin to imitate or adopt some of SWA’s operating practices. However, Kelleher doesn’t believe that the company’s personality, which drives customer service, can ever be cloned. It may seem kitsch, but everywhere you look Southwest promotes red hearts and “LUV.” The symbols are supposed to embody the Southwest spirit of employees “caring about themselves, each other and SWA’s customers,” states an employee booklet. You see it on the company training books. It’s in the name of the mentor program, “CoHearts,” and it’s used for the “Heroes of the Heart Award.” In fact, SWA is so doggone proud of its star employees, it wants to let the whole world know. Because Southwest presented this year’s Heart Award to the scheduling department, its name will appear on a banner painted across a red heart on the nose of an airplane for one year, says Simmons.

Many of these ideas spring from a special group known as the SWA Culture Committee. Chaired by executive vice president Barrett, the group is composed of 66 employees representing a cross-section of departments. Occasionally, it includes customers such as Ann McGee-Cooper, a management consultant based in Dallas. McGee-Cooper has maintained an ongoing relationship with the airline since 1989. “I’ve been traveling on Southwest for years,” she says. She started observing them unofficially—looking for holes in its highly touted customer service. “I didn’t find it, so I asked to study them internally,” says McGee-Cooper. To her surprise, Kelleher and Barrett invited her to study the company and propose some customer-service improvements. She was allowed to attend training sessions, observe meetings and interview the employees. Later, she was invited to serve on the Culture Committee, an honor that obligates her to attend four annual meetings to discuss customer service. All of the participants volunteer their time. “It’s the only committee I’ve been on where everyone is active. We talk about how to keep the LUV alive,” she says.

When Southwest received criticism for transporting passengers “like a cattle car,” McGee-Cooper made a suggestion. Observing the rails at the boarding gates, she concluded they served no other purpose than creating the perception that people were being herded into the airplanes. Southwest eventually removed the rails at Love Field and other airports. “It helped the flow of traffic, too,” she says. That kind of openness is what McGee-Cooper describes as unusual for many large companies.

As a creative management consultant, McGee-Cooper also helps the Culture Committee explore different concepts such as mind space. Mind space, she describes, is the very first thing you think about in reference to a person, place or thing. “Cheap is not good mind space. Fun is. I try to encourage people to stretch themselves. Fun doesn’t have to take more time,” she says. But when SWA employees do extend themselves beyond the call of duty, that’s what the airline calls Positively Outrageous Spirit. Like the time when a passenger in Houston rushed to the gate with his Chihuahua, only to discover that the airline required a crate to ship the animal. With no obvious alternative in sight—and his two-week vacation to Hawaii in peril—one of the gate agents came to his rescue. She volunteered to watch the dog. For peanuts.

You’ve seen them off the highway. You’ve probably even fidgeted behind one at the nearest pit stop: The long-haul trucker who’s tying up the pay phone. He could be calling home. But most likely he’s on hold, awaiting his fleet manager’s next road assignment. Wouldn’t it be great if we could just eliminate the frustration on his end, the manager’s and our own? That’s just what J.B. Hunt Transport Services, Inc. and IBM did in 1993. A strategic alliance between the two companies produced the on-board computer—a satellite technology that looks like a cellular phone and simplifies the trucking industry’s ability to track and assign its drivers while expanding IBM’s commercial market.

In addition, Armonk, New York-based IBM also introduced a new software program called Micromap® to simplify the logistics manager’s job by sorting through the difficult process of matching loads to truckers. This enabled the computer to consider more than 90 different assignment possibilities. “[The computers] also give us the ability to communicate back and forth with the drivers every minute and at any place in the world,” says Steve Palmer, executive vice president of human resources and risk management for Lowell, Arkansas-based J.B. Hunt. Already, the technology shared through the alliance has reduced the number of driving miles and has contributed to getting employees home on time. Moreover, the on-board computers have helped to reduce fatigue and the number of highway accidents, he says.

Companies are looking for ways to share resources and opportunities.
The strategic alliance between J.B. Hunt and IBM is only one of thousands springing up in the business world every day. One of the most visible partnerships announced recently is the one between Microsoft Corp. and DreamWorks, the entertainment studio founded by producer Steven Spielberg, former Disney executive Jeffrey Katzenberg and music mogul David Geffen. Others include Schering-Plough Corporation and Corvas International; Motorola and various enterprises in China; Amoco and Enron corporations. The list goes on. Today’s strategic alliances are cooperative arrangements between two or more companies that want to develop a win-win strategy. Primarily, both sides want to gain access to untapped geographic markets and resources, exercise more control and share risks. They can be created in response to a variety of needs and can take the form of anything from a technology licensing agreement to a full-blown joint venture. Both parties, essentially, want to reduce the time needed to get product to a greater market at the lowest possible costs. According to global management and technology consulting firm Booz Allen & Hamilton, more than 20,000 new alliances were formed between 1987 and 1992. Nearly 6% of the revenue generated from the top 1,000 U.S. firms now comes from alliances. But about 40% of U.S. alliances today are still considered failures because they don’t achieve their objectives, says John R. Harbison, vice president for BoozoAllen, based in Los Angeles.

No one knows exactly why they’re failing, but industry analysts, business consultants and organizational development specialists are beginning, at least, to understand their nature, to avoid some of the traps and to identify the keys to an alliance’s success. Some also advocate a stronger presence of human resources executives. Because most strategic alliances are initially driven by CEOs and marketing and sales executives, HR executives have been underrated and ignored in the process. But, as those involved in alliances are learning, HR professionals—such as the ones from Dresser Industries, J.B. Hunt Transport, Inc. and Lau Technologies—can contribute to an alliance’s success at any stage: They can help define the two partners’ culture, assess the alliance’s business needs and map out a common language. In addition, HR can take responsibility for the usual compensation and benefits issues that would apply to the alliance employees.

“HR needs to get on a really rapid learning curve,” says Jessica Lipnack, president of West Newton, Massachusetts-based The Networking Institute, Inc. and co-author of “The Age of the Network: Organizing Principles for the 21st Century.” “They need to facilitate interaction and communication and be electronically savvy to connect people and functions at different sites.”

