An excellent article on loyalty citing research from various Wharton professors on the subject of worker loyalty is a valuable read.

It’s good for bosses and employees alike; the former can use it to analyze and improve their approach, while the latter can give a printout (anonymously, if necessary) to their boss.

One of the most valuable findings is that in some ways nothing has changed on the employee retention front over the years.

Human nature, Harter adds, “doesn’t change when the economy changes. It might take on a different dynamic” during a recession, but what remains constant is “the need to be connected — to a manager, a co-worker and/or a purpose, and also the need to be recognized.” People’s perceptions of their own standards of living “did drop as the economy dropped,” he says. But that same drop was not registered in workplaces where employees said they have “someone who encourages their development. There is something about having a mentor, or someone in your life who helps you see the future in the midst of chaos, that can make a difference.”

Wharton marketing professor Deborah Small cites a body of research on what is called “procedural fairness,” indicating that much of what employees feel about an organization “is not the outcomes they get, but the processes. If people feel like processes are handled fairly in the organization, even if they don’t get the best for themselves,” that would tend to encourage loyalty.

Recognition, fairness, being valued and encouraged to grow are still the most powerful intangibles when it comes to retention and their source is still the immediate boss and maybe their boss.

As I wrote last year, caring begets caring and the actions that show you care aren’t found in compensation packages.

Flickr image credit: fsse8info

I ended Tuesday’s post about micro cultures by saying, “That’s why cultural fit or, at the very least, cultural synergy, is the most important trait to look for when hiring at every level.”

The result was several phone calls and a few emails asking for specifics. I’ve offered specifics multiple times over the years, so just click the links for the answers.

• How to check cultural fit; and
• how to avoid bad hires and wrong hires.

But when all is said and done, the hardest part of good hiring is walking away from candidates with the right skills and the wrong attitude.

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A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

By now, everybody knows that the Jets management turned itself into a pretzel and spent big money to acquire Tim Tebow from the Broncos.

Notice I didn’t say “add him to the team,” because from what I read there is no team, just a series of “splashy acquisitions.”

That’s the difference between the Jets and the Giants.

…championship teams are built, not bought, not bartered. … The Jets have yet to learn what the Giants already know: championship teams are built, not bought, not bartered. The Jets lacked two important elements last season: roster depth and locker room cohesion. They built their roster as if playing fantasy football, certain Coach Rex Ryan could glean character from a locker room full of characters. But when this grand chemistry experiment blew up the Jets’ laboratory, with players arguing in the huddle and on the field, Ryan acted shocked.

Last year I wrote Insanely Smart Retention and Stars (the third in a series; it contains links to the first two, Insanely Stupid Hiring and Insanely Smart Hiring) and last fall I posted the story of what happens when a founder sets out to hire a star.

In one form or another I and others have been warning that hiring stars is an iffy business and your energy is better spent building and maintaining an all-star team.

So which is your company channeling?

The Jets or the Giants?

Option Sanity™ is a team-builder.

Come visit Option Sanity for an easy-to-understand, simple-to-implement stock process.  It’s so easy a CEO can do it.

Warning.

Do not attempt to use Option Sanity™ without a strong commitment to business planning, financial controls, honesty, ethics, and “doing the right thing.” Use only as directed.

Users of Option Sanity may experience sudden increases in team cohesion and worker satisfaction. In cases where team productivity, retention and company success is greater than typical, expect media interest and invitations as keynote speaker.

Flickr image credit: HikingArtist

Last December a post entitled Top Ten Reasons Why Large Companies Fail To Keep Their Best appeared in Talent Forbes and about a month later another contributor boiled the 10 reasons down to one (with 2 parts),

1) Create an organization where those who manage others are hired for their ability to manage well, supported to get even better at managing, and held accountable and rewarded for doing so.

