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When I began to research this story, I assumed that cool would be defined very differently depending on the region of the country in which you worked. What I discovered is that the characteristics of cool companies — diversity, integrity and respect — are universal. A company in Omaha could, believe it or not, be just as cool as a company in San Francisco.

Take Milwaukee-based Harley-Davidson, a Rust Belt manufacturing company if there ever was one. Employees just love building them “Hawgs” because the company is such a great place to work. Voluntary turnover is just 3 percent annually.

However, I also discovered that there are slight differences between geographic regions in terms of the attributes of cool that are considered most important.

Lynn Taylor, vice president and director of staffing at Robert Half International Inc., one of the world’s largest specialized staffing firms, put a call out to her regional directors to find out if the characteristics of cool employers differed much by region. Here’s what she discovered:

“In [California’s] Silicon Valley, the bar has been raised as far as coolness,” Taylor explains. “People here are already accustomed to a high level of progressive practices, so companies have to be even more entrepreneurial than usual to attract top-notch people.”

Here, the coolest companies are those whose managers support the latest technology. They don’t necessarily have to be producing the technology to be considered cool, but they must be using the latest technology in the workplace. Lifelong learning also is essential, and progressive ideas, outside-of-the-box thinking and creativity must be allowed to flourish. While these attributes are exaggerated in the valley, they tend to be true of cool companies all up and down the California coast.

In the Midwest, cool employers are financially stable and are experiencing rapid growth. The coolest companies are those that offer solid advancement opportunities as well as more flexible work options, flexible schedules, casual dress and telecommuting. “In the Midwest, cool companies aren’t quite as wacko as they are in Silicon Valley, but they do keep employees informed and involved,” Taylor explains. Pioneer Hi-Bred International Inc., based in Des Moines, Iowa, which markets and sells seed corn around the world, is considered to be one of the coolest of the region’s cool. Why? It fosters teamwork, creativity, innovation and extensive employee communication.

On the East Coast, particularly in the Northeast, the coolest companies tend to be those that are involved in exciting industries such as advertising, entertainment and high tech. Why? Maybe because it’s easier to push the envelope in creative companies. The Rockwell Group, a New York City-based design firm that specializes in entertainment architecture (clients include Disney, Sony and Planet Hollywood) is considered one of the best. Here, employees are even allowed to bring their pet dogs to work.

Workforce, April 1998, Vol. 77, No. 4, p. 54.

Picture the 1950s organization man: the man in the gray flannel suit. Picture the slightly graying, neatly trimmed sideburns. Picture a slim leather briefcase, metal filing cabinets, rotary phones and time clocks. Picture order, predictability and sameness. Picture Ward Cleaver.

Fast forward to 1998. Imagine an employee wearing a baseball cap and running shoes — at work. Picture office furniture on rolling wheels and meetings that take place on the Internet. Picture computers, chaos and Koosh(R) balls. Picture smiles.

Other than feeling like you’re comparing black and white to color, what’s the difference between these two companies — the corporate hierarchy of yesteryear and the colorful chaos of today? In a word, today’s companies, the most successful ones anyway, are cool, otherwise known as “ku,” “clutch” and “tasty” (for the younger set) or “with it,” “far out” and “groovy” (for you older folks).

Yes, cool. To succeed at the end of the millennium, it’s not enough for companies to be profitable, pay well and offer competitive benefits. As important as these factors are, if companies really want to attract, retain and motivate the best employees, they must also be cool places to work. In short, cool is to human resources what hip is to fashion: It’s what sets you apart.

Now if you’ve been in the corporate world for any length of time, you may argue that cool is only possible in certain industries — high tech and entertainment, for example. Or you may think cool is the province of certain regions, say Seattle or California’s Silicon Valley. You may even dismiss the idea of cool as something that’s only attainable in small, entrepreneurial companies. Sorry. With all due respect, you’d be dead wrong on all three accounts.

Any company in any industry in any location can and should strive for coolness. Why? Because it’s great for the bottom line. Best of all, your company may already be cooler than you think. Even if it’s not, there’s a lot human resources professionals can do to cultivate coolness.

What’s cool?
Before we talk about what it is exactly that makes a company cool — and how it benefits HR — let’s talk about what the word itself means and why, once again, it has become part of our national lexicon.

