February 4, 1999
Nerds in Gilded Cubicles
In Silicon Valley, Free Diet Coke Is Out. Gourmet Meals and Private Gyms Are
In
By GARY ANDREW POOLE
hen Eric Schmidt, chief executive of Novell, joined the company nearly two years ago, he
would meet a smart employee and wonder why the person still worked there. Not only had
Novell, the world's fifth-largest software maker, missed the Internet phenomenon and been
hampered by product delays, but it also had some of the ugliest offices in the area.
In Silicon Valley, where many corporate "campuses"
resemble destination resorts, Novell looked like an
hourly motel. It was hampering Schmidt's ability to
attract and retain the brightest programmers.
Salespeople were embarrassed to bring customers to
the office.
Schmidt made the decision to go ahead with a new
$130 million campus in San Jose, Calif., with tennis,
volleyball and basketball courts, a restaurant, a gym and
an espresso bar. "To compete in an extremely tight labor
market, our campus had to have at least the quality of
our competitors'," Schmidt said recently as he admired
his complex, which opened in December.
He is particularly proud of the look of the campus,
which was inspired by a trip to Venice. Many of the
buildings are made of Olympia cream limestone, a
light-colored stone imported from Tunisia, because Schmidt was awed by the colors of St. Mark's
Square.
To lure talent in an industry desperate for it, Schmidt and other Silicon Valley chief executives have
become part-time architects, restaurateurs, fitness gurus and concert promoters. Companies are
trying to out-perk one another. Some of the best gyms and restaurants here are not open to the
public. As the saying goes: Want a good meal? Go to work.
In Silicon Valley, surly servers in hairnets do not dish out mushy mystery meat. The best meals are
served at corporate cafeterias where technology workers choose their own pieces of fish or meat
and have the chefs grill them to order. Like hoteliers, chief executives brag to other chief executives
about their chefs.
Cooks like Lucent Technology's executive chef, Robert Sullivan, can write their own meal ticket. "I
come in early, I leave early, and I don't work weekends," Sullivan said, taking a break from
preparing a basmati rice salad with currants and mixed nuts, to be sold at the highly subsidized price
of $4.35, for employees at Lucent's Coyote Creek Cafe.
Why are technology companies, especially large ones, so
enraptured with creating fine eateries and other perks?
"We are living in an economy that is driven by skills, and the
skills bucket is close to empty," said Thornton May, vice
president for research and education at Cambridge Technology
Partners, a consulting firm. "Companies are desperate for skilled
workers. They'll do anything to recruit and keep you."
This flies in the face of Silicon Valley's tradition of frugality. After
all, this is the business that popularized the cubicle, stock options in lieu of salary, casual Fridays and
tilt-ups (a Valley term for cheap office buildings). But as the industry has grown, a quiet revolution
has taken place. Companies flush with money are investing not only in in-house restaurants but also
in gyms with tae kwan do; spinning and yoga classes; pool and Ping-Pong tables; free soda, juice
and fresh popcorn; massage therapists; dry-cleaning services; car detailers; dog walkers, and roving
ergonomics experts.
It also doesn't hurt to present Bob Dylan and his son Jakob -- both Grammy winners. Applied
Materials paid $500,000 so the Dylans would help the company celebrate its 30th birthday.
Bob Dylan had never played a public show with Jakob Dylan, who headlines the Wallflowers, which
meant that the 12,000 people attending the Applied Materials private celebration had a "once in a
lifetime experience," said Richard Garwacki, vice president of Bill Graham Special Events, which
organized 60 shows last year for companies, most of them in Silicon Valley. He said that "there's a
lot of ego involved" as companies tried to outdo one another.
"Silicon Valley companies have sophisticated, young employees," Garwacki said. Presenting
corporate-party regulars like the Temptations, Chicago or the Beach Boys just won't cut it. Young,
hip and perhaps spoiled, geeks want bands with current hits. "We get more requests for new bands
like the Barenaked Ladies, Matchbox 20, Smashmouth, No Doubt and the Smashing Pumpkins,"
Garwacki added.
One of the Valley's largest growth industries is perk subcontractors.
Bay Sport, a manager of corporate fitness centers, was
co-founded by Linda and Doug Emery in 1984. Today
they have 200 employees and 100 corporate clients.
