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Employee Retention: Not Rocket Science

Wednesday, March 25th, 2015


Yesterday we looked at how a new IBM analytics tool that analyzes tweets found that customer loyalty was severely impacted by employee turnover.

A decade ago research by Frederick Reichheld found that a 5% improvement in employee retention translated to a 25%-100% gain in earnings.

Deloitte recently released its annual survey, which seems to back up the need for improved retention.

2015 Global Human Capital Trends report, their annual comprehensive study of HR, leadership, and talent challenges, the top ten talent challenges reported for 2015 are: culture and engagement, leadership, learning and development, reinventing HR, workforce on demand, performance management, HR and people analytics, simplification of work, machines as talent, and people data everywhere.

The first three are nothing new; the terms have changed over the years, although not the meaning behind them or their ranking as top concerns.

In a major employee retention push, companies are turning to algorithms and analytics to mine a raft of data, identify which employees are most likely to leave and then try to change their minds.

But some things never seem to change and until they do companies won’t make much headway.

At Credit Suisse, managers’ performance and team size turn out to be surprisingly powerful influences (emphasis added –ed.), with a spike in attrition among employees working on large teams with low-rated managers.

With decades of research saying the same thing, it makes one wonder why the finding was “surprising.”

In fact, nothing will change until companies, bosses and the media stop being surprised every time a survey shows that talent acquisition and retention is most influenced by

  • the culture in which they work;
  • the bosses for whom they work;
  • the work itself; and
  • the difference they can make.

Gee, maybe it really is rocket science.

Image credit: Steve Jurvetson

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Ducks in a Row: Proof That Employee Turnover Hurts Customer Retention

Tuesday, March 24th, 2015


Back in October Twitter and IBM announced a new service to give enterprise a way to mine its 15 billion daily tweets.

Of the research done since the, one result surprised them.

The more a customer shops at a particular store or eats at a particular restaurant, the more likely they are to stop shopping there when employees leave. It stands to reason that you would get to know the people at a place you patronize often, but IBM found that really loyal customers get so attached to employees that they complain on Twitter about having to “start over” if a favorite employee leaves. If they don’t feel like employees know them, this can really impact revenue because the loyal customers are the ones who spend the most money.

Do you find that surprising? I don’t, having done the same thing myself. (I’ve also switched brands when a favorite was acquired by a company I didn’t trust.)

Cost of customer acquisition is the most critical, prime metric when valuing any business, from startup through Fortune 50.

For the last few decades the prime focus has been on investors, while customers came in a long second; IBM’s findings move customers much closer to investors.

Why employee turnover results in customer defections isn’t the least surprising.

It’s a well accepted dictum that people don’t leave companies, they leave managers — or leave because of management turnover, so customers leaving for a similar reason makes sense.

However, employees are still a long third behind investors and customers.

When I started writing this blog back in 2006 I cited research by Frederick Reichheld that proved a 5% improvement in employee retention translated to a 25%-100% gain in earnings.

You would think that a 25% earnings increase, let alone higher, would be enough to get the attention of even the greediest Wall Street types, but obviously not, since low employee turnover is still cause for amazement.

Perhaps the new Twitter/IBM findings will help drive the needed change.

Image credit: BetterWorks Breakroom

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Ducks in a Row: Don’t Do As Sephora

Tuesday, December 9th, 2014


As workloads have increased, companies are pushing people to move faster and faster—often to the company’s detriment.

At the same time employee engagement (AKA, giving a damn) has been plummeting like a rock.

This is especially true when it comes to written communications.

Whether errors are from lack of knowledge or carelessness doesn’t change their effect on readers.

Some errors just make a company’s workforce look ignorant and uneducated (here’s a list of 15 common errors), but some can make it a laughingstock and cost big-time.              

Consider the effect of a spelling error on Sephora.

In the lead up to its launch in Australia Sephora has made a doozy of a spelling mistake, leaving out the ‘o’ in its #countdowntobeauty hashtag on Facebook.

Social media is having a field day and it’s doubtful it will go away any time soon.