2) Then be clear about what you’re trying to accomplish as an organization – not only in terms of financial goals, but in a more three-dimensional way. What’s your purpose; what do you aspire to bring to the world? What kind of a culture do you want to create in order to do that?  What will the organization look, feel and sound like if you’re embodying that mission and culture?  How will you measure success?  And then, once you’ve clarified your hoped-for future, consistently focus on keeping that vision top of mind and working together to achieve it.

Yesterday’s Ducks in a Row focus was Greg Smith and his resignation from Goldman Sachs. Greg resigned because he felt the culture had deteriorated to the point that he could no longer ethically tell candidates that it’s a great place to work—Goldman’s focus is squarely on maximizing their own profit and clients be damned. (The story is all over traditional and social media.)

At the end of his resignation Greg says,

Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.

The bold is mine and that thought fits the “if you learn nothing else…” admonishment.

But I will go a step further—

You can’t attract great clients without great talent, so even if you make money in the short-term you will die in the long-term—bereft of both talent and clients.

Great culture attracts great talent; great talent attracts great clients; great clients spend great money—over and over and over.

Flickr image credit: Samuel Mann

A study by Bain & Company, published in 2001, showed that acquiring a new customer can cost six to seven times more than retaining an existing customer, and that increasing customer retention rates by 5% boosts profits by 25% to 95%.

Why is it that so many managers ignore the connection between happy employees and happy customers?

Why do they insist on putting the cart before the horse and only invest in their people after revenues increase?

In yet another study researchers again found that customer retention is a function of great customer service, in other words, happy employees result in more loyal customers who spend more.

Zappos may be the poster child of the happy workforce, but there are many ways of achieving the same happy results.

2006, American Express, the credit card issuer, started an internal program that involved training and incentivizing its staff to get customers more engaged. The company transformed its traditional service call by getting rid of scripts and taking customer service representatives off the clock — which allowed the representative to decide how long he or she wanted to spend on each call. It also changed its employee compensation structure, directly linking a big portion of incentive pay to customer feedback. The result: Customers increased their spending on Amex products by 8% to 10% and overall service margins widened, according to a case study by Joseph Handelman, a professor at Ross. In the most recent quarter, the company announced that card members spent a record amount on their Amex cards; total revenue was $7.74 billion, up 5% from a year ago.

Underlying Amex’s actions was recognition of the intelligence of their customer service workforce and a decision to trust their people to treat their customers well and the payoff for doing so was substantial.

Lack of trust in employees is the elephant in managerial corridors and while it sometimes stems from a manager’s own insecurity it’s more often the result of poor hiring.

Managers claim that careful hiring is time-consuming and takes too long, but that’s a cop-out to short-term thinking, as is gutting customer service when the economy slows.

“When sales and profits are down, customer service is easy to cut. It [poor customer service] doesn’t show up right away. Where it shows up is in long-term customer profitability.” –Ronald Hess, professor of marketing at William & Mary School of Business, who studies customer satisfaction and loyalty.

And while you can’t control the economy, you can focus on eliminating the elephant within your own organization.

Flickr image credit: Phillip Martyn

This list is from a columnist at China Daily in response to reducing high turnover and improving retention.

Six essentials employees want in their jobs

1. A great boss
2. Trust and respect
3. Appreciation and recognition
4. Career progression
5. Corporate culture
6. Communication

The list doesn’t differ much from dozens of similar lists you’ve seen under the title of “What Millennials Want’ or descriptions over the decades of what most US workers want.

And I’m willing to bet the list applies to any workforce in any country on Earth or elsewhere in this or other galaxies.

These are universal desires of both educated and uneducated people; what changes is their ability to articulate them.

It’s a list that managers and management should take to heart, because it isn’t going away.

The six are constants that every manager had better understand and provide or be prepared to staff a revolving door.

Flickr image credit: Joe Shlabotnik

As hiring has picked up I’m getting the same questions from a variety of managers at different levels and in different industries.

