Stanford, GSB: SAS Institute- A System Built on Respect and Trust!

March 1, 2010

Rather than luck, the success of SAS Institute is more about the management philosophy and the systems they held onto from its inception.

  • Background: SAS was founded in 1976 by Dr. Jim Goodnight, and other three members: Anthony Barr; Jane Helwig, and John Sall. Their product- statistical analyses of data software. In 1971, Jim obtained a Ph.D. in statistics from N. C. State Univ. from which him and his partners obtained SAS rights in exchange of providing the campus free upgrades of the software. SAS had a solid client base so it was profitable from day one; most importantly SAS had no debt, nor did have to go public, which allowed Jim to manage the company in the best interest of its customers and its employees at SAS. Jim’s oppressive work experience with GE working on the Apollo Space Program led him to adopt a different role management style at SAS.
  • Philosophy: Based on 4 principles:
  1. Treating everyone fairly and equally
  2. Intrinsic motivation: trust and respect
  3. Think long-term
  4. Bottom-Up decision making

It is amazing how the company has its systems based on respect and sustainable philosophies where people can thrive in and with the company.    

  • Competitive Advantage: SAS invests on Research and Development.
  • Leadership: knowledge-based business; long-term vision, centralized power- rests with the corporate office, Jim controls headcount and authorizations to hire, promotes creativity and intellectual growth from with.
  • Workforce: SAS employs more than 5000 people, really low turnover- they reassign employees instead of allowing them to turnover, SAS doesn’t offer stock options, merit increases are given once a year, no financial compensations- that is SAS makes sure its people take care of the customers all the time not just when it is time for bonuses or raises therefore it places less stress on meeting sales or revenue goals.
  • SAS spirit: southern-style culture described as being nice, friendly, and informal; incredibly customer-oriented culture, look into friendly personalities, innovation, family-friendly workplace, self-direct, trust, citizenship behavior.
  • Recruitment and Selection: they look for talented people end keep them, they hire locals, college students, but mainly candidates who are willing to help each other out- that is to fit into the SAS culture of cooperation, teamwork, and mutual respect.
  • Competitive threat: SAS has no single competitor that provides the range of software products that it does.
  • Organizational structure and career development: SAS gives people the opportunity to change jobs and get training within the organization; managers are working managers- hands on.
  • Performance appraisal process: it is not considered very important at SAS which means that they do trust on their people performance by giving them the tools to do their job and then get out of the way.

In summary, SAS institute is a great example of a company that shows their employees that it cares and so employees give the same back which instills a healthy partnership: growth through excellence.

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