Leadership Barometer 40 Turnover

March 2, 2020

Is employee turnover killing your company? Turnover is one of the most significant, and avoidable inhibitors of profit. The US national average for turnover usually runs between 2-3% per month, whereas the top 100 companies often have a turnover rate of only 2-3% in an entire year.

In this article, I put a spotlight on the turnover problem and offer some antidotes that are common sense but sometimes not common practice.

For professionals, the cost of replacing an employee is roughly the annual salary of the individual. That means a company with 1000 people, each with an average annual salary of $48K, will lose more than $17 million per year due to turnover. These costs go directly to the bottom line in good times and bad.

Even in periods of high unemployment, turnover is still a problem for most groups. When jobs are scarce, workers may not leave immediately, but they are quietly planning on exiting once the job market improves.

One recent estimate is that 40% of workers are unhappy and plan to move within the next year if jobs become available (National Labor Statistics). That would mean a dramatic rise in turnover costs and a significant shift of the best talent from organizations with poor practices to those with stronger cultures.
How can we fight this needless drain? Here are seven key factors that can help you reduce turnover in your organization:

Supervision

When people decide to leave an organization, it is most often the result of dissatisfaction with their direct supervisor. The most important thing to improve is the quality of leadership at all levels. Teaching supervisors and managers how to create the right culture makes a huge difference in turnover.

Unfortunately, when money is tight, often the first thing that gets cut is training. Improving leadership at all levels needs to be a continual investment, not a one-time event when someone gets promoted to a supervisory role.

Supervisors who are well trained recognize their primary function is to create a culture where people are engaged in the work and want the organization to succeed. These people rarely leave because they are happy where they are.

Compensation

Pay is often cited as a reason for people leaving an organization. Pay may be a factor in some cases, but it is often just the excuse. What is really happening is that the work environment is intolerable, so the remuneration for the grief to be endured is not a good tradeoff. We need to teach managers to improve the trust level within the organization.

High trust organizations can pay workers non-inflated wages and still have excellent retention rates. There are numerous examples of this. One of them is Zappos, where they have such a great culture, that when employees are offered $2000 to leave, they do not take it.

In Drive: The Surprising Truth About What Motivates Us, Dan Pink points out that the relationship between pay and motivation is not what most people think. He cites several studies that show a pattern where higher pay can actually lead to poorer performance.

Pink advocates paying people enough so that the issue of money is off the table. Then three other conditions, Autonomy, Mastery, and Purpose, will take over as the key drivers to satisfaction and motivation, and therefore, retention.

A better future

Another key factor that causes people to leave is lack of a path forward. Employees who can visualize some pathway to a better future will generally stick around to experience it. Training and development are a key enablers for people to know there is a brighter future. Cross training is a particularly helpful way to have employees feel they are being developed to be more important to their organization. Cross training also helps make the work environment more interesting.

A family atmosphere

If you read about the culture of the top companies worldwide, there are many common themes. One of these is that employees describe their work associates as their extended family. They cherish the relationships with their co-workers. Sure, there will be some squabbles and an occasional lecherous uncle, but the overarching atmosphere is one of a nurturing and caring group of people similar to a family. Who would want to leave that environment?

Freedom

Enabling people to do their own work without being micromanaged is a characteristic of organizations that are good at retaining people. Nothing is more irritating than being ordered to do things in a certain way by a condescending boss who does not really understand the process as well as you do.

The ability to use one’s own initiative and creativity to get the job done right helps build self esteem, which is a key ingredient in the retention of people.

Recognition

Knowing that someone cares about you and recognizes your efforts and accomplishments goes a long way toward building employee loyalty. A loyal employee is not out there looking for another position. Instead, he or she is thinking about how the organization’s success can be enhanced through even more effort. The collective muscle of thousands of employees who each feel that way is amazing to behold.

Safety

Many organizations live on the edge of impending disaster. The competitive world has forced legions of companies to downsize on a regular basis simply to survive. When employees witness the revolving door that occurs as a result of things they cannot control, you can’t blame them for wanting to find a safer mode of transport through their career.

