Sunday, January 6, 2008

JWN: Company Loyalty

Company Loyalty: What My Generation Thinks
Life and Times of JWN
JWN Goldman

Let's talk about management. The world of business features many generations of employees and all need to be managed differently. We are moving away from the years where employees stay at one company for all of their life. I know that is the case for me.

Studies say that my generation of employee will change jobs 11 to 13 times in their career. That is incredible to think about because often one thinks of a career change as a life-changing decision. So, how do you as a manager lead a team of employees with that level of expected turnover?

Some styles of management drive employees into the ground because they only expect them to be there a few years anyway. I recently heard a story about this scenario and I must say I was surprised. That is both neglectful of the bottom line for your company and for the morale of the employee. Turnover has a detrimental effect on the bottom line due to high recruiting and training costs. Retention is the key for both employees and customers. But, don't quote me. Those studies are everywhere.

MY ADVICE: Don't lead in that manner. I say that because I know what my generation is thinking. They are always thinking about the value add. In fact, I advise my friends and co-workers to think like that all the time when I am sought after for counsel.

My friend Adam Karp once told me, "You always need to be thinking about the next step. Think about how you can add value to the company and how the company can add value to you. If you hit a ceiling in either scenario, then it is time to move on."

There you go managers. That's what we're thinking every single day. Notice a few things about that statement; it's not always, "Me, me, me," like some managers may presume. There is still an element about the company in there. Thus, company loyalty is not gone my friends. The bar has just been raised.

My generation holds companies to a higher standard than they may have been held to before. I'm not saying that all of you one or two company employees don't hold your place of employment to a high standard, but you may not have been as active in searching for better options. People my age on the other hand tend to always be thinking about the next step.

In the long run, this type of thinking makes sense for moving businesses forward. When I used to be an education major they always talked about managing a classroom well by keeping high expectations. If you expect a lot out of your students then you will get a lot out of them. The same applies to employees and to companies.

The more you expect out of your employees, the more you will generally get (as long as the incentives, or value, is there). And, the more employees expect out of their companies, the more the companies will fulfill their employees (and ultimately their customers).

KEY QUESTION: What is the most important part of your business?

FACT: Your employees.

Many VIP executives that I have had the pleasure to listen to and learn from and authors I have read back this FACT whole heartedly. Ed Pettinella (VIP Profile), of Home Properties, Inc. (Symbol: HME), reflected to Ben and I about the importance of being proactive with employee incentives. The people you manage are going to be approached by other employees. I guarantee that. That's why you hired them right? They're top notch people.

The idea is to keep your key players happy so they don't have a reason to leave. Ed manages like this at Home Properties. In addition, Rob Gross (VIP Profile), CEO of Monro Muffler Brake (Symbol: MNRO), reflected on this concept in our VIP Conversation as well. He pointed to the low turnover amongst his shop managers as a key driver for the incredible success the company has had over the last decade under his leadership. Rob manages this by properly incentivizing their roles.

What can you do then?

Think long and hard about who your top people (or clients) are and how they are treated. Do you give them what they deserve? What are your expectations for them? Too much? Too little?

KEY HINT: It's probably the latter: Too little.

Take that fact into consideration at your next budget meeting. Think vertical rather then horizontal. Get the most out of every employee before you bring on another. I learned that fact from Chris McVicker, owner of The Flanders Group (VIP Profile), an insurance company based out of Pittsford, New York. That organization's success speaks for him and his management style.

If you need help quantifying the value of the relationships with your employees or customers, give me a call. I'm currently developing a relationship management system for a western New York company to do just that.

All the best, ~JWN