Sanity Inc.

Jim Goodnight is not a guy who notices management fads or worries much about outside criticism. He lives the way he wants his employees to live. He goes home around 5 p.m. (at which point SAS's automated switchboard starts answering the phone, "Most of SAS Institute is closed at this time . . ."). He refrains from checking email when he's away from the office.

A lean man with the build of a basketball player, Goodnight, 55, has a dry wit that can easily become a cutting wit, even among employees. He can also exhibit the oblivious air of a computer-obsessed 19-year-old, especially in public situations.

Recently, at the end of a day-long company presentation to customers, Goodnight took the stage and gave an auditorium full of people a tour of his "virtual office" -- the computer program that he can use to probe deeply into the performance of any aspect of SAS. Without warning, he showed the crowd his personal cache of computer games: first, a blackjack game, which he created years ago for his own entertainment; then a tic-tac-toe game; then a word-jumble game, which he completed with blazing speed. He challenged other CEOs to come to Cary and work the jumble as fast as he can.

How did a quirky guy like Jim Goodnight come to have such a well-managed company? By creating an organization that reflects his strengths, without being hindered by his weaknesses.

SAS places enormous emphasis on three things: employees, customers, and products. Employees and customers, for instance, are surveyed every year. The company says that 80% of the suggestions for product improvements that customers make most frequently eventually find their way into the software. SAS plows 30% or more of its revenue (that's revenue, not profit) back into R&D -- a higher proportion than any other software company of its size.

Goodnight is now talking about converting a chunk of SAS into a stock offering -- perhaps as early as this year. In part, his goal is to raise the company's profile and to keep competitors at bay. In part, it's to reward employees who have worked for salaries while watching their colleagues at other technology companies work to build wealth. Would the company's day care, or its private offices, or its putting green pose a problem for a public company? Not a chance, says Goodnight. "Going public is not going to change the way we operate this company. I wouldn't go public if I thought it would."

Until now, SAS has been almost completely undistracted by marketing. Outside of its customer base, the company is virtually unknown. This is partly because, as a private company in a world obsessed with investment opportunities, SAS has seemed irrelevant. But the low profile has also been very much according to plan: Goodnight wants his company to be known for its programming, not for its commercials. And by knowing about programming, and about the customers for that programming, and about the creators of that programming, Goodnight has created a model business.

"You're looking at really good businesspeople," says John Ladley, an analyst for META Group, who follows the company. Most employees, says Ladley, live in a world of "FUD -- fear, uncertainty, and doubt." All three are absent from SAS. Goodnight has "low turnover, happy employees, good cash flow, and a balance sheet with the atomic density of lead. The principles required to achieve what SAS has achieved are not very prevalent in business today. But SAS has them all: patience, hard work, vision, focus, honesty, and loyalty."

Plus 22.5 tons of M&Ms per year.

Charles Fishman (cnfish@mindspring.com) is a Fast Company contributing editor. You can learn more about SAS Institute inc. on the Web (www.sas.com).