Alan Liu, an English professor at the University of California, Santa Barbara, has been studying the culture of cool for some time. (Yes, believe it or not, there are people who research this sort of thing.) As he explains it, the word cool as a slang term originated with the jazz scene in the 1920s. In speakeasies and smoke-filled rooms, jazz and blues musicians would relax after a hot set by opening the back door and letting in the cool night air. The word cool soon grew from a way to describe the breeze coming in the door to a term that described the whole jazz scene to a term that described anything that, like jazz, was rebellious, nontraditional, cutting-edge and outside of the mainstream. And in a sense, that’s what the word still means today.

Cool as a slang term has been reborn several times over the years. Jack Kerouac and the beat generation of the ’50s used it to describe their own particular brand of beret-wearing, filterless-cigarette-smoking counterculture. In the 1960s, cool referred to anything anybody in a suit or over 30 wouldn’t understand. And while cool disappeared from use during the polyester days and disco nights of the ’70s, and the preppy, get-ahead Reagan years of the ’80s, today, in 1998, it’s back with a vengeance.

Credit the Internet for flashing the word back into our vocabulary. Every other Web page has a reference to something that’s considered cool. This time around, however, cool doesn’t refer to a particular subculture or style, but to anything, anywhere, that’s new, different, nontraditional, not the status quo, avant-garde, cutting edge, and most especially, forward-thinking. And cool even refers to what’s happening in Corporate America.

In the 1990s, we have casual dress, Halogen lights, onsite massage, lattes in the lunchroom, virtual teams and domestic-partner benefits. The triangular corporate hierarchy has collapsed. We want employees to speak their minds, not toe the line. Management is bottom up, not top down.

What has happened is that traditional ways of working have been tossed out the window, at least in progressive companies, and employees have responded. Fancy that. It turns out workers like such things as flexible schedules, onsite day care and the ability to express an opinion. Today, the corporations to work for are those in which managers and employees act least like you’d expect them to act. And this is cool.

Are you cool?
So how does a company become a cool place to work? What are the dimensions that turn your run-of-the-mill company from a money-making machine into a cool place of employment? For starters, the company must never, ever, do something because that’s the way it has always been done. That kind of attitude is the very antithesis of cool. As John Challenger, executive vice president of Challenger, Gray & Christmas, a Chicago-based outplacement firm, explains, “Cool companies are revamping the traditional notions of business.”

But what does this mean, exactly? While cultivating cool is far more art than it is science, there are common denominators shared by cool companies. Any one of these dimensions, on its own, isn’t enough to brand a company as cool. To become the coolest of the “kew-el,” a company needs to possess nearly all of them. These dimensions are:

1. Respect for work/life balance. Bruce Tulgan, founder of RainmakerThinking Inc., a New Haven, Connecticut-based consultancy that helps businesses understand Generation X, conducted more than 1,300 workplace interviews with employees age 35 and under. Searching his database of transcripts using the keyword “cool,” he discovered that the HR practices most employees find cool are those that support the notion that employees are individuals who have lives outside the office.

   “In cool companies, the old-fashioned distinctions between ‘home’ and ‘work’ aren’t there,” he explains. These companies recognize employees have pressures outside of the office — and that’s OK. Cool companies work to ease these pressures by providing such benefits as flexible work schedules, part-time jobs, job sharing, telecommuting, sabbaticals, onsite day care, dry cleaning and banking.

   Among the leaders in the work/life arena are Deloitte & Touche LLP, Eddie Bauer and the City of Phoenix, the 1998 winner of the Workforce Magazine Optimas Award in the Quality of Life category.

   But really cool companies don’t just help employees manage their lives outside work. They also enable employees to bring life into their work. How? By allowing them to express their individuality on the job through casual dress and personalized office decor, and by allowing them to play while at work.

   OddzOn Products, a toy manufacturer based in Campbell, California, has practically institutionalized the notion of having fun at work. Granted, it may be what you’d expect from a toy company, but how many companies do you know have closed the office and taken all 100 employees to a movie in the middle of a workday?

   Human resources managers at companies such as OddzOn understand that the majority of working adults spend the majority of their time at work. If these adults have any hope of getting cool into their lives, it’s not by dropping out altogether. That’s so impractical. It’s by working for companies that allow employees’ individual sense of cool to flourish. It’s by working for companies where they can be slightly nontraditional and nonconformist while at work. “Today, coolness isn’t outright rebellion,” Liu explains. “It’s rebellion from within. It’s the ability of a person to say, ‘I work here and I’m cool.'”

