CMA Ideas

As the number of job opportunities increases in line with the rebounding economy, voluntary turnover goes up in tandem.  In a 2009 Towers Perrin survey of 668,000 employees, 29% expressed interest in leaving their employers when the economy improves.  Researchers at Deloitte coined the term “resume tsunami” for the coming surge of employees who have grown dissatisfied with their jobs during a recession and will look to leave when more opportunities arise.  The costs of turnover are amplified when top performers walk, and because your stars are the ones who can thrive anywhere, they are your biggest retention risk.

Here are some steps organizations can take to improve employee satisfaction and reduce turnover risk:

1. Hold managers accountable for retention.  People tend to quit bosses, not organizations, so make retention part of a manager’s job description and performance evaluation.
2. Communicate better.  Find out what matters most to your employees.  Ask about obstacles that prevent good performance.  Share information to project an image of transparency and build trust.
3. Provide development opportunities.  Perceived lack of upward mobility is usually a stronger cause of employee dissatisfaction than compensation.  Keep career track in mind and ask employees what they want to learn.
4. Offer challenging and meaningful work.  Show how employees’ efforts fit into the bigger picture and help the organization achieve its objectives.  Allow employees the autonomy to problem solve on their own and grow professionally.
5. Praise employees for a job well done.  Consistent feedback and praise is by far the simplest and most inexpensive way to improve employee satisfaction.
6. Consider non-monetary perks.  Money is less of a catalyst for voluntary turnover than many managers think.  Personal recognition in front of peers tends to boost employee satisfaction, and creative perks such as flex-time and telecommuting arrangements can be key motivators for retention.
7. Focus on gender balance.  A recent London Business School study showed that productivity is higher on work teams with a 50/50 male/female split, and a McKinsey & Company study showed that companies with more women in high-level roles tended to outperform their competitors.  Emphasize retention and development of high-performing women.

Our annual Family Business Speaker Series at the Ritz-Carlton is coming up on May 5th (reserve your spot).  Here are ten numbers about family business you may not have known:

16 – Percentage of family businesses that are cousin-owned. (source: From Siblings to Cousins: Prospering in the Third Generation and Beyond, by Craig Aronoff, Ph.D. & John Ward, Ph.D.)

24 – Percentage of family businesses with a female CEO or President as of 2007.  This is up from 10% in 2002 and 5% in 1997. (source: 2007 MassMutual/Kennesaw State University survey)

20-40 – Percentage of US GDP generated by family businesses as estimated by the Family Firm Institute.  This figure cannot be calculated with precision, and “Street Lore” estimates have pegged it at 40-60%.

51 – Median age of leaders in family businesses. (source: 2007 MassMutual/Kennesaw State University survey)

Over half – Family businesses expecting a leadership change by 2013.  The number is especially high right now due to baby boomers approaching retirement. (source: Harvard Business Publishing)

60-70 – Percentage of family businesses that are sold or liquidated after losing a founder to retirement or death. (source: Harvard Business Publishing)

70 – Percentage of family business leaders who expect other family members will assume at least one key senior role within the business. (source: 2007 PricewaterhouseCoopers survey)

95 – Percentage of registered American companies that are “family-controlled.”  These range in size from Fortune 100 behemoths like Wal-Mart and Ford to literal mom and pop operations. (source: 2007 PricewaterhouseCoopers survey)

77,000,000 – Americans employed by family businesses as of 1997 (source: Family Firm Institute, Inc.)

5/5/10 – The date of our Family Business Speaker Series with guest speaker Drew Mendoza.  There is no charge to attend, but reservations are required.  RSVP online.  View the flyer here.

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There are many types of consulting firms in the marketplace, and one major distinction that separates products and service offerings is custom vs. standard. Each has its place, and neither is totally appropriate or inappropriate.

Customized products and services tend to be more appropriate for issues that are mission critical, more complex, or more individualistic in nature.  For example, your strategic planning process is by definition mission critical and should fit with your organization’s specific situation, goals, and resources.  Your organizational structure should be designed to execute your strategy and link your organization with your customers.  Your sales incentive compensation plan and the selection process for high-level positions are complex issues that should be customized to your organization.