Although it costs $940,000 to build an average
7,500-square-foot club and $200,000 to stock it with
the latest exercise gadgetry, Emery said he could barely
keep up with demand.
On Sand Hill Road, a thoroughfare famous for its
collection of venture capitalists, Fedele R. Bauccio runs
Bon Appétit Management Company, one of the largest
catering companies in Silicon Valley. Starting in 1986
with a single executive dining room, Bauccio now has
140 locations, 50 in the Bay Area. Last year his
company generated $200 million in revenue.
"We do not use the term cafeteria at this company," Bauccio said. "Green beans do not sit in water
for hours at one of our restaurants. We provide fresh food rivaling any fine restaurant." Every
in-company restaurant worth its paprika prepares food reflecting the work force's ethnic diversity, he
said, with Indian, Japanese and Chinese foods as musts. The Oracle Corporation, based in
Redwood Shores, is a Bon Appétit client that is known to have one of the Valley's best Japanese
noodle bars, complete with a baby grand piano.
It is not likely that a genius programmer will go to a company just because of its tasty crab cakes,
step-class guru or cool hip-hop concerts, but if a company does not provide the standard perks, it
will not get on the brightest recruits' short lists.
Of course, at Sun Microsystems' stately Menlo Park campus, the
4,000 workers can eat at several restaurants, including the
upscale Java Java, where you can have a generous portion of
porcini mushroom and cheese ravioli for $8.25. Sun's fitness
center, Fit@Sun, has the latest crazes in fitness classes, including
kick-box aerobics. And to keep employees in good humor, Sun
brought in the comedian Dana Carvey to perform at a
state-of-the-company meeting.
To set itself apart in the perks war, however, Sun has an on-call
lactation consultant. Furthermore, it actively helps people interested in adoption. With a $2,500
adoption stipend, Vicky Yee, Sun's corporate diversity manager, went to Guangzhou, China, to
adopt her daughter.
Visit Autodesk's headquarters in San Rafael and you will find dogs -- lots of dogs. Kathy
Tom-Engle, a spokeswoman, estimated that 100 people had their pooches sleeping in their cubicles.
"On occasion you'll hear a growl when you walk around here, but for the most part, the dogs are
lazy," she said.
Another popular, and unusual, perk at Autodesk is prepared dinners. An employee can call Rick
Gernetti, a chef lured from the film director George Lucas, and he will prepare a gourmet meal that
employees can take home and reheat. The company encourages the practice because it keeps
employees at work. A recent dinner selection: blackened salmon with mango salsa, wild rice and
vegetables for $6.25 per person. Gernetti and his staff bake cookies every day, too.
Despite these inducements, established companies are still at a recruitment disadvantage. Since the
biggest perk in Silicon Valley continues to be stock options, start ups have the hiring edge. Having a
steady but anonymous job at a stable company is not as valued as getting in on the ground floor of a
startup where a person has the chance to become a multimillionaire, even the next Bill Gates.
"The greatest difficulties faced by larger companies
include a perceived, and often real, lack of willingness to
offer equity options or profit sharing," said Michael R.
Forrest, president of Job Options, an online recruiting
company. "As the employment market continues to
tighten, they are faced with having to offer salaries and
perks to new hires that exceed what the existing work
force receives."
Schmidt said Novell's new 536,000-square-foot
campus had already bolstered morale and given him
confidence that he would be able to hire hot recruits.
Almost every employee has an office because
"programmers hate cubicles," he said. Schmidt
encouraged his architect, Hellmuth, Obata & Kassabaum, to create spaces throughout the building
where people could gather and talk -- while not creating so much space that people would never
meet.
"The density of space in relationship to people is very important in creating a buzz," said Schmidt,
43, who was an architecture student in college before realizing that he was "truly terrible" at it.
During the building of Novell's campus, Schmidt was known to say, "Make it so no one has a
reason to leave." That mantra seems to be fulfilled. Eat a plate of pasta with salmon, pesto cream
and fresh tomatoes ($4.95) at Novell's @cafe.com, ride a stationary bike, sit in one of the Herman
Miller Aeron chairs and have a latté at Java City, Novell's coffee bar, and Schmidt's intended effect
seems plausible. "I wouldn't mind if they were working 24 hours a day, seven days a week," Schmidt
said, half-jokingly.
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