Why the Churn and Waste?

Strategy Doesn’t Matter?  Part 8

Most job satisfaction surveys have resulted in the same results for more than a decade. They point to the same managerial perception problems versus what employees really value!  Here is a long list of other reports and statistics suggesting and supporting an actual factual basis for these endless negative employee employment comments and actions.  I believe these reliable, studies and statistics bring great credibility and weight to why current strategies fail and current employees are so dissatisfied: 

1.  Real wages over the last 30 - 40 years have declined because of inflation, meaning employees fall  behind every year, while profits soared.  Lack of available credit is but one result.

2.  In April of 2012 Department of Labor (DOL) stated 70+% of employers violate labor law standards and wage and hour laws, while private Labor Law Firms estimated 90+% of employers are in violation! This means almost every company!

3.  Real employee health care coverage has declined, if it exists at all, while employee out of pocket expenses, insurance premiums and insurance company’s profits have skyrocketed.

4.  Employee retirement security has all but disappeared as employers contribute less and less, if at all, to retirement.  Once a reward for service and an incentive to stay, it is now an employee Do-It-Yourself savings retirement, while our federal government is trying new limitations on Social Security and Medicare.

5.  State’s Right-to-work laws have freed employers to fire people with implied, but not legal, impunity.    

6.  Private sector union membership has declined from 38% to 6+%, the lowest level since 1950.

7.  Federal Agencies charged with enforcing employment laws, until recently have been un-mandated, understaffed and underfunded…..meaning minimal enforcement considering the scope of problems.

8.  Retaliation toward employees complaining, enlightening and whistle blowing is a quickly growing legal complaint.  Employers consistently show they are clueless, don’t care and won’t change.

9.  Generations of workers have experienced, first hand, how their parents or grandparents loyalty to “the company” has been rewarded by having been sent packing after a lifetime of work.

I will stop here….there are many more.  In summation, employees are stuck, have fewer protections, little representation and fewer opportunities.   The employee’s presence with you, the employer, is one of the few leverages and control they have left.  Today’s newest employees work to live their lives, while the boomers lived to work. Younger workers will and do leave in an attempt to find a work life balance, security and an employer they can support and who supports them.
 
Additionally, we constantly hear there are not enough qualified people for the millions of available jobs.  This may be true in some cases, however, enough hiring isn’t happening because there simply are not enough jobs compared to the number of unemployed (currently 40Million according to DOL). Some are not hiring due to lack of economic confidence, some only  want to hire the employed, some only want to hire the perfect employee, but most have either forgotten how to hire or never knew how to hire in the first place.

The above items should become the basic list to investigate and address as a beginning to changing your company culture and employee relations challenges.

Next: Why do stuck wages affect business growth?
 

$2Trillion Wasted Through Not Knowing ... or Not Caring?

Strategy Doesn’t Matter?  part 7

The stories regarding employee - management relations concerns are consistent.  Regardless of what leadership might think its company culture represents, most employees within those companies would define today’s work environment, in general, as disingenuous, disengaged and uncaring in the minimum and methodically anti-employee, abusive, internally disconnected, counter-productive and possibly illegal in the extreme.  All one has to do is ask and/or read their comments and posts.

Further proof is a recent CareerBuilder survey of more than 2,480 managers and 3,910 workers shows that people in supervisory roles often doubt their (own) capabilities…..Many workers say their bosses are ineffective and that they play favorites and fail to communicate well. ……. the vast majority of managers never receive formal guidance on effective team leadership. “Good management skills can positively impact productivity, performance and overall employee morale,” said Rosemary Haefner, Vice President of Human Resources  at CareerBuilder. Another key focus of the survey [was] the shortcomings of the very top leaders of today.
http://www.careerbuilder.com/share/aboutus/pressreleasesdetail.aspx?sd=3%2F28%2F2011&id=pr626&ed=12%2F31%2F2011

