By Margery Weinstein
Sometimes it’s a relief when a leader leaves. What large organization, after all, doesn’t have its “seasoned” corner office dragon who predates everyone, and who no one can figure out how to get rid of? But more often, companies are proud of their leaders, especially the ones they took pains to develop over a decade or two. After years of mentoring, job rotations, and leadership retreats—when they’ve finally made it to the top and are ready to give back to the organization—the last thing you want is for them to walk out the door. We’re still in an economy that’s more oriented to the employer than the employed, but with a slow recovery in progress and better times hopefully ahead, you need a plan to prevent your competitors from successfully wooing your best leaders.
Monitor Retention Rates and Patterns
First, you need to know what you’re dealing with. Monitoring leadership retention rates and patterns is a good place to start. Once you notice patterns, such as leaders leaving after, say, five years, or leaders citing the same cause of departure in their exit interviews, you can begin to craft a plan for improvement. Keeping careful watch of who’s leaving, how long it takes for them to leave, and why they leave is just what Toshiba America Medical Systems, Inc., does. “Toshiba works closely with the executive team on a continuing basis to try to stay ahead of the curve so that if issues such as employee retention arise in their department, we can do what we need to support them,” says Vice President, Human Resources and Information Technology Mark Mindell. “At Toshiba, we have noticed there is a link between the level of support provided and a department’s ability to keep top performers.”
Mindell says tracking the numbers of its leadership departures and the causes behind those leavings is central to his department’s mission. “The two primary reasons for the HR department to exist is, one, to find the best people and, two, to retain them. Every two years we do succession planning down through the senior manager level,” he says. “The HR business partners work closely with each department to monitor top performers and give them the support they need to do their jobs well. One of the ways we support them is through the benefits we provide, and Toshiba has one of the best benefits programs in our industry. We also provide tuition assistance and competitive compensation plans.”
In addition to working with HR business partners, Toshiba does quarterly surveys with randomly selected employees, and every two years, it does a survey with all employees, giving it better insight into what motivates employees and their current levels of satisfaction. “Based on this feedback,” says Mindell, “we are constantly adjusting our programs to motivate and retain top performers.”
While tracking key retention numbers is essential, the strategies Toshiba creates in response is no different for leaders than it is for other top performers. “Toshiba’s thought is that we want to retain all top performers regardless of level,” Mindell explains. “Now, there may be a difference in strategy because of job description. For example, we might send a marketing executive to an MBA program, which we may not do for an engineer, but instead, we’ll offer the engineer a different opportunity. Toshiba has a good tuition reimbursement plan, and so we use that to help each employee educate themselves in those areas that will help them and help Toshiba.”
As Baby Boomers retire, and Generation Xers move into leadership, Toshiba is considering how to adapt its retention strategies. It believes age plays a role in creating incentives for inspiring leaders to stick with the company. “We realize that the managerial style that worked in the past is not going to work today,” says Mindell. “What we are finding is that what motivates an employee of Generation X or Y is not the same thing that used to, and still does, motivate a Baby Boomer employee. One size doesn’t fit all, and as Baby Boomers retire and new generations replace them, Toshiba needs to be able to determine what these new employees want for themselves, where they see themselves in five years, and how Toshiba can help them achieve their goals.”
For example, says Mindell, employees in the Baby Boomer generation tend to judge the success of their career on their ability to move up in an organization. The younger the employee, the less they care about level, title, and money. “They do not necessarily want to become managers; they want to be able to do what they love doing and stay hands on,” he says. To respond to this variation in motivators, Toshiba has developed technical ladders in addition to the managerial ladders so an employee can still move up while remaining an individual contributor. For example, now an employee at Toshiba can rise from being a customer engineer to being a level two or level three customer engineer, allowing them to stay technically focused and still move up through the organization.
While mentoring can play an important part in creating leadership loyalty, Toshiba takes the view that all employees, from day one, deserve mentoring in the form of one-on-one attention. “Toshiba does not have a formal mentoring program. Because we are a flat organization, it doesn’t make sense,” says Mindell. “Informally, people pair up, and when a new employee comes on board, managers take the time to show them around and help them learn the ropes. Our HR business partners and staffing group sit down with every new employee to answer questions, introduce them to people, and help them get settled.”
But, despite the lack of a formalized mentoring program, employees quickly get a sense at Toshiba that they are valued. “When an employee begins their career at Toshiba,” says Mindell, “they quickly pick up that there would be a hole if they left. Because Toshiba is a lean company, every employee is needed, and they quickly realize their value.”
Even if, like Toshiba, your organization doesn’t have a formalized program to retain leaders, it’s worth taking the time to think about what’s most important to those who have risen to the top of your organization. “The most common mistake any company can make is to assume what motivates us to perform well are the same factors that motivate others,” says Mindell. “Rather, we need to take the time to learn what motivates employees and then adapt. The key for retention, satisfaction, motivation, and everything related to our employees, is to first accurately understand what motivates each employee, and second, be flexible enough to adapt to that which motivates them. And then, continue to adapt as those motivational factors change.”
