How does a midsized software developer become one of the 25 most influential companies in information technology? We have incredible trips," says Joe Andrews, vice president of human resources for Progress Software Corp., a company based in Bedford, Mass., that makes the programming tools that software developers use to build and manage all kinds of networked applications.
It's not just sales incentives that Andrews is talking about, either. In fact, Progress finds a way to turn nearly every meeting into an opportunity for an incentive--from company-wide vacations to sales meetings to user-group meetings. Maybe that's part of the reason Intelligent Enterprise magazine named Progress Software one of 25 information technology companies that "set the pace in 1998 and are poised to lead in 1999," and why the Gartner Group's Dataquest consulting unit has declared Progress the top vendor in the U.S. embedded database market, ahead of giants like Sybase and Oracle.
At Progress, employees from every department in the company, down to the administrative assistants, go on a company-paid trip--not just salespeople who beat their targets. And when they go, they get to bring their families, if they want to. "We recognize that while our employees are here working every day, there's another part of their life, and in that life there may be someone who is asked to be understanding about why they're away so much, why they put so much time and energy into their work," says Andrews, a 17-year veteran in the high-tech human resources field, who says the company has had this policy in place since 1992.
Group trips are organized by business function. For example, the marketing department goes on a trip together as a group of about 40 people, as does the finance and administration department, the largest with about 150 people. Progress allocates funds for the trips per employee. Larger groups typically offer the opportunity to take one of two trips a year, one to a destination within driving distance from the company's headquarters northwest of Boston, aimed at employees with families, and another to a destination requiring air travel. Progress pays for hotel rooms and meals for employee and companion; when air travel is involved, companions (spouses, significant others, children) pay for their own airplane tickets.
Members of the company's six-person event management department are involved in planning these trips only when asked. "The groups like to plan these themselves," says Leah DePolo, event manager. "Once in a while they'll ask me to look at a, or they'll ask whether we've been to a property they're considering." Last year, the marketing group itself went to Fort Lauderdale, Fla.
10-Year Trips In a policy begun a year ago, Progress employees also travel on the company when they reach their tenth year of employment. "We give all 10-year employees an additional week of vacation, 1,000 stock options, and a four-day, all-expenses-paid celebration in Bermuda," says Andrews. "There are only three requirements for the trip: One, that you show up; two, that you attend the welcome reception we hold at one of the hotels; and three, that you attend the actual award ceremony."
Last year's award ceremony for 23 10-year employees and their spouses was held on the beach at the Sonesta Beach Resort. "There was a beautiful full moon, the seas were calm, we had a big bonfire and a steel band, and everybody walking around barefoot in the sand," grins Andrews. "People just loved it." The rest of the trip is virtually unstructured, he says. For the event management group, one of the best things about the 10-year trips is that predicting attendance is straightforward. "We'll have about 30 people next year, and I think it jumps to 45 after that," says DePolo. "Assuming they all stay with the company that long."
Does This Work? Odds are, according to Andrews, that those employees will be there to collect their trip. "Does this program work to retain employees? I believe it does," he says. "The average turnover in information technology and product development across the industry is something like 20 percent. I'd rather not say what ours is--it's a number we don't publish--but it's well below 20 percent. Compared to other companies like ours in the region, we've got to be at the top in employee retention."
Kathy Bensky, a principal with Westchester, N.Y.- based Towers, Perrin, Forster, and Crosby, a human relations consulting firm, confirms Andrews's estimates. "Software developers are looking at anywhere from 15 to 25 percent annual turnover, on average. Some organizations, clearly, are much more successful at keeping that number low."
Incentives That Retain Employee retention may be a human relations issue, but at Progress it is always near the surface in sales, as well. "Today, any good software company has to be thinking about how to motivate and retain employees," says Dave Vesty, vice president of worldwide sales for Progress. "Money is important to a lot of people, but travel and recognition are huge motivators. Any company that's competitive today really has to be thinking about these things," says Vesty, who has been with Progress since 1986--five years after its founding.
Progress has a fairly ordinary sales incentive, called ProClub. Salespeople who exceed their quotas by 30 percent have, in recent years, been whisked off to Hawaii or the Caribbean. "There are about 120 of what I'd describe as bag-carrying salespeople around the world," says Vesty. "In a lean year, 25 percent of them will make ProClub. This year we've got 40 percent." While Vesty says he's never done the math on ProClub's return on investment, he's confident that any salesperson who makes 100 percent of his or her goal is going to push to make 130 percent. "You don't find too many people at 110 percent," he says.