Most strategic alliances, says Lipnack, are typically viewed as a deal. Executives often don’t get down to the level of what it means as far as implementation is concerned. “The most important thing is that the purpose be clear. If the purpose is clear, then everyone involved has a role. The alliance enables you to throw an anchor into the future and pull yourself toward it,” she says.

Today, many alliances are formed by larger companies that partner with smaller companies. For example, take a look at Maynard, Massachusetts-based Digital Equipment Corp. Here’s a company that recently traveled a very bumpy road. It has posted more than $3 billion in losses in the last several years, has restructured and faced several top-level resignations, and has slipped in ranking behind its competitors, IBM and Hewlett-Packard. To acquire more sophisticated systems expertise, Digital entered into an alliance with Acton, Massachusetts-based Lau Technologies. A company with 200 employees, Lau Technologies was the only minority-owned company of three technology firms designated by the state of Massachusetts as a supplier of personal computers, local area networks and other systems for state-agency purchases. In 1992, it had won a $10 million contract from the Massachusetts Registry of Motor Vehicles (MRMV) to provide equipment for automating the issuance of driver’s licenses. Digital provided the stand-alone system, and Lau customized it for the MRMV. By forming an alliance with Lau, Digital was able to take advantage of a state-agency contract targeted for a minority-owned company. It also gained an opportunity to improve its visibility and flash its name on the more sophisticated technology systems provided by Lau. In turn, the smaller company captured a new business opportunity outside of the waning defense industry. (About 90% of the company’s revenues still come from producing electronic systems for defense contractors.) “We needed to find new avenues for sharing the burden of defense cutbacks. So we researched what other businesses we could do,” says Joanna Lau, president of Lau Technologies.

Human resources, Lau says, plays an important role from a defense conversion standpoint. The skills set of many company employees have drifted from manufacturing to research and development and engineering. “Strategic alliances [spur] innovation, an entrepreneurial environment, more projects and more diverse customers,” she says.

Kathleen Camire, Lau Technologies’ training manager, says that human resources entered into the two companies’ alliance to assist in training.

First, Digital had to train Lau employees to use its hardware equipment. That part was relatively easy. But there were several other Lau employees that had to learn how to train the motor vehicle trainers. “We had to teach 14 [MRMV] trainers how to operate the work station that we were providing for them,” says Camire. It was a Windows-based application that allowed an operator to capture a digital image and print a license. The challenge, she says, was to train Lau employees who weren’t used to dealing with the commercial side of business. “Before they were trained to do contract-specific tasks like soldering and inspection. Now they had to learn how to set up computers, test software and train others how to use the equipment at the customer’s worksite,” she says. No longer could these Lau inspectors wear blue jeans and T-shirts to work. “Now, they had to wear a suit and rethink what they were doing. Because we didn’t hire people from the outside, we took people already here and trained them to think differently about the way they do business,” she says.

Since the alliance, Camire says, HR has spent more time on training, curriculum development, scheduling and choosing the right employees for new tasks. About 30 new types of jobs have been created for internal employees. They encompass customer service, maintenance and installation, software engineering and testing computers. Prior to the alliance with Digital, Lau Technologies didn’t even have a customer-service department, she says. “We formed it right before the alliance.”

Even rivals can become strategic partners.
J.B. Hunt Transport, Inc. also made headlines years ago when it allied with railroad companies to share the freight market. It began with Schaumburg, Illinois-based Santa Fe Pacific Corporation in 1989. Today, J.B. Hunt—a $1.2 billion a year company—has at least nine hauling arrangements and 47 ramp locations with railroads covering the 48 contiguous states, Canada and access to Mexico. Intermodal transportation has become big business at J.B. Hunt and generates more than 30% of total revenues. “We’ve been given a lot of credit for the [increased] intermodal activity,” says Palmer. In the past, the railroad industry had been tarnished by a reputation for high cargo claims, broken freight and unreliable schedules. Then railroad companies like Santa Fe began to change their image by improving their tracks and minimizing the jarring of freight. It also invested in high-speed locomotives to improve its transit time. “In the past, we all competed for the same customers,” he says. “But we already had a customer base and a great reputation for service and claims.” The bulk of J.B. Hunt’s customers were Fortune 500 companies with plants all over the country. Santa Fe, Palmer says, had the tracks and the rail expertise. “They used us as the marketing arm to improve their service, and we saved time in delivering freight to our customers. Together, we cut costs for the customer,” he says.

From a human resources standpoint, the alliance provided J.B. Hunt’s HR managers with better incentives for recruiting, career pathing and retaining employees. Before the alliance, HR was troubled by the high turn-over rate among long-haul truck drivers. “We couldn’t get them home as often as we’d like,” says Palmer. “A lot of drivers would call me fixing to quit. They’d say, ‘I need more stability for my family life.'” Long-haul truck drivers of the past would drive 2,500 miles at a time, with home stops about every two weeks. But today’s driver is younger, less experienced and more antsy to get home.

With the alliance, HR at J.B. Hunt was then able to create local and regional driver jobs. “It impacted turnover dramatically,” Palmer says. At first, the truckers viewed the intermodal services as a threat. Senior truck drivers usually earn up to 33 cents per mile. So when they make a 3,000-mile haul, they earn a hefty sum in addition to various performance bonuses. “They viewed [the alliance] as taking their miles away from them,” says Palmer. But after HR had held several orientation and training sessions, the drivers began to see the combined freight service as a career-path opportunity. “Every time we established a rail partner, we gained another rail lane that gave us the opportunity to open up more local and regional jobs.” Drivers would still have to pick up the supplier’s freight, deliver it to the railhead, unload it at the end of the line and take it to the final destination. In other words, more frequent short shops, rather than one long one. “If we could get them the same compensation and home every night, or two to three times a week, that was a big plus.”

