A FOCUS ON FLEXIBILITY.

It's not often that a new company backed by $16 billion in assets gets to behave with the nimbleness of an entrepreneurial start-up. But a nimble operating style -- particularly where employee needs are concerned -- is what Peter Rust counted on when he became Con Edison Communications' (CEC) first CEO in February 1999. The company, which provides a portfolio of wholesale fiber-optics transport services in New York City and its environs, launched headfirst into a competitive marketplace where talent scarcity has reached legendary proportions.

The solution? Create a flexible work environment that attracts individuals and gives them the kind of personal attention that will entice them to stick around.

Rust, himself a veteran of such giants as Bell Atlantic and its predecessor, NYNEX, knew the recruitment and retention techniques of CEC's larger-than-life parent wouldn't work for his telecom offspring. "We needed a flexible culture, where the point was to work with individuals and their very different needs," he says.

"One thing we focus on at CEC, which large companies don't always do well, is utilizing our talent well internally. Almost every successful start-up has a leadership team that came out of other large companies. If those companies were able to retain those people and use their talents, they would be better off. So we listen, we communicate, and we make people feel part of the process."

One of Rust's strategies is breaking large jobs into smaller projects and assigning a project team to oversee each one. The team chooses a leader, without regard for rank in the organization, and that leader, along with other project team leaders, joins the weekly senior management meeting. "It gets people interacting at all levels across the organization," says Rust, "and when the task is done, they feel they've accomplished something, and they move on to other project teams for a new challenge."

All employees share information on the company's intranet, which Rust anticipates will became more robust once it is browser-enabled later this year. "We're kind of small for an employee portal right now," he says, "but we'll double our work force of 35 in 2001. We're also a virtual corporation, because we manage a number of contractor crews.

A portal will strengthen communications throughout the organization and will also support the kind of flexible benefits Rust believes will keep employees happy: cafeteria-style holidays, sick leave payout options, flexible spending accounts, tuition reimbursement, shift coverage by consensus, and career path and performance reward systems.

"These kinds of things are easier to do as a startup," says Rust. "The challenge is how do you grow and maintain the flexibility that differentiates you? You set the atmosphere from the top and drive it down through the management teams, instilling it in the people who help grow the organization."