Sanity Inc.

In a quiet corner of North Carolina, there's a place that contradicts most of the assumptions of modern business. In an era of relentless pressure, this place is an oasis of calm. In an age of frantic competition, this place is methodical and clearheaded. In a world of free agency, signing bonuses, and stock options, this is a place where loyalty matters more than money.

This kingdom, a secluded realm west of Raleigh, is home to an all-but-unknown group of software wizards whose output touches every aspect of life -- from what medicines get developed to who gets a mortgage. Although this company is thoroughly modern (endowed with advanced computers, the best child care, art on almost every wall, and athletic facilities that would make an NBA trainer drool), there is something fairy-tale-like about the place. The inhabitants are happy, productive, well rounded -- in short, content in a way that's almost unheard-of today. They are loyal to the kingdom and to its king, who in turn is the model of a benevolent leader. The king -- almost unbelievably -- goes by the name Goodnight.

Goodnight's land even has a gate, a kind of moat, which marks the border between the immaculately manicured grounds and the messy, hectic world beyond. It clangs shut at six each evening.

Among the many privileges accorded the kingdom's subjects, one privilege gets noticed -- one privilege gets misunderstood -- more often than any other. The curious find it puzzling; the derisive find it childish: Every Wednesday, by order of Goodnight, M&Ms -- hundreds of pounds of them, in equal amounts plain and peanut -- are distributed to every floor of every building. Altogether, these weekly allotments come to 22.5 tons of M&Ms a year.

That's 10 times as many M&Ms as Goodnight was buying 15 years ago. During that time, however, the expanse of his kingdom has increased by a factor greater than 10. What's the real source of the company's magic? M&Ms aren't a bad bet.

Sanity as Strategy

The kingdom that Jim Goodnight has created in Cary, North Carolina is SAS Institute Inc., and it is probably the least-well-known major software company in the world. In simplest terms, SAS writes software that makes it possible to gather and understand data, to sift through mountains of information in order to find patterns and meaning. SAS -- which stands for "statistical analysis software" -- started out as a tool for statisticians: Goodnight originally developed it to analyze agricultural-research data in North Carolina. These days, the product is so acrobatic that it is used for tasks that don't seem even vaguely similar: Marriott Hotels uses the software to manage a frequent-visitor program; Merck & Co. and Pfizer Inc. use it to develop new drugs; the U.S. government uses SAS to calculate the Consumer Price Index.

The software is not cheap. A charge of $50,000 a year for 50 users is typical. But it is powerful and adaptable -- and, therefore, spectacularly successful. All but 2 of the 100 largest U.S. public companies use it. In 1997, SAS had sales of $750 million -- double its revenues of five years earlier. The company now employs 5,400 people worldwide, up from 1,900 people five years ago.

What is truly unusual about SAS is not the software it creates but the contrarian way in which it does business. The freedom and exuberance associated with the new economy has a dark side: Work is so demanding, so all-consuming, that it can become unsatisfying. In that context, SAS may be the world's sanest company.

First, there's the mood of the place. SAS operates in a competitive arena choked with buzzwords -- "data mining," "knowledge management" -- and builds cutting-edge products that set the industry standard. Yet the one word that employees universally use to describe the company's work environment is "relaxed."

There's also the stability of the company. It is an article of faith in the software business that the only way to attract and keep talent is to offer stock options, along with extraordinary salaries. SAS, a private company, offers no stock, and its salaries are no better than competitive. But SAS treats its employees so well -- there is no limit on how many sick days they can take; they can even stay home to care for sick family members -- that employees remain fanatically devoted to the company. Last year, its turnover rate was 3.7%; never in the history of the company has the rate been higher than 5%.

Then there's the sense of balance to be found at SAS. At a time when confusion abounds on how to mix work and family, SAS has the largest on-site day-care operation in North Carolina. To encourage families to eat lunch together, the SAS cafeteria supplies baby seats and high chairs. To encourage families to eat dinner together, the company has adopted a seven-hour workday. Indeed, most people at SAS keep work hours that are far from typical of the new economy: They leave the office by 5 p.m.

Sanity -- the bedrock of the company's culture -- has become so unusual in the workplace that even SASers are amused by the contrast. "I'd never seen anything like this in my career," says Martin Bourque, 52, who has been at SAS for 10 years and who manages a group of programmers in the technical-support division. "Here, what you accomplish is more important than how you appear."