Kepner-Tregoe: Replacement Costs

Retaining Leaders

Beyond the Iron Fist

Good People, Good Business: Richard M. Stone

Corrections or additions?

Managing People, Not Just Businesses: Blessing White

If you are the employee and are waiting for the boss

to create an ideal job that is both challenging and fits in with your

values, you may have a long wait, warns Christopher Rice, new

CEO and president of Blessing/White, the Orchard Road-based firm that

pioneered in the area of defining corporate values (908-904-1000).

"It sure is easier to take control of your career yourself. It

also helps if you have a manager who may take a little prodding but

also realizes how to respond."

"Whether you are the employee or the company, we are in the


of getting individual goals in alignment with company goals,"

says Rice. Example: someone works in a department known for inflexible

12-hour days and is frustrated by being unable to leave early,


to watch a child’s soccer game.

Goal setting is also important on the hiring side, Rice says. "For

the next 10 years, a low unemployment economy is great news for people

looking for jobs, but it is a challenging situation for large and

small companies. Ten years ago, they could be highly selective, but

now they have to drop the standards down."

"As companies deal with people who are calling the shots, they

want to make sure new hires get up to productivity very quickly, and

they want to retain employees. But if you have a job that can’t be

done in eight or 12 hours, it is very easy to get out of alignment

between what you want to do versus what your company wants you to


Blessing/White is now part of a $3 billion conglomerate based in the

Netherlands and is changing from being a training company to be a

training company with a technology-based learning platform. As CEO

and president Rice is headquartered in the Princeton, where he lives

in with his attorney wife, Liza, and their nine-year-old twins. He

did simultaneous bachelors and masters degrees in economics and Slavic

languages at the University of Pennsylvania, Class of 1976. He has

worked for Prentice Hall and Xerox Learning Systems (the world’s


provider of sales training programs), and the Gallup Organization.

Most recently Rice was head of worldwide sales and marketing for the

40-office outplacement firm, Drake Beam Morin.

"I now work for a company that has phenomenal brand equity, with

products that are dead on for the needs in the new millennium —

retaining employees and getting higher productivity," says Rice.

Values are the core of companies that have the competitive edge, says

Rice. They seem to be able to develop and maintain cultures that


star performers. They display a level of flexibility unusual for their

size. And even when facing serious setbacks, they bounce back, turning

problems into opportunities and rallying their troops behind them.

In these kinds of values-based cultures, rank and file

employees are connected to the organization at a far deeper level

than pay, and they share values with senior management. This


where employees can thrive, provides a clear point of difference for

businesses in a crowded recruitment market. Six characteristics of

this values-based business:

1. People are personally committed to the organization.

2. They are also committed to the business goals.

3. Individuals are encouraged and able to innovate,


and experiment.

4. People feel valued and are valued by the organization.

5. Employees demonstrate discretionary effort and exceed

the organization’s expectations.

6. Employees are respected for their individual strengths

and qualities.

Part of one value-clarification exercise involves rating 28

personal values — from achievement and pleasure to wealth and

wisdom. You are asked to rate each value from one to five in two


"How would I feel if my present satisfaction of this value was

greatly reduced?" and "How would I feel if my present


of this value was greatly increased?" The exercise also includes

third party evaluations (how others see you) and estimates of how

willing you are to take action to achieve a particular value. At the

close, you prioritize and choose your top five values for that moment

in time.

This is followed by an analysis of your skill sets and then your


are matched up with development needs of the company. Managers are

supposed to use this data to help the company meet the bottom line

while still satisfying your individual values.

All this values palaver does benefit the company, Blessing/White says,

because it results in higher productivity, more fluid and faster


making, greater retention, reduced recruitment costs, and higher brand


Implementing this strategy presents a range of challenges: How to

ensure employees are able to convey their personal values in a no-fear

environment? How do you develop a coaching culture within line


Exactly how do you align an individual’s values to corporate values?

