Tag Archives: bernard rosauer

‘War for Talent’ Is Not Necessary

Everyone is talking about the war for talent. Must there be a war? Or can your organization accomplish what it wants to (needs to) by fighting the battle for retention quietly, within its own borders?

There’s only so much a company can manufacture with its brand to catch the attention of top talent. Smart candidates understand that the truth about you is displayed by your existing employment base. Your employment brand is much less the result of intentional messages created for an external audience than it is the result of the vibe your existing employee base creates in the marketplace. Social media has increased the volume of this voice exponentially.

To retain the talent you have and to make that social voice work for you, you should:

  1. Make sure existing talent knows it’s being treated fairly in terms of pay and recognition.
  2. Make sure each employee leaves work for the day, week, month with a sense of achievement.
  3. Make sure your processes continue to improve. Smart people don’t like working with dumb processes.
  4. Make sure each employee has at least a small sense of camaraderie.
  5. Relate all work to the customer experience. Most employees would rather work for customers than bosses!

Brilliant people or brilliant processes?

In some cases, employers believe they need brilliant employees because they are the only ones who have been proven to find their way through the maze of terrible processes. Often, employers don’t even realize this is the reason they’re looking for talent. A well-known Japanese company’s leader once said, “In America, you have brilliant people working with average processes; in Japan, we have average people working with brilliant processes.” Something to think about.

Lets face it. There are only so many brilliant people to go around. Most of us are closer to average. Given this, is it really smart to fight a war for talent? Or would it be smarter to work on processes — remove waste (things customers wouldn’t pay for), minimize the things customers do have to pay for but would rather not (things normally required by law) and spend time working on processes that create value? It’s about the customer.

The focus of everyone’s work must be on creating value for customers. The message should be, “Shoot for referrals, settle for retention.” The entire workforce should be motivated by this. Common purpose builds workplaces worth working for.

Unfortunately, it has been my experience that it is easier to convince a janitor of this than it is most executives. Executives make a lot of money. There’s a lot of temptation to protect their domains, their technical areas of work, their lines of business, their territories, etc. What these executives need to understand is that customers flow horizontally through the spectrum of work performed by each executive’s area of influence. The thicker the borders between those areas of influence, the harder it is for employees who want to satisfy customers to get their jobs de. These employees, especially the smart ones, eventually leave the organization. They definitely don’t recommend their own workplace to people they care about.

What if you actually won the war?

So before you begin to fight a war for talent, my recommendation is to think internally. If you did win the war for talented people, what kind of environment would they be working in? What kinds of processes would they be forced to work with? Are your best employees already recommending others to work at your company? If not, why not?

Don’t just sit there, ask them!

Is It Time for Un-Change Management?

Pull back on the reins for a moment and come to a complete stop. What do you see behind you? Probably a wake of both straight and winding roads… some intact, some obliterated, most somewhere in between. You probably see customers satisfied and dissatisfied at a number of different levels. Same with employees.

Now look ahead of you. What do you see? A yet-to-be-unfolded strategic plan? A vision? Goals? Innovation?

“Change management” is used to make the transition to doing things a new or different way. It’s a tool used to implement change required for forward movement, innovation, strategies, etc.

“Un-change management” refers to the need for organizations to let go of the unwavering focus on innovation and advancement and share some of the time and energy removing that which is not valued by the external customer or not required by law. In a word, we’ll refer to it simply as “waste.”

Waste unattended grows, at best, in parallel with your company’s growth. If you are pleased with your growth goals, ask yourself if you’re pleased with your simplicity goals. The ratio of waste to value should be reduced when you grow. Unbridled growth often leads to an increase in the waste-to-value ratio, and that isn’t realized until years later, mostly because all eyes are on growth. Companies then scramble, point fingers, place blame and cut costs without really understanding were the problem could have and should have been addressed in the first place.

Continuous improvement is more about elimination of waste than it is about doing anything new. It requires serious focus on work and asking why things are done. The goal is to arrive as close as possible to creating perfect flow in your business systems — where orders are placed, where product or service is made or conducted and where they are provided to the customer for consumption.

Clean out the garage (and keep it clean)

For companies that have never emphasized waste, large gains are made in a relatively short period after they introduce their system of elimination. After that, removal efforts continue to whittle away at midsized waste and so on until, finally, the mindset converts to innovation. I think we’d all agree that an innovative company with little waste is a valuable thing indeed.

The way companies manage waste has a profound impact on the way the company culture emerges. (See www.ThreeBellCurves.com and download the free whitepaper.) Employees want to work on things that matter, not waste. Customers want to pay for things of value. Keeping the price low requires the elimination of as much waste as possible.

Is your company ready to share some of its change management with “un”-change management? If you are, you will create more room for value without escalating costs.

Reputational Risk Management Using the Three Bell Curves

Incremental reputational risk, if not managed correctly, can chip away at a company’s brand for years and eventually result in lower sales and lower retention of customers.

Most risk management initiatives we hear about are “outside-in” approaches.  Managing the Three Bell Curves proposes an “inside-out” method that builds an organizational culture where reputational risk management is woven into the fabric of a company’s DNA.  The only way this can be done is by including the customer’s voice in just about all decision making.

What Is Organizational Culture?

I Googled “organizational culture” and got more than 36,000,000 hits in .32 second.   None of the definitions is wrong—but none is perfectly right, either.  What people miss is that organizational culture is an emergence – an immeasurable state made up of two or more relatively simple ingredients, where 2+2=7. 

