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Ducks in a Row: Why Invest in People?

Tuesday, April 29th, 2014

invest-in-peopleThere are two attitudes when it comes to investing in people.

The common one considers it a cost that should be minimized.

The more astute believe it provides significant ROI.

Providing benefits can raise productivity and reduce turnover no matter the size or type of business.

Training is just as important (in England it can even stave off a corporate manslaughter charge).

It’s a well-documented fact that attitude/cultural fit are the most crucial factors when hiring, so where’s the sense in dumping people who are not only good cultural fits, but also possess institutional knowledge?

The graphic elegantly sums up the fear of the cost minimizers and the pragmatism of the astute.

One boss lesson that really needs to sink in is the true cost of replacing people.

  • A decade ago replacing cost 2-6 times the annual salary and although the dollar amount has risen I’m sure the multipliers haven’t gone down—they’ve probably gone up, too.
  • Losing the wrong person at the wrong time has the potential of crippling or even destroying the company.

As to ROI, look no further than Frederick Reichheld, founder of Bain & Company’s Loyalty Practice and author of Loyalty Rules!, and other loyalty books, whose carefully researched studies that a 5% improvement in employee retention translates to a 25%-100% gain in earnings.

That is one hell of a return for creating a culture that does the right thing by investing in its people.

Flickr image credit: Peter Baeklund

 

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From Ageism to Sexism

Monday, April 14th, 2014

https://www.flickr.com/photos/kazvorpal/10020809313

It’s pretty obvious that ageism is alive and well in tech.

As is sexism, which you can see from the email a female CEO received from an engineer she tried to hire.

But far worse are these examples of what women in tech face, exemplified by the latest bit of app stupidity.

“Titstare is an app where you take photos of yourself staring at tits.” –David Boulton and Jethro Batts at the TechCrunch Disrupt hackathon

Not to mention those who defended it.

“It is not misogyny to tell a sexist joke, or to fail to take a woman seriously, or to enjoy boobies” –Pax Dickinson, co-founder and CTO, Glimpse Labs

Or the incredible level of ignorance and pure stupidity exemplified by White_N_Nerdy on Reddit.

“I’m honestly trying to understand why anyone says that females are ‘needed’ in the tech industry.” He continued: “The tech community works fine without females, just like any other mostly male industry. Feminists probably just want women making more money.”

Being old enough to remember, medicine, research and law were “mostly male” industries not that long ago—as were college and advanced degrees.

In the comments section of the article, many women say that prior to the Nineties women developers and engineers weren’t subject to nearly as much abusive harassment, which matches my memories from when I was a tech recruiter in the late Seventies through the Eighties.

What happened?

Please join me tomorrow for a look at what may be an epiphany of cause and effect for both ageism and sexism.

Flickr image credit: KAZ Vorpal

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What is Ex-employee BCS?

Wednesday, March 12th, 2014

http://www.flickr.com/photos/library_mistress/3723274800/It’s well known that what goes up comes down; programmers know that ‘garbage in/garbage out’ always holds true (and applies to more than programming, but that’s another post) and bosses (should) know that at some point current employees become former employees.

While people leave because of layoffs, it’s often by choice; either way it’s bad news and, like all bad news, requires clear communications to avoid repercussions.

However, there’s one repercussion that even the best communications can’t avoid and that’s what I call boss/company stupidity or BCS.

Granted, there’s a lot of BCS floating around the workplace, but this particular BCS ranks in the top three.

It’s the attitude that no matter how great employees are when they leave they are suddenly no good, their time with the company had no value and the resources invested in their growth were wasted.

The traditional way of looking at the “return on investment” on the training and coaching of employees is that it is truncated the moment they walk out of that door.

Which is really, really stupid.

Stupid because both companies and bosses have street reputations and while current employees contribute to them, those who leave have an outsize impact that lives everywhere forever in our social, wired world.

Flickr image credit: library_mistress   

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Can Awards Demotivate?

Monday, February 10th, 2014

http://www.flickr.com/photos/fsnorthernregion/5061121998/Ian Larkin is an assistant professor Harvard Business School and he shared some interesting research last spring.