The first step is to make someone important — a board member or

other top level person — responsible for the task of aligning

employee and corporate values. Then form a working team to determine

what the organization’s values are. Create ways to get a two-way


on this. Train line managers to inform their individual workers about

the company’s core values and help the individuals to determine their

own values. Then plan for how you will note the changes in values

that will inevitably occur.

"More and more organizations are discovering that values hold

the answer to such challenging issues as retaining good employees,

managing work/life balance, and adapting to the changing world of

work," says Rice.

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Kepner-Tregoe: Replacement Costs

Hiring, firing, and hiring again. It’s a treadmill that

no company can afford to stay on. Just how costly is employee


Few companies are willing to guess, but Kepner-Tregoe, the


research firm at 17 Research Road (609-921-2806), put several


to the test. (U.S. 1, August 11, 1999). After sending out surveys

to nearly 1,300 managers and workers, Kepner-Tregoe priced employer

turnover in dollars and cents. Replacing a typical information systems

engineer, they discovered, costs $34,000. Make that $40,000 to replace

a mid-level manager.

Businesses are the ones who get hurt the most when employees are


and decide to leave, concludes Peter M. Tobia, who led the


appropriately titled "The Brain Drain." New hires don’t have

the efficiency of an experienced employee, which means loss of


and additional sales expenditures to win back customers. In the end,

employers could spend thousands of dollars to gain back lost ground.

The cost of failure is high, but the cost of success is low,


concluded. After surveying corporations that have high retention


the firm discovered that businesses don’t have to use financial


or hire in-house masseuses to keep their best employees around. What

works is old-fashioned positive reinforcement and creative career

development strategies. Managers need to maintain an open dialogue

between upper management and mid management, mid-management and


and everyone from the CEO to the human resources professional should

work together to the same end:

Develop employee careers, not just jobs. Corporations

should think of employees as being on a continuum — a career path

— and help them meet those goals within the organization by


their performance at every point along the way. Institute uniform

standards, allocate appropriate resources, and get feedback from


Create a "culture of caring," where management

and employees alike demonstrate integrity and follow ethical codes

of behavior. The company should do whatever is necessary to


that employees are important — even if that means putting their

money where their mouth is.

Develop a stair-stepping process for conflict resolution.

High performers often leave jobs because of conflict with a


Create "alternate avenues" to circumvent a supervisor,


an "open door policy," and establish a proactive employee

relations department.

Take stock, then take action. Look at the data about


age, gender, job class, length of services, and department — to

discover where problems typically occur. Then find a way to keep


Keep your eye on high performers. The stars set the tone,

according to the study, for the whole business. You can tie rewards

to performance, but you should offer more than just stock options.

Indulge an employee’s creative urges, for example. Offer them


to learn more and escape from the daily grind. Hallmark Cards, one

of the retention leaders, offers creative retreats for its employees.

Approach people management as a strategic business issue.

Put people needs at the top of business priorities.

Keep it a work in progress. Always request feedback and

encourage questions.

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Retaining Leaders

Instead of offering your employee a raise, why not offer

him or her a chance to learn something new — to get a unique


experience, or take the day to attend a seminar, says Michael


management consultant and CEO of the Pacesetter Group at 176


Circle (609-683-5225) "I would maintain that one of the biggest

changes in organizations is attracting, developing, and retaining

employees," he says (U.S 1, December 8, 1999). "Employees

look for something different in their work experience. If you can’t

give them an opportunity to flourish, they’re less likely to


Seminars and classes work in the short-term, but the best companies

work closely with staff to set a career track and develop skills.

On-the-job developmental assignments are key. "Companies like

Merck or AT&T not only have career development plans identified, but

as part of those plans they’re talking about what type of internal

assignments their colleagues need to expand their competencies,"

says Hierl.

Dual career tracks are also something that today’s workers want —

a chance to dabble in another field. "In the industrial model

for organizations, people were very specialized, almost assembly line

workers," he says "You can’t take that model and apply it

to the Information Age very successfully." With dual career


a research scientist at a pharmaceutical firm, for example, might

be asked to work in partnership with the licensing department. Both

the company and worker gain from that cross-fertilization.

