Occasionally I share stuff I receive from clients and sometimes from readers, as I’m doing today. I ask if I can share it and usually the response is ‘yes’, with the caveat that I change enough to ensure that nobody will recognize the writer.

I think “Caz’s” situation and its outcome are very applicable right now. I hear from a lot of you, all asking how to know when to “pull the plug.”

As always, I’m available by phone or email if you want/need to hash things out; contact info in the right-hand frame.

Hi Miki,

It’s been awhile and a lot has happened, with both family — the adoption went through and I’m a new dad! — and I’ve got a new job.

As you know, I’ve been getting more and more concerned about my future at “Locus Systems.”

You also know I’m extremely culture sensitive and the culture has been changing quite a bit, moving more and more towards a fear-based approach.

In addition, we launched a new product about 2 years ago and landed a total of maybe 20 customers.

While the product itself worked and there is a real need, the market just didn’t respond.

This in turn led to our CEO, who owns the company, to push the sales teams harder. In the end he said the failure was on the individual sales teams, not the product.

I have a strong business background and know that for no discernible reason good products sometimes just don’t find the market demand expected.

This whole ordeal has led to a lot of resentment on the part of the sales teams and management.

Some of our best team members started leaving; I’m talking about people who sell $4MM plus a year, so great salespeople.

Each time someone left the CEO would make it a point to remind everyone that that person lacked the vision and we were better off without them.

Give me a break!

On a personal level commissions started being delayed. We always waited 2 months or so for our commission, but it was creeping into a 3-4 month time frame, sometimes longer.

All this led me to a realization that I was probably on a sinking ship. I don’t mind struggling, and you know I’m a fighter, but when the CEO and management are essentially belittling employees and putting all failures on them it’s time to go. 

So I started looking.

I found a great opportunity with “Jasper, Inc.,” another young software company that’s growing organically and has what seems like a terrific culture — all the good stuff you’ve written about (why I started reading you in the first place).

I found the opportunity locally, but the company doesn’t care where I live. That means we aren’t restricted to one town. I always wanted to be able to choose where I live and not have my job dictate that to me.

Although I just started, I’m really enjoying it. The opportunity came as a bit by surprise, but quite frankly, the conditions, benefits and pay are all superior to what I had. 

I’d like to stay in touch. This role will give me more financial freedom then I have had in the past and that may come in handy down the road ;-)

Caz

Image credit j. botter

The Data Alchemy Conference that I recently attended was well worth going to. In contrast with a lot of these types of conferences, it was an interesting view of how to use predictive and other technologies to improve business outcomes, i.e. not the more common type of technology or data scientist oriented conference here in Silicon Valley.

One of the factors that was attractive was the way that vendors used case studies and best practices to elucidate some of the advantages and complexities of big data and analytics. People from companies such as PayPal, IBM, HP, SAP, Silicon Valley Data Science and others were speakers. There were also lots of industry practitioners in the audience.

The emergence of predictive analytics as a core tool in planning and monitoring in organizations is a relatively recent phenomenon, being less than 10 years old. Now, companies like SAS have been around for a long time, but it is only when IBM acquired SPSS in 2009 and applied their significant marketing engine behind predictive analytics that this market started to take off. 

Of course, it had been used with regards to risk analytics in insurance, churn analysis in telecoms companies and credit worthiness analysis in FICO scores, etc.

Since then we’re seeing predictive analytics being incorporated in many different areas in enterprises based on the growing amount of data and the increasing need to make decisions based on data.

This comes partly from increasing complexity in the business world, greater binary behavior (1 major company in each market that is 10x larger than #2), speed of growth and decline of companies, and decreased cycle times.

One of the most interesting talks was by Jenny Dearborn, Chief Learning Officer at  SAP, who spoke of the way they’re using predictive analytics with regards to employee turnover and onboarding. By using big data analytics on structured and unstructured data, it is possible to understand employee sentiment, training needs and likelihood of staying at the company.

A major challenge to analytics is data quality, what in common vernacular is termed bad or dirty data. Theresa Kushner, VP Enterprise Information Management at VM Ware mentioned that 1/3 of her staff were focused on data quality and cleansing.

It seems as if data quality is an even more important issue than being able to apply advanced algorithms to the data, and that by just ensuring that data is clean we can make better decisions that reduces the need for advanced algorithms in many situations.

In short, it was interesting to see how analytics is being advanced within organizations and getting a practical view of what challenges are faced from a business perspective.

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

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

“It’s not about the dollars you invest. It’s about the people you invest in.”

I don’t remember where I read that, but it’s certainly true.

Some bosses invest in their companies—they buy new hardware, upgrade development software, customer service and other IT systems, improve the physical environment, etc., etc.

They spend to improve their company’s bottom line.

They don’t spend much on training.

They believe the money spent building and growing people provides marginal return, while increasing turnover.

Great bosses invest in their people—they encourage learning new skills, cross-train, provide access to educational opportunities, etc., etc.

In return they have a highly creative, fully engaged, hyper-productive workforce.

They know people may leave if there are no internal growth opportunities, but great bosses cheer them on.

They know that people leave for many reasons, but when the reason is positive then the buzz is positive.

And positive buzz enhances both the boss’ and the company’s street rep.

