From the October 25, 1999 Issue of FORTUNE MAGAZINE
FORTUNE
By Mark Borden

What makes a company a great place to work? Good managers. And good managers, say Marcus Buckingham and Curt Coffman in their best-selling book, First, Break All The Rules (Simon & Schuster, $25), are leaders who ignore conventional niceties. Good managers play favorites, don't try to fix their employees' weaknesses, and don't believe in the power of positive thinking. Rather, they build on strengths and cast people in the right role. Based on interviews of more than 80,000 managers and a million employees, the Gallup Organization (yes, the poll people, but nearly all the company's revenue comes from management research and consulting) created a 12-question formula to determine the strength of a workplace. None of the 12 questions address issues like pay, benefits, perks, or what employees think of the CEO. Instead, questions like 'Do my opinions seem to count?' and 'Does my supervisor, or someone at work, seem to care about me as a person?' were used to discover the keys to higher levels of productivity, profit, retention, and customer satisfaction. FORTUNE's Mark Borden discussed the book with its authors.

Your book's title should have been It's the Manager, Stupid. It's not the company that the employee quits--it's the manager.

Coffman: The relationship with the manager, we know, is just the pinnacle. Employees will tolerate a lot from a great manager. But employees are very quick to leave a manager. The manager is the way in which all broader initiatives are translated and filtered and make sense to individual employees.

Why are managers so important?

Coffman: When we go back and study some of the most productive business units, we find that great managers are the consistent variable in all those great work groups. The manager sets a tone for that work group. The average to mediocre manager can set a very destructive tone too. My description of a bad manager is, Be good, but don't be better than me.

So what's your succinct definition of a good manager?

Coffman: A great manager is someone who says, You come to work with me, and I'll help you be as successful as possible; I'll help you grow; I'll help you make sure you're in the right role; I'll provide the relationship for you to understand and know yourself. And I want you to be more successful than me.

Tell me about great managers concentrating on talents or strengths of their employees--not their weaknesses.

Buckingham: If you were to ask us the one thing that we learned from our study of great managers, it would be that people don't change that much. You should try to draw out what was left in, not try to put in what was left out. Great managers spend a ton of time trying to figure out the unique things that each person brings, and how [they] can make the most of that to get the greatest performance.

How do great managers define fairness?

Coffman: Great managers define fairness according to who the individual is. True equality is treating you according to who you are, not according to [how] I'd like to be treated or how I think you should be treated to be fair across a demographic group or a characteristic group.

Every individual is different. I think we've all checked into a hotel where the person read a script to us to try to make us feel welcome. That's where we try to treat everybody the same: Read this script--don't vary from the script. Whereas if I leave the individual in it, and that individual has a tremendous talent for making people feel comfortable and welcome, they do that in a very different way than the next person would. Let's define the outcomes we want to achieve, not the means.

One of your 12 questions is, 'Do I have a best friend where I work?' What does that question reveal?

Coffman: All employees reach a point in their jobs where they have leaving moments. Somebody comes along and offers something, or we get called by a headhunter. The quality of the relationships you have with your manager and your co-workers helps some of the most productive people get through those leaving moments. If those relationships are not in existence, people leave.

Can you retrain managers?

Buckingham: You can teach people new knowledge. You can make them aware of something they weren't aware of and that will help change their behavior to some extent. One of the first things you can do is just hold up these 12 questions like a mirror. I don't care what your style is, but if people don't know what's expected, we have a problem with you as a manager. If people don't feel as if they have a chance to do what they do best every day, we have a problem with you as a manager. So it's a slap. It sort of wakes you up as a manager: 'Oh, that's what being a manager is.'

However, if you've got a bunch of [managers] that distrust people, don't value the uniqueness in people, and would rather be doing the job themselves than being responsible for having someone else do the work, then retraining won't help them. You have to honor what great managers tell us, which is if somebody is massively miscast, then retraining will just help them know 'I'm massively miscast.'

Is there a bottom line?

Coffman: That's the real acid test. If I were a CEO, I'd [say], That's fine. These work groups are in the 95th percentile [of the companies Gallup studied]. But are they more productive? Do they have lower turnover? Do they have better customer scores? Are they financially doing well? And we'll tend to show unbelievable metrics. For instance, there was one [company group] that was in the top 75th percentile [of companies studied] and was, on average, 13.68% above budget on earnings. The bottom quartile [group] were 30% below budget on earnings.

That would pop the CEO's eyes open.

Coffman: It did. It equated, for this organization, to $16 million of difference between that top and bottom group. These groups are obviously more engaged, but do they also have performance? That's where it stops being a number and starts being reality.

[SIDEBAR]

There's Something About Mary...

It's 7:30 on a Saturday morning in Boca Raton, and Cynthia Abernathy is doing an interpretive dance for an audience of her Best Buy colleagues. When she finishes, she smiles and blushes to rowdy applause. Sure, the computer and electronics retailer wants its stores everywhere to look the same, but it doesn't want to kill off personality. So each store chooses its own way to get monthly staff meetings going. Boca went with a talent show before getting down to the business of meeting new employees and hearing sales and loss figures from previous months.

In the world of Boca general manager Mary Garey, creating an environment where employees are willing to dance in front of their co-workers is just as important as profitability. The two, in fact, seem to go hand in hand. Garey is one of Best Buy's best managers. The company has worked with consultants at the Gallup Organization for three years to identify great managers within its ranks. Once they are identified, they might be moved to troubled stores or, as in Garey's case, asked to mentor others.

Garey, 32, started with the company 14 years ago as a customer-service rep and took over as general manager of the then-struggling Boca store four years ago. 'She turned around a store that was going downhill,' says district manager Curtis Copeland. The store had poor sales, apathetic employees, high turnover, and major loss problems. Not anymore. Today Garey's store is in the top 10% companywide in all its measurables (and Best Buy measures everything), including financial growth (up 13% last year), retention (the Boca store's rates beat the industry average by nearly 20%), loss prevention, and customer service.

Garey says she motivates the 110 employees in Boca by practicing a 'behind-the-scenes' management style. After seeing her in action, it's clear what she means. She puts them at ease, listens, and teaches by example. While walking through the cell phone area of the store with one of her salesmen, she bends to remove a piece of trash from the floor. It's an involuntary act, but one her colleague notices. Later that afternoon he spies a crumpled receipt on the floor and picks it up. Garey interviews all prospective employees and knows each of them by name. 'When Mary is superbusy, she'll say a quick hello and go her way,' says product specialist David Fredrickson, 'but she always comes back and says, 'What's happening, David?' and gives you some time.' Garey believes personalities, not corporate policies, set the mood for her store: 'I'm a firm believer in making sure my people know who I am, and I want to do the same with them.' The results at Garey's store and others like it have Best Buy's stock booming more than 135% in the past 12 months. Now that's talent.

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