The study focused on the effect of rewards, and although the subjects were laundry plant workers the results apply to knowledge workers, too.

The plan rewarded workers for being on time and not missing days.

The results were not as expected and productivity dropped.

In other words, the rewards plan ended up demotivating the workers.

Why?

Because it was easily gamed and structured to reward actions that were an expected part of the job, such as being on time.

Rewards should always be for going above and beyond the job description, showing initiative, creativity, reaching out to support not just the team, but others with whom they interface, etc.

It’s also important to remember that money isn’t always the best reward.

Most studies have proved that praise is an excellent driver of performance, productivity and good feelings—public recognition/kudos usually carries more weight than bought rewards such as meals or movie tickets.

“You can’t put a price on that. The recognition of hearing you did a good job and that others are hearing about it is worth more than money.”

The main thing to remember is that awards aren’t a solve-all panacea for an ailing team.

“You can’t say awards are good or bad. It depends on how they’re implemented.”

And they certainly won’t/can’t replace good management skills.

Flickr image credit: FSNR

 

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Harley Davidson: Against the Tide

Sunday, February 2nd, 2014

http://www.flickr.com/photos/gonmi/8719381711/

Harley-Davidson is my hero.

Not because I’m a motorcycle nut, but because they do everything I believe makes a company successful—not to mention all the stuff about which I know nothing.

What I do know is that Harley proves there is more than one way to skin a cat.

They didn’t outsource manufacturing; they didn’t bust their union; they didn’t dump people for robots—in fact, there are no robots on the main assembly line.

They did redesign production to take advantage of the knowledge inherent in line workers with an average tenure of 18 years.

There are around 1,200 different configurations, and a new bike starts its way through the production line every 80 seconds. Virtually each one is unique, and workers have no idea what’s coming 80 seconds later. Surprisingly, robots can’t adjust on the fly like that.

They did spread 150 problem-solvers through the 5-6 man production teams that hand-build each bike.

Every time a new bike came down the line, it took a few extra shoves to push it into place. In fact, it took an extra 1.2 seconds. But Dettinger, who had spent some 20 years at the York plant, knew that every second counted. With 400 motorcycles built each shift, on two shifts a day, an extra 1.2 seconds per bike added up to 2,200 lost bikes annually. Millions could be lost in revenue. Maybe it wasn’t such a small problem.

Each problem-solver has the same core mission: “to monitor his small section of the production line and search for better ways to make motorcycles.”

For decades, management and economists have driven a mantra that to prosper manufacturing in the US meant no unions, low wages and no benefits.

At Harley, costs have fallen by $100 million and the stock is trading around $62 (it was around ten in January 2009).

Most importantly, from a customer’s viewpoint, what used to be an 18 month wait from order to pick-up is now two weeks.

Harley went against the tide and the results are proof that the “experts” aren’t always right.

Flickr image credit: Gonmi

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Ducks in a Row: the Need to Change

Tuesday, January 21st, 2014

http://www.flickr.com/photos/44148352@N00/3726480621/

Media, including me, have termed Millennials the “entitled generation,” but, as with most things, there are two sides to the coin.

Over the last few years I’ve written about what I call “aMillennials” and I still think the term is apt.

As they age, the difference has become clearer.

Some Millennials still seem to think they are entitled to a job because they are there and promoted because they show up; in general, they feel they are owed something by the world at large.

aMillennials believe they should be hired because they can contribute, challenged to grow and that hard work will get them promoted.

They also have the silly idea that there is more to life than work.

 “There’s a huge gap across the generations in terms of how people look at the whole question of time and commitment and what that means,” said Stewart D. Friedman, director of the Wharton Work/Life Integration Project and the author of “Baby Bust: New Choices for Men and Women in Work and Family.”

They crave transparently, have little patience with corporate games and vote with their feet when stymied.

“People are just more disaffected now with that kind of lifestyle and want to have a greater sense of control,” Mr. Friedman said. “Where companies don’t provide that sense of meaning and purpose, their brand as employer is weakened. They’re not going to be able to compete for the best and the brightest.”

aMillenial-style entitlement is even invading the hallowed halls of Wall Street.