Parent partners often give birth to new entities.
Strategic alliances have often been compared to the dynamics of marriage and the family. Harbison, of BoozoAllen & Hamilton, even describes some of the more common sense traps by using these analogies:

• Picking the wrong spouse: Failing to take the time to select the right partner

• Being vague with the prenuptials: Failing to explicitly agree on objectives and goals

• Being a possessive child: Focusing on one’s slice and who controls the baker

• Seeing through the eyes of a juvenile: Not developing much-needed trust

• Causing the generation gap: Relying on inadequate or erratic communications

• Living with the in-laws: Not solving the protective-parent syndrome.

Harbison also warns that partners should not be in a hurry to consummate an alliance as in a shotgun wedding. It usually takes about a year to put an alliance together. Armed with an understanding of the motivations for an alliance, it’s tempting for companies “to plunge ahead without understanding the perils in the path ahead,” he says. “It’s dangerous when the selection of a partner drives strategy rather than vice versa,” he says.

Ask Paul Bryant, vice president of human resources for Dallas-based Dresser Industries, Inc. He participated in his company’s alliance with Woodcliff Lake, New Jersey-based Ingersoll-Rand Company in the mid-1980s. Both were American companies, and both competed worldwide for products. Dresser is known for being a leading international supplier of products and services for the oil and gas industry. It offers everything from drill bits to gas pumps to pipe-coating services. Ingersoll-Rand, on the other hand, is a manufacturer of non-electrical industrial machinery and is one of the world’s largest makers of air compression systems, anti-friction bearings, construction equipment and air tools.

The seeds of the alliance were planted by the two companies’ CEOs. Both had known each other through various industry associations. Because of the downturn in the energy market worldwide, both companies ended up with a surplus of products. “Both sides quickly went from being highly profitable to highly unprofitable. By combining [some facilities], we could put more resources into development and return to profitability as soon as possible,” says Bryant, who participated in the planning stages. As alliances evolve, partners often can assume different roles. Some might simply lend a name. Others might invest money, provide expertise or just roll up their sleeves and lend a hand. But regardless of the role, both partners must be committed to the alliance’s success. In the case of Dresser and Ingersoll-Rand, the alliance would give birth to a new entity.

The parent companies had to first agree on their strategic goals: To restructure in a way that would reduce the capacity and improve a new product line for their global customers. With the Dresser and Ingersoll-Rand alliance, HR played a pivotal role in the beginning by helping select the remaining sites that would evolve into the new entity known as Dresser-Rand company. The new entity, based in Corning, New York, was slated to manufacture compressors and gas turbines.

“Our philosophy was that the new company had to stand on its own. We decided there would be little interference from the parent companies,” he says. Instead, the parent companies would serve as consultants.

Under Bryant’s leadership, the then-combined work force of 9,000 [today there are 7,500] would have to be selected. HR had to determine the criteria with which to evaluate them and also establish a smooth transition for their transfer. Because the new headquarters for Dresser-Rand was in a small community, HR made arrangements for temporary housing. Some employees were offered accommodations in local motels within a 15- to 20-mile radius of Corning. The alliance also required that HR design a new set of rules and benefits program. “We had to use grandfathering techniques to look back at each employee’s history, pension formula and service credit with the parent company.” In other words, the Dresser-Rand alliance was different from an acquisition because a third entity was formed immediately as part of the alliance arrangement.

Bryant says that one of the most difficult aspects of any alliance is reconciling two operating cultures. Dresser Industries and Ingersoll-Rand were similar in some ways: Both had a long-service type of culture in which the average employee tenure was about 14 years. Both also came from engineering backgrounds. But the work styles were very different. One was from the East Coast; the other was based in the Southwest. Those regional differences impacted whether employees were more used to a formal or casual way of working, he says. HR facilitated both groups’ mingling by arranging special dinners and van pools to the local facilities. “Even though the purpose of the trips was to become familiar with our operations, you get to know each other better after spending two hours in the same [vehicle],” he says.

After serving six years as Dresser-Rand’s HR manager, Bryant was promoted in 1993 to his current position as vice president of HR for Dresser Industries. Today, he says, Dresser-Rand is more focused on team building and TQM initiatives that he led before his departure. In addition to the HR department, which includes a staff of 12 professionals, Dresser-Rand also established a quality department run by one vice president and one assistant. “We believe in quality so much that we wanted it to be on equal footing with the other departments,” says Bryant, who recommended that Dresser-Rand purchase and implement Corning Incorporated’s successful total quality program. “Total quality gave us the framework and initiative to harness our employees. People led teams for the first time and blossomed,” he says. Dresser-Rand’s alliance has been so successful, that in 1992 the two companies also combined their pump businesses and formed Ingersoll-Dresser Pump after gaining approval from the U.S. Justice Department. Today, IDP is a mammoth global enterprise, with reported sales nearing $900 million, factories around the world and 7,000 employees. By forming that alliance, the two companies were again able to shrink capacity, combine technology and become more cost competitive. In other words, the businesses brought complementary technologies and marketing strengths to the table.

“Strategic alliances are usually set up for one reason. But it often creates so many other possibilities,” says Lipnack. Adds Peta Penson, principal of Saratoga, California-based Co-Development International, Inc.: “All of these alliances mean new ways of working together. The most important stakeholders often lie outside one’s traditional boundaries. People have reached out to other suppliers and vendors.”

Upstart companies team up with global resources.
For William Koch, co-owner of Ontario, California-based Rexor Corp., forming a strategic alliance meant partnering with a Korean-American chemist with ties to Korea. Together, they formed Rexor, a small company with five employees that primarily has been a technology research and development firm. Now, the company is proceeding to commercialize by growing single silicon crystals called boules, which are sliced into wafers and used to form computer chips. The technology, Koch explains, is one in which Americans have virtually no knowledge. “The people who had been working in this [field] aren’t in the United States.” Koch’s company was exploring a way to grow the crystals in a cheaper and more efficient manner. “Technology is so expensive and so large that it requires more than one single-source provider. In our case, we grow this crystal, which is just one of many steps to get the computer chip to the market place. It requires a high degree of competency,” says Koch, whose background is in engineering organizational development.