Flickr image credit: opensource.com

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

A senior manager I work with is having high turnover because he’s rewarding and promoting those who are busy instead of those who are productive.

He’s concerned when his people aren’t busy. He believes that if they have they aren’t working they must be slacking or are under-utilized in their position and gives no thought to their productivity.

In a comment Jim Gordon said, “In school, people are taught to do WORK and not to be productive (well, they don’t say “don’t be productive,” but rather “stay busy”).  The problem is that of conforming to peoples’ constant need to stay busy.  Often “work” is seen as productivity – if you are one who is productive and you aren’t busy, people consider that to be counter-productive.  So the tragic upshot of this perception is that you have to put forth equivalent “work” alongside them.  The result is a lot of work and a little production.”

A manager who focuses on ‘busy’ instead of ‘productive’ will not only alienate her best experienced people, but also drive away her most promising new talent who, like Jim Gordon, do know the difference.

Always being busy may be visually impressive, but it lacks substance and leaves people exhausted.

Productivity drives success, both the company’s and the manager’s, but it’s also necessary for individual self esteem—it’s what gives people satisfaction in a job well done and energizes them.

So the choice is yours.

Do you want your people productive, excited, up for the challenge or busy, bored and polishing their resumes?

Your comments—priceless

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Image credit: ZedBee|Zoë Power on flickr

Post from Leadership Turn Image credit: weirdvis

The best way to guarantee lots of media exposure is to be successful and in some way on the bleeding edge of your market—two feats that Google has managed since its inception.

Although it recently blew away its financial nay-sayers the media seems to grab for anything that looks like a weakness and pundits love nothing better than taking a poke at a high-flyer.

This is expecially true when high-profile employees leave, which they do no matter how great the company—it’s a personal thing—people get restless, annoyed, bored, follow their friends. Then there’s change—change that messes with people’s comfort zones because stuff is different.

CEO Eric Schmidt’s comment when asked about those leaving helps put things in perspective, “Let’s do some math. We have 18,000 people. What is 1% turnover [per month]? 180. Do you think 1% turnover is reasonable? In this area, it’s quite low. Ours is some small percent, 1, 2, 3%.

What bothers me is that some people write: “So-and-so left the company.” Well, they don’t also write that we hired 120 people that week, five of whom have Nobel prizes, three of whom have PhDs, and so on, who are beginning their career here now.”

Whereas most companies tightly control IT, Google keeps it’s people happy by giving them as much choice as possible in technology.

CIO Douglas Merrillsays, “Google’s model is choice. We let employees choose from a bunch of different machines and different operating systems, and [my support group] supports all of them. It’s a little bit less cost-efficient — but on the other hand, I get slightly more productivity from my [Google’s] employees.”

Other companies, not just technology, take heed. A wave of that could easily turn into a tusami fueled by Millennials and iPod lovers are agitating for and getting Macs in the workplace—an effort not instigated by Apple.

Considering how much money companies spend on incresing productivity and improving retention catering a bit on tech issues seems like a no-brainer.

How open are you/your company to choice?

Your comments—priceless

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Image credit: emdot

I frequently have people ask me for an example of a really bad corporate culture, especially after I write a post about a good one as I did yesterday. Sure, I know a number of them, but when it’s insider knowledge it’s dangerous to share, even if it’s scrubbed.

So I looked around the Net and found this great example on Eric Peterson’s blog that he made up, “It was a bit facetious on my part.”

Not hardly! Eric may think he made it up—he even has a disclaimer—but I know the CEO he was channeling. Reading that interview was one of the eeriest things that’s happened in a long time, since I lived it and it was practically verbatim.

It happened back when I was a headhunter and the CEO wanted to hire me to staff a new division. He was explaining his company’s management approach in response to my question about work environment and turnover.

He wanted me to understand that it didn’t really matter what kind of people I sent, they would break them to fit their needs. He thought it was so funny—I thought he was so sick.

I refused the assignment, but didn’t forget the company. In the course of the next few years I removed more than 100 people, some went to my clients, but many I just gave away, coached, helped. And turned on every other recruiter I knew to that happy hunting ground.

It wasn’t about money, it was a humanitarian effort—you can’t just walk away when you see people being abused.

And that’s what it was, abuse. Abuse is rife these days and we all owe it to ourselves to step in and do what we can when we see it.

In business it can be the entire corporate culture or just a rogue manager, but it’s never something to turn your back on or put up with—no matter the name, abuse is just plain wrong.

Have you rescued yourself or a friend lately?

Post from Leadership Turn Image credit: kikashi

Turnover is enormously expensive but turnover rarely stems from salary issues; high salaries won’t buy a strong, motivated workforce and money certainly doesn’t buy loyalty.

I’ve yet to see it fail that when people join a company mainly for the money (in whatever form) they will quickly leave for more money.

So why do people stay? What motivates them to higher levels of productivity and turns them from company employees to company evangelists?

The answer is simple.

Most of us humans have the same top four desires—although not necessarily in the same order,

• To be treated fairly.
• To make a difference.
• To matter [to boss and colleagues].
• To find a home where we can continue growing.

Yesterday, Ken Meador mentioned that average tenure is 11 years—that that can only happen because these desires are being satisfied.

How do you satisfy these desires?

Your comments—priceless

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