Standardized products and services tend to be more appropriate for issues where the organization needs to know how it compares to others, that are less critical to the core of the organization, that are more straightforward, and that affect larger groups of individuals.  For example, off-the-shelf may be more appropriate for your 401K program.  The selection system for lower-risk, entry-level positions with many incumbents could be an existing instrument that measures the top few skills needed in that job.  A survey on employee engagement might be more effective using an instrument developed and researched across organizations.

While CMA falls in the camp of providing customized products and services, we believe standardized solutions have their place.  How do you make the call between custom and standard?

About the author

Dan Bean, M.A., M.B.A., is a managing partner at CMA.

How is talent management like an incandescent light bulb?

As unemployment swells across the globe, the conventional wisdom is that employees will cling to their jobs, appreciate their employers more, and show higher levels of motivation.  This is a dangerous misconception.

According to a study by the Center for Work-Life Policy, the number of employees expressing loyalty to their employers fell from 95% to 39% between June 2007 and December 2009.  With regard to trust, the dip was 79% to 22%.  Your most talented employees, those with the brightest futures at your organization, are the most likely to leave during down times.  Talented employees have greater flexibility, and the old model of the “organization man” is a relic of the 20th century.  Today’s workforce is more diverse and gender-balanced, favoring a discontinuous progression through multiple organizations.

The globalized marketplace adds another level of complexity to talent management.  Marshall Goldsmith of Harvard Business Blogs rightly points out that it isn’t just organizations that are going global; it’s individuals, too.  Whether you’re calling tech support in India or playing a game with a Facebook friend in Spain, globalization is no longer the exclusive terrain of businesses.  These societal changes have rendered old talent management systems obsolete, shifting the focus from developing functional skills to retaining leaders who can build partnerships.  Your organization needs people who get the strategic direction, who can step back and look at the big picture or work with individuals and teams at any level.  These are the skills that translate across cultures.

Which brings us back to the question: how is talent management like an incandescent light bulb?  A few years ago, consumers started switching over to compact fluorescents.  They’re just as bright, last longer, use less energy, and save you money.  Incandescent bulbs burn out quickly, use more energy, and have to be replaced more often.  Yet just as some people cling to the old technology, many companies still hold onto outdated ideas around talent management.  The addition of high-quality data can have a major impact on your organization, because talent, anywhere in the world, is a real competitive differentiator.

We hope you’ll join us for our webinar on March 30th.

The recession is winding down. There is a lot of pent-up demand and the competitive race is again underway. Now is the time to make sure your organization is ready to generate profitable top-line growth through an effective ‘make it happen’ sales force. The sales organization holds the key to recovery and sustained success. As we emerge from a recessionary economy, the spotlight of accountability will shine on sales with no room for mediocrity or low achievers.

But, here are some disturbing stats gathered over a 10 year period from 3,700 companies in 19 industries published in 2006 by Sales Benchmark Index.

• 40% of sales people miss their sales goals every year
• 40% of sales people lose their jobs every year
• 40% do not sell enough to cover their costs
• 87% of the revenue comes from 13% of sales people

Why? The two most common causes are lack of an effective, managed sales process and inadequate sales talent.

The Sales Process

Selling is guided movement toward an objective…a step-by-step process, guided by the sales person, to the final objective of closing the deal. A significant responsibility of a sales executive is to define, implement and monitor this step-by-step process that contains best practices for selling the company’s products/services. Some sales people will be successful in one sales process and market but may fail in others. Sales people should be selected relative to the demands and disciplines of the company’s sales process. If this process is not developed and managed, sales people will invent their own.

Selection of Sales Talent

The risk and cost of not selecting the right sales people are high. A bad hire in sales has geometrically profound and highly visible consequences within the organization. Consider the management time and effort of coaching the uncoachable; costs of recruiting, hiring, training a replacement; draws against commission and expense accounts; and the incalculable cost of lost sales, poor morale and injury to customer relationships.

