Company Profile: 365 Technologies Sharing the Wealth
Big corporations have the highest profit margins ever recorded, yet according to 2012 St. Louis Fed research, they are paying the lowest wages in history as a percent of the economy. At a time when it seems businesses are ever more reluctant to share, 365 Technologies, which provides managed IT services to small- and medium-sized organizations, is an exception.
The Winnipeg, MB company is relatively young, having started up in 2010, but they have wasted no time in finding ways to share their success with their employees. “We knew that once we became profitable we wanted to share that with our employees,” says Michael Anderson, CEO of 365 Technologies. “That was just sort of part of our company DNA, wanting them to share in our success.”
A unique approach to profit-sharing
Starting from a traditional approach of awarding bonuses based on individual performance indicators like productivity, they originally built a fairly complex bonus structure to share profits with employees. But, that was not proving worthwhile. “We found that they weren’t really having the desired effect,” says Anderson. “Either people weren’t seeing how their results were directly tied to their bonus or they were finding ways to sort of game the system … It just wasn’t creating a team-based focus.”
In response to these problems, they adopted a new method for gathering client feedback, replacing their old process with a one-click system. Now, for every service ticket that is closed, clients receive an email with a green smiley face, a yellow neutral face or a red frowny face. All clients need to do to give feedback is click on one. At the same time, the company also eliminated their complex bonus structure and replaced it with a bonus pool, allocating a maximum of 5% of the quarterly profits to be shared by all the technicians. (365 also has a separate profit sharing program for its management team, and, all told shares up to 10% of its profits with employees.)
“We set a minimum satisfaction level,” says Anderson. “We said we wanted 95% of the client feedback to be positive … And so, that’s the minimum. For anything less than 95%, there are no bonus payouts … The guys understand. They know how to get those green smileys — they have to close tickets quickly, do accurate and professional work, and make sure they find root problems (not just put Band-Aids on issues). That bonus pool is split evenly across the technicians. So, it is truly a team bonus. No one person is receiving any more than anyone else. We are a team.”
Anderson points out that another benefit of their profit-sharing system is that if for any reason the tech team is missing a member and they need to work more to fill the void, they get a bigger share of the bonus.
A positive environment that fosters collaboration
Client satisfaction is a key value for the company, which provides unlimited support in an industry that typically charges by the hour. 365’s services are provided for a flat monthly rate.
“This way, users can contact us as soon as they discover a problem and increase the speed of response without concern of incurring any additional expense every time they call. It gives them an easy way to budget predictable monthly expenses for IT,” says Anderson.
With 450–500 inbound support calls every month and a small team, the pace of work can be intense. To help maintain employees’ well-being, each day is started with a team huddle where they look for ways to better support each other. “That’s the first half-hour of every day,” says Anderson. “The office environment is designed to be collaborative. It’s an open environment. And there is a lot of back-and-forth and information sharing.”
As well as engaging in daily huddles, 365 staff gather every Friday to do a week’s-end review, where each employee gets a chance to share how their week went, take ownership of mistakes and contributions, and discuss training they may have completed.
“Sometimes we get really busy with managing everything that is going on with the business,” Anderson explains. “So, our weekly meetings on Friday are a way of ensuring every individual on the team gets to talk about what they’ve done, how they’ve contributed and how they grew that week.”
When a negative experience does crop up, Anderson says, “There are always lessons learned. We’re able to dive into our system and understand where things went wrong, where we maybe didn’t understand the client’s expectations on a ticket or where we took things in a direction that wasn’t ideal … and we learn from that.”
In addition to their profit-sharing plan, 365 strives to provide its employees with a positive work environment through other benefits and perks. They get weekly deliveries of fresh, organic fruit and a dry-cleaning service is provided for employees so they have one less thing to worry about. They also give staff time during office hours to work on personal development and technical certifications that will help them grow in their career.
“We certainly work hard to build a culture where we retain employees, but we also understand that opportunities will come up and folks may choose to move on and that’s OK too.”
~ MICHAEL ANDERSON
Planning for the future
As CEO at 365 Technologies, Anderson believes it’s his job to ensure that every staff member reaches or exceeds his or her goals. One way he does this is by having a lunch meeting with each employee twice a year: once around his or her birthday, and then about six months later. “This ensures that even if I’m a little more removed from the service delivery these days, by taking the time to take each employee out and understand how 365 fits into their longer-term career goals, the employee understands my commitment to his or her success.
“Those have been some pretty interesting lunches. You learn things about your employees that you didn’t know. Things like — one of our technicians is taking an after-hours course to learn French as a second language. His partner speaks French, so he’s been doing that for a couple of years. [You learn] little things that you wouldn’t necessarily get to know if you don’t take the time.”
Anderson also understands that the long-term future of most of his employees will not be with 365 as they only have so many spots for advancement within the company. “When you’re not a large organization and you don’t have a lot of levels, people can’t necessarily see their next step within the organization,” he explains. “For folks that might have immediate management aspirations, there’s not necessarily a seat here for them.”
When it comes to discussing the future with employees, Anderson stresses the importance of communicating a clear picture of where the organization is heading. One exercise they use to do this is to build a future organizational chart. Anderson shows employees what the company will look like as it grows and asks where they see themselves.
He admits that accepting that the next step for an employee might not be with 365 was a bit of a mental shift. “I read a book called The Dream Manager. It talked about understanding how our employees are with us and how we’re part of that journey, but that their future journey may not be with us. Our employees’ bigger goals and dreams may extend outside of 365 and that’s okay. Our job is to make their time with 365 the most valuable
we can as it contributes to their longer-term vision and goals … We certainly work hard to build a culture where we retain employees, but we also
understand that opportunities will come up and folks may choose to move on and that’s OK too.”
When it comes time every quarter to hand out those bonus cheques, Anderson relishes the opportunity to talk about how the company is doing. As it’s a profit-sharing plan, bonuses obviously vary quarter to quarter based on how the company did. It’s a perfect chance to discuss if they had a good quarter or not and why.
Through it all, the main thing that drives 365 Technologies is their commitment to innovation. “At 365, innovation is not an occurrence,” says Anderson. “It’s an attitude and approach that underlies every aspect of our business. Our intentionally flat organizational structure and open team environment foster a collaborative approach to problem-solving.”