If the other suggestions above are followed religiously, then the organization will have a lower risk of having to lay off people, so they will enjoy a lower turnover rate.

These seven factors are not an exhaustive list, but I contend that groups who focus on these seven conditions and understand the dynamics will have consistently lower turnover rates, saving millions of dollars each year. That advantage is sustainable and scalable. It just requires leaders at the top who are skillful and relentless at applying these principles.

Bob Whipple, MBA, CPLP, is a consultant, trainer, speaker, and author in the areas of leadership and trust. He is the author of: The Trust Factor: Advanced Leadership for Professionals, Understanding E-Body Language: Building Trust Online, and Leading with Trust is Like Sailing Downwind.


Leadership Barometer 33 Downsizing Tips

January 13, 2020

Every organization deals with downsizing occasionally in a struggle to survive difficult economic conditions. These times are true tests of the quality of leadership.

In many cases, downsizing leads to numerous problems in its wake, especially lower trust.

The most crucial shortage threatening our world is not oil, money, or any other physical resource. It is the lack of enlightened leaders who know how to build trust and transparency, especially when draconian actions are contemplated.

We are in need of more leaders who can establish and maintain the right kind of environment. A serious problem is in the daily actions of the leaders who undermine trust, even though that is not their intention.

The current work climate for leaders exacerbates the problem. The ability to maintain trust and transparency during workforce reductions is a key skill few leaders have.

Downsizing is a unique opportunity to grow leaders who do have the ability to make difficult decisions in ways that maintain the essence of trust.

Thankfully, there are processes that allow leaders to accomplish incredibly complex restructurings and still keep the backbone of the organization strong and loyal. It takes exceptional skill and care to accomplish this, but it can be done.

The trick is to not fall victim to the conventional ways of surgery that have been ineffective numerous times in the past. Yes, if you need to, you can cut off a leg in the backwoods with a dirty bucksaw and a bottle of whisky, but there are far safer, effective, and less painful ways to accomplish such a traumatic pruning.

One helpful tool in a downsizing is to be as transparent as possible during the planning phase. In the past, HR managers have worried that disclosing a need for downsizing or reorganization might lead to sabotage or other forms of rebellion.

The irony is that, even with the best secrecy, everyone in the organization is well aware of an impending change long before it is announced, and the concealment only adds to the frustration.

Just as nature hates a vacuum, people find a void in communication intolerable. Not knowing what is going to happen is an incredibly potent poison.

Gossip and rumors generally make the problem bigger than it actually is, and leaders find themselves dealing with the fallout.

Human beings are far more resilient in the face of bad news than to uncertainty. Information freely given is a kind of anesthesia that allows managers to accomplish difficult operations with far less trauma. The transparency works for three reasons:

1. It allows time for people to assimilate and deal with the emotional upheaval and adjust their life plans accordingly.
2. It treats employees like adults who are respected enough to hear the bad news rather than children who can’t be trusted to deal with trauma and must be sheltered from reality until the last minute.
3. It allows time to cross-train those people who will be leaving with those who will inherit their work.

All three of these reasons, while not pleasant, do serve to enhance rather than destroy trust.

Don’t humiliate people

Another tip is how to break the news to someone who will be terminated. One way to handle the situation is to ask yourself how you would like to be treated if the situation were reversed. Would you like to be paraded down the hall to pack a box with your possessions and escorted outside the gate and forced to hand over your keys and badge?

Many enlightened leaders have handled the separation in a more humane way. They break the news to the individual and share that the employee needs to find alternative employment. They may even offer assistance with ideas on where to look and offer for a reference.

Then, the employee is not immediately escorted off the premises, but is allowed to pack things up over the next several days and say good bye to friends and work colleagues. Some employers have even experimented with letting the impacted worker use the facilities and equipment for a short while during the job search.

HR managers will quickly point out the risks of having formerly employed workers on the premises, and it is true that the person needs to understand that if he or she is disruptive in any way, then the leaving will be immediate.

The idea is that when you treat separated employees with respect and kindness, even when the news is not good, they respond with a better attitude, which generally improves the outcome.