When Rexor purchased a $500,000 machine to enable the process, the equipment manufacturing representative who came to install the machine had also installed one in India. Koch asked him to recommend someone who might have the required technical expertise. The representative gave him the name of an Indian professional who had been studying the crystal-growing method. Koch flew to India and negotiated to have the Indian join the Rexor staff. That was three years ago. Today, Rexor also is engaged in a strategic alliance with an Indian company that takes the manufactured crystal and converts them into solar cells, then sends them to Korea where they’re mounted onto boards and are prepared for worldwide export. “We’re getting a price enhancement on our materials by paying a strategic alliance partner a fee in India to do what they want to do—[make solar cells]. Then we pay another enhancement fee in Korea to put them into modules.”

The Korea connection was strengthened through the Korean-American co-owners’ ties to his native homeland. But even with that cultural advantage and insight, Koch quickly learned that conducting global transactions between two different cultures can still get sticky. “[Americans] have a tendency to do business as a contractual arrangement. Koreans are different. They rely more on verbal agreements. Contracts, dates, checkoffs don’t fit well with them. They view it as questioning their integrity. So you never know until the day a project is done, if it’s done.”

HR can contribute to an alliance’s success.
As with any marriage, there’s no guarantee that strategic alliance partners will “live happily ever after.” James Finnegan, director for Cambridge, Massachusetts-based Arthur D. Little, Inc., a management and technology consulting firm, believes the failures boil down to two factors: “After some period of time, either the alliance hasn’t achieved its objectives, or it’s met the objectives, but one of the two partners has changed its mission.” To ensure the best scenario, Finnegan believes HR should participate during the early stages of an alliance. As soon as two or more companies reach a consensus that an alliance is necessary, HR should help define the different cultures and objectives of the marriage. Even if an HR professional hasn’t participated in one before, some consultants advise that HR aggressively seek the opportunity. HR has often been responsible for its own lack of involvement, says Susan Studd, an organizational development consultant at Intel in Hillsboro, Oregon. What HR needs to do is apply its people skills to the overall business needs of the alliance. “Talk to a senior manager who’s participated in one and ask, ‘Could you help me understand what worked well and what didn’t?’ Then, if you hear of a strategic alliance being considered by your company, jump in and ask, ‘What can I do to make it more effective?'” advises Studd. “HR’s reputation and credibility [in strategic alliances] is still being established. Hopefully, it’ll grow over time.”

Last January, Carole Collins and three other women climbed Mt. Kilimanjaro—Tanzania’s extinct 19,340-foot volcano near the Kenya border. “I’m going to make it to the top,” said Collins, a few days before her departure. As vice president of human resources at Long Beach, California-based EARTH TECH, an environmental consulting and engineering firm, Collins’ mindset applies to work and play. In Tanzania, she says, one is able to view Kili’s immense glaciers covering Uhuru Peak and also feast one’s eyes on the flocks of zebras, antelopes and gnus grazing on the Serengeti Plain. It’s a world far removed from the toxic landfills that her company deals with every day.

Likewise, when Diane C. Creel isn’t running EARTH TECH as president and CEO, she’d rather fly 200 miles per hour in a Bonanza V-35, single-engine plane. “Flying is the most exhilarating thing I’ve ever done in my life. It keeps your adrenaline pumping,” she says. Creel also loves to sail, but when the sea got a little too peaceful, she decided she needed to race. “I enjoy a little competition now and then,” she says. Indeed, whether they’re on land, in the air or on the sea, both women love to tackle big challenges. They’re also ever mindful of the environment around them. Not only because they respect and honor Mother Earth, but because it’s the nature of their jobs.

EARTH TECH’s 1994 annual report aptly describes what that job is: “Successful companies, like healthy organisms, are in constant development. They adapt over time. From its genesis as a geotechnical firm [in 1970], EARTH TECH evolved into an environmental services company assessing, managing and remediating environmental problems for government and industry. Occasionally in the evolutionary cycle, the pace quickens, yielding dramatic change. A metamorphosis. So it was for EARTH TECH in 1994.”

New corporate identity evolves after recent mergers.
Last May, Earth Technology Corporation merged with Canton, Ohio-based Summit Environmental Group, forming what is now known as EARTH TECH. Later, the company announced it also had signed an agreement in principle to acquire Richmond, Virginia-based HazWaste Industries, one of the nation’s largest rapid-response, full-service remediation [cleanup] contractors. By acquiring Summit and HazWaste, the former company grew from a $62 million company with 500 employees to a $200 million company with 1,700 employees in 40 locations. The integration of Earth Technology with Summit was completed in six months—positioning it as one of the top 20 full-service environmental consulting and engineering firms in the United States. “The greatest pressure in a merger process comes on the HR department,” says Creel, the country’s first and only woman to run a publically-owned engineering firm. “HR has probably borne the brunt, but they evolved as the heroes. The merger worked, and we got it done in a very short amount of time.”

Indeed, when a growing company such as EARTH TECH expands through mergers and acquisitions, human resources professionals play a key role in unifying the two different cultures. Because they manage people, they understand that employees may become particularly vulnerable or insecure about keeping their jobs. Most of EARTH TECH’s employees are educated professionals with such job titles as geologist, asbestos specialist, hydrologist, structural engineer, toxicologist and geophysicist. “These are people who want longevity in the kind of work they’re doing,” says Collins. EARTH TECH’s HR, therefore, performed several critical tasks. Among them: defining a new HR structure, centralizing policies, streamlining compensation and benefits, and propagating the new policies and corporate culture through as many creative venues as possible. Collins and her HR staff had to begin managing an employee base that more than tripled in size. Asked how she felt when she was told about the Summit merger, Collins recalls: “I looked this elephant in the eye and said, “You’re mine. We’re going to do this one step at a time.”