Recently in Forbes, Renee Sylvestre-Williams said, “Managers who don’t create the right opportunities for their employees, don’t communicate with them, and don’t appreciate them often find themselves dealing with a high turnover rate. Good managers are people you keep in touch with even after you leave a position. Bad managers are people you keep track of so you can avoid them in future.”
http://www.forbes.com/sites/reneesylvestrewilliams/2012/01/30/why-your-employees-are-leaving/

Finally, let’s not forget top leaders like JC Penney’s Ron Johnson, who alienated JCP’s customer base and laid off almost 25,000 people in a predicted ruining of the company, wrapped in a multi-year rebranding effort.  This top leader of the company never moved to headquarters, but irregularly commuted to Texas from California and didn’t even know the upper level company management.  JCP now faces a totally devastated and demoralized workforce, totally untrusting of company leadership!  Which is it…not knowing…or not caring?  Does it matter?

Whether or not you believe employees feel as previously described, why are these employee opinions and concerns so universal?  Why are they not believed?  However, more large surveys are unnecessary.

Next:  Why the churn and waste?

Employee Churn Cost Business $2Trillion?

Strategy Doesn’t Matter?   part 6

In a recent Workforce Management report, Gary Krantz quotes Jason Corsello, Cornerstone's vice president of corporate strategy and marketing:

…19 million Americans plan to change jobs this year, or 13 percent of the total U.S. workforce, according to the survey. The churn will cost U.S. businesses an estimated $2 trillion to recruit and train new workers. [!!!]  Fourteen percent of survey respondents said they plan to leave their current job within six months to a year. About 25 percent are eyeing a move sometime in the next three years. Just 46 percent of those surveyed acknowledge having a long-range career with their current employer.

This is a really unsettling if not shocking report.  To those of us aware of the costs, it is surprising only in the total dollar estimate.  It serves to illustrate simply controlling employment costs is not the best way to save money when you don't know or don’t care what questions to ask  regarding the effects of your employment culture.

This company disconnect, the lack of managerial, customer and employee value and feedback, is not only a fundamental strategy flaw, it is the primary contributor to why employees have become so disengaged. Their opinions are neither sought nor are they valued and given weight even when learned.  At the core it has become the quest for profits price paid for the long term wellness and survival of the company.  In addition to the above, it is also VERY costly in ways most organizations don’t recognize, track or monitor.  If becoming an ”employer of choice” isn’t a motivator, try to determine what current shoddy recruiting, hiring, engaging, developing and retaining practices cost you every year.

Another recent Forbes talent retention article, by Mike Myatt, echoed past decades and vast numbers of past survey and study findings going back decades:

So, for all those employers who have everything under control, you better start re-evaluating. There is an old saying that goes; “Employees don’t quit working for companies, they quit working for their bosses.” Regardless of tenure, position, title, etc., employees who voluntarily leave, generally do so out of some type of perceived disconnect with leadership.”  

Thank you, Mike.  I would add most managers quit for the same reason.

In these uncertain times of slow recovery how can business afford…. how can our country afford…. $2 Trillion in employment churn and training……when the waste and wasted effort can be changed?

Next: $2Trillion wasted through not knowing, or not caring?

My Way Management Culture Fails. Why?

Strategy Doesn’t Matter?     Part 5

“My way” (or the highway) management uses intimidation, internal spying, micromanagement, inconsistency, fear, yelling, poor performance appraisals and threats of discipline or termination.  It is characterized by worker distrust, micro-management (too much communication) or lack of communication (secrecy), production inconsistency and constantly higher never-attainable metrics, high turnover, poor health, absenteeism, lack of engagement, fear and/or total confusion about what’s going on and why.  It may work in the short term but poisons engagement and crushes retention and long term stability.  Today, sadly, this is what most employees see every hour of every day in their working life. 

“…. an obnoxious boss can make life miserable for his or her direct reports, but new research covered at length in HBR this month, shows that tormented victims are actually more likely to engage in office nastiness themselves, thereby spreading the unpleasantness in a widening circle around an organization. …… we can add one more item to the list of the highly contagious: being a jerk.”

