“I went to a dinner party recently where we played a parlor game,” George Colony explains. “Everyone at the table was asked to choose one word to describe himself. I chose ‘fun.’ That choice might rub some people the wrong way, but I find that I’ve got to have fun at whatever I’m doing or my level of effectiveness goes down. I adore working. I’d pay to do what I do — but I don’t want to spend my whole life working. I love the other parts of my life too. I often remind people that the Declaration of Independence entitles us to life, liberty, and the pursuit of happiness. I’ve heard that Thomas Jefferson originally wanted it to read life, liberty, and the pursuit of wealth. But there has to be more to life than money.”
How would you like to work for a guy like that?
Colony, 47, is the chairman and CEO of Forrester Research Inc., one of the largest and perhaps the most-respected Internet research firms. Founded in 1983, the company’s revenues have increased at a compounded rate of 52% since it went public in 1996. In its short but happy life, the company has played a significant role in shaping the strategies of hundreds of new-economy ventures as well as traditional companies that are now seeking to compete on the Internet. But I went to visit Forrester not to understand its business, but because I was interested in its reputation as a place where people loved to work. Specifically, I was curious about how a young, hard-charging, rapidly growing company could demand such high performance from its employees, still treat them humanely, and inspire their loyalty.
What makes Forrester distinctive, I discovered, is the culture that Colony and his team have managed to build. The company doesn’t have especially progressive work-life programs, and they don’t pay higher salaries or offer significantly stronger benefits than those of their competitors. More subtly, what Forrester does is address people’s needs on multiple levels, recognizing their complexity. Colony has resisted choosing sides among traditional management styles, and opted instead to embrace paradox openly. The result is a company that feels both driven and laid-back, informal but highly focused, individualistic and collaborative. Call their approach post-conventional. Above all, Forrester’s culture seems comfortable balancing opposites.
Democracy Vs. Meritocracy
No one at Forrester, including Colony, has a separate office. Back in the early 1990s, everyone had an office, although there was one central room for computers. “That room was where we had the most fun,” Colony explains. “It’s where people from different disciplines would sit around and share what was going on.” When Forrester launched its first Internet-research venture in 1994, Colony suggested forming a “pod” of 8 or 10 core people who would work together in one large room.
“Everyone screamed,” he remembers. “They would only agree to the idea if I joined them, and no one believed that I would leave my plush office. One day I came in, put all of my stuff in boxes, and moved into the pod. That’s how it began. That new team lit the company on fire. We shared our tears and our fears, and at the end of the year, we danced on our desks to celebrate our success.”
Today, everyone at Forrester sits in pods, which are mostly composed of research teams. If you want to talk to Colony or to any other top executive, you just walk up to his or her desk. “It creates a much higher bandwidth of communication, and it helps people form relationships faster,” Colony argues. “Also, your mentor is sitting right next to you. The company’s DNA gets spread quickly throughout the pods.” As Mary Modahl, 38, vice president of marketing, puts it: “Credit is usually unfairly distributed in companies. The guys with the big offices are seen as the only ones responsible for the successes. By taking away the physical expressions of authority, people can speak up and be valued equally.”
But while Forrester’s culture encourages people to voice their opinions, decisions are not made by consensus, and people are clearly rewarded for their accomplishments. “Individual achievement is very important here,” says Modahl. “So is personal accountability.” Each employee sets goals quarterly and receives four performance reviews a year. Forrester also gives out plenty of awards. For example, a prize goes to the person who has the highest impact on the company as determined by a vote of all the employees.
Self-confidence is valued more than self-promotion at Forrester. “You need ego as fuel to give a speech in front of 3,000 industry people or to have your research read by 50,000 clients,” says Colony. “At the same time, we’ve found that the creative process here is collaborative. Feedback is very hard-hitting and critical. Your skin has to be thick, so it’s best to check your ego at the door.”
Embrace Change and Preserve the Core
Forrester captures this paradox in something that it calls “proactive destruction.” The notion is that companies must be willing to anticipate demand and to change rapidly, without sacrificing the core mission and values. “We’re destroying and building at the same time,” says Colony. “On one hand, we want to keep our core culture sacred and constant. On the other, if you are not a catalyst for change in this company, you probably won’t last long. It may look chaotic to outsiders, but we’re doing all of this in a very planned way with a long-term outlook.”
Last year, for example, Forrester completely transformed its business model, changing the way that it delivered its current product to clients — moving largely into an electronic format — and introducing a series of new products. Despite all the tumult, the company not only managed to increase revenues from $61 million to $87 million compared to 1998, but also grew net profit from $7.5 million to $11 million.
In the race to the future, Forrester balances sprinting in bursts with a recognition that the race is ultimately a marathon. It’s the company’s way of avoiding the get-rich-quick orientation of so many startups. Colony made this point in an especially blunt position paper that he sent to Forrester’s research clients this spring. “Many Dot Coms,” he wrote, “are about to be exposed for what they are: vapid, shallow, hollow companies.” The problem, he went on to say, is that too many Internet CEOs have short-term vision and commitment, a “fanatical” focus on stock-market valuation at the expense of providing genuine value to the customer, and insufficient patience and resources to withstand sustained competition in the long run.
Forrester struggles to balance short-term and long-term visions. “You can’t just burn people out,” says Modahl. “What we’re trying to say is that when you have a high priority, sprint as fast as you can. When it’s not urgent or critical, take a pause.” Colony is even more direct: “Clients pay us for our thinking. The more balanced your life is and the more diverse your interests are, the better your thinking will be. If you work 20 hours a day, your product will be crap.”
Get Big, Stay Small
Inspired by his prep-school headmaster who knew every student by name, Colony did the same with every Forrester employee until recently. This year, however, the company will hire 300 new employees, and open two new research offices. While Colony can no longer keep up, he still makes it a high priority to get to know people one-on-one. The first week that Mariko Zapf, 30, came to work at a mid-level job at Forrester last year, she unexpectedly found herself sitting next to Colony on a bus ride to a company outing. “He introduced himself as George,” Zapf says, “and for the next hour he just asked me questions about my family, what movies I liked, what books I read. I was blown away.”
At the same time, Colony is firmly committed to getting bigger — and not primarily to please stockholders. (The company went public in 1996, and its stock has jumped 631% since then.) “I wouldn’t be here if we stayed at 100 people because it just wouldn’t be challenging enough,” he says. “Every step we take is a whole new menu of challenges and stuff to work out. As we have scaled, things have gotten more interesting.”
For Colony, the challenge is to maintain a sense of humanness and intimacy in the sort of large company that he has long avoided joining. “The pods are one way that we mitigate size,” he says. “It’s like being in a squad of 8 or 10 people in the military. You get so that you’re willing to die for the guy next to you.” Colony is also determined to keep the scale of Forrester’s new research offices modest. “In The Tipping Point, Malcolm Gladwell writes that the human brain is wired to have no more than 150 relationships,” Colony says. “That feels about right to me. It’s probably not coincidental that we’ve designed each of our new research offices to have no more than 150 employees.”
Break the Rules, Win the Game
Forrester is known internally as the land of the mavericks. “We want people who think in counterintuitive ways,” Colony explains. “There are a couple of dyslexics here who are great analysts. They’re what I call jumpers, because they’ll take a wicked leap to an entirely different place.” Indeed, Forrester is renowned for defying the conventional wisdom. It was the first research firm to suggest, for example, that Internet retailers were severely overvalued and were headed for a fall. “When I see someone who has done something unusual,” says Modahl, “it suggests that she can think independently, isn’t following a script in life, and won’t be afraid to go against the pack. Three times out of 10 she’ll be wrong, but that’s okay as long as she’s done the work.”
If Colony is a visionary, he is also a pragmatist. He understands that the old rules don’t work in the new economy and that the retention of valued employees is the key growth engine for today’s companies. Forrester’s turnover is under 20% — unusually low in the dotcom world. “If we keep people for at least five or six years it’s a big win for us,” Colony says. “We’re living in a world where every employee is a free agent. People can get money anywhere. Jobs are everywhere. Why do people stay in any one place? It comes down to a company’s environment. That’s where we focus our sights.”
Tony Schwartz (firstname.lastname@example.org) is the author of What Really Matters: Searching for Wisdom in America (Bantam Books, 1996).