SAS CEO says companies succeed when they make
the best use of their creative capital.
From February 2009
By
Susan Reda, Executive Editor Jim Goodnight
CEO, SAS
Cary, N.C.
Sponsored by
Jim Goodnight runs one of the world’s largest
privately-held software companies. Since its
incorporation in 1976, SAS has enjoyed an
uninterrupted streak of revenue growth — a feat
almost unheard of in the software industry. Yet
Goodnight is among the most humble CEOs in the
high-tech industry, projecting a determined yet
understated demeanor.
Goodnight traces the origins of the company back
to a project he worked on when he and some
colleagues at North Carolina State University
were tasked with analyzing agricultural-research
data. Today, SAS’ business intelligence software
is used by corporations across multiple
verticals — including some of the nation’s
largest retailers — to gain better insight into
their respective businesses and, increasingly,
to gain a better understanding of the consumers
they serve.
Goodnight is a firm believer in a supportive
corporate culture. A fixture on Fortune
magazine’s “Best Places to Work” list, SAS’
corporate headquarters — better known as the
“campus” — is nestled on 300 wooded acres and
employees are provided with on-site health care,
a fitness center and child care facilities.
Goodnight also is a fervent supporter of
education initiatives: In 1996, he and his wife,
Ann, co-founded Cary Academy, a college prep
school created as a model for integrating
technology into all facets of education.
Over the years you’ve been both criticized
and praised for keeping SAS private. Why do you
believe that private ownership is ultimately the
best approach for SAS?
I don’t believe that business should be driven
by a bunch of people on Wall Street. Analysts
tend to briefly look at a business then make
sweeping judgments which are not always rooted
in deep understanding of what a company is
trying to accomplish.
SAS analytics have had a positive impact on
the retail industry. When you look at what’s
been accomplished in this vertical, what are you
most proud of?
It’s hard to point a finger at one thing, but I
think the pricing optimization tools developed
for Kohl’s stand out. We were able to apply
enough computing power — not to mention from 400
to 500 man-hours — to tackle what they
considered a huge problem and apply metrics to
the business.
We also worked closely with Kohl’s to analyze
sales by size and location to develop size
optimization metrics. Bottom line: you can’t
have the same pre-pack of sizes for every store;
it just won’t work and the store ends up with
leftover items they can’t sell and dissatisfied
shoppers who can’t find the size they need. We
were able to analyze various data points and
determine the appropriate size range to send to
each store.
Did you ever work in retail?
Actually, I grew up in retail. My dad owned a
hardware store and I worked there helping out
much like any family business. My experiences
there convinced me that I didn’t want to be in
hardware; I wanted to be in software. If ever
there was a need for inventory management it was
a hardware store 30 years ago. We had so much
stuff it was amazing, but my dad knew where
everything was.
You have been lauded over the years for
creating one of the “best places to work in
America.” What inspired you to do so?
Companies succeed when they make the best use of
their creative capital — that is creative
thinkers whose ideas generate valuable products
and services. Creativity is especially important
to SAS because software is a product of the
mind. As such, 95 percent of my assets drive out
the gate every evening. It’s my job to maintain
a work environment that keeps those people
coming back every morning.
What one person most influenced your career?
I have great admiration for my high school
basketball coach. He treated the guys on the
team with respect. He encouraged us to take
responsibility, whether we achieved success or
not, and he was generous with his praise. I’m
not sure I realized it back then, but he was
demonstrating the skills of a good manager and
over the years I’ve recalled his methods many
times.