The more powerful result is that the employees who are not leaving are also impressed by the way these former colleagues were treated. That factor tends to bolster morale a bit for workers who are now asked to take up the slack.

Full and timely disclosure of information and thoughtful exit processes are only two of the many tools leaders can use to help maintain or even grow trust while executing unpleasant necessities.

My study of leadership over the past several decades indicates that the situation is not hopeless. We simply need to teach leaders the benefits of building an environment of trust and transparency and how to obtain them.

Robert Whipple, MBA, CPLP, is a consultant, trainer, speaker, and author in the areas of leadership and trust.


Leadership Barometer 31 12 Rules of Success

December 30, 2019

Several years ago I generated a list of rules for success. It is important to write down a set of rules for yourself, just as it is to document your values. It gives you something to hang on to when there is too much confusion.

Another benefit of a list like this is that it helps other people know how you operate much quicker. I would review this list and my passion for each item whenever inheriting or joining a new group.

• The most important word that determines your success is “attitude” – how you react to what happens in your life. The magic learning here is that you control your attitude, therefore, you can control your success.
• Engagement of people is the only way to business success.
• Credibility allows freedom to manage in an “appropriate” way (which means if you are not credible, you will be micro-managed).
• Build a “real” environment – maximize trust – This requires honesty and transparency.
• Create winners – help people realize their dreams of success (which means, grow other leaders).
• Recognize and reward results at all levels (reinforcement governs performance).
• Operate ahead of the power curve (which means, be organized and get things done well ahead of the deadline).
• Don’t get mired down in bureaucratic mumbo jumbo, negotiate the best position possible, out flank the Sahara. However, feed the animal when necessary (which means pick your political battles carefully).
• Enjoy the ride – when it is no longer fun – leave.
• Admit when you are wrong and do it with great delight. Beg people to let you know when you sap them and thank them for it (which means Reinforce Candor).
• Provide “real” reinforcement that is perceived as reinforcing by the receiver. Build an environment of reinforcement.
• Keep trying and never give up. You will succeed.

There are many other things that could be mentioned, but if you can master the things above, most other things become subcategories of them.

For example, another bullet might be “Treat people as adults and always demonstrate respect.” That is really a sub item of the second bullet. Or another bullet might be “Always walk your talk.” That is one thing (among many) you need to do for bullet four to happen.

I believe every leader should have a documented set of beliefs such as the one above. I am not advocating that you adopt my list. Think about it and develop your own list.

Don’t worry about being complete, just start an electronic file and add to it over the years as you grow and encounter new ideas. You will be amazed how this simple task enables you to operate with congruence and grow in your leadership skill.

Bob Whipple is CEO of Leadergrow Inc., a company dedicated to growing leaders. He speaks and conducts seminars on building trust in organizations.


Leadership Barometer 25 Drive Out Fear

November 18, 2019

Number eight of Deming’s Famous 14 Points was “Drive Out Fear.” In just three words, the long-deceased quality genius put his finger on the most important concept in building and maintaining trust.

I have a favorite quote that I use on my website: “The absence of fear is the incubator of trust.” It seems a little backward to describe the lack of something to be the cause of something else, but I really do believe that is the case. When there is low fear in a culture, trust will grow spontaneously, like the mold on last week’s bread, only in this case the mold is good.

If we turn the logic around, there are a number of positive leader behaviors that do cause trust to grow.  If you think about it, these behaviors are easy to name.  Consider the following (incomplete) list:

  1. Do what you say (walk your talk)
  2. Act in a consistent manner
  3. Treat people with respect
  4. Honor your commitments
  5. Be honest
  6. Be transparent
  7. Admit mistakes

We know all these things, and we could list hundreds of behaviors that contribute to building trust on a daily basis. They all work, and yet the power of each one is significantly blunted if the general environment is one of fear.

If you are a leader, of course you need to model the seven behaviors above, along with the others I did not name, but doing that alone will not get you to the promised land.

You need to create a culture of low fear, and you will see the impact of the other behaviors is like they are all on steroids. So the question becomes, how does a leader create a culture of low fear?  The answer is simple, but most leaders have a difficult time doing it, which is the reason trust is so low in most organizations.

