Vanguard: A Crew’s Views
Employees sail into Vanguard’s Malvern office complex — its buildings are actually laid out in the shape of a ship — knowing that they are part of a crew. In Vanguard’s nautical world, the cafeteria is the galley and the company store is the chandlery.
But while corporate themes may not be a new device, the binding influence at Vanguard works well in finance. In these tumultuous times for mutual funds, for example, managing director and CFO Ralph Packard does view his department’s more than 500 people as having to weather constant squalls. And he makes sure they have good navigational tools for the job.
Finance staffers — about 60 percent of whom work in mutual-fund financial services, while the rest work in the corporate finance division — get regular market updates from Packard and chairman Jack Brennan over their “CrewNet” Web site. They mince no words about the challenges, but promote Vanguard’s advantages. “Our business is strong, and we can ride out some rough times more easily than others,” says Packard.
Employees say they’d stay at Vanguard even if times were tougher. One reason is the availability of desktop “dashboards” that help staffers track their contribution to corporate performance and their status in achieving incentives. “We try to ensure that all crew members have their jobs’ expected results linked to dashboard measures,” notes Packard, and that forms “the basis for their annual merit review or salary increase.” The dashboards also let employees track the Vanguard Unmatchable Excellence (VUE) program, a Six Sigma-like system that Packard says “strives for virtually error-free business performance.”
Glenn Booraem, a principal in fund financial services, says VUE “really makes a difference in focusing folks on critical measures” in their jobs. One of Booraem’s own indicators shows “process accuracy and efficiency,” since pricing data for his trades measure how well he is doing. He compares a fund’s net asset value to “a car coming off the assembly line,” with many workers contributing to the final product. VUE measurements “deconstruct this end output into its component processes” and let the workers see their contribution for themselves.
Despite the success of the dashboards, the area of technology and tools wasn’t a strong suit for Vanguard in the Best Workplaces benchmarking. Packard acknowledges that the company is still working to automate some systems, and to link more individual dashboard readings to results across the company, for example. “But we’ve made a big advance since the survey,” he says, noting that “our CrewNet site now has divisional dashboards.”
Vanguard had the highest score in the work-life quality category. While the nautical theme may have nothing to do with this, it does reflect the company’s team spirit. Fernanda Antunes, a service administrator, says the motif “at times can seem overdone,” but she has no problem saying “welcome aboard” to a new recruit. Moreover, she notes that the “Crew’s Views,” the employee surveys that are done every 18 to 24 months — covering topics that include workplace issues — are famous for getting results. Once, for instance, the company created lactation areas for nursing mothers because of a point that was raised on a survey, Antunes notes.
Sharon Koop, a senior manager in institutional program accounting, is even more encouraged by the responses she sees whenever a survey asks employees about their ethical standards. The high integrity level reflected there has convinced her “that Vanguard is doing the right thing” at a time when other companies are not, she says. “It’s something to be proud of.”
Roy Harris is a senior editor at CFO.
Measuring Good Work
For benchmarking “human-capital management,” the second annual Best Workplaces for Finance Professionals program used a methodology developed by The Hackett Group. The program rated companies on personal and professional development, quality of work life, innovation, tools and technology, and job satisfaction.
Individual companies — 140 began the process — used the Web to complete a 100-item questionnaire. Then salaried and hourly finance employees were randomly and confidentially sampled, forming the job-satisfaction component. Next, corporate ratings in the five areas were charted on a “radiating pentagon” graph with a 4.0 scale for each, and the top quartile scoring 3.0 or above.
Hackett and the Association for Financial Professionals, which along with CFO magazine are program sponsors, will accept entries starting this month for the 2003 program (see www.bestworkplaces.org). This year’s participants are being acknowledged at the AFP annual conference in New Orleans, November 3–6. —R.H.