It is critical to select sales people who fit the expectations of the sales role, the company’s sales process and the company culture. Because sales people are excellent at selling themselves, ‘fit’ is best determined through an assessment by a licensed Ph.D. psychologist using multiple sources of data:

• In-depth, behavioral and career interview.
• Analysis of resume and background information.
• Series of well researched, validated and normed questionnaires.

Both research and experience confirm that an objective, data-based assessment is, by far, the best predictor of future performance. Sales performance relative to a sales goal is tracked and therefore the return on the assessment investment is also easily tracked. The following is the result of an internal study, conducted by a client using CMA’s sales assessment process. The study analyzed 38 hires over a 5 year period.

• Each of 29 candidates recommended by CMA exceeded 100% of their sales goal. As a group, they averaged 108% of goal.
• 9 sales candidates not recommended by CMA (but hired by the client) did not achieve their goal and as a group averaged 77% of goal.
• If 9 “recommended” candidates had been hired (in lieu of the 9 “not recommended hires”) and achieved the average level of performance over the 5 year period, the organization would have received net profit of 400+ times the cost of the hiring assessments.

Achievers on a sales team are needed to power an organization to resumed growth. There are sales people available who fit your company’s sales role, sales process and culture. Get the right ones through a comprehensive assessment process.

CMA conducts thousands of assessments for selection and development each year for hundreds of client organizations. To learn more, please contact Joe Hoffman or Dan Bean, both Partners at CMA.

CMA is proud to announce Jennifer Nguyen, Ph.D. and Terence Bostic, Ph.D. have been promoted to Senior Consultants.

Jennifer’s work is focused on talent management, training and development, assessment for selection and development, executive coaching, and organizational change efforts. She is also experienced in the development and implementation of employee surveys and validation of selection systems.

Terence has provided a wide variety of consulting services in leadership development, leadership curriculum development, organizational assessment, change management, selection and developmental assessments at all organizational levels, executive and managerial coaching and development and implementation of organization-wide Talent and Workforce Management Systems. He has been instrumental in the successful establishment of Corporate Universities. At client request, he serves on Corporate University boards and serves as a member of the Board of Directors of a corporate client.

Both are licensed psychologists in the state of Missouri.

Jennifer Nguyen, Ph.D.

Terence Bostic, Ph.D.

We’re proud to announce that our new website is up.

Your feedback is important to us, so please take a look around and let us know what you think.

You are invited to attend a complimentary seminar, Leading Through Tough Times and Into Recovery, on October 29th, 2009, from 7-9:30am.  The featured speaker is Tom Phillips, CEO of Weekends Only.  Parking is free in the hotel garage, and a continental breakfast will be provided.

Reservations are required.  RSVP with contact info to apropst@cmaconsult.com.

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For a printable copy of the seminar flyer, click the image below:

Leadership Seminar Flyer

Leaders emerge to meet the challenges of the time.  Certainly these are challenging times.  Current economic data indicate that the economy is no longer in free fall and signs of recovery are appearing, but the economy is still fragile.  In these times, how should leaders lead?  Here are some thoughts to consider.

Stay Close to Customers. Paying rigid attention to cost containment, particularly in difficult times, is an absolute necessity.  But, to stay alive and live to fight another day depends on revenue generated by sales to the customer.  Leaders need to be face-to-face with their customers to retain customers, gain market share and get timely marketplace input in order to be in the lead as the market begins to turn upward.  Leaders must continue to stay focused on the only reason any organization exists, in good times and bad…to serve and retain the customer.

Continue Doing What Got You Here. High performing companies got that way for a reason.  It just didn’t happen.  Enumerate the significant drivers that produced success and sharply focus on these.  Don’t retreat.  A leader’s attitude is constantly observed.  Leaders cannot afford the luxury of looking inward at their own fears and concerns, they must focus outward and reiterate the organization’s long-term vision, goals and strategy as the way to driving success into an economic upturn, which will happen.

