High-Impact Performers
Wednesday, July 23rd, 2008In Leader to Leader’s Premier Issue, I discussed retaining high-impact performers.
The workplace is changing. Job security isn’t what it used to be. We tend to focus, understandably, on the profound impact these and other workplace changes are having on the lives of individuals. But too often leaders overlook the equally profound impact these changes are having on their organizations.
The fact is, the “new work contract”- employees taking responsibility for their own careers, and corporations providing them with career-enhancing but impermanent opportunities-can be as difficult for organizations to manage as for individuals. We as leaders still understand little of the mechanics of retaining essential high-performers in turbulent times.
Our task is complicated by four additional, less widely acknowledged trends:
* The reduced status of working for a “Fortune 500″ corporation.
* The frequent lack of connection between pay and contribution.
* The decline in opportunities for promotion.
* The rise in the influence of the “knowledge worker”.
Peter Drucker has noted the dramatically increased importance of the knowledge worker in modern organizations. Yet we are often still unsure what that means for how we should lead. Bill Gates has said that Microsoft would do “whatever it takes” to attract and retain the brightest software developers in the world.
Innovative high-technology corporations (such as Sun Microsystems) pay employees large bonuses to recruit top talent. In tomorrow’s world the “intellectual capital” brought in by high-knowledge employees will be a major, if not the primary, competitive advantage for many corporations. As the perceived value of key knowledge workers increases, the competition to hire these workers will intensify.
A Strategy for Retaining High-Impact Performers
Leaders can no longer afford to let the vagaries of the job market determine who leaves and who stays with the organization. We must learn to manage our human assets with the same rigor we devote to our financial assets. The following seven steps can help you accomplish that task:
1) Clearly identify whom you want to keep.
In recent years many organizations have focused on those people they should get rid of rather than those they should keep. Many downsizing “packages” give all employees with similar levels of experience the same incentive to leave. Unfortunately-for the organizations-the employees who decided to leave were often the high-impact performers who could find other work quickly.
2) Let them know that you want to keep them.
Amazing as it may seem, many high-impact performers who are asked why they’ve left an organization report, “No one ever asked me to stay! ” Many organizations have deliberately not told high-impact performers that they were special in any way for fear of alienating others. In the future it will become increasingly easy to retain “average” performers and increasingly difficult to retain high-impact performers.
3 ) Provide recognition.
Although compensation is an important factor for retaining high-impact performers, several studies indicate that it is currently not “the” most important factor. Typically, the chief reasons great people leave major organizations are lack of recognition, lack of involvement, and poor management The CEO of a leading telecommunications company has recently embarked on an innovative approach.
Division-level executives provide a quarterly report on high-impact performers who should be recognized. The CEO calls these individuals personally, thanks them for their contributions, and asks for their input on how the corporation can increase effectiveness. The CEO believes this process not only helps retain key talent but also generates great ideas for continuous improvement.
4) Provide opportunities for development and involvement.
One of the world’s largest consulting/ accounting firms has embarked on an original program to identify and cultivate high-potential leaders. As part of the process, young leaders engage in an “action learning” project in which they work on real-life problems facing the firm.
This gives young leaders a fantastic developmental opportunity and gives the firm valuable input on solving real problems. It also enhances the young leaders’ commitment to stay with the firm. The firm’s leaders say that such a process would not have been tried just a few years ago, for fear of alienating other partners, but that today the firm has no choice but to identify and retain high-impact partners.
5) Challenge the compensation plan.
Organizations unwilling to make performance rather than mere seniority the key driver of pay will face an increasing challenge in keeping top talent, especially young talent. One Fortune 500 industrial company recently refused to implement a variable, performance-based compensation plan because half the employees felt uncomfortable with the concept.
The corporation neglected to measure which half felt uncomfortable with more differentiated pay; but my guess is that it was the lower performers. High-impact performers of the future will be able to demand and receive substantially more pay than their lower performing peers. A “socialistic” compensation plan combined with lowered potential for promotion leads to an “average” workforce.
6) Relax the culture.
In addition to reducing bureaucracy, high- performing, high-tech companies like Netscape, Sun Microsystems, and AT&T Wireless (formerly McCaw Cellular) are known for providing freedom in dress code, scheduled hours, and lifestyle choices. While employees work very hard, they appreciate the lack of rules, regulations, and restrictions that can inhibit their freedom without increasing their productivity.
7) Provide intrapreneurial opportunities.
Gifford Pinchot (inventor of the term intrapreneur) has shown how major corporations can provide opportunities for semiautonomous enterprises to operate within the larger corporate structure.
By allowing high-potential leaders to “run a business” inside a larger business, corporations can gain commitment while simultaneously developing people. People who see opportunities for “ownership” and personal development are much more likely to stay with the organization.
In the past when a high-impact performer in a major corporation was offered a position at another company, the employee was likely to say no. Most managerial and professional jobs offered good pay, job security, promotion potential, and status.
Today the high-impact employee is much more likely to say yes. To retain such talent in the future, organizations will need to take decisive action.
Only those organizations able to create a dynamic new human resource model will retain the high-knowledge talent needed to succeed in tomorrow’s globally competitive environment.
Life is good.
Marshall
UPCOMING EVENTS:
July 25, 2008: Join me for a special live conversation on Friday July 25th with Learn From My Life. This 60 minute will be driven by your questions and will enable us to drill deeper into the key behavioral changes that will make you a better leader and more accomplished individual.
August 1, 2008 - Dartmouth - Tuck Executive Program
August 25-26, 2008 - Indian School of Business - Hyderabad
September 15, 2008 - New York - SHRM - contact Marshall if interested
www.MarshallGoldsmithFeedForward.com