Promote from Within
At American Fidelity Assurance Company (AFA), loyalty is an important tool for retention. “American Fidelity Assurance prides itself on a strong promote-from-within philosophy, with approximately 41 percent of our positions filled by colleagues within the company,” says Assistant Vice President, Training Bev Wood. “In the last 12 months, 78 of our 190 open positions were filled by colleagues within the organization. Only after we have given our colleagues an opportunity to apply and interview for positions, and we feel that we do not have a good fit for our position internally, will AFA look externally.”
Some 94 percent of the company’s officers were promoted from within. “As evidenced by their tenure in the company, the time we place in trying to match colleagues’ long-term goals with AFA’s is fundamental, and it works,” says Wood.
A secret to AFA’s leadership retention success is it recruits based partly on which candidates are interested in staying with the company the longest. “AFA looks for colleagues who are interested in long-term commitments. We are clear that we are a conservative organization that makes decisions on a long-term basis. Our conservative philosophy has allowed AFA the ability to provide job security while other companies adjust staffing with layoffs,” Wood points out. “Historically, AFA has been layoff-averse. Colleagues can work as long as they want. AFA does not have mandatory retirement requirements at any level. We believe in our approach to hiring the right colleagues for our culture, and because of that, the average years of service for our colleagues is 10.”
Developing a culture that values longevity is key to AFA. The company monitors retention across all levels of employees. “Creating a culture where people feel they can come to work and make a difference for our customers and community resonates with colleagues and leaders,” says Wood. “The All Colleague Bonus benefits all employees. In a company committed to continuous improvement and a promote-from-within philosophy, colleagues find it inspiring that they are not limited by their current role. Growth is encouraged at AFA through multiple training opportunities, career development resources, and the Tuition Reimbursement Program.
Along with creating a culture that is livable for its employees, trainers at AFA study the needs of its differing generations of workers. “With nearly half of our new hires during the last year age 34 or younger, we realized the importance of establishing and monitoring benefits and a culture that is appealing to those in this generation, says Wood. “As part of the commitment to a long-term career with AFA, we look for colleagues who are interested in continuous learning, as this is a requirement whether you are age 24 or 70. The continuous learning process is integrated into our career development program. A colleague’s success depends a great deal on how they embrace continuous learning and change. Colleagues and leaders nearing retirement are encouraged to take training courses and keep their skills fresh.”
Several years ago, the company made a significant effort to provide more flexible work arrangements and telecommuting, recognizing that work/life balance was increasingly important to the younger generation workers, says Wood. One AFA manager reports: “Working at home one day a week has really helped with planning and projects. Although colleagues will call me at home if they need me, the fact that I’m not physically at the office has reduced interruptions. I’ve found colleagues are less likely to ask me those ‘There’s Cheryl, she will know’ questions versus digging for answers themselves. I’m not only seeing the benefit of providing me with quality time but the benefit of colleagues becoming better problem solvers.”
In addition to paying attention to what motivates its managers, the company has crafted a specialized mentoring program to develop leaders. Since 2005, more than 150 colleagues have participated in AFA’s Mentoring Program (AMP). With the purpose of “Developing American Fidelity’s future, one Colleague at a time,” participants are paired based on assessment results and mentee goals and objectives. Current leaders serve as mentors, but also can assume the role of mentee. Mentees are often less experienced supervisors and colleagues interested in playing a leadership role in the future. “One benefit of the mentoring program is that it allows colleagues to comfortably communicate concerns and ask questions in an informal setting,” says Wood. AMP statistics show success for the participants: Nine colleagues have received promotions since participating in AMP; 86 percent of the partners were successful in meeting their goals; 88 percent of the mentees indicated their mentors played a key role in achieving their goals; and 88 percent of the partners plan to continue the professional relationship.
Other programs also place AFA leaders into a teaching role. The company introduced its Leadership Reading Program two years ago to rave reviews. Participants read a designated book and meet for one hour over four weeks to discuss and apply new learning techniques. Guest facilitators are the AFA Executive Management Team and include the company president, who introduced leaders to “The Gold Standard” by Mike Krzyzewski. A learning opportunity, termed “Leadership Circle,” was developed by AFA’s Association Worksite Division (AWD) to improve communication among the president of the division, managers, and team leaders. The group meets quarterly for company and division updates or concerns, leadership training, and the opportunity to hear from outside speakers. Past speakers have been Oklahoma’s governor, lieutenant governor, and Oklahoma City’s mayor, who discussed the leadership qualities and skills needed in today’s ever-changing world.
Though development programs are critical, trainers also shouldn’t underestimate the power of “thanks,” says Wood. “Recognition and reward are important at all levels of the organization,” she says. “‘Thanks for a job well done’ goes far in keeping leaders within a company. Organizations should go out of their way to recognize and highlight outstanding performance.”