You lower fear when you make people glad when they bring up a contrary opinion to what you thought was right. Of course, people need to bring up the disconnect in a respectful manner as opposed to an obnoxious way.  When you make people glad they brought up their concern and reward them for doing that rather than punishing them, it lowers fear within your group.

You make it safe for people to tell you things that you perhaps did not want to hear. I call the behavior “reinforcing candor,” and I believe leaders who have the ability to exhibit this behavior consistently will build the highest trust organizations.

Since high trust is linked to outstanding performance, morale, and low turnover, the benefits of learning how to reinforce candor are immense. This set of behaviors become the super sauce of excellent leadership.  Learn how to reinforce candor; for sure you will become an elite leader.

Bob Whipple is CEO of Leadergrow Inc., a company dedicated to growing leaders. He speaks and conducts seminars on building trust in organizations.


Leadership Barometer 8 Not Playing Games

July 23, 2019

Here is a quick way to assess the quality of a leader.

Build a real environment

Many people describe the actions and decisions of their leader as a kind of game.  There is an agenda going on in the head of the leader, but the true intent is often hidden from view.

This situation is common in all parts of our society from C-Level executives, to politicians, clergy, academics, lawyers, accountants, law enforcement, and really every corner of society.

Another symptom is that the story changes from day to day without any apparent provocation or believable explanation. People try to guess what the leader really wants, only to be embarrassed or disappointed when they make a wrong assumption.  It is a common break room discussion for people to speculate what the leader is trying to accomplish by the latest pronouncement.

The contrast with this pattern when there is an excellent leader at the helm could not be more clear.  Great leaders do not play games. They build a culture of trust, where people know the objectives, and all actions are in alignment with those objectives. Workers know what is going on in the mind of the leader and are expected to point out anything that would seem to deviate from the plan.

This condition leads to maximum engagement of everyone because there is no need for second guessing.

Do not assume people know

It is important for any leader to not assume people know the intent.  Since all actions are totally rational in the mind of the leaders, it is a simple leap to figure that other people can connect the dots as well.  You can tell when people are confused by their body language.

A puzzled look on the face is the easy way to spot the confusion. Great leaders are constantly trying to sniff out any possibility of misinterpretation, so they can take immediate corrective actions.

Poor leaders go ahead blindly, assuming that everyone will figure out why a certain action was taken. Sometimes they are astonished to discover significant confusion and wonder why motivation is so low.

That disconnect becomes the acid test of a good leader on this dimension. If there are rarely or never any need to go back and explain an action or statement, then this leader is communicating well and not playing head games with people. In that environment, trust will grow strong, and it will endure.

Put a high premium on direct information, and always verify that people understand not only what you are advocating but why you think that is the wise path. That verification allows people to challenge anything that seems to be out of the expected so that corrections can be made before damage is done.

Bob Whipple is CEO of Leadergrow Inc., a company dedicated to growing leaders. He speaks and conducts seminars on building trust in organizations.

 


Leadership Barometer 4 Absence of Fear

June 24, 2019

Here is a quick and easy way to measure the caliber of any leader.

Lack of Fear

Fear is the enemy of trust, and trust is what you must foster in order to be a great leader.  My favorite quote on this connection is “The absence of fear is the incubator of trust.”

In any group, if the leader creates an environment where there is very low fear, the trust will grow to a high level.  It is as reliable and unstoppable as the mold on last week’s bread.

Good leaders create an environment where there is less fear. That does not mean there is never any fear within the organization.

Sometimes scary stuff is needed in order for the organization to survive. But in those times of uncertainty, great leaders redouble their communication activities to keep people aware of what is going on.

In draconian times, it is the lack of solid reliable information that causes the most fear. When leaders are as transparent as possible, it leads to open communication. This practice means lower fear, and higher trust, even when things are not pleasant.

Nature hates a vacuum. If you have a bare spot in your lawn, nature will quickly fill it in with something, usually weeds. If you take a bucket of water out of a pond, nature will fill in the “hole” immediately. When you open a can of coffee, you hear the rush of air coming in to replace the vacuum.