Obviously, the error wasn’t intentional; it’s more likely the result of not taking time to proof the copy, whether from being overloaded or just sloppy.

Either way, the damage is done.

Here are three simple things you can do to avoid finding your company in a similar situation.

  • Spell and grammar check should be the default on all company computers—executives and senior personnel aren’t immune to errors.
  • For critical content, writing and proofing should be done by different people; the second person is less likely to unconsciously correct an error.
  • Budget enough time to allow for proofing; reading a sentence backwards makes it easier to catch errors.

Flickr image credit: Jean-Daniel Echenard

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Do You DIY?

Monday, November 11th, 2013


Oops; Wally Bock’s at it again; much to the detriment of a majority of the leadership industry who aren’t into DIY.

Wally once again put the ball firmly back in management’s court when it comes to engagement.

He did that with an irreverent (gently sarcastic?) take on the ills that engagement is supposed to cure and explaining five engaging actions that bosses at any/every level can and should take.

Wally is a gentleman and far more subtle than I, so he refrained from the blunt assessment I recently gave a client after recommending a similar program.

When “Richard” balked at the personal effort involved and excused his reluctance by saying he would rather “bring in professionals to formulate and implement a strong engagement program” I couldn’t stop laughing.

Richard was offended and we, as my 90 year-old maiden aunt used to say, had words.

The upshot was that I suggested Richard do two things,

  1. find a coach who wasn’t into DIY and had a comprehensive list of consultants to recommend; and
  2. update his resume now, since, based on his team’s productivity, creativity and turnover, he would be needing it sooner rather than later.

Flickr image credit: Wendy

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Ducks in a Row: Some Things ARE About You

Tuesday, February 14th, 2012

Consider this a Valentine message from me.

Last summer I wrote that the solution to having employees who care about their work and company was to look in the mirror, since their caring was a direct result of your management and the culture it engendered.

A few days ago Jeff Haden wrote in Inc. magazine about eight things people want that are a function of your MAP as opposed to your budget.

  1. Freedom
  2. Target
  3. Mission
  4. Expectations
  5. Input
  6. Connection
  7. Consistency
  8. Future

The words and explanations vary slightly, but this is the same advice I and dozens of other culture mavens have been saying for years.

Culture matters; it matters more than strategy, planning and even compensation.

Culture is your responsibility.

Culture is how you show you care.

Culture is you.

Whereas it’s barely possible to effectively live a personal lie, it just isn’t possible to propagate a culture based on one.

Not in ten lifetimes could you implement a culture that deviates from your basic values, your MAP, your essence.

You can provide what people crave, because you can change at any time you choose.

That’s the key, the choice is yours; it can’t be made for you by someone else or made by you because another desires it.

You can change, but only if you want to change.

Valentine’s Day is a good day to choose to start changing.

It won’t be easy; it will take more than a day; but it will take longer if you don’t start now.

Flickr image credit: AForestFrolic

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Ducks in a Row: Motivating Your People

Tuesday, November 1st, 2011

It’s always surprising how often different sources address the same problems offering similar solutions, but in such different ways that at first glance you wouldn’t notice.

Within days of each other, both Fortune/CNN and BNET offered up good information on employee motivation. Fortune/CNN article was science-based, while BNET was experience-based, with a leavening of humor.

They both said essentially the same thing with one exception, which I’ll get to in a minute.

Motivating employees means providing real purpose in their work; it requires challenging them and encouraging them to learn and grow; and it requires clear communications, including well-defined plans, roles and responsibilities.

Pretty standard stuff.

Now for the exception; the science offered up a new twist that just might help your implementation.

Removing obstacles is not the flip side of providing purpose, challenge and clear communications.

In other words, this is not one of those times that removing the negative means the positive will automatically rush in to fill the void or vice versa, that having the positives will overcome the negatives.

In this case you need to address the two as totally separate subjects.

First, remove any obvious negatives.

Next, start implementing the positives.

Third, be on the lookout for new obstacles.

Fourth, and most important, be sure that you on the side of the angels and not one of the obstacles.

