Spare him the gurus

Workforce, June, 2003 by Andy Meisler, Todd Raphael

What has made the founder of Paychex very, very successful is brains, drive, and tenacity. And those are the very qualities he wants in the people he hires and trains. Contemplative "visionaries" need not apply.

B. Thomas Golisano, founder and CEO of Paychex, Inc., is worth reading about for three very good reasons.

Reason One: During the past 32 years-by working incredibly hard; giving open-ended opportunities to bright but uncredentialed young employees; and using old-fashioned training, promotion, and compensation policies-Golisano has exploited a profitable, albeit unsexy, niche market.

He has led his payroll and benefits outsourcing business from a one-man enterprise into a 7,400-plus-employee corporation with $954.9 million in annual revenue. A graduate of a little-known state college and the son of a pasta salesman, he now has a net worth of more than $1.1 billion.

Reason Two: During the past 15 years or so, he has attempted, without complete success, to do several other notable things. He has run for governor three times and lost badly, the last go-around, in 2002, costing him $60 million from his own pocket. He has jump-started many major charities, giving away several fortunes. And, most recently, he bought the Buffalo Sabres, a woebegone nearby National hockey League franchise that was $94.5 million in debt.

Reason Three: He's living proof, in these business-guru-ridden times, of the worth of a passionate and well-executed business plan, the value of effective employee training, and the futility of any one-size-fits-all theory of workforce management. And everyone at Paychex understands this perfectly.

Except maybe Tom Golisano. "I'm afraid I have a reputation of always looking at accountability and results. I think that applies pretty much across the board," he says with a wry smile. From his assertively nondescript headquarters in a suburb near his hometown of Rochester, New York, he adds, "I'm a big believer that you can control a lot of things-if you put in the effort and have the creativity to get it done."

Why Paychex succeeds

By all accounts, the husky white-haired leader plans to keep the plates spinning indefinitely. At the rate he's going, he should run out of money--well, never. Which is good news for the political consultants, fundraising executives, sports agents, and Paychex employees who work for him.

The newest members of the Paychex team are especially excited about their boss. "I'd really love to spend my entire career here' says Kerry Davis, speaking recently to a reporter outside the corporate training center, located pointedly--to demonstrate the company's emphasis on training--off the first-floor lobby. She's on the third day of a two-week training course to become a payroll specialist, an entry-level number-crunching and client-hand-holding job. A 23-year-old from Portland, Oregon, with two years of community college and no degree, she is one of 27 men and women--all dressed in new off-the-rack business attire--in her training class. This is just a small fraction of the newcomers Paychex will hire in this opportunity-challenged near-recession year.

Davis joins a company that has never had a layoff. Over the last six years, Paychex has exceeded a 23 percent annual profit. It has about 475,000 clients and 101 offices in 36 states and the District of Columbia. The company ranks 22nd out of 712 corporations in the Wall Street Journal's Shareholder Scorecard and is 88 on Fortune's current list of "100 Best Companies to Work For' In 2002, Davis's new boss and role model ("I know everything about Mr. Golisano!" she says excitedly) made $744,230 in total compensation and was number 3 on Chief Executive magazine's Market Value Added ranking of CEOs.

Most interesting, perhaps, is that to win a job at Paychex, Davis and her classmates didn't compete against people considered prime corporate recruiting material elsewhere. According to Tom Golisano, having an MBA won't necessarily eliminate an applicant from consideration at the firm, but experience as a consultant or as a manager in a large corporation is a showstopper.

"We expect our senior management to be hands on," the CEO says. "And I think when you talk to a lot of people who come from larger organizations, a lot of times they come from a different culture and it's hard for them to adapt. They expect in most cases a much healthier benefits and wage package, okay? They expect larger support staffs. They expect a little more freedom in their time and movement than we're willing to give them."

Some also tend to be "visionaries." Unfortunately. "I don't think a person can have meaningful visions unless they have some good knowledge of what to do," Golisano says. "Chances are, for new people walking into an organization like that, they are going to come up with an idea. And that's great. We encourage it. But quite frankly, if they've only been here for several months, they'll probably find we've already thought of most of them. Okay?"