Best-run companies are not the best to work for

The Merc did a Silicon Valley take on the November 2011 “Best Places to Work” list prepared by Glassdoor.

Here are the top 5 overall:

1. Bain (of Mitt Romney fame)
2. McKinsey (the high end strategy consultants)
3. Facebook with a 4.3 out of 5.0
4. MITRE (alongside RAND, the elite DoD consultant)
5. Google - 4.0/5.0

This is yet more evidence proving my career maxim to my undergraduate students: all things being equal, you’ll be much happier at a high gross margin company than a low gross margin company.

Other Bay Area companies listed

• Apple (10) - 3.9/5.0
• Salesforce.com (13) - 3.9
• Chevron (16)
• NetApp (30) - 3.7
• Intel (32) - 3.6
• Groupon (40) - 3.6
• Intuit (42) - 3.6
• Nvidia (49) - 3.5

But what was really interesting was the losers in the beauty contest:

• Yahoo,eBay,Oracle: 3.2
• HP: 2.5 (Note: HP Pavillion, the ice hockey arena, rates 3.4)

(The Merc said Netflix ranked below Yahoo, but the numbers are not on the Glassdoor site.)

A few observations

• Having a good boss helps, but isn’t enough. NetApp’s CEO got 100% rating from employees but his company is only 30th. Apple CEO Tim Cook is liked by 96% of Apple employees vs. 89% for Mark Zuckerberg, but Facebook is still preferred overall
• Being a winner certainly helps, but again isn’t everything. Apple stock options from 2005 or 2008 are worth far more than those from Google, but Google wins out overall.
• Being a loser certainly hurts. Then high-flying Netflix was #3 on the 2009 list, but this year employees seem demoralized by wave upon wave of bad news.
• Some results are puzzling. Yahoo is perpetually up for sale, but does well compared to two companies that are in no danger of going away. It’s equal to Oracle, which has $26 billion in working capital — more than the GDP of half the world’s countries. Yahoo ranks well ahead of HP, the once great company whose total assets are 50% more than Oracle’s

Young high growth companies are exciting, but what happens when the growth (and stock returns) disappears? Groupon employee satisfaction will collapse when (as with Netflix) the high-flying stock comes crashing down to earth. Will a mature Facebook become another Google, more like Intuit (down 31 slots in 3 years), or end up like Adobe (which is no longer on the top 50 list).

It also confirms what I've observed since Steve Jobs took over at Apple in 1997. Apple is the Valley’s most valuable and (among Fortune 500) highest growth company, but it’s not a worker’s paradise. People work hard, and unlike at Google, it’s all about business. As long as their run continues, it will be a good place to work, but it remains very demanding.

Meanwhile, Google seems to me to be like IBM 40 years ago — a dream job living off monopoly profits. What will the working conditions be like when the rents from search dissipate the same way that they did from mainframe computers? Like IBM, I think the company will make a fair and ethical transition in how it handles its employees, but like IBM (and HP) it will be unable to treat them as generously as it did during its salad days.