So it is with people, if there is a void of information, people will find something to fill in the void – usually “weeds.”

That is why rumors attenuate in a culture of high trust. There is no fuel to keep the fires of gossip going. Leaders keep people informed of what is going on all the time. This transparency helps people vent their fears and focus on the tasks at hand, even if they are involved with unpleasant things.

Eliminating fear is much more than just sharing information openly.  Most fear in organizations comes from the feeling that it is not safe to voice a concern, especially if it is about something the leader wants to do.

There is ample evidence in most organizations that people who voice their concerns about what the leader is doing get punished in numerous ways. They learn to hold their observations inside rather than risk getting clobbered.

Trust cannot grow when people are fearful, so in most organizations, it is the lack of ability to be candid with the leader that hampers the growth of trust.

Contrast this pattern with one where the leader is enlightened to welcome and REWARD people for their candor, even if it is contrary to what the leader thinks is right at the moment.  In that kind of culture, trust grows because fear is extinguished.

If you see an organization where people know it is safe to express their opinions (in an appropriate way and time) it is the result of a great leader at work. If you see an organization where people are afraid to speak their truth, the leader of that organization is weak and has a potential to change and grow into a stronger leader.

 

Bob Whipple is CEO of Leadergrow Inc., a company dedicated to growing leaders. He speaks and conducts seminars on building trust in organizations. He can be reached at bwhipple@leadergrow.com or 585-392-7763.


Leadership Barometer 2 Level of Trust

June 11, 2019

There are hundreds of assessments for leaders. The content and quality of these assessments vary greatly.

You can spend a lot of time and money taking surveys to tell you the quality of your leadership. There are a few leading indicators that can be used to give a pretty good picture of the overall quality of your leadership.

These are not good for diagnosing problems or specifying corrective action, but they can tell you where you stand quickly. Here is one of my favorite measures.

Level of Trust

Good leaders create a legacy of trust within their organization. I have written elsewhere on the numerous hallmarks of an organization with trust as opposed to one that has no trust. But is there a quick and dirty kind of litmus test for trust? Think about how you would know if an organization has high trust.

You can do extensive surveys on the climate or call in an expensive consultant to study every nook and cranny of the organization, but that is not necessary.

All you need to do is walk into a meeting that is going on and observe what you see for about 5 minutes. You can get a very accurate view of the level of trust in what Malcolm Gladwell calls a “thin slice” of a few minutes watching a group.

1. Overall Body Language

Look at how the people sit. Are they leaning back with arms crossed and rigid necks, or are they basically leaning either in or toward the other people next to them?

2. Facial Expressions

Observe the look on the faces of people in the meeting. Can you see pain and agony, like they do not want to be there but are forced to endure the agony till the boss adjourns?

3. Tone of Voice

Listen to how people address each other. Is there a biting sarcasm that seeks to gain personal advantage by making other people in the room look small or do the people show genuine respect and even affection for each other?

4. Respect for the Leader

See how individuals interact with the leader. Is it obvious that everyone is trying to help the leader or are they trying to trip her up or catch her in a mistake? Do the participants show a genuine respect for the leader?

5. Lack of Fear

Is there a willingness to speak up if there is something not sitting right – for anyone, or is there a cold atmosphere of fear where people know they will get clobbered if they contradict the leader?

6. High Initiative

If there is work to be done are there eager volunteers or does everyone sit quiet like non-bidders at an auction?

7. Attitude

Is the spirit of the meeting one of doom and gloom or is the group feeling like masters of their own fate, even when times are rough?

These are just seven signs you can observe in only a few minutes that will tell you the level of trust within the group. That trust level is an accurate reflection of the caliber of the leader.

I used to tell people that I could tell the climate of an organization within 30 seconds of watching a meeting. You can actually see it in the body language of the participants. Would you agree with this assessment?

Bob Whipple is CEO of Leadergrow Inc., a company dedicated to growing leaders. He speaks and conducts seminars on building trust in organizations. He can be reached at bwhipple@leadergrow.com or 585-392-7763.