A recent Florida State University study revealed these results about supervisor treatment of employees:

39%: Their supervisor failed to keep promises
37%: Their supervisor failed to give credit when due
31%: Their supervisor gave them the “silent treatment” in the past year.
27%: Their supervisor made negative comments about them to other employees or managers.
24%: Their supervisor invaded their privacy.
23%: Their supervisor blames others to cover up mistakes or minimize embarrassment

Strategy failures look similar whether $Billion over-arching brand/sales strategies like Talbots or JC Penney or internal company/organization culture change. They fail to make the necessary and required changes and improvement and fail the ROI test.   Changes to Employee/Employment Culture are no different, but must represent more than change issues, which is not a strategy. 

New strategies are generally doomed because there is a lack of understanding on how to successfully implement the strategy, the management who will implement it and the reaction of those people most impacted by the strategy change, the People.  The employees know how disconnected and fragmented the companies are, and to most it’s laughable.  It’s only the leadership that doesn’t know.  So…the employees simply bide their working time until something perceived as better comes along….or as Don Weis commented on the LinkedIn's Chief Operating Officer Network Group, “Having buy in from the workforce ….. raises the odds of a great strategy, that will be enthusiastically implemented vs. "just another dumb initiative being thrown out there by corporate" .

Next:  Employee churn costs business $2Trillion?

Why Do Strategies Fail?

Strategy Doesn’t’ Matter?   Part 4

With the pace of change in today’s business and technology, it would be nearly impossible for top Leadership to be too strategic, unless it isolates leadership from what the organization actually does.   Leadership must know where they are, their base line, why and where they are going and its effects.  Providing it’s a good strategy, the execution plan must determine if it can be successfully implemented and how.  This is what top leadership is hired and paid to do! There is no more crucial function than change strategy and it becomes more critical the larger and more diverse the company grows.

Implementation is the hands on work, oversight and due diligence.  However, undertaking a strategy change must represent more than an idea or feeling.  It needs to be backed up with data and facts.  Many strategy makers are also assigned a role in developing the execution plan for implementation.  The larger the company the more difficult implementation becomes and the greater the need for the right strategy coupled with a successful execution plan. 

The biggest roadblocks to successfully implementing any plan are the leaders in charge of and the management implementing it.  Not knowing or understanding your own organizational capabilities, limitations and/or motivations is foolish.  Unfortunately, most companies have let managers manage their areas devoid of real and consistent cultural leadership and oversight.  Management culture defines the what, how and why management exists in the first place…. the basic building blocks and backbone of the company’s cultural essence or identity, the organization’s DNA. 

Without a leader, or group of cultural leaders, who value(s) certain actions and beliefs, who do certain things in a certain way and behave in ways that help the group succeed, the culture of the company becomes whatever each department manager thinks and manages it to be.  This is the “My way (or the highway)” culture, full of favoritism, secrecy, intrigue, anger, infighting and poisonous as well as (usually) illegal people policies and practices.  This type of management culture will doom even a good strategy. 

Next: My way (or the highway) management culture fails.  Why?

Talbots and JC Penney - Two Failed $BBillion Strategies ?

Strategy Doesn’t’ Matter?   Part 3

The first is the recently ended Talbot’s saga under the leadership of Trudy Sullivan.  In 5 years this CEO oversaw a race to the bottom of a highly regarded mature/professional women’s apparel retailer.  Stock plummeted from $22 to $1.50/share, while she received bonuses every year.  In mid-2012, Talbot’s was purchased by a private venture equity firm, Sycamore Partners, for $2.75/share, or somewhere within the range of $197- $369Million on sales of $1.4Billion!  This represents the lowest price to sales ratio ever paid for a retail company…. in history!  