“The longstanding tradition of 100-hour work weeks, that’s not going to be easy to change, but I applaud these efforts,” Mr. Friedman said. “The young people, after two years in an analyst program at a bank on Wall Street, they’re burnt out, they’re saying ‘I don’t want to live like this.’”

Given the attitude, you can expect careers, from medicine to finance, that have historically included long hours, total immersion, high stress and total commitment to change and the changes will be wrenching.

What it means to business, both large and small, is a willingness to provide meaningful work as opposed to just a paycheck—no matter how fat.

Please join me Friday for a first person look at this change and another view on what’s driving it.

Flickr image credit: Jannes Pockele

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Entrepreneurs: Craig Bohl Wins without Stars

Thursday, November 14th, 2013

http://www.sxc.hu/photo/982534Parallels are constantly drawn between business and sports—building and motivating teams, leading in all its many guises and, of course, the importance and power of stars—whether first round draft choice or coder from the hot startup.

I am not a believer in stars and have written numerous times on why they are a bad idea.

I frequently told I’m wrong, especially sports-wise; I’m told that every winning team has stars or they wouldn’t be winning

Not true and thanks to Craig Bohl, North Dakota State’s football coach, I have someone to point who has a very winning team sans stars.

Since 2011, the Bison have posted Division I’s best winning percentage (36-2, .947), slightly ahead of Alabama (33-2, .943) and Oregon (32-3, .914). N.D.S.U. has beaten four Football Bowl Subdivision opponents in four years, most recently the defending Big 12 champion, Kansas State, in this season’s opener on Aug. 30, and is 7-3 against F.B.S. teams since 2006.

Bohl’s understands that with the right attitude and hard work he can build his own star team.

“A lot of our guys come from the farm or hard-working backgrounds, and we’ve leveraged that as we’ve developed our football team. It goes a little counterculture to the way college football is now, with spreads, up-tempo offenses and all those other things. We’ve taken a blue-collar approach on playing hard-nosed, physical, disciplined football, great defense, controlling the football. That’s how we’ve won.”

He’s pragmatic; he doesn’t believe his winners have to walk on water; they just need to be damn good.

“I don’t think there’s a team in the country that would absolutely destroy us, 70-0, or anything like that. Obviously, there are teams that have more talent than we do. I won’t deny that either. But I think we could hold our own with a lot of teams out there.”

Bohl’s approach isn’t rocket science, other than few other coaches want to bother building a team this way or prefer splashier players whose glory can provide a halo effect for coaches and teammates alike.

While Bohl qualifies as a star, and there is constant talk about who will lure him away, he doesn’t seem to be interested.

And he stays for the same reason talented employees always stay.

“When you find a place that fits your value system, the allure of ‘what the big time is’ is not such a big hook.”

Image credit: Ilco

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Ducks in a Row: Culture Builds Talent

Tuesday, July 23rd, 2013

http://www.flickr.com/photos/yarik-ok/7936908700/Yesterday we focused on the importance of, and managers’ responsibility for, continually building their people, so they are ready for the challenges their company will face in the future, as opposed to firing them for having the wrong skill-set.

Later on I was discussing the whole terminate vs. develop thing with EMANIO CEO KG Charles-Harris and he made an interesting comment.

There is no question that creating a good culture is essential and underinvested in.  However, there are cultural biases in the US that are different from some other countries.  And while there is something to be said for the extreme success of American business, my background is in Sweden, which has the highest number of multinationals per capita. Clearly there is something that a country of 9 million is doing right.  

While there are plenty of companies that do it right and studies to prove that doing it right is good for the bottom line, US companies are infamous for short-term thinking driven by Wall Street’s quarterly mentality.

Even when the right culture and supporting policies are in place managers at all levels need to monitor and make sure that the managers under them are encouraging their people to take advantage of them and often that doesn’t happen.
Further, great culture isn’t self-sustaining; it needs thought and TLC so it can grow and change as the company grows and changes, without losing the traits that make it great.

