Hero’s Journey: James Goodnight, CEO
The information superhighway has become clogged with billions of pieces of information, ranging from the top secret to the extremely mundane. There are few companies who are as strongly equipped to deal with this avalanche of information as SAS. The company’s CEO, James Goodnight, has been in charge of SAS since its inception in 1976. Goodnight, with a doctorate in statistics, worked with faculty at his alma mater North Carolina State University to develop an effective system for the retrieval of agricultural research data. Goodnight’s work as CEO has helped expand the mission of SAS into one of the most prolific business intelligence companies in the world.
As an expert in the accumulation and dissemination of electronic info, James Goodnight was aware of the problems inherent in the rapid expansion of technology over the last two decades. Goodnight recognized that business managers and owners who were experts in their field, whether it was insurance or selling cars, were not equipped to handle the vast amount of information that would pour in on them from the Internet. In addition to the sheer amount of information that needs to be sorted through by corporations, Goodnight understood the problems of false information or deception through the built-in anonymity of electronic transactions. Goodnight and his team of statisticians set out to work on these problems, which allowed SAS to grow rapidly.
James Goodnight saw the first problem in business intelligence as the lack of creativity and imagination in developing new solutions. Goodnight co-authored an article in the Harvard Business Review in July 2005 titled Managing for Creativity. In this article, the CEO laid out the main principle in the success of SAS in the information industry. Goodnight speaks at length about the best use of creative people in any industry as the key to further success. His viewpoint is that developers, engineers, and statisticians are the ones who create the complex solutions to our modern information problems. As such, Goodnight found that these professionals formed 95 percent of his assets and thought using them wisely was the best business investment possible. The use of “creative capital” was one way in which Goodnight ensured the long term success of SAS.
The SAS method of research and development can be attributed to Goodnight and has been the cornerstone of their business model. Goodnight’s idea that “creative capital” needed to be expended wisely meant that creative individuals needed the right equipment to get the job done. Goodnight and his staff saw the steady growth of revenue not as an opportunity to pad their banking accounts but to reinvest in the company’s research and development department. In fact, nearly one quarter of the company’s 2005 revenues were redistributed into R&D funding. The academic background of Goodnight and others in SAS demonstrates their concern not only with the knowledge of their employees but the quality of equipment they use to get their jobs done.
Goodnight’s approach to expanding SAS on a global level has come out of the necessity for companies in an almost endless variety of industries to develop business intelligence systems. Insurance companies needed a system to determine the legitimacy of claims, retailers needed analysis of their market numbers, and credit companies needed an effective way to develop credit reports. Goodnight’s vision was to never close the services provided by SAS to industries in need. His solution was to use annual software renewals to ensure that every company had updated and legitimate licenses for business intelligence software.
Finally, Goodnight has used his interest in education to help both his employees and the community. The CEO helped found Cary Academy in 1996 and the school has expanded as a reflection of the rapid expansion of computer technology over the last decade. Goodnight’s work with Cary Academy, a school for sixth through twelfth graders that focuses on integrating technology and education, has helped increase exposure to America’s need for educational modernization. As well, SAS has been used by Goodnight to develop special software for teachers in need of training on technological integration. The SAS inSchool software package includes a number of teaching tools and tutorials for teachers on how to use their technical knowledge to improve the skills learned by their students.
All of these efforts have helped SAS ascend to the top of the business intelligence industry. Since 1976, SAS has seen a continuous growth in revenue which is unheard of in any industry. As well, the “creative capital” idea instilled by James Goodnight in the early stages of the company has yielded high employee loyalty. The industry standard for annual employee turnover is about 20%, depending on the strength of the general economy. In 2005, the rate of turnover at SAS was around 4%. In essence, Goodnight’s commitment to using every employee to fulfill their creative potential has helped build a sustainable future for this industry leader.
Thursday, May 24, 2007