In order to proceed with those steps, Creel made a decision to form an Integration Committee that would oversee all aspects of creating the new corporate identity: integration of management; technology transfer; compensation and benefits; work force coordination; and communication. The eight members included the four top executives from Earth Technology and Summit. (Summit Environmental Group Inc. was a holding company for environmental firms with established reputations in air quality, infrastructure development and management of water and waste water systems.) Because the committee relied on HR for its expertise on benefits and policies, and insights about the employees’ needs, Collins worked closely with Creel and attended several meetings in which HR-related issues were discussed. “We put everything on the table. I think that was a very good move. It made everyone participate in what was going to be the new EARTH TECH,” says Collins.

In other words, Creel offered her management team a new corporate landscape. She asked them to join her in pondering: Where have we been, what do we want to be doing, and where do we want to go?

Government regulations and public consciousness drive the industry.
As Creel explains it, the environmental services industry in the ’90s is a mature industry. But only 30 years ago, the American people were just beginning to learn about the dangers of the pesticide DDT on the chain of life, when biologist Rachel Carson wrote Silent Spring in the early ’60s. When the U.S. Environmental Protection Agency (EPA) was created in 1970-71 and the first sets of mandates such as the Clean Water Act and National Environmental Policy Act were issued, many businesses didn’t even know those regulations existed. By the ’80s, the environmental services industry was beginning to develop. The main challenge then was to find the right people to do the work, says Creel. Today, amid greater public awareness, more governmental regulations, market competition and company downsizings, organizations such as EARTH TECH are emerging as environmental service industry leaders. The field of competition, she says, has narrowed and matured. Where regional companies once divided the work, the jobs are now being done by national firms. And the market is oozing with opportunity. Here’s just a few of the EPA’s statistics:

• Twenty years after the passage of the Clean Air Act, one in five Americans live in areas where the air does not meet federal air quality standards
• Fourteen years after Love Canal, one in four Americans lives within four miles of a toxic waste dumpsite
• Thirty years after Carson’s book, the use of pesticides has doubled.

The costs to remediate and manage existing waste sites could reach $400 billion over the next three decades. Moreover, the Department of Energy and DOD are currently projecting expenditures of between $65 and $100 billion in just the next five to seven years. Their combined 1994 budgets were approximately $9 billion.

Within the context of the environmental services industry, Creel was responsible for expanding the company’s market, geography and technology, and cultivating the organization’s collaborative management team. Her leadership emerged when she became the company COO in 1987, the president in 1988, and the CEO and chairwoman in 1993. Today, mid-size firms like EARTH TECH are hoping to increase their Fortune 500 portfolio and grab a bigger chunk of the Pentagon’s post-Cold War base closure contracts. “Years ago, when we sited nuclear power stations and missile sites for the Air Force, we used to say that the greatest threat to our strategic plan was peace. Now, with our involvement in the environmental aspects of base closures, the greatest threat to our strategic plan is war.”

According to the White House Office of Science and Technology Policy, the environmental services industry reaped $134 billion last year in four categories: pollution prevention; pollution control; monitoring; and remediation. EARTH TECH intends to cash in on the growing market, but to do so, the company had to expand its services and geographical presence. Since the Summit merger and HazWaste acquisition, EARTH TECH’s client base now comprises 44% federal government, 38% private industry and 18% municipal government. Among its key government clients are the U.S. Air Force Center for Environmental Excellence, the EPA, U.S. Army Corps of Engineers and the U.S. Coast Guard. Some commercial clients include 3M, Chevron, Dow Chemical USA, Occidental Chemical and General Motors Corporation. To meet this growing market, EARTH TECH had to be created as a new corporate identity.

The Integration Committee seeks buy-in.
When former Earth Technology and Summit consummated its merger last May, Creel knew that she couldn’t proceed without input from her executives and top managers. “Clearly, we could have made in three months at our corporate office decisions that the committee made in six months. But I was looking for buy-in,” says Creel, who began her career at Earth Technology as vice president of marketing in 1984. She understands the importance of having consensus. Her own climb up the corporate ladder, she says, wasn’t easy. She had three strikes against her: “I wasn’t an engineer; I was a female; and I came out of marketing.” (Creel also received bachelor’s and master’s degrees in journalism from the University of South Carolina.) So when company founder Jack J. Schoustra wanted her to serve as COO and president in 1988, Creel insisted upon receiving a vote of confidence from the board of directors. Likewise in 1993, when Schoustra was asked to step down as CEO after a series of money-losing acquisitions and a struggle to replace him, she did not accept the top position without the board of directors’ endorsement. “I wanted it on record that the entire board backed the decision. I wanted to make sure that I had their support before I took the job,” she says.

As Creel established the Integration Committee, she kept those lessons in mind. She made it clear that she not only wanted it to be a well-endorsed unit, but a fast-tracked vehicle toward change. Why? “I believe people are inherently afraid of change,” she says. At first, she received some resistance from the Summit executives. Some felt the integration would be too disruptive to employees, and that the transition should evolve more slowly. Creel disagreed, won them over and believes that those same managers would now say, “Thank God, it’s over.” Her reasoning was that the quicker the integration, the lower the fear factor.

One of the first actions the Integration Committee took was to approve the new HR structure that would manage the new employee base. As CEO, Creel announced that Collins would remain as director of the human resources department and invited her to attend several Integration Committee meetings. Collins, who came to Earth Technology in 1980, had built the department from the ground up and had proven her HR management skills during the last 15 years. “There was no HR department when I first arrived,” she says. She remembers hopping from department to department, taking burdensome tasks away from other managers so that personnel files, benefits and payroll information would be organized and stored in one place. “As you start building on this, people started using me more. They were very glad to give me some of their tasks. That’s how HR started.” Then in 1986, Collins began to feel the crunch of government regulations. It was the year that COBRA (Consolidated Omnibus Budget Reconciliation Act) was passed. From then on, the government regulations started piling up one after another. If it wasn’t the Immigration and Reform Act, it was the Americans with Disabilities Act or the Drug Free Workplace Act. “What’s become the biggest issue in my mind is complying with these regulations and then being able to still add value to the company,” she says. “It takes time away from developing programs that are more valuable to management and employees.”