But if a culture that supports building people pays off, why doesn’t it happen more often?

The simple, but sad, answer is that building and sustaining a great culture that develops its people, as opposed to considering them expendable, is work—and people are lazy.

Flickr image credit: Yarik. OK

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Why Netflix’s Patty McCord is (Mostly) Wrong

Monday, July 22nd, 2013

http://www.sxc.hu/photo/1193409“Troy,” a CEO I work with off and on, sent me a link to an article referencing Netflix Chief Talent Officer Patty McCord’s explanation of why you should immediately fire underperformers to explain (justify) his own actions.

McCord’s core advice is to think six months in advance, about what the company can and should do better, which will highlight the people who don’t have the skill set or drive to get there. (…) “I tell an employee I’m going to put you on a performance improvement plan, but the truth is they don’t actually know how to do what I need someone in their job to do. I did my six months out thing and realized she wasn’t qualified, and I put her on a plan even though it’s not an issue of performance, it’s an issue of skill set.”

This was the latest salvo in our ongoing disagreement on managerial responsibility when it comes to people—a subject we vehemently disagree on.

Troy says that young, fast-growth companies have no time to develop their people and when you have a lot of capital and very stringent targets to achieve [Wall Street quarterly reports, ed], you have to think differently.

I say that it’s mostly management’s fault, especially in larger companies like Netflix because they should be growing their people all the time so their skill-set is ready for the challenge; obviously, I’m not referring to those employees who need to be dragged kicking and screaming into their future.

Startups, fast growing and established companies all need to add the right talent to get where they are going.

Good managers assess the situation, current and future, and inform employees regarding their promotional opportunities.

Further, good managers keep them informed of what new skills they will need in the future, as well as the best way to acquire them.

I read about and know personally thousands of good managers who work hard to grow their people, so they are ready for the new challenges coming down the road.

There are also plenty of companies with good programs in place that bad managers won’t use.

Yes, people deserve to know the truth regarding their opportunities and McCord’s approach when termination is the right course is extremely humane—but few companies would spend the resources.

“Instead, I could have told the employee, ‘here’s what I’m going to need six months from now, and here’s the talent and skills I’ll need. Then you tell her, ‘It’s not you. I don’t want you to fail. I don’t want to publicly humiliate you.’”

However, if that person’s actual manager had been doing his/her job the situation McCord describes might never have happened.

That’s the part that Troy doesn’t get.

Upgrading employee skills and adding new ones is an ongoing process that requires better and stronger management skills and more work than McCord’s approach—hers is the easy way out.

During my 40+ years around the workforce there have always been managers who build their people and those who don’t.

  • Those who do build understand that people are holistic and it takes more effort to instill cultural understanding and rebuild group morale after someone is terminated than it does to keep upgrading skills.
  • Those who don’t build believe that it’s easier to replace than train/build employees.

But demographics are against them. Replacing people will only become harder as the economy improves and the number of working people and their experience continues to go down.

stock.xchng image credit: arte_ram

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Management is Like Coffee

Wednesday, June 12th, 2013

http://www.flickr.com/photos/25187937@N05/5525163305How much management/coaching is too much?

I hear that question a lot.

Most managers want to do a good job and are looking for ways to improve.

But, as one commented recently, if you do everything recommended by the experts you would use so much of each person’s time that productivity would tumble and even the best coaching would have a negative impact.

Which is why I say that management and coffee are similar.

In the right amount coffee is good for your brain and may help you live longer.

The right amount of management/coaching is good for the brain in that it provides challenges that foster growth; it also lowers frustration and stress, which enhances mental and physical health.

According to the research, the “right” amount of coffee is around 20 ounces a day, i.e., one venti-size Starbucks.

That equates to the most effective management/coaching, which provides all the information needed to do the job at one time (not more nor less) and then gets out of the way while staying accessible if needed.

Many of the coffee-fueled are more likely to drink three to five ventis a day, which is detrimental to health and longevity.

A comparable amount of management/coaching is detrimental to health, productivity and retention.

Flickr image credit: Kurtis Garbutt

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