Another day, another discussion post from my Principles of Management class at Umass Amherst. This assignment involved describing why a company on Forbes’ 25 best managed list was so well managed. I chose Intuit, the makers of Turbo Tax and other accounting software. If there are any Intuit employees out there reading this, I would very much welcome your comments on the accuracy of this post. Even if you’re not an employee of Intuit, your comments are still much appreciated and welcome.
Many of you probably know of Intuit, or at least have heard of their insanely popular Turbo Tax software. Intuit is a medium-sized company, employing 7,500 people, and was founded in Mountain View in 1983. Intuit develops accounting and finance software to anyone who needs it, businesses, consumers and accountants. I personally use their software at least once a year, via their free electronic tax filing program. In addition to being one of the 25 best managed companies, according to Forbes.com, it also is listed as one of the top 100 best places to work for on Forbes list.
Using my intuition (no pun intended), I would think that Intuit would have to have a high level of attention to detail. Not only is Intuit in the Accounting industry, in which a slight error could literally cost millions of dollars (if not more), they are also in the software industry, where, based on my personal knowledge of computer programming via my Computer Science AP class in high school, the slightest miscalculation, typo, or omission could literally cause an entire program not to run. From the Fobers.com profile, it’s also apparent that Intuit is oriented to both outcomes and people, as the CEO, Steve M Bennet, points out "We win because we emphasize customer-driven innovation, along with technology-driven innovation" (Intuit profile). In this industry, it’s especially crucial for Intuit to listen to their customers and actually develop their products to meet their customers’ needs. Intuit is challenged by new and old rivals constantly. Intuit controls 91% of the small business and 74% of the consumer markets. These two markets are very unique in what they need. Some people only need a very simple accounting program to help them file their taxes, while some small business owners may have global operations for which the accounting can becoming very intimidating, very quickly. In order to keep their customers happy and away from competitors, Intuit must be receptive of its’ customers ever-changing demands. They accomplish this in a manner of unique ways, for instance the Practical Accountant reports that Intuit has devised software that can read data from scanned tax forms and input it into Intuit software for analysis (Practical Accountant, Tech Bulletin, pg. 20 Vol. 40 No. 1, LexisNexis1). This will help small accountants by eliminating the need to manually type in data from their clients tax forms. New programs such as this one point to Intuit allowing their employees to take risks to enable a strong innovative culture in which ideas can flourish. Another example of the strongly innovative culture at Intuit is their acquisition of Digital Insight Inc., an online banking services provider, which will enable the merged company to better position itself to offer a full suite of financial services to its small business customers (Accounting Today Pg. 1 Vol. 21 No. 1 2007, LexisNexis2). This acquisition is a huge risk for Intuit as it is a leap from their traditional business, however, in the grand scheme the merger represents a huge benefit to both company’s customers as they can now go to one source for many of their financial services needs.
Intuit is also a huge proponent of its’ employees being the reason for their success and in turn Intuit aims to keeps its’ employees happy. Looking at the career section on their website, I’m very intrigued by their culture, from the simple motto of "It’s the people" to the fact that they issue employee surveys to which managers are expected to respond. These surveys have enabled Intuit to go beyond meeting it’s employees basic needs and seems to have created a great work-place. Managers are graded on employee expectations to:
- Help me be productive, do great things and be the best I can be
- Let me know where I stand and how I’m doing
- Invest in me to help me grow fast
- Pay me fairly and recognize my contributions
- Make me an integral part of the team
- Create a positive work environment
Even though Intuit is successful because of it’s employees and innovative products, they are also in a good industry, as there will almost always be a demand for tax preparation assistance. In this regard, Intuit faces a pretty stable environment. Intuit continually emphasizes that is employees are a huge reason for it’s success, it only makes sense then that quality people are a huge supply issue for Intuit. They are located in a good location, near Palo Alto and the many intelligent people who live in the area. As Intuit is moving more and more to a web-based format, bandwidth from internet service providers is another crucial supply issue. Another supplier for Intuit would the banks who provided them the means to download data to the customer’s computers so it can be loaded into the Intuit program. Although there are many competitors to Intuit, they clearly hold the market lead for their targeted markets. Microsoft has recently begun to go after Intuit but so far has not been able to match the quality provided by Intuit. Another supplier for Intuit would be the various accounting standards groups, as they are the ones who alter accounting rules which in turn forces Intuit to put out new versions of their software that is in compliance with the new accounting rules.
It’s very clear that Intuit is a very responsive company. It’s managers must not only be aware of and respond to customers but also to employees, "In fact, people are so important that the primary job of each manager here is to help people be more effective in their jobs and to help them grow and develop at Intuit." (Intuit Operating Values). The managers at Intuit are true managers, in that they are not expected to go hands on and do the work of their employees, rather they are expected to guide and help the employees do the work Intuit needs them to do. In my mind, I can imagine Intuit managers being the ones responsible for predicting customer demand and notifying employees of new accounting rules, so that the employees can focus on developing the software, interface, and equations that will allow consumers to manger their finances. Intuit is also a huge proponent of teams and the sharing of ideas amongst those teams. This contributes to Intuit’s success because they do not value who comes up with a new idea but the idea itself. This seems to loosen up the culture inside Intuit to enable employees to make progress and continually innovate the products as employees do not have to deal with the politics of the office. Many people consider accounting to be a boring and stuffy topic, and with the creative, open culture at Intuit, it allows the company to portray an easy-going image which directly impacts it’s software and customer’s perception of the company and it’s products.
Another way the internal culture of Intuit complements the external environment it functions in is it’s emphasis on integrity. The first point in the Operating Value section of Intuit’s website is "Integrity without compromise"; it is inherently important for an accounting software company to display integrity, especially in light of the new Sarbanes-Oxley law enacted to deal with corporate scandals revolving around lying about financial results.
Another operating value of Intuit that correlates directly with the environment they exist in is "Think Smart, Move Fast", which is described as coming up with new ideas and implementing them quickly to maintain their technological advantage over Intuit’s competitors. In the world of software companies, the playing field is constantly changing, and if Intuit’s employees were not allowed to exchange ideas freely and implement them quickly, Intuit would quickly fall behind it’s competitors and would lag behind in providing customers features they need and want. Although Intuit is in a very delicate industry, helping people and business manage their money, it seems to be a great place to work as managers are given the freedom and responsibility to ensure that the workplace is an efficient exchange of ideas.