Today, government regulations still burden the HR department. But Collins’ first task after the merger was to restructure her department. Before the merger, there were only five people in the HR department: Collins, Mark Coulombe (benefits manager), an HR coordinator, an employment specialist and a secretary. They operated out of the corporate office in Long Beach. After the merger, the Integration Committee recognized the challenge of managing larger numbers of employees nationwide, including those in the Midwest and Northeast regions gained from Summit. Collins, Coulombe and two HR employees still operate out of the corporate office. But the employment specialist’s functions were given to three HR managers overseeing the West, Midwest and Northeast regions. The regional HR managers’ main assignment, she says, is to implement company policies and corporate procedures in recruitment and employee relations. Each of the regional offices in turn employ three to four HR staffers. After Collins and the Integration Committee met many times, members approved a set of recommendations regarding HR’s structure, management approach and proposals for centralized policies, benefit package and an incentive compensation program for executives, she says. They primarily relied on Collins to provide insight about how the merger would impact employees, financial information about benefits and ways to remain competitive in the marketplace. Did she receive some resistance from the acquired company’s HR managers? Not surprisingly, she did. But in any merger, she says, employees of the acquired company are more likely to be resistant to change. “For the HR [managers] that were interested in our proposed structure, they stayed on. For those that felt it wasn’t something that they wanted to participate in, they left,” she says. Once the new HR structure was established, however, Collins was then able to focus on centralizing EARTH TECH’s benefits and policies.

HR designs new corporate policies and benefits.
One of HR’s most daunting tasks was consolidating the policies and benefits of the merging companies. Again, the Integration Committee and the HR staff approached these tasks with the same general philosophy that Creel had applied to all other areas impacted by the merger. “What we tried to do was start with a clean slate,” says Coulombe, who says that after the merger, his reponsibilities primarily changed in scope. He and Collins focused on planning and implementing the new policies, benefits and executive incentive compensation package. “When you start new programs, it takes a lot more creativity to get the information out that will help people take it in,” he says.

Instead of nitpicking each company’s policies and benefits, HR proceeded by asking the question, “What do we want in this new organization?” After some cursory comparisons, Coulombe began researching the policies and benefits of other companies in the same market. Most of the policies that were finalized covered many of the basic areas of any employee policy handbook. The process allowed EARTH TECH to consolidate or formulate policies that the merging companies were either enforcing or lacking. For example, Earth Technology employees didn’t have floating holidays, but Summit did. The new policy established them for all employees. At Summit, bereavement and sick days were separate. After the merger, they were combined. HR also came up with a combined policy for jury duty. Previously, Summit paid its employees for serving jury duty. Earth Technology didn’t. “That’s important because if someone wants to serve jury duty and one company pays, and the other doesn’t, that’s not good. These are the things we had to throw on the table,” says Collins. The same process applied to reviews, evaluations and classifications of employees. For example, HR and the Integration Committee had to decide who’s a part-time employee. At what point do individuals receive benefits? After 30 hours or 32? “We had to come up with an agreement that was going to affect some new employees who would have to accept the new policies. But existing employees of Earth Technology had to be informed that they weren’t going to receive benefits unless they worked at least a 32-hour week,” she says.

Most of the employees, Coulombe recalls, wanted to know more about their benefits. “People had a lot of concerns. They get very specific about my medical plan, my doctor… the things very personal to me,” he says. HR’s challenge was to offer the best benefits the company could buy for the dollars it had and to streamline them because of the merger. Because medical benefits usually cost the most, the company underwent a bidding process among different insurance carriers. The goal: To find a national carrier that could service all the company’s geographical areas and offer some type of consistent managed-care program. “There was going to be gives and takes on both sides,” says Coulombe.

After several discussions between HR and the Integration Committee, these are some of the new benefits that were designed for EARTH TECH:

Before the merger:
There was a variety of medical insurance carriers, including HMOs, PPO, EPO [Exclusive Provider Organization] and indemnity plans.

After the merger:
The company signed with one national carrier who provided a point-of-service medical program and a high network match throughout the company. Employees now enjoy low copayments, prescription benefits and out-of-area coverage for non-networked areas. This supported HR’s goal of having one national carrier providing a managed care program for the majority of employees.

Before the merger:
The mental health coverage for most employees was included in the medical plan. There were stand-alone employee-assistance programs (EAPs).

After the merger:
Mental health and substance abuse were carved out of the medical plan and placed with a specialty carrier. EAP benefits were included for all employees with additional mental health coverage for employees enrolled in the medical plan.

This supported HR’s goal of providing an EAP for all employees and providing a separate mental health carrier.

Before the merger:
Earth Technology had a choice of indemnity or EPO dental. Summit had no dental plan.

After the merger:
The company signed with one national carrier to provide dental coverage for all non-operation services employees and freedom to choose between indemnity and managed-care coverage. Here the goal was to select an experienced dental carrier for all employees.

Before the merger:
There was a variety of life insurance carriers, and the coverage was from two to three times the annual salary with different maximums. After the merger: Again, EARTH TECH used one national carrier with coverage up to three times the annual salary and a maximum of $500,000.

Before the merger:
There was no travel medical assistance program.

After the merger:
A program was included with AD&D coverage. It helps employees in the event of medical or other emergencies while traveling away from home, especially in foreign countries.

In addition to establishing the companywide benefits, Collins was the main architect of EARTH TECH’s revised executive incentive compensation plan. One of the reasons the plan had to be revised is that Summit didn’t have one in place. Earth Technology did. “We had to consider how to make it fair and equitable,” says Collins. About 15% of EARTH TECH’s 1,700 employees are eligible to participate in the program. Targeted for top-level managers, the program includes senior-level managers all the way up to the company executive vice president.