Deal and Kennedy (1982) defined organizational culture as “the way things get done around here.”  Of all the definitions I’ve read, this simple one resonates with me most.  Deal and Kennedy’s definition, while not perfect, seems to be the most widely accepted.

“The Way Things Get Done Around Here”

While culture itself is extremely difficult, if not impossible, to measure and manage, the relatively simple ingredients of culture are not.  Because they are manageable, it is possible to guide the organization’s culture without being able to manage it directly.

When we think about “the way things are done around here” from a high level, we see there are really only three key ingredients:  employees, work and customers.  That’s all.  And managing all three well ensures customers get what they want, when they want it, at a quality level they expect (or better).   Guiding culture through the proper management of employees, work and customers results in a maximization of customer retention, brand strengthening and even growth (through referrals). 

The Three Bell Curves

The simple bell curve shows the normal distribution of things in many facets of business.  We use them when gauging success, failure, mediocrity and everything in between.   A bell curve can be assigned to each of the simple ingredients that make up your company’s culture.

Employees

Gallup estimates that 52% of American workers are not engaged and that a further 18% are actively disengaged.  This means  that only 30% are either engaged or actively engaged.    Where does your company stand?  There are several ways to find out.

  1. Employee surveys
  2. Employee giving
  3. Attendance
  4. Customer surveys

The impact of employees on reputational risk is obvious.  Or is it?  When we think about the impact employees have, most of us think about the customer-facing employee – the ones customers actually communicate with.  The fact of the matter is that, in many companies, most employees are back-office or noncustomer-facing.  These workers as a whole have every bit as much of an impact on customer retention and growth as those who are customer-facing.  This is because problems left unsolved in the back office always present themselves in some form or another on the front line.  Similarly, the problem solving that occurs in the back office creates a smoother experience on the front lines, helping those customer-facing employees provide a better experience.  This is even more the case in manufacturing, where a product does all the speaking for itself and there is no customer-facing employee to manage the experience.

While it’s one thing to come up with metrics, it’s a whole other thing to execute strategies for change or improvement.  Fortunately, much work has been done in the field of organizational psychology that has revealed the drivers of engagement.  Sirota Survey Intelligence, out of New York, has been capturing data regarding employee attitudes since the early ‘70s.  Their findings are really interesting.  In terms of drivers of engagement, the three most important areas should be:

  1. *Employee equity (sense of fairness)
  2. Employee camaraderie
  3. Employee sense of achievement

*most impactful

By measuring and managing the workforce’s sense of equity, achievement and camaraderie, a company can make great strides toward reducing reputational risk.

Work

Peter Drucker said, “There is nothing more useless than doing efficiently that which is not necessary.”  Unnecessary work (waste) results in a couple of things.  First, working with processes that aren’t necessary smacks an employee’s need for the sense of achievement in the gut – dead center.  Second, the customer pays for everything your company does, even if the work is considered “waste.”

Necessary work is activities that are required (usually by law) that customers aren’t necessarily interested in paying for but must.  Valuable work is work that customers would pay for.

The measure of value vs. waste comes during the process of problem solving.  Problem solving done the right way eliminates waste.  Done the wrong way, it adds complexity.  Workarounds, for instance, add waste.  Root-cause elimination removes waste and leaves more room for creating value.

Success on the” work” ingredient can be measured in terms of speed, cycle time and quality.  It also presents itself in overall customer satisfaction.  It helps employees to envision the work bell curve as they perform their everyday job duties.  If everyone had an “eliminate waste, maximize value” mindset, think of the ideas employees would come up with!  And once those ideas are acted upon, it leads to the employee’s sense of achievement and the removal of something customers didn’t want to have to pay for.

The Lean Enterprise Institute (Cambridge, MA) has a website that contains a plethora of useful information on working with the principles of lean inside and outside of manufacturing.  Check out http://www.lean.org for more information on thinking and working lean.

Customers

Fred Reichheld, who founded Bain's loyalty practice, was determined to find out why some companies were so successful while others weren’t.  In side by side comparisons, he and his research team found that customer advocacy was very strong among the successful companies while, at the mediocre or poor-performing companies, customer advocacy was weak.  This all makes perfect sense. What didn’t (make sense) was that there was no calculation, no indicator, that could help a company understand where it stands and how to move the needle to the right on the bell curve.

By asking just one question, the team found, a company could develop a benchmark and use it to improve results.  The one questions is: “On a scale of 0 through 10, how likely are you to recommend (company XYZ) to a family member, friend or colleague?” Having listened to answers to that question many times, researchers began to notice that customers who responded with a 9 or a 10 had actually promoted the organization or were going to in the future. Those who answered with a 7 or 8 were neither excited nor disappointed.  Customers who scored between 0 and 6, the team found, were most likely to damage the reputation of the company by speaking about an experience in a negative light.  

So how does a company calculate its Net Promoter Score?

A company’s Net Promoter Score is calculated by subtracting the percentage of detractors from the percentage of promoters:  %PROMOTERS – %DETRACTORS = Net Promoter Score.  Yes, it’s that simple.  NPS is a sign for everyone from the ground up to the corner office to see and work to improve.  It’s the customer’s voice.  It’s your company’s true north.  Measure it.  Improve it.

For more information on The Net Promoter Score , read The Ultimate Question by Frederick Reichheld. 

Conclusion

The inside-out approach to reputation risk management requires an understanding of the nature of organizational culture (the way we do things around here).

Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld