Another Perspective
More Cowbell
How do you turn a company from a small Internet start-up into a billion-dollar-a-year business?
How do you turn a company from a small Internet start-up into a billion-dollar-a-year business? We wish we knew, but we can tentatively say that it sure doesn’t hurt to empower employees — to tell them that they have a stake in the company’s success, and mean it.
A worker vs. management mentality is often pervasive in D.C. You’ve heard the litany peddled by union bosses: company executives are motivated only by greed and perhaps malice. They’re out to oppress the worker for fun and profit. Industries that let themselves get sucked into this adversarial set-up struggle. The hostility can lead to battles that cripple or bankrupt companies.
Many employers know better than to let it come to that. Successful firms today treat management and labor as a partnership and help their employees succeed. These employers know that success depends on the quality and betterment of those who work for them.
Take the Internet discount retailer Overstock.com. At the company’s invitation (and on its dime), we went to tour the Overstock’s warehouses in Salt Lake City, Utah, in September. We found a company that was working to enhance the quality of its workers and rewarding them for their efforts.
We found that promoting from within is ingrained in the Overstock management philosophy. The Internet sales giant believes that the experience that employees obtain by starting at the front lines of its customer care and warehouse departments is indispensable.
Overstock management believes that workers who start at these entry level jobs and climb their way up have the right mindset for improving the company. So management encourages customer care and warehouse department employees to apply for positions of greater responsibility.
We met Stormy Simon, who started as a sales representative in the very early years of the company. She joined a team of four making business -to-business cold-call sales. She quickly took the lead, ringing a cowbell every time she made a sale. That constant ringing got the attention of CEO Patrick Byrne, who decided that he wanted more cowbell. He put her in charge of the department.
Byrne soon discovered Simon had experience with radio. He gave her a budget for radio and television commercials. Simon discovered the woman for the now famous “Big O” commercials, which helped put Overstock on the map. Simon now runs the marketing and customer care departments.
Overstock also promotes education to its workers. The company provides a “corporate campus” — an integration of online resources and an onsite leadership library — to provide employees with leadership, business management, and other courses. About 600 free courses in all.
Overstock has partnered with four colleges and universities to expand opportunities for employees. These schools accept credits from the “corporate campus” as electives toward degrees. There are also a few full scholarships available to overstock employees each year.
We met Jose Jimenez, who started working in Overstock’s warehouse as a temporary worker on the janitorial team. He was in the U.S. on a visa. Because of his enthusiasm he was quickly moved to the packaging department as a temp. After a few weeks, Jimenez (no relation to the astronaut created by Bill Dana) pulled a supervisor aside and suggested a physical modification. It was implemented and improved packing efficiency by 30 percent.
Jimenez was a college graduate in Mexico who had come to America seeking better opportunities. After he made the improvement to the packing operation, he became a team leader. In 2005 he got his U.S. citizenship and has since completed his Masters Degree in Information Systems from the University of Phoenix. He was the first recipient of the company’s Vanessa Antrobus Quinn Scholarship and is now a shipping manager and one of the top leaders in Overstock’s main warehouse.
Finally, we found that Overstock encourages employees to feel like owners of the company by making them owners of the company. Each year Overstock gives associates company stock as part of their end-of-year compensation. Generally employees receive stocks equal to one or two percent of their salary. If they hold onto those stocks and the company does well, everybody wins.
Aggressively promoting from within, encouraging education, and giving employees a stake in the company are great ways to allow workers to flourish. The company understands something important — something that union bosses and sadly too many companies miss — that by bettering workers it is also bettering itself.
About the Author
Jeremy Lott is editor of RealClearPolicy.com, RealClearBooks.com and RealClearReligion.org and associate editor of RealClearScience.com.
Letter to the Editor View all comments (54) | Leave a comment
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Denver Todd| 11.24.09 @ 8:46AM
I am a bit jaded about things like this. I remember the tech boom in Seattle where lived at the time, when good companies allowed workers to bring their dogs to work. It is nice to know there are positive working environments out there, even if THE COMPANY PAID THE AUTHORS TO WRITE THIS ARTICLE.
Jeremy Lott | 11.24.09 @ 9:43AM
Overstock paid for our travel and such. It didn't fatten our bank accounts.
Ken (Old Texican)| 11.24.09 @ 9:56AM
Denver Todds of the world unite!
You have nothing to lose but your cynicism.
There was nothing in the article about bringing dogs to work. The article was about building employees up to help a company reap greedy profits...and share them with the employees for their sweat equity invested.
I have watched Mr. Byrne battle "wall street" for shorting his stock for years. I am proud he and his employees have won at last.