EARTH TECH’s program, she explains, has seven levels of eligibility, depending upon the employee’s fiscal year performance at a specific level of responsibility within the company. The incentive plan is composed of two components. One component is based on the company’s overall profit as a percent of net revenue. The other is based on individual objectives established between each individual participant and senior management. This second component includes quantitative objectives for the individual profit and losses for a region or department, and includes profit as a percent of net revenue, accounts receivable goals, booking goals and utilization goals. Marketing personnel, however, will have individual revenue goals apart from the program. Although Earth Technology managers took a major cut in their maximum bonus levels, the main goal of HR was to “bring everyone into the larger corporation and come up with something that was quantifiable and perceived as fair,” she says.

Stop rumors, eliminate fear, offer multiple forms of communication.
Throughout the first six months of the integration, EARTH TECH executives and managers were true to the open process advocated by Creel. She and Denise Pierangeli, director of public relations, issued a periodic newsletter called Synergy. Creel says she picked the name because that’s exactly what she was trying to achieve between the two companies. Employees from both companies received the newsletter soon after the committee had met. It provided updates on everything from the new organizational chart to health and safety issues to changes in policies and benefits to the new company logo. “Diane made an all-out effort to communicate,” says Collins. Through Synergy, employees kept abreast of the agendas, management decisions and timetables. Then Coulombe would follow up with a more specific benefits newsletter. Because there were 1,700 employees nationwide, the Integration Committee also installed an E-mail system so the employees could be networked online. “It was our policy to respond within 24 hours,” says Creel. “We put [E-mail] in place prior to closing the merger.”

But even with the speed of technology, EARTH TECH executives still valued the importance of human contact. “The more you communicate, the more people will understand the direction of the company and feel a part of it,” says Coulombe. With that awareness, HR launched a communications campaign by announcing that meetings would be held throughout the country to address benefits. Prior to the meeting, each employee received a newsletter with a benefits overview, a letter from Creel and a special benefits enrollment guide. Then HR formed six teams that included an HR manager—Collins and Coulombe also participated—insurance company representatives and brokers. “We conducted 35 employee meetings within one week,” he says. Spouses also were invited to attend. Because the employees had already received written information, most meetings lasted about two hours. “In most cases, the spouses had more questions.” Clearly, by allowing the employees to raise all of their concerns, they became active participants of the new corporation.

CEO’s corporate vision includes HR as strategic partner.
One thing Collins is certain about is that Creel doesn’t just pay lip service to HR’s role in a company. Her commitment was first proven in 1988 when Creel became Earth Technology’s president, in addition to her position as COO. The company held brainstorming sessions with non-management employees to receive their input about benefits and other HR issues. They were asked what attracted them to other companies, and what they liked about Earth Technology. “The process let us know what the value system of the employees was,” says Creel. As a result of these sessions, the company’s programs and policies were streamlined for the first time. It was a major change, one that Collins attributes to Creel. “The company was made up of separate entities then, and people liked doing things their own way. A lot of mentoring and support came from Diane. She came on the scene and developed the HR department,” says Collins.

Now that the HR functions have been even more systematized since the merger and integration, Collins has set her eyes on positioning HR as a more visible strategic partner. What that means, she says, is showing how HR adds to the bottom line. “As part of HR’s annual goals, we’ll start quantifying the processes we do,” she says. Are they reducing the number of days to bring in a new hire? How long are they taking to fill a request? Are they improving the process and how? For example, if it takes 45 days to find a geologist, what can they do to find one in less time? What kind of recruiting techniques have been most successful, and how much is the company spending on benefits per hire? The tougher issues to evaluate, she says, are employee relations. “It’s hard to know how long it will take to solve a problem with a supervisor. It could take one conversation or several months.”

As EARTH TECH’s HR department tackles these issues, Creel will be thinking more about the company’s direction as a whole. Each year, EARTH TECH establishes a three-year strategic plan. But due to the nature of the industry, which fluctuates according to the economy, government regulations and public sentiment, management adjusts the plan accordingly. “One has to be flexible and responsive to the client. If the client needs missiles, you site missiles. If the client needs base clean up, you clean up the base.” Part of EARTH TECH’s future strategy, she says, includes laying the foundation to absorb the global market, particularly in the Pacific Rim. For example, if EARTH TECH had been operating in Kobe, Japan during last January’s earthquake, the company might have been charged with responsibility for the repair and rebuilding of water and waste-water treatment systems. Likewise, other Asian countries, she adds, appear more willing to pay for cleaning up contaminated water and waste water in that region.

But until the global opportunities become more concrete, Creel plans to continue overseeing the integration of the Summit merger and HazWaste acquisition. Last year, she traveled 233,000 air miles. This year, she expects to continue at the same rate. She believes that her accessibility will demonstrate her commitment to open communication between EARTH TECH’s executives and the new employees. But if she’s learned any lesson from the Summit merger, it was this: Don’t neglect the employees of the original company. “With Summit, I was so concerned about reaching out to the new employees, I didn’t give as much attention as I should have to the [others]. The original employees need the same amount of time and attention. Through the second merger [HazWaste], I’ll be more sensitive to that.” That’s good news for Collins, who says that working on the same floor and being involved in the transition helped her to keep pace with Diane’s direction. Now, was that by air, land or sea?

Charlie Jones, an adjunct professor of compensation management and labor relations at Boston University, says:
Have you ever heard the comment, “It’s not my job”? I have, and when I heard it, I wondered how the person knew it wasn’t his or her job. Did someone tell the individual, or did the person learn of the responsibilities through a job description? If so, what kind of description was it?

I believe the generic approach provides a better management tool than the specific approach because it’s more flexible and easy to maintain.

Fortunately, several software and hardware products currently on the market provide generic descriptions to assist companies in creating job descriptions. One of the oldest, “The Dictionary of Occupational Titles,” is a book that was originally published by the Department of Labor in 1949; it has since been published in newer editions. The descriptions usually require some tailoring to fit the individual organization, but such commercial products are a starting point and a viable, cost-effective alternative.

With a generic job description, one gains flexibility because the description addresses expectations and accountabilities and doesn’t get into the details of how a task should be performed. As more and more companies try to improve their products and services, generic descriptions keep employees focused on results rather than tasks.