Flickr image credit: zedbee

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Employee Enchantment

Monday, September 26th, 2011

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 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

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Expand Your Mind: Surveys

Saturday, September 24th, 2011

I owe my Saturday readers an apology. Expand Your Mind was absent last week and I have no excuse; worse, I have to admit I just plain forgot. That is embarrassing. I hope today makes up for it.

A rude awakening for all the companies and managers who believe they can treat their people any way they choose comes from an Aflac survey-based report saying otherwise.

77 percent of adults employed full/part time, and not currently self-employed, stated they would leave their current position to become an independent entrepreneur.

However, PeopleMetric’s 2011 survey on employee engagement says the opposite when compared to 2007.

…more employees intend to stay with their employer, feel motivated to put forth extra effort, recommend their companies as a great place to work, and say they love their current organization.

What’s the difference; why such disparate results?

More research from Harvard shows that what excites and engages people has nothing to do with money and everything to do with managers (you knew that).

According to recent research, the single most important factor is simply a sense of making progress on meaningful work.

Next, two excellent survey-based articles about women and work.
First, research from Harvard Business Review, looks at the factors that impact both women and men when competing.

…how women and men perform at work may be strongly linked to the gender of the person they are competing against.

And from McKinsey comes advice based on feedback that focuses on changing deeply embedded attitudes.

…a survey we conducted earlier this year indicated that although a majority of women who make it to senior roles have a real desire to lead, few think they have meaningful support to do so, and even fewer think they’re in line to move up.

Finally, a word about the poster boy of engagement, Richard Branson.

He simply pursues his vision of excellence in whatever he does, leaving others to decide whether he is working or playing. To him, he is always doing both.

Not a bad way to live!

Flickr image credit: pedroelcarvalho

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Ducks in a Row: Supporting Progress

Tuesday, September 20th, 2011

Tony Hsieh Has been beating the drum that happy employees provide the best customer experience and help assure success and sharing his wisdom on how to do it.

The other question I keep getting asked is how do you do it when you

  • aren’t the CEO or even a senior manager;
  • don’t have the budget for great perks; or
  • aren’t the touchy-feely rah-rah type (direct quote).

The short answer is in five words, you take time to care.

Why should you care?

The how is nicely summed up in this article about new research from Harvard Business School.

Gallup estimates the cost of America’s disengagement crisis at a staggering $300 billion in lost productivity annually.

$300 billion is a number that should get anyone’s attention.

The engagement issue is relatively simple and definitely cheap to solve.

The problem is that, as usual, employees and managers aren’t on the same page.

The research shows that for employees “the single most important [event] — by far — is simply making progress in meaningful work.”
Managers are another story.

When we asked 669 managers from companies around the world to rank five employee motivators in terms of importance, they ranked “supporting progress” dead last. Fully 95 percent of these managers failed to recognize that progress in meaningful work is the primary motivator, well ahead of traditional incentives like raises and bonuses.”

What constitutes supporting progress isn’t rocket science, either.

  • Autonomy, meaning no micromanagement;
  • sufficient resources, meaning valid scheduling and enough of whatever to get the job done without having to beg or being left to fail without them; and
  • learning from problems, meaning understanding the why and how, not just the what.

If you find any of the three difficult to provide you need to look in the mirror.

The problem isn’t about having time to support progress; the problem is that your MAP doesn’t support the concept.

Flickr image credit: ZedBee | Zoë Power

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Ducks in a Row: Creating Destiny

Tuesday, January 25th, 2011

There is much written about the importance of authenticity and trust when it comes to engaging employees and developing culture.

Enough, in fact, that you could spend years trying to digest it all.

So I thought it would be useful to offer up some very basic advice (often attributed to Frank Outlaw, the Josephson Institute can find no proof of him as the author).

Watch your thoughts, for they become words.
Watch your words, for they become actions.
Watch your actions, for they become habits.
Watch your habits, for they become character.
Watch your character, for it becomes your destiny.

This common wisdom is the kind of thing you can print out and keep as a mantra.

Best of all, it applies equally to individuals, companies and other organizations.

Flickr image credit: http://www.flickr.com/photos/zedbee/103147140/

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