Life at the Top

After sky-rocketing to first place in Fortune’s list of the 100 Best Companies to Work For this year, NetApp is living the high-life. We ask Gwen McDonald, the firm’s SVP of HR, what its like to be the best in the business.

“The HR organization has to continue to play a pivotal role in assuring that our employees feel that they have the ability to continue to be motivated and productive during this period of time”
-Gwen McDonald

In January of this year, after six years on Fortune’s 100 Best Companies to Work For list, NetApp was catapulted to the top spot. It is an acknowledgement that has been reverberated ever since. In March, French publication Réussir/L’EXPRESS ranked NetApp as fourteenth on a list of the Best Workplaces in France; in May, NetApp Australia ranked second on a list of Best Companies compiled by the Great Place to Work Institute of Australia; and in June, Washington Business Journal (WBJ) ranked NepApp as the second Best Place to Work in the DC Area.

Following the #1 Ranking in January – the second year the company has achieved a top 10 ranking on Fortune’s list – it was noted that an egalitarian culture, salary, unique benefits, and a down-to-earth management style were the reasons behind the company’s flight to the top of the list, and chairman and CEO Dan Warmenhoven said that he believes this success is a result of the company's continued commitment to embracing the values of what he calls a ‘model company.’

Whatever the reason for behind the jump, company culture plays a central role in day-to-day management at NetApp and is defined by the organization’s core values – trust and integrity, leadership, simplicity, teamwork and synergy, going beyond, to get things done. It are these aspirations that are at the heart of the company, a key differentiator being that employees at NetApp look to live these values each and every day, marking them as the strength and foundation of the company's culture.

For Gwen McDonald, SVP of Human Resources at NetApp, culture is, quite literally, everything: “This is an organization that is well known for its phenomenal culture and it’s a culture that is very much anchored around our values,” she says. “Our values really are guideposts to the company and how we behave with our decision-making. So, as a result of that, we have a very clear trust environment.”

And trust is something that is currently very important, not just for NetApp per se, but for companies generally as they continue to battle against the tide the economy. “Given the huge economic downturn,” says McDonald, “the HR organization has to continue to play a pivotal role in assuring that our employees, which are our assets, feel that they have the ability to continue to be motivated and productive during this period of time.

“So the area we have really focused on is our continual and effective communication on what’s going on with our business and what would we still need from our employees in terms of driving our business forward.”

Historically, NetApp is a company that experiences double-digit growth, both in terms of its revenue, as well as in terms of its people growth, so this slowdown has allowed the company, at least from a HR perspective, to look at the company’s transformation and at ensuring that the HR organization plays a role in helping with some of the business readiness and change readiness aspects of the company. “We are currently in the process of looking at business transformation in terms of some of our critical key processes that will help us to continue to scale the organization,” says McDonald. “We have created an organization called Business Transformation, which is looking at all those key critical processes. Within our sales organization, we’re looking at transforming that and how to continue to leverage different pathways to get to our broad audience. Then, within the HR organization specifically, we are looking at different areas of what we consider to be our absolute core and what we can outsource to gain cost efficiency. We are currently increasing our technology platform so that we can make sure we are scalable and that our processes are not bottlenecking the company’s growth.”

Its quite an extensive list, but one that does not seem to phase McDonald. Then again, why should it? She already has extensive experience in Human Resources, having been at 3Com Corporation for 14 years before leaving to join NetApp several years ago. At 3Com she served in a variety of positions, including SVP of Corporate Services, Vice President of Worldwide Product and Supply Operations, and Director of Human Resources for the Business Connectivity Company; she was also the HR Manager for LSI Logic's Santa Clara operations, and served at Fairchild Semiconductor for 12 years in various Human Resources positions, including the Senior HR Manager for the Linear Division. So, because of her experience in the HR field, McDonald understands the core importance that this function has and understands the kind of benefits that HR can bring to the management table.

“HR has really stepped up in recent years in helping the organization,” she explains, “and I believe that the role that I and the rest of my leadership team must now play is really in partnering with executives from a business and a human perspective. These are tough times, and we have to balance the cost of our business model with continuing to have employee retention. At NetApp, we have HR individuals that are in line with each business unit, ensuring that those conversations are continually going on. We’re looking at some of our changes to meet the cost structures, our customers and, overall, our shareholders.”