Generic job descriptions also are much easier to maintain because they don’t have to be modified for minor changes in tasks. They can be used to cover employees performing the same function in different departments.

Although each organization is different and has its own approach to job descriptions, the purpose of a job description essentially is to serve as a communications vehicle. It should be the vehicle used to help describe a job to an applicant; facilitate communication between supervisors and employees concerning an employee’s role in the organization; outline the principal expectations and specific accountabilities associated with the position and form the basis for performance reviews; and identify work flow.

Glenn Nosworthy, an industrial psychologist with the Royal Canadian Mounted Police, says:
The amount of work required to write useful job descriptions has led some HR professionals to turn to generic cut-and-paste descriptions as an alternative. But this practice doesn’t come without a cost.

Because job descriptions are used for a variety of functions, sometimes you may require more detail. A job description not founded on a systematic job analysis within the host organization can’t provide all the necessary information on the context and specifics of the job.

There also are important legal considerations. Courts in the United States and Canada have repeatedly ruled that personnel systems must be supported by job analysis. Consequently, using generic job descriptions in lieu of job analysis may place an organization in a legally vulnerable position.

In conducting job analysis sessions for one of North America’s largest police services, we’ve found that job descriptions often don’t reflect the actual requirements. On many occasions, we’ve gathered groups of job incumbents with identical job titles and descriptions only to find the nature of their work varied substantially. Given that generic job descriptions tend to use job titles as their starting point, this approach gives us much cause for concern.

There are no quick fixes in HR management. If an organization wants to have an effective, legally-defensible human resources system, there’s no substitute for a systematic job analysis. While job analysis can be time-consuming, its multiple benefits more than justify the investment. With generic cut-and-paste job descriptions, on the other hand, you get what you pay for: potentially erroneous or misrepresentative information. In today’s litigious climate, this isn’t a risk that organizations can afford to take.

In any strike-planning situation, companies are well advised to prepare for the worst and hope for the best. Strikes, by their very nature, are adversarial. They often are accompanied by disruptions in service and product delivery, and sometimes even violence. And although HR professionals usually oversee functions other than security, they still need to be aware of how it will impact their company’s contingent operations. “HR should be in the forefront of promoting those kinds of discussions,” says Jim Levine, senior vice president of Vance International, a protection service firm based in Oakton, Virginia. “There’s not one thing that a company should dismiss as not going to happen,” he says.

Although most strikes occur over contract issues, some may not even be related to negotiations. A union could have other reasons for calling a labor action. For example, the union could be attempting to organize a competitor’s facility 20 miles away. By striking, it would gain visibility in the eyes of the non-union employees it wants to organize. Or, a union could be negotiating a contract at another company and want to use the striking employees as an example of the union’s muscle. “There could be a hidden agenda. Strikes don’t always have logical reasons for happening,” says Levine.

Regardless of the circumstances, strikes require anticipation, planning and meticulous security precautions. Levine says that companies should be careful about who they hire for security. Those with previous strike experience will provide the best reassurance that violence will be avoided. Some companies, he says, decide to utilize their own personnel. Others may hire local, off-duty police or local guard companies. But Levine cautions against the latter because the personnel could very well be related to the striking employees. “[Their] own family members, neighbors or friends could be working in the facility. It could be real tough for Johnny, the security, to look the other way if a buddy [or relative] comes up and says, ‘Maybe at 2 a.m., you need to go have a coffee break.’ And the next thing you know, the company has suffered a million dollars worth of damage because Johnny wasn’t around when the problems happened. When you get into a labor dispute, you need specialized services.”

During a strike, he says, the role of security is twofold: giving managers and non-striking employees the peace of mind that they can go to work without being hurt; and providing a level of evidence gathering to document any strike-related misconduct or illegal activity on the part of union employees. “Evidence gathering is definitely an HR concern,” says Levine, adding that the threat of identification averts disruptive and violent activity. One of the more common practices, he explains, is for strikers to throw down welded nails on the road with their points sticking up. The intent is to stop the movement of personnel, raw material or finished products. “If you can do that by flattening the tires of a vehicle, they’ve succeeded,” says Levine. “Unfortunately, the [agitators] often are indiscriminate and take out a school bus with innocent people. Then, the community suffers.”

In order to avert such mischief, during one coal strike, Vance International photographers took 60,000 pictures and collected thousands of hours of videotapes. The evidence was used in court against the mineworkers union that ended up owing $64 million in fines, according to Levine. “It reaffirms that evidence gathering is the most critical part of strike security,” he says.

In addition to perimeter security and evidence gathering, hired security should also provide protection for key executives and their families. The service can include escort service to and from work or round-the-clock protection for the executive’s family at their home. “Sometimes, there’s picketing at the home, late-night phone calls, bomb threats and drive-bys,” he says.

But the good news is that firms like Vance International corroborate what labor analysts are observing: Over the years, unions have gotten more sensitive about what they should and shouldn’t do. Strikes, after all, are emotional events. “They deal with people’s lives,” says Levine.

Here are afew things management can do to avoid stereotypes:

• Redefine and expand your concepts of what constitutes news.
• Don’t just assign negative stories about minorities and ignore the positive ones.
• Don’t send minority reporters out to cover race-related stories and then assign white reporters to write the stories.
• Before and after a story, have an informal checklist of a story’s cultural implications.
• Diversity is a long-term commitment to change. Don’t just focus on diversity when it’s black history month or Cinco de Mayo.
• Management can conduct content audits that help bring the media face to face with bias and point out institutional blind spots. How often are minorities quoted? How many minority bylines are there? Where are stories about minorities often played? Publish the findings.
• Make diversity a companywide commitment. Managers need to see diversity as an asset.
• News organizations can host race awareness seminars, develop diversity forums online and have forums open to the public to educate readers about how news organizations work.
• Ask readers what they think about coverage; encourage open dialogue with the community.

SOURCE: News Watch, a Unity ’94 project co-sponsored by: Center for Integration and Improvement of Journalism; Asian American Journalists Association; National Association of Black Journalists; National Association of Hispanic Journalists; and Native American Journalists Association