2. A sense of purpose. According to Robert Levering, co-author with Milton Moskowitz of the Fortune 100 list, Best Companies to Work for in America, cool companies are those in which employees feel connected to the product, to the corporate mission or to the overall vision of the industry. “In these companies, employees are energized by the sense that they’re somehow making a contribution,” Levering explains.

   Referring to his list of the 100 Best, which he also considers to be the 100 Coolest, Levering believes cool companies are like Harley-Davidson Inc., the motorcycle manufacturer based in Milwaukee, Wisconsin. Here, employees are so excited about the product that many of them have tattooed the company’s name on their bodies.

   Cool companies also are companies like Interface, a carpet manufacturer based in Atlanta. In an industry known for its environmental unfriendliness, Interface is setting itself apart from the competition by working to become the cleanest carpet manufacturer around. CEO Ray Anderson is leading this charge, making environmentalists out of employees by convincing them, “We’re screwing up royally as a human race.”

   Merck & Co. Inc., the giant drug manufacturer based in Whitehouse Station, New Jersey, also has fostered a devoted workforce by working to always “put patients before profits.” Here, according to Levering, “employees take obvious pride in the fact that Merck provides a low-cost anti-AIDS drug and gives away medicine in developing countries that prevents [a disease known as] river blindness.”

3. Diversity. An increasingly important dimension of coolness, according to people who observe Corporate America in action, is diversity. Not just politically correct diversity, as in affirmative action, but also real-life diversity. J. Walker Smith, managing partner with Yankelovich Partners in Atlanta, explains that cool companies are “a part of the world, rather than apart from the world.” They’re places where employees feel it’s safe to express their differences, whatever those differences may be, including gender, race, sexual orientation, work style, temperament and opinion.

   Allstate Insurance Co., based in Northbrook, Illinois, is one organization that takes its diversity missive seriously, and as a result, is considered pretty cool by some of the leading corporate list makers. The company has received extensive national recognition for its work to provide opportunities to women, Hispanics and disabled individuals. Among those bestowing the honors are: Working Mother Magazine, Hispanic Magazine, Business Week and the American Society for Training and Development.

   But when it comes to cool, diverse demographic numbers are only part of the story. Jerry Hirshberg, president of Nissan Design International Inc., in San Diego, California, believes his company is successful — and highly cool — for the very reason that diverse personalities aren’t only nurtured, but expected. His company, which lists the Nissan Sentra and Pathfinder among its many design credits, hires people especially for their unique cognitive sets and work styles. “Then, we work very hard to allow people to maintain those differences,” Hirshberg says. “This isn’t easy, but it’s more real and has a lot more built-in stimulation, the kind that’s necessary for creative work.

   “I think of two kinds of parties,” he adds. “An uncool party is one where people are invited for the sole reason of having a proper and impressive guest list. A cool party, on the other hand, is one where people are invited because they provide a stimulating and enjoyable mix, regardless of whether or not they have the right credentials.” Admit it: Which party would you rather attend?

4. Integrity. Tired of all the lying, cheating and stealing they read about in the news, today’s employees also find the idea of integrity a real turn-on. They don’t want to be forced to check their value system at the front door of the office. As Tulgan discovered in interview after interview: Integrity is where it’s at.

   Integrity refers to the ability of a company to communicate the truth to employees — whatever that truth may be. But, Tulgan says, it’s also much, much more. Integrity also refers to a company’s ability to care about the quality of its products and services. Companies with integrity want employees to do a great job, not just get the job done. Companies with integrity also allow employees to stand up for what they believe in.

   J.P. Morgan & Co. Inc., the Wall Street banking firm that ranked 44th on Levering’s Best Companies list, earned that honor, in part, because of its high ethical standards. If integrity is possible on Wall Street, this kind of cool can certainly be achieved elsewhere.

5. Participatory management. Lynn Taylor, vice president and director of research at Robert Half International Inc., the Menlo Park, California-based specialized staffing firm, decided to do her own research into what makes a company a cool place to work. Putting a call out to her regional directors, Taylor asked them which of the firm’s clients were considered the coolest places to work — and why. Their coolness had to be demonstrated by the fact that temporary workers were just dying to work there. (This is important because a majority of temps use these assignments as a way to shop for traditional jobs.)