Apparently unable to exist without the kind of leadership that got them there, after resigning as CEO in December of 2011, the same Trudy Sullivan remained as one of the board’s negotiators.  The result:  Shareholders received $2.75/share - 10% less than the $3.05 offered in early 2012 or $2.95/share originally offered in 2011.  As Motley Fool said, “That's right, in true George Costanza fashion, they held out for less money!”

Speaking of less money, the other story opens with Yahoo Finance reporting JC Penneys made it to the top of the most hated companies in the U.S.  This is the JC Penney saga under ex-Apple president, Ron Johnson.   2012 annual sales have fallen by 24.8% to $12.98 billion and the stock has plummeted from near 62% to around $15/share.  JCP is now valued at $3.3 billion, down from almost $8 billion last year.

When hired Johnson reportedly bought $50,000,000 in shares at just under $30/share.  Although this was both pro-Johnson faith and a pro-Johnson/JCP 6 year equity gesture, why would any individual want to lose $25,000,000+, even on paper?  For that matter, how many could?  We will have to wait and see if his strategy works.  So far it doesn’t appear to have been well designed, unless the plan was to lose $Billions!

An accompaniment to the (so far) failing retail strategy was the expected ousting of Michael Theilmann, the former Exec. VP and Chief HR and Administrative Officer.   As a follower of JCP, one of the bright spots within JCP’s recession performance – where most retailers performed poorly - was the noticeable upgrade in positive, helpful and smiling floor and management people.    

Where these apparently successful People policies will go under Dan Walker, new CTO and former Apple CTO with Steve Jobs and Ron Johnson, is only one of the sagas to be played out.  As of this post, JCP will have shed 25,000 people since Ron Johnson took over.  Apple products are the most highly esteemed and sought after tech products in the world.  New products and upgrades create a stampede of interest.  This is not the retail apparel and department store world.  Only time will tell if the Johnson and/or Walker strategies will be successful.

Next: Why do Strategies Fail?

A New Strategy or a Good Strategy?

Strategy Doesn’t Matter?    Part 2

We’ve all heard the endless stories:  business leaders lament the lack of profit, slow growth, slow economy, European troubles, need to streamline, become more efficient ….  Human Resources lament the lack of influence, no seat at the table, restricted budgets, being relegated to processes, report generation, lack of top leadership’s support to change things…. Business and HR both talk of the lack of qualified people, rate of turnover, bad hires, lack of engagement, lack of interest, poor work attitudes, efficiency or job performance, distracted workers and terrible work habits ….Unless you like these results and you and your company are willing to endure, a good new culture strategy is needed.

Good strategy formation requires you look at your organization from its managerial, employee and/or customer point of view!   Truly successful customer driven organizations have always had the customer/consumer, and their employee’s interaction with those customers, as the top influencers of organizational plans.  Compare this to - or versus – the lip service most companies give to customer service by viewing customers and employees as top down organizations do.  Only those truly comprehending the keys to successful strategy implementation have bothered to get to know their organizational capabilities, limitations, motivations, the feelings of its own people and their consumer/customer base as a basis for forming that successful strategy.

Most companies fail to investigate, study, collect data and assign a proper value to customer’s or consumer’s views, as well as their employee’s direct interaction with those customers.  Without this essential priority in formulating a great strategy, tremendous waste occurs, as described by John Stumpf.  This same waste is mentioned by Brenton Van Breda, in his, “STRATEGIC PLANNING:  A practical approach to developing strategic plans and achieving objectives” https://www.box.com/shared/git0raxd2h.  For those unfamiliar with, looking for a simple outline for, or a compressed version of, a strategy formulation process, I think you will find it very interesting.  For more detailed strategy formulation processes (104 pages) try these slideshare presentations from drawpack.com:

http://www.slideshare.net/anicalena/strategic-management-business-presentation-slides

Thanks John and Brenton

To those of us in retail following what bad strategy, plans and outcomes look like, two recent highly visible overarching strategy change examples have played out or are being played out for all to see:

Next: Two Failed $Billion+ Strategies - Talbots and JC Penney