Optiva Chief Hailed For Sonicare Workers' Rewards -- Benefits, Workplace Earn Kudos

Eight employees of Optiva joined President and Chief Executive Officer David Giuliani in his office last week for a lunch of gourmet pizza, salad and dessert.

Appropriately, a shelf in the office held copies of a book Giuliani hands out to all his managers: "1,001 Ways To Reward Your Employees."

Having worked for the company for a year, the employees who lunched in Giuliani's office were told they are now eligible for stock options that will give them an ownership stake in one of the nation's fastest-growing companies.

Stock options - which are offered to $7.25-an-hour assembly line workers along with more highly paid professionals and managers - are part of an unusual benefits package at the company that manufactures the Sonicare electric toothbrush. Other benefits include college-tuition reimbursement, interest-free loans to buy home computers, lunch-hour English classes, medical insurance for part-timers and matching 401(k) contributions.

The company last year attracted the attention of President Clinton, who invited Giuliani to Washington, D.C., and cited him as a model of corporate responsibility.

This afternoon, Giuliani was scheduled to be recognized as the U.S. Small Business Administration's Washington state small-businessperson of the year in a ceremony at the Optiva production plant near Factoria.

The national businessperson of the year will be named in Washington, D.C., early next month, and Bob Meredith, Seattle district SBA director, thinks Giuliani has a good chance of winning that honor as well. SBA officials lauded Optiva for manufacturing in the United States, contributing to a local food bank and homeless shelter, hiring a diverse work force (employees speak 17 languages) and providing an unusual package of employee benefits.

Founded in 1988 with the help of a $550,000 National Institutes of Health grant administered by the SBA, the company has grown far beyond its former one-room office on Mercer Island.

Inc. magazine in October identified Optiva as the second-fastest-growing private U.S. company. Between 1991 and 1995, its revenues skyrocketed from $400,000 to $49 million. Sales reached $75 million in 1996 and are projected to grow again this year.

The Sonicare Plus toothbrush sells for about $130. Profitable since the end of 1993, Optiva has captured about 30 percent of the market for power toothbrushes.

"They have a pattern of being relatively conservative in what they put forth to me as their expectations," says Tim Hardin, a Portland-based loan officer for Optiva's bank, the Silicon Valley Bank. "And then they hit the ball out of the park on a regular basis."

Growing pains are evident. To get to the new production plant on the other side of Richards Creek, Giuliani, 50, must climb down a rock wall, follow a dirt path and cross the creek on three strategically placed stones.

Giuliani, who calls himself "a Silicon Valley kid," worked 12 years for a home-town company, Hewlett-Packard, before moving to the Seattle area to direct research at Advanced Technology Laboratories. He co-founded a Bothell company, International Biomedics, that he managed before and after its acquisition by Abbott Laboratories.

The University of Washington recruited him in 1988 to develop and market products using sonic toothbrushing technology patented by researchers at the UW. The university remains a shareholder in Optiva.

Part of the Giuliani formula is to create what he calls "a daily fervor" for beating the competition - particularly the leading producer of power toothbrushes, the Braun division of Gillette. He also believes good employee benefits are good business. "The cost of good benefits isn't necessarily much more than the cost of bad benefits," he says.

Tu Huynh, who started working on the assembly line in 1993, has boosted his salary through a series of promotions from an unskilled production job to the position of engineering technician.

A carpenter in Vietnam before he came to the United States seven years ago, Huynh, 34, improved his job skills by taking engineering classes at North Seattle Community College. Now, with support from Optiva, he is taking higher-level Western Washington University extension courses.

Optiva executives estimate that 80 to 100 of the 350 employees either recently immigrated to the United States or speak English as a second language. Giuliani's wife Patricia teaches English during the first production shift.

Employees' loyalty was tested last fall when the company learned it had shipped a dangerously defective toothbrush-charger base. The company promptly issued a recall and began inspecting merchandise in an effort that became known as "The Frenzy."

Giuliani directed the effort as executives and secretaries worked in long shifts around the clock on the shop floor. The company brought in pizzas and soft drinks, along with a team of massage therapists.

"It was like war," Giuliani recalls. "We found out on a Thursday, I think, there was a defect. By Monday, we had been through 20,000 units in our warehouse, figuring out how many had that defect."

Preparing for the longer-term war of market competition, Giuliani and his top executives pass around books and videos on successful management. Among their favorites are works by Deepak Chopra, Stephen Covey and Guy Kawasaki.

One lesson Giuliani keeps finding in those books and in his own experience is the effectiveness of telling employees how valuable they are.

"It's amazing how positive reinforcement works so well," he says. "It's amazing how infrequently it gets used by some people. It's the most amazing magic I've seen. People will do almost anything to be praised. As long as that praise is truthful - not patronizing, but truthful - why not?"