   Taylor discovered one of the primary characteristics of today’s coolest companies was a participative management style. “These are companies that have realized employees on the front lines often have the best ideas, and that it’s often counterproductive to tell them what to do.” You see, in companies with a participative management style, collaboration may be the norm, but it’s still also possible for individual employees to have an impact. Who was on Taylor’s list? Nantucket Nectars, a juice company based in Cambridge, Massachusetts. Here, the style of management is so participatory that there’s no established hierarchy and no secretaries.

6. Learning environment. Another thing Taylor discovered when she set out to separate the cool from the merely tepid, is that cool companies promote lifelong learning. “These are companies in which employees leave at the end of the day knowing more than they did when they started,” she says.

   Anybody who has recruited on college campuses lately knows that the ability to continue learning is foremost in the minds of today’s young workers. “New graduates want to know your training budget,” Tulgan says. And why wouldn’t they? You’ve told employees they have to be responsible for their own career growth and development, and guess what: They believed you. Now, it’s up to human resources to keep up its end of the bargain by providing opportunities for that growth.

   Companies that do this, including Motorola, a training powerhouse based in Schaumberg, Illinois, and Trident Precision Manufacturing Inc., in Webster, New York, are considered very cool places for the knowledge thirsty.

Why cool matters.
If you can take all this — the telecommuting, tattoos and diversity, and blend them with ethics, empowerment and education — then yours would truly be a killer company to work for. But what’s the benefit? Why should HR care?

Because being cool — I mean, really, really, cool — makes it much easier to attract, retain and motivate the best employees around.

Let’s start with recruitment. For years, the Kwasha Lipton Group/hra of Coopers & Lybrand LLP, in New York City, ran your basic line-up of traditional recruitment advertisements. You know, the ones that promote competitive benefits, a good salary, growth opportunities, yada-yada-yada. For each newspaper ad, they’d receive approximately 100 responses from which they’d identify one good candidate — maybe.

Realizing the ads weren’t working, the company’s HR people began to look at what they really had to offer employees: a unique and challenging environment in which the expectation was for individuals to perform, not conform; an environment in which individuality was allowed to flourish.

HR revamped its ads to more accurately reflect the workplace. One headline reads: “Sell your expertise. Not your soul,”. As a result, Kwasha Lipton started receiving approximately 350 responses per ad, from which the HR staff hired an average of five to seven top-notch employees. According to Rosemarie Bruno, director of human resources in the company’s New York metro region, “The ads work not only because they’re a more accurate portrayal of what it’s like to work here, but because people want to work in this kind of environment.”

Netscape, the Mountain View, California-based maker of Internet software, also has been able to capitalize on its cool image to attract some pretty cool employees. In fact, Margie Mader, whose responsibilities include worldwide staffing and recruiting, isn’t called the staffing director. Her title is Director of Bringing in the Cool People. Why? “Because with all the competition in hiring right now, you need to give yourself an edge. You need something that describes the working environment and that’s intriguing to the candidate pool. Cool is appealing,” says Mader.

Another advantage to becoming and then marketing yourself as a cool company is that you’ll be attractive to employees who want to work at cool companies — and that’s a good thing. According to Mader, employees who are attracted to cool companies are less motivated by the money than the work. They’re interested in the level of work they’re doing and in their own personal career development. They’re people who are taking cool out of the arena of “neat clothes and nice car” and using it to refer to a contribution of intellect. In short, she says, “cool appeals to bright people who are asking questions that force companies to think differently.”

Bruno agrees. “The candidates who responded to our new recruitment ads were different from other candidates, especially in terms of their creativity. These people want to use their creativity at work. They think it’s cool to be able to work in a corporate setting and still be able to use all of their intellect, experience and expertise.”

But, you’re wondering, can you keep them around? Are cool employees the type to stay put? How does all this affect retention and the bottom line? Let’s take a look at the numbers. Using the Levering and Moskowitz research on the 100 Best Companies as a benchmark, today’s coolest companies possess a turnover rate considerably lower than the national average: 6.9 percent versus between 11 percent and 12 percent. Not only that, but if you average the top 100 companies together, the typical best or cool company increased its workforce by 23 percent in the last two years and receives more than 63,000 applications per year. In short, people want to work for cool companies; when they get there they stay; and they help companies grow. What more can HR ask for?

So, for all the Ward Cleavers of the world who think cool is only for young Californians who wear very small eyeglasses, very large pants and work on computers, think again. Cool is not about youth; it’s not about location; it’s not about fashion; and it’s not about technology. It’s a way of thinking — and a profitable one at that.

Workforce, April 1998, Vol. 77, No. 4, pp. 50-61.