A human resources strategy needs to be applied proactively and


at each level of the company, says Hierl. "It’s too important

to be delegated to one group," he says. Management and human


need to work together to keep people in an organization. Successful

companies "live and breathe this."

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Beyond the Iron Fist

Not so long ago all one needed to be a good manager,

it seemed, was an `iron fist’ and the drive to get things done no

matter what," says Sheree Butterfield of Drake Beam Morin,

a global career transition and outplacement consulting firm with an

office at Forrestal Village ( "But

as we tumble headlong into the next millennium, the skills required

of a good manager will be all the more complex and diverse." (U.S.

1, March 24, 1999).

Managers should learn to do the following:

Make the most of technology: There is not going to be

a single area of business immune to the advancements of technology.

Managers may also find themselves communicating regularly with


they rarely see. Managers will need to know how to take advantage

of the latest in communications technology.

Learn to lead by listening: The ideal manager in the next

millennium will be a vortex, of information, drawing on all the vast

resources available. Managers will have to make use of everything

they hear from above, below, and even outside the immediate sphere

of business.

Cultivate emotional balance: Under the pressures and


inevitable in time of change — and the coming years will be times

of great change — managers will need to approach such changes

as challenges, opportunities for learning and even altering one’s

mindset. They should be able to let certain things simply "roll

off," to see the larger picture, the greater vision, and not let

the momentary storm and stress of change affect them.

Manage the relationships, not the employees: The days

of merely supervising are waning. In the shifting sea of full and

part-timers, freelancers, temps, and flex-time workers, the manager

of tomorrow will need to "read between the lines" of these

varying groups, and understand the weaknesses and utilize the


inherent in each group.

Adapt: Once managers were acknowledged for the uniqueness

of their style. But no longer will a single style, however unique,

suffice. The managers of tomorrow will need the ability to step from

one way of doing things to another, to become strategist, then mentor,

then team leader.

Mediate information: Tomorrow’s managers will have at

their fingertips a growing reservoir of knowledge and information.

They will need to be able to retrieve, understand, and repackage this

information swiftly, and in a manner that suits the given situation.

Juggle resources: Tight budgets are a necessity, and they

will remain so. Managers in the next millennium will have to shift

and juggle resources with ease. This applies to more than just money;

customer satisfaction, employee morale, and company image will become

part and parcel with "bottom line" concerns.

Be a visionary: Vision is more than a quarterly objective

or personal aim. Being able to see not only the forest for the trees

but beyond the forest, being able to envision your company as it could

be, and how you can contribute to the achievement of that vision,

will be a necessity in the new millennium.

Cultivate ethical practices: Tomorrow’s employees will

be even less likely than they are today to endure unethical behavior

on the job. Sound ethical practices tend to trickle down, and


rise to the occasion. A greater sense of achievement is often the

result. The managers of the next millennium will be the wellspring

of this focus on ethics.

Welcome diversity: Diversity means different ways of


life and business, different ways of looking at the world. Tomorrow’s

managers will not only succeed but thrive in the midst of diversity.

"It all comes down to being willing to become a lifelong


says Butterfield. "If you want to succeed into the next


you can’t rest on your laurels. You have to keep learning new things

and grow out of the box of what used to be called, `standard



Top Of Page
Good People, Good Business: Richard M. Stone

For the third millennium, we will see that people will be most


asset in business. We will have to respect our employees as much as

we now respect our customers and our bottom line. Why? Because of

three developments:

1.) As we know, there is a shortage of good people, caused

to some extent by a mismatch between our educational system and our

business requirements. This makes employees the most critical raw

material of a business.

2.) Employees are being empowered like never before


the weakening of the "employment at will" doctrine, along

with the ease of job-changing made possible through the Internet.

We now know that a "career" does not mean one company.

3.) The success of business will depend mostly on having

"smarts" and that will be "people smarts."

Richard M. Stone

The Stone Group, 252 Sayre Drive,


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