Jame | 11.25.09 @ 10:02AM
A horrid balance sheet, 2 current SEC investigations, they have now fired 2 auditors in 9 months and are now calling one liars. Unreviewed 10-Q so they are on track to be booted from the NASDAQ and cannot access new capital.
This one stinks and is closer to bankruptcy than ever before. Byrne is showing himself to be the bad guy he has whined about for years..... Just like a pennystock scam CEO....
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Dai Alanye | 11.24.09 @ 11:39AM
But if you aggressively search online you soon find that Overstock often fails to stock the product you desire, and rarely is low on price. As a result I have never done business with them.
Aside from these minor failings, though, I'm sure they're a wonderful company.
Ken (old Texican)| 11.24.09 @ 12:10PM
Hi Dai
You must think we are truly dumb out here. If they were not competitive...and then some...they would not have grown so nicely.
Silly!
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Margie| 11.24.09 @ 2:41PM
What a fabulous success story! Overstock is great. Purchased many a great item from them at bargain prices. Shipping is minimal no matter the item~~ that's one of their best draws too.
This is what makes America work!
Tim| 11.24.09 @ 3:04PM
The we have the Gubmint model: no bottom line, customers as such do not exist. Top management positions filled with a parade of political hacks, many of whom have no idea about what they're managing. Incestuous relations with unions like AFSCME which seemngly exist solely to protect bad employees from their own mistakes.
Tex Expatriate| 11.24.09 @ 6:45PM
I can tell a story on a smaller scale. As an undergraduate I worked as a bartender at Nick's English Hut in Bloomington, Indiana. It was bought by a young man named Nick Barnes. In the late fifties and early sixties, Nick ran the bar the way everyone else would have done. After I left there he began to see the value of profit sharing. Over the years he extended it. When he died, around forty-years later, he left the bar to his loyal workers. I don't know the legal intracacies of the arrangement.
Ken (Old Texican)| 11.24.09 @ 7:52PM
Margie,
My wife (boss) buys everything these days. (grin).
...She shops until the shelves bleed...and she likes overstock.
What do I know? heh.
Margie| 11.25.09 @ 10:05PM
Tex,
Well, shopping IS in our natures, you know. :^)
Of course, it can be dangerous too.
I've had to put the brakes on these days.
But I'm sure your wife and I could shop up a storm together and have a lunch break and shop some more, if conditions permitted!
fallen earth chips | 11.24.09 @ 8:56PM
But if you aggressively search online you soon find that Overstock often fails to stock the product you desire, and rarely is low on price. As a result I have never done business with them.
free realms coins | 11.24.09 @ 8:57PM
Overstock paid for our travel and such. It didn't fatten our bank accounts.
Tony Ryals| 11.24.09 @ 9:18PM
Oh my Patrick Byrne is the one who pays ex Columbia School of Journalism con artist Mark Mitchell to stalk and lie about me on deepcapture while his penny stock scam artist Bud Burrell threatens my life on thesanitycheck.con website.
You should all be ashamed to do such a white wah of the real issuses such as Byrne's outright lieing about Overstock.con being a victim of 'naked short selling' when it is insiders pumping and dumpuing worthless shares.And Overstock.con sponsered nfi.org and ncans.org and claimed NFI or Novastar Financial was also a vistim of 'naked short selling' or share counterfeiting even though NFI pai dividends and no shareholders even those involved in the scam came forward to claim the didn't receive their dividends - so the naked short claim was and is a provable lie.In fact Mary Helburn the 'president' of Byrne's NCANS or National Coaltion Against Naked Short Selling admitted she loaned her shares out(for profit) to short.Now why or how would she do that
according to Byrne et.al. a 'Sith Lord' was 'naked
shorting' or counterfeiting so many shares that her
loaned shares should have not been of value to conventional shorters ? Huh !?
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Richard Baker| 11.25.09 @ 12:43PM
The Entrepreneurial Spirit built this country. Of course, that means every liberal flake decries it as the reason this country grew into what it became. From where in the Hell do you clods think the money came? Too many of you liberals are still reading "Uncle Tom's Cabin." To Mr. Jimenez, thanks for choosing to become an American and selecting my country. Welcome.
Ken (Old Texican)| 11.25.09 @ 7:14PM
Tony,
You are either a liar...............or STUPID!
mR. BYRNE has just been trying to build a good company.
The underlying value has been built.
You stock buzzards just don't get it do you?
Dumbsnot!
Mandarin Chinese Online | 11.28.09 @ 5:07AM
nothing is impossible to a willing heart!
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