NetApp views its employees as its most critical asset. It is McDonald’s belief that if you have an employee who is motivated, then you have a direct correlation to productivity. “Not to state the obvious, but everyone wants to be part of a winning company,” she says, “so we are really clear about that and our people understand that their involvement makes a significant difference not only to the immediate result of our success, but that it also continues to have residual, long-term effects too.”

Something extra
Last year, NetApp introduced a program called Volunteer Time Off, which has proven to be one of the organizations most successful programs to date. In the program, employees across the globe are provided with the opportunity to have five days off [a working week], to volunteer at a non-profit organization. “It allows for a tremendous amount of work-life balance because each individual has his own personal choice around how they want to give back. Again, that also talks wonders for the motivation of our employees and their empowerment. It is great that we are able to do that,” says McDonald.

The company is also looking at different methods to handle its employee training, given the fact that how training is actually delivered is even more critical given the tough economic times. McDonald defines the new tactic as a sort of ‘blend’ process, which recognizes the business challenges in this climate by looking at processes such as e-learning and Webex as alternative training ideologies that can not only save on costs, but continue to provide development for employees.

It is an interesting point, especially considering that reductions in training is among the seven most popular actions that companies are taking in this recession. “We have not had a straight reduction in area, and we are looking at how we can continue training both from a sales training and a professional training perspective. Ultimately though, we believe that it is absolutely critical that our employees continue to improve on their skills, and there are some areas, such as leadership, which are even more critical, and believe that we have to continue to sustain development in those areas.”

But incentives and interesting perks at NetApp don’t stop at training and development. Employee enthusiasm for the company is rife – another reason the firm jumped 13 places to Fortune’s top spot this year – and typical of its down-to-earth management ethos, the company early on ditched a travel policy a dozen­pages long in favor of the preferred maxim: “We are a frugal company. But don't show up dog-tired to save a few bucks. Use your common sense.” What’s more, instead of business plans, many units write “future histories,” conceptualisations of where the business will be in 12 or 24 months’ time.

Strengthening the cause
“One of the things that being top of Fortune’s list this year does is reinforce the reputation of the company,” says McDonald. “We have launched a company rebranding that as really spoken to the company. What we have done is commit to achieving market leadership through our values, so the Fortune 100 was just a validation of what we believed we had created here at NetApp.

“It’s another validation in terms of our employees because two-thirds of that overall Fortune process is based on anonymous questionnaires that Fortune sends to 400 employees. The questions ask whether employees believe this is a company where they trust their leadership – whether they believe that leadership is credible?  Essentially it’s a culture or a trust index. ‘Do you believe that what you’re doing is making a difference? Is the work that you’re doing challenging? Do you believe that you have respect and are working with talented colleagues?’ That sort of thing. But the biggest piece is around this whole notion of trust. We believe that we have a company that is unique and our culture is our absolute differentiator, and being the Fortune number one is a validation and a confirmation that we believe what we created – for our employees – an experience that simply is a great place to work.”

And, on a personal level, McDonald considers the new ranking a complete honor. “I’ve been here for five years and NetApp has been on the list for seven years in a row. So, it’s a phenomenal reinforcement, even in spite of the growth of coming from a company that’s been growing 20 percent year over year, to continue to have a culture that’s been able to sustain and then be nominated for number one is a great attribute.

This article is based on an interview with Gwen McDonald for HRM’s sister publication Business Management. For more, please visit their website www.busmanagement.com.

A unique touch
As well as the Volunteer Time Off Program there are several other exclusive programs at NetApp that not only provide employees with wonderful benefits but also build on the creative culture at the firm. We take a closer look.

Leave of Absence (LOA) Policies
NetApp's LOA policies go above and beyond what is required by law and/or common practice by extending the same rights and protections to employees across the US that are required only in certain states, or in locations with specified numbers of employees.

Disaster Relief Relocation Program
NetApp cares deeply about its employees, and has developed a disaster relief relocation program in order to aid new employees in their time of need after facing a natural disaster. The program includes temporary housing, temporary transportation, and a cash lump sum to help victims buy the necessities to get back on their feet.

Environmental Stewardship
NetApp prides itself on having successfully implemented company-wide ‘green’ programs that reduce waste and conserve resources. Ranging from stocking its cafes and break-rooms with eco-friendly containers and biodegradable service ware, to conserving resources by over 50 percent within their data centers, the company is committed to practicing good environmental stewardship.