Intranets.com believes strongly in workplace communications. In fact, communication is their business. The Woburn, Mass.-based company provides small and midsize firms with intranet solutions. Using their product, companies can communicate the latest internal news to their employees, manage projects, and recognize individual and team accomplishments.
Prior to 2001, the organization provided their service to clients free of charge with all of their revenue coming from ads. In spite of an impressive portfolio boasting almost 600,000 subscriptions, the ad model was failing. Intranets.com was burning hundreds of thousands of dollars per month with no relief in sight.
CEO Rick Faulk knew that the company needed to change how they did business if they were going to remain viable. In 2001, Intranets.com decided to transition to a paid subscription model. There was only one problem: The company's marketing slogan was "It's free forever."
Intranets.com responded to this challenge with what they do best: honest and direct communication. "In essence, we told our customers that it was a choice between free and forever," says Faulk. "In other words, the service would go away if we didn't charge for it."
Intranets.com has always taken the same open and honest approach to communicating with their employees. The company was candid with employees about the financial challenges, logistics and risks of changing their business model.
To the organization's credit, financial challenges rarely catch employees off guard, because Intranets.com practices open-book management. "We are an unusually open company in that we share all of our financial statements with employees on a quarterly basis," says Faulk. "This way, every employee knows exactly what the company's revenue and profits numbers are and what our goals are for the future."
The organization has taught the staff how to read financial statements and the chief financial officer personally guides every employee through the latest figures. When Intranets had to lay off a significant amount of the staff in 2001, there was little bitterness as employees understood the challenges facing the company.
Vice President of Sales Morris Porter, a former WorldCom employee, says that the candor with which the company addressed business challenges sets Intranets apart from any other place he's worked. "Aside from payroll, the management team shares everything with the staff," he says. "When I came here, there was a lot of good news and a lot of bad news, and it was all shared openly and honestly."
This approach has served Intranets well in turning the organization around. The company dropped from 600,000 to 75,000 subscribers after the transition to a paid-subscription model. Today, they have 200,000 paying customers and have posted 40 consecutive months of increasing revenue. Currently, they generate a robust $10 million in annual revenue.
Faulk believes that sharing financial information has resulted in a more engaged workforce. "Our people understand the core business model and their role in our success," he says.
Each quarter Intranets tasks employees with setting specific goals for themselves that the company calls OKRs (Objectives and Key Results). "Through these objectives, employees become equal participants in creating their own deliverables, and partners in the company's success," explains Public Relations Manager Greg Shenk.
OKRs are set at the individual, departmental and company level. Everyone's progress toward their goals is reviewed monthly.
The company also invites employees to provide input on the workplace and the company's direction. For example, they have a polling application on their own intranet to solicit feedback from the staff. In addition, Faulk frequently takes small groups of employees out to lunch and asks them what would make the company a better place to work. He then addresses all concerns on the organization's intranet, explaining which issues the organization can or cannot tackle and why.
To encourage interdepartmental communication, the company will hold frequent, structured brainstorming sessions that draw on people from such varied areas as development, sales and customer service. These often take the form of four-hour offsite meetings and employees are encouraged to make their ideas reality. "People excited about a particular idea are put on a 'champions' team,'" says Vice President of Marketing Karen Leavitt. "These teams are charged with shepherding the project along to its completion."
It is not uncommon for Intranets' employees to drive key business initiatives. For example, the company was recently grappling with how to cover a revenue shortfall in their business plan. Faulk named two employees "CEOs for a week," and they were charged with coming up with ideas to address the issue. The two employees suggested that Intranets build out its previously neglected Web and audio conferencing business, and the organization has since adopted the initiative. Recently, Intranets has put together a new marketing plan and is in the midst of hiring contract salespeople to push the product.
By giving employees a voice in the company's direction, the organization has fostered a loyal workforce. According to Faulk, the company has experienced little voluntary turnover. Porter points to the fact that few of their technical people left during the mercenary dot-com heyday as an example of how much Intranets' staff believes in the organization.
Retention has paid off in consistent, high-quality customer service, which is of the utmost importance considering the long-term relationships the company has with its clients. "Customers have been seeing the same photographs in our newsletter for years," says Leavitt. "This gives customers a sense that they are getting a personal touch in their business."
Company: Intranets.com
Web site: www.intranets.com
Industry: Intranet solutions
Location: Woburn, Mass.
Number of employees: 45
Sales: $10 million
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