Small companies such as Denali Marketing find success by treating employees as valued, respected individuals.
Denali employees don't get cookie-cutter holiday gifts. Instead, everyone gets something different, something president and managing partner Margaret Murphy knows each actually wants and will enjoy: a prized vintage, for example, a favored brew or an iTunes gift card.
"I want them to know I value them as individuals and that was my way to show that," said Murphy, a former Carlson Marketing executive who earned an MBA from the University of St. Thomas. "My role is, I work for them. At the end of the day they're the heroes in my world. My whole focus is really to give employees a chance to spread their wings."
Murphy's approach helps explain how Denali Marketing, a loyalty marketing agency founded in 2006, ranked first among the 45 small companies in the Star Tribune's 100 Top Workplaces 2010. It also may have something to do with the recession-defying growth of the company, whose clients include Best Buy and Sun Country Airlines.
Revenue at Denali Marketing more than doubled from 2008 to 2009. The company had 60 employees and had hired 35 people in the 12 months that ended in February, when it completed the Workplace Dynamics survey. That fast growth explains, in part, why Denali was acquired earlier this month by Minneapolis ad agency Olson. Murphy said she's confident that Denali's culture will remain largely unchanged after the merger.
"If we were merging with a shop from New York or someplace outside the Midwest, I might have some concerns," said Murphy, who will lead the new Olsondenali marketing unit. "Both parties did their due diligence, and our two priorities are our clients and our culture. I think culturally we're very, very compatible."
In the confidential survey, one employee said of Murphy: "If our president sees you at the office late, she asks what she can do to help you finish up so you can get home to your family." Other Denali Marketing employees said they appreciated the company's "environment of teamwork and accountability," its lack of egos and office politics and having work that is "fun, challenging and very rewading."
Employees at other top-ranked small companies used similar terms to describe their workplaces.
Overall, the small companies -- those with 150 or fewer employees -- in the 100 Top Workplaces ranged from health care and information technology companies to professional services firms, public relations agencies and even a bank and a family owned junk yard that has matured into "an automotive dismantling and recycling facility."
Tom Lyons, founder and president of mergers and acquisitions advisory firm Faelon Partners Ltd., said small-business owners help themselves when employees have positive feelings about their workplace.
"Good, happy, productive people make perhaps the biggest difference between a good business and a bad business," said Lyons. "Without good people, you're in trouble."
A positive workplace environment can play a role in an owner's exit strategy, Lyons said. Owners who let sales teams and managers oversee customer relations and delivery of products and services present a lower risk to potential buyers than companies with do-it-all owners.
"You can kind of smell it, whether people are happy or ornery, whether it looks like a fun place to work or not," Lyons said. "Happy people that understand their expectations, are put in position to succeed and be productive are going to have a huge effect on the bottom line. More than a moral victory, there are good business reasons to do it the right way, though not every business owner understands that."
At second-place Holmes Corp., an Eagan-based company that designs, markets and distributes educational materials for professional associations, employees praised opportunities to grow at what they said was a fun, flexible company that also promotes work/life balance.
The company, which has kept a low public profile, lets employees leave to watch children's ball-games or work from home to assist elderly parents.
"We allow people to have a life but also work really hard," said Kelly Cusick, vice president of marketing at Holmes Corp., which has 61 employees. "We put a lot of trust and respect into our employees. Everybody steps up and does what they need to do to get the job done."
St. Cloud-based Marco Inc., the fourth-place small company, has done extensive employee and customer satisfaction research for more than two decades, CEO Jeff Gau said.
The employee-owned company, which sells, installs and supports voice, data, video and other technology products, shares all profits, last year distributing $2.3 million to its employees, Gau said. Revenue was $62 million.
"I don't have patents or unique products," Gau said. "It just gets down to our people. My solution is to attract and retain good people. Even in this recession we've been able to perform well financially and, more importantly, so did the satisfaction of our workforce."
P.J. Voysey, former president and CEO of information technology support company Techies and a small-business turnaround specialist, said studies have shown that employees derive more job satisfaction from a boss' positive feedback than from a huge paycheck.
"Happy employees who feel valued and respected will be more engaged and will care about the company," Voysey said. "An employee who cares about the company is worth gold."