Study Reveals Employee Energy Key To Business Success

Results of an initial study by the University of Michigan Business School's Zell Lurie Entrepreneurship Center and eePulse, Inc. indicate that employee energy is vital to business success.

ANN ARBOR, Mich. (PRWEB) June 25, 2003 - Research results released today from the University of Michigan Business Schools Zell Lurie Entrepreneurship Center indicate that 1996 IPO firms that placed high value on employee energy, corporate culture, rewards and organization structure outperformed their peers on stock price growth, sales growth and size when measured as total assets. At the same time, firms that focused on the product, technology or venture capitalists had lower performance scores in 2001.

In 1997, Theresa Welbourne, Ph.D., eePulse, Inc. CEO and adjunct professor at the Zell Lurie Entrepreneurship Center, collected data from 300 senior executives who led firms that went public in the largest IPO year ever, 1996. CEOs and senior executives were asked 50 questions regarding different factors that business, finance, and management theory experts claim are vital to an organizations success.

Questions on financing, economic conditions, sales, quality, marketing expertise, leadership, employees, how hiring decisions are made, and the use of outside experts were included in the survey. On a scale of 1 to 5 (with 1 being not important at all and 5 being very important), each executive was asked to rank over 50 different factors on the degree to which these items were important to their firms success. The statistical analysis of all the questions showed seven key factors emerging from the data, ranked by the respondents order of importance:

1. Energy - The sense of urgency or energy level that is exhibited by employees (rating = 4.09)
2. Product/Technology - The overall product and technology the company offered (rating = 4.07)
3. Culture - The firms overall values and culture (rating = 4.01)
4. Rewards - The rewards and pay system for all employees and executives (rating = 3.73)
5. Structure - The way the company is organized internally (rating = 3.43)
6. Board of Directors - The board and advice given by board members (rating = 3.17)
7. Venture capitalists - The VCs themselves and the advice they give (rating = 1.78)

These are preliminary findings of the overall research study linking the CEO and senior executive survey data with performance, states Dr. Welbourne. The initial results show that long-term firm survival and growth is a function of people, but the people who seem to matter are internal to the firm not external."

Additional analyses predicting firm survival and performance through year-end 2002 will be done over the next few months. The second phase of the study, which is still in progress and that employs more rigorous methods and controls, looks at the factors executives said were important and how those resources relate to long-term financial performance and growth. The study was designed to be longitudinal in nature, allowing the researcher to show cause and effect due to the time period in which the data were collected. The second phase of the analysis also includes interviews with surviving CEOs and senior executives.

Other research conducted by Dr. Welbourne shows that maintaining a high-energy culture that places high value on people and the relationships the business has with stakeholders, such as employees, will outperform their peers in the long run. They win" because employees in these high performance oriented businesses will go above and beyond" to help their firms when the going gets tough. According to Dr. Welbourne, this is particularly true for IPOs because after the IPO executives are faced with the ultimate challenge of managing to the quarter, its easy to lose perspective and focus on the outside at the expense of the inside."

About Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies

The Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies was formed in October 1999. The Institute actively engages the nations most successful entrepreneurs and offers an outstanding faculty composed of both academic researchers and practitioners in entrepreneurship. The Institutes mission is to focus the capabilities and resources of the University of Michigan Business School to provide education, experience and opportunities in entrepreneurship; serve as a catalyst for new venture development; and contribute important research in the field of entrepreneurship. Members of the Institutes Advisory Board include Samuel Zell, Chairman of Equity Group Investments; Michael Hallman, former COO of Microsoft Corporation; and Eugene Applebaum, Founder of Arbor Drugs.

About eePulse, Inc.

eePulse, Inc. delivers relationship management tools designed to improve the performance of any organization. Productivity enhancement comes from utilizing Pulse Reports(TM) of issues and trends reported by stakeholders. Pulse Reports provide management with synthesized information that allows them to act quickly on opportunities and solve problems today. The core of the eePulse solution is actionable data obtained through Measurecom(TM), a Web-based measurement and communication software package that powers Pulse Reporting and the next frontier in management science, Data and Dialogue-Driven (3D) Leadership(TM).