Build a Culture of Engagement. You cannot over communicate in tough times.  Be honest and direct.  Don’t spin the truth.  Give people as much information as is prudent and possible on what is likely to take place, when and why.  Value employees and show your compassion but do not accept less from people.  Insist on excellence and hold people accountable.  Be visible and positive.  Have an open door policy.  Be with the people.  Ask for their input and ideas, don’t just hear them, listen to them and be prepared to take action on their input.  Let them know by action, not just words, that “we’re in this together.”  Celebrate wins…even small ones.

Manage Talent.  Talented performers are the biggest contributing factor in the drive to do more with less.  In tough times, costs must be cut and cash conserved.  Although downsizing is never easy or pleasant, now is the time to get under performers “off of the bus” and invest in talent.  Workforce reductions have an emotional effect on talent that stays.  Leaders should never speak negatively about those who leave, it will undermine the leader with those who remain.

Retain Talent.  Reward talent through competitive and fair compensation and take advantage of a slow time to develop talent.  Talent wants to be developed.  Make an investment in talent.  Consider such things as added responsibility, stretch assignments like improving work processes and products, cross-functional training and a developmental assessment and/or 360 multi-rater feedback process.  Provide coaching based on strengths and developmental areas.

Hire Talent.  Now is the time of opportunity.  Today, talent is on the street.  Invest in talent, such as sales representatives, who can help return to sustained growth.  If marginal players are gone, make sure they are replaced by strong talent as the organization grows.  Well developed components of your selection system and/or assessments can help with talent acquisition.

A time of economic downturn is a difficult time, but, “In the Middle of Difficulty Lies Opportunity” – Albert Einstein.

Leaders cannot exist without followers, and followers cannot exist without leaders. Successfully living out this interdependence can produce a powerful partnership of collaboration up and down the organization. Perhaps too often we have shown great affection, focus and praise for leadership and are uncomfortable with and shy away from the concept of followership. Yet leaders and followers exist in a participatory, interdependent relationship where each adds to the effectiveness and success of the other. When we observe the activities of people, followers become leaders and leaders become followers as the situations change. All effective leaders, at some time, occupy the position of follower. A long time ago, Aristotle succinctly stated, “All great leaders must first learn to follow.” More recently, Peter Drucker told us, “The defining characteristic of leaders is followers.” Volumes and volumes have been written about the traits and behaviors for leaders. However, seen through the eyes of the follower, there are three emotional responses or feelings that leaders need to generate among followers. (Followership-Its Personal, Too, Robert Goffee and Gareth Jones, Harvard Business Review, 2001, page 3.) It is these emotional responses that build the connection, commitment and loyalty of followers to a leader.

• The feeling of significance, as an individual and for my contribution, driven by the universal human need to be valued. Behavior of the leader says to the follower, “You and your contribution really matter.”
• A feeling of community which happens when people feel a unity of purpose around work, have respect for each other and enjoyment in their relationships.
• A feeling of excitement, challenge and edge.

Generating Emotional Responses
The addition of emotional responses is critical to the discussion of leadership traits and behaviors. Leadership traits are important because those traits drive leadership behaviors. These behaviors, in turn, generate the emotional responses that bind followers to leaders.

Significance
Make sure that each follower knows how their job connects with the end product/service and how the product/service benefits the customer. Let each one know how they contribute to the overall success and goals of the company. Get to know your followers, as individuals. Talk with them about them and their world. Listen (different from hearing) to them. Thank them. Show compassion in difficult situations. Give them honest and deserved praise.

Community
Foster a culture of ownership…”we’re in this together”. Demonstrate an intense desire for your work community to be the best. Hire, develop and retain workers who possess the competencies to contribute to the successes of the team. Celebrate “wins” as a community. Help your team get to know each other and have fun together. Have a visible “something” that identifies your work community, e.g. a shirt with the team name or logo.

Excitement
Assign goals that move followers out of their comfort zone and into their stretch zone where they are challenged through a new and different assignment. Empower followers who will accept responsibility for outcomes. Stretch followers through feedback, coaching, mentoring, learning programs, etc. Encourage innovation by allowing the freedom to sometimes fail. Know each follower’s strengths and passions. Celebrate achievements. All of this proclaims that leadership is not a position of privilege, but rather a position of great responsibility, and that the hardest part of leadership is the people part.