Vesty is also confident that the timing of the ProClub incentive helps with employee retention. The company's fiscal year ends in November, and ProClub takes place the following March. "Salespeople usually decide they've had enough of their company toward the fourth quarter," he says. "They're not feeling good about their prospects for the coming year. But anyone thinking of leaving to join a start-up company or something like that, who is also doing well enough to qualify for ProClub, is far enough into the new year that they'll hang in because they don't want to see the trip go away. And maybe by then they'll decide to stick it out after all. It's a way of elongating a stay." And from Vesty's perspective, anything that encourages successful salespeople to stay is a good thing.
User Group as Incentive? "Many employees consider it a desirable perk to attend the user-group meeting," says Mike Mitsock, vice president of corporate marketing. The company holds 1,200-person worldwide meetings in odd years, and smaller regional meetings in North America, Europe, and Asia in even years. "It's especially important for software developers. When they get to see what customers have built with the tools they've developed, it's kind of cool for them." While it may be a perk, developers have to put in work to attend, typically by agreeing to put on a customer presentation.
Because feedback from customers is important to developers, facilitating interaction is an important job in the events group, says Pamela Corcoran, manager of corporate events at Progress. "We can't expect developers to walk down the hall and interact with people they don't know very well."
A Cultural Statement If meeting and talking is by itself a motivating perquisite, then Progress Software is taking advantage of every opportunity to motivate--and to entwine motivation with sales. "The folks who use our products are probably the most Web-savvy online people in the universe, yet they will still come to a hotel ballroom because they need to see and touch the product and ask questions of the developers and marketing people," says Mitsock.
For all this, however, Kathy Bensky, the human resources consultant, is still most impressed by the nonsales aspect of what the company does.
"They've come through with recognition programs that focus on quality of life; that's great. The fact that they've chosen features that really focus on work/life balance is a really good cultural statement."
Founded in 1981 by Joseph Alsop, a graduate of the Massachusetts Institute of Technology who had started up two software companies before hitting on the idea of an applications tools supplier, Progress is an old-line company by current standards. It has grown steadily since going public in 1991, and, as of November 1998, reached nearly $240 million in annual revenues, with 1,200 employees in 60 offices across North America, Europe, Asia/Pacific, and Latin America. The company's success is a result of its 2,300 independent software vendors (ISVs) and end-users who use Progress Software technology to build the hidden frameworks that make all kinds of business applications work.
As an "open solutions" company--meaning it uses software standards that are public, not proprietary--the company depends on the innovations its ISV customers come up with, which explains why Progress does everything it can to engender the loyalty of these users.
Mike Mitsock, vice president of corporate marketing, Pam Corcoran, manager, corporate events, and Leah DePolo, events manager, share their hard-earned wisdom about meetings and events:
Mike on Audience Research: "We poll non-attendees as well as attendees at our user group meeting. That's been a real eye-opener. Some of our consultant attendees, who need to be billable to make money, say they'd pay more to attend if we'd make the conference shorter."
Pam on Hotel Size: "In Dallas, the Wyndham Anatole didn't have connectivity--although they do now, because we put in a network--but it was big enough that we could put everything under one roof. That way, even a trip in the elevator was an opportunity to network."
Pam on Connectivity: "We hire an outside firm called ShowNets to set up our networks at meetings. We used to do it ourselves, but as our conference grew, it became more and more intense, and our network guys have their own jobs to do. Every breakout room has to have an Internet connection. Our exhibit hall always has a network node for any exhibitors who want Internet connections, too."
Leah on International Attendees: "Latin Americans like to do things in big groups. When we have a big contingent from the Latin countries at ProClub (the annual sales incentive), we'll plan more big group events and rent vans instead of cars. They like to be together."
Mike on Keynote Speakers: "There's always a component of the audience that wants to hear an industry expert, but increasingly we're hearing from attendees that maybe they'd rather just be entertained on the closing day. We're thinking about Penn and Teller."
Pam on Booking Seminars: "We go to our national account reps when we need a ballroom for half a day in 18 cities. We try not to go to individual properties, because that's when you're nobody--you have no leverage."
Pam on Meeting in Europe: "We use a housing bureau when we go to Europe. With the time change, language barriers, and different hotel standards, it's just easier. In London, I think we used seven different hotels. Not only do they not have big hotels, they won't give you big room blocks, either."
Mike on Scheduling: "We used to try to cram all the general sessions at the user group meeting into the first day. I think we were putting people to sleep by the middle of the first morning. Now we have 90-minute sessions each morning."
Leah on Third-Party Companies: "We used to use the local destination management company for our incentives. Now we use Passages, an incentive travel company near us. Instead of dealing with a differentevery year, we work with one company. It's more consistent."