Boiled down they all want to know if there is a way to avoid bad hires, i.e., the ones that happen in spite of a rigorous interviewing process.

The answer is yes and I’ve written about them at various times over the years; rather than compose yet another post discussing them I thought I would just link back to them (getting lazy in my old blogging age).

The most persistent reason for bad hires is unconscious.

The first is charm (or charisma, if you prefer), which it makes us want to be around the person. You combat charm using RampUp Solutions four hiring rules.

On the flip side, attractiveness, which we are actually hard wired to prefer, is the biggest reason for missing good hires. But that, too, is preventable.

There are additional links and trackbacks in each post that you will find useful.

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As I said New Year’s Day, I’m looking for guests who want to share their own experiences whether as a boss or a worker. Areas of interest are culture, management, motivation, people acquisition and retention and startups in all their gory glory.

And if you always wanted to draw a comic based on your experiences in the workplace, but aren’t much of an artist, give me call at 360.335.8054 or write me; I care more about your sense of humor, irony and irreverence than your drawing skill!

Flickr image credit: bgottsab

Lynn Blodgett, president and C.E.O. of ACS, a Xerox company, believes that all 85,000 ACS employees should think entrepreneurs. He sees a direct correlation between accountability and great the performance—increase the former and the latter goes up. This includes pushing P&L deeply into the organization, which encourages people to spend as if it was their own money.

“So you give people control, hold them accountable, give them control of their resources, and then monitor what they do.”

He also believes the right kind of incentives fuel motivation and engagement.

“I believe that a really important management principle is that if you get the incentives aligned, people will motivate themselves far better than you’ll ever motivate them. But, again, you have to get the incentives right.

It’s not only financial.  It’s being able to feel like they have a level of control over their destiny, that they are valued in what they do, that they’re being successful, that they’re contributing.  Those things are actually probably more important than the money.  But you’ve got to get the money right, too.”

An additional benefit of this approach is that people will “self-select,” i.e., if they can’t/don’t achieve the incentives they will realize much faster that they’re in the wrong type of work.

I especially like this because it is a better career development tool. Being terminated for non-performance allows people to rationalize, whereas missing incentives tied to viable goals offers the insight that they may need to find more fulfilling work and not keep making the same mistake over and over and that’s not a bad thing

Notice I said “viable goals,” which mean feasible, possible, doable; not goals that only one in a hundred can achieve them.

Goals that set people up for failure have a boomerang effect; they’ll return to their place of origin and smash a large hole in that manager’s reputation.

This is also not a bad thing, since “holey” managers seem to align with “holey” companies making it easier to avoid them.

Flickr image credit: zedbee

Over the years I’ve heard variations of this rule from the best managers I’ve worked with in every field and across all disciplines and levels.

It’s the wise boss who understands that the only thing more important than hiring someone new is retaining someone you already have.

One would think it’s both simple and obvious, but you can walk into any company of any size and find more managers who don’t practice it than do.

Which are you?

Are you one of the thousands of managers who spend your days trying to increase productivity and improve your company’s bottom line and you nights worrying that you aren’t doing it fast enough—if at all?

Does your company hire experts to teach motivation and employee engagement techniques?

Do you twist in the wind trying to implement complex, sometimes costly, approaches?

Why?

Why complex when some of the smartest CEOs, advisors and academics are all saying the same thing?

Simply put, in the words of Tony Hsieh, if your employees are happy they will make your customers happy; if your customers are happy they’ll spend more; if they spend more your bottom line will grow.

Saturday I gave you multiple links showing just how simple and inexpensive engaging your people can be—but not everybody reads Saturday.

So, instead of writing yet another post on engagement, I thought provide a video from Guy Kawasaki, who talks about how to “enchant” your employees.

His advice is simple and doable, although it does require the right MAP.

The only cost may be to your ego, since in order to implement it you need to change.

YouTube image credit: http://youtu.be/s_ju0HhPpaU