Leadership Fundamentals

While looking around the web and thinking about leadership topics, I came upon this article about employee loyalty and thought it well-written and thoughtful, so I wanted to share it with you all. So I’ve copied it here and, of course, credited the writer. It reminded me of how years ago, when my husband and I had our own typesetting company, one of our employees referred to it as a “sweet shop”. When we asked him what he meant, he told us it was the fact that “when you come into work, you feel like you’re home.” That feeling promotes a sense of loyalty that is as strong as steel. So that is why this article interested me. Without further rambling on my part, here it is.

Back in 2008, my firm was asked by The Lane Construction Corporation to conduct a survey of their employees on the topic of loyalty. The results of the survey, and the additional unanswered questions that were raised by them, have been the subject of much of my thinking time ever since. While I have formulated many theories on how Lane’s culture of loyalty developed, the one conclusion that can be drawn is that the culture is unique and worthy of being documented.

Background

Prior to conducting the survey, loyalty had been extensively discussed and debated by Lane’s management, primarily during planning sessions. Management felt that the company’s culture was strong and formed the foundation for aggressive growth. The company had pursued growth through internal channels, as well as acquisitions, without a deterioration of quality or an undue strain on their infrastructure. The growth had led to improved financial performance, and it was only natural that management wanted to continue on that path. They felt that the company’s culture was strong and able to support further expansion, but they wanted to be sure. In addition, they simply wanted to confirm that all employees felt about Lane the same way they did. Therefore, they decided to undertake a double-blind survey of all employees that would assess the strength of their culture and the loyalty of their employees. At the time of the survey, Lane had approximately 1,200 employees.

The survey was conducted online in a manner that completely preserved the confidentiality of the participants. All programs and databases were deployed on our servers, under a sub-domain web address that was secured. Participants were given unique user names and passwords, to ensure that there was no unauthorized access to the website. However, once access to the website was granted, there was no attempt to attribute answers to survey questions to specific individuals. No session data were maintained, and no cookies were set. In essence, all reasonable steps were taken to ensure that participants could submit their responses to survey questions in a totally anonymous fashion. The goal was to ensure that participants answered survey questions openly and honestly, without any fear of possible reprisal.

Survey Results

To some of us, the survey results were nothing short of astounding. A full 75% of all participants responded that they were totally loyal to Lane, and would not even consider offers from other companies under any circumstances, even if those offers were for better opportunities or higher compensation. Many of us feel a sense of loyalty to the company for which we work, but most of us would be excited for an offer of a better job or higher compensation. Not at Lane. Three quarters of Lane employees said they would not leave under any circumstances. The remaining 25% of employees said they considered themselves totally loyal to Lane, but would consider offers for better opportunities or higher compensation. In our experience, the views of this remaining 25% are more reflective of almost all employees at other companies.

The survey touched on several other topics related to loyalty, but it was the main results of the survey that caused us to pause and consider the implications for Lane. Immediately, we began asking ourselves obvious questions, such as:

* How did this type of culture develop at Lane?
* Does Lane’s culture provide them with a competitive advantage?
* Can the culture be sustained?

In the remainder of this document, we will try to explore each of these questions in a little more depth.

How Did Lane’s Culture Develop?

No one at Lane seems to be able to answer this question, but employees seem to know that the culture is real, and that it has been there for a long time. The culture seems to be a natural assumed part of their everyday working life at Lane. The Lane Construction Corporation was founded in 1890, and it would not be surprising to us if it were learned that the company’s culture stemmed from those early days.

One symbol of the culture is Lane’s published Mission, Vision, and Values Statement. Care for People is clearly spelled out in the Values Statement. We believe that these types of corporate documents are important to defining and developing a culture. However, even more importantly, Lane seems to have lived up to their stated values over many years. When asked to provide examples of instances when Lane demonstrated their values to them, employees cited numerous times when the company continued to pay them during periods when construction projects were halted for various reasons. They also cited numerous situations when the company came to their aid during periods of personal tragedy. Therefore, it is our conclusion, that one element that has contributed to the development of Lane’s culture is a clearly stated set of values regarding people. In addition, the company seems to have adhered strongly to those stated values, even though other decisions may have been easier and less expensive. In other words, the company has “walked the talk”.

Legacy is certainly another element that has played a role in the development of Lane’s culture. A high percentage of employees have been with Lane for many years, and in some cases, through generations of families. A case in point is David Benton. David is currently Executive Vice President of Lane’s Southern Division, and he was the sponsor of the survey of employees that we conducted. David has been with Lane for over 30 years. His father was with Lane for over 40 years. His brother is currently with Lane, has been there for over 40 years. His father-in-law was with Lane for over 40 years. His brother-in-law is currently with Lane, and has been there over 20 years. David’s legacy at Lane may be somewhat extreme when viewed against the average employee at Lane. However, there are numerous examples where multiple members of the same family worked at Lane for at least some period of time. Therefore, it seems reasonable to conclude that many employees view Lane as something more than just a place to work. The company is linked to the family history of many employees, and that has certainly contributed to the development of the Lane culture.

Does Lane’s Culture Provide a Competitive Advantage?

There is no doubt that Lane’s culture is a strategic asset. Most companies with which I am familiar would deeply covet such a culture. It is also easy to conclude that Lane’s culture provides the company with operational strengths on a day-to-day basis that are just not present in other companies. However, for a strategic asset to become a competitive advantage, it must be able to be leveraged in the marketplace. It also must be visible and evident to customers, suppliers, and competitors. When viewed in this context, the answer to this key question is not so clear.

Lane currently acquires almost all of its business through government sponsored bids. In the bidding process, as long as all bidders can demonstrate the technical ability to do the job, the lowest bid wins. Having employees that are more experienced in the company’s methods than those of competitors does not necessarily translate directly to lower costs. A highly experienced workforce would probably translate better to a company strategy of higher quality, rather than one of low cost producer. However, Lane’s experienced workforce does lower costs of a project in an indirect way. The higher level of knowledge and experience on a project reduces the amount of rework that must be done, the processes are cleaner, and fewer mistakes are made. Nevertheless, these attributes do not necessarily lead to a low cost bid on a project, and any government entity that is choosing a vendor for a project would be hard pressed to select one that is not the lowest bidder.

It is our conclusion that while Lane’s culture certainly provides the company with operational strengths and flexibility, it does not provide a strategic competitive advantage in the markets where Lane currently competes. This would likely change if Lane decides at some point to enter markets where quality of work is paramount to winning jobs.

Can Lane’s Culture be Sustained?

Another obvious question that comes to mind when being exposed to such a unique culture as Lane’s, is how long can this last? There is no way of predicting, but it seems to have lasted a long time at this point. One way that strong cultures get changed and diluted is through mergers and acquisitions. Yet, Lane has made many acquisitions over the years, and has folded them into the company and their culture very effectively. The Lane culture appears to exist everywhere in the company, regardless of how employees came to be part of Lane.

In fact, Lane’s culture was probably a strength when integrating acquisitions. Seeing and meeting large groups of loyal, dedicated Lane employees would have to ease the anxieties of employees whose companies were being acquired.

Lane has grown significantly over the past several years, through internal growth as well as acquisitions. During that growth, the company has done a masterful job of maintaining the strength of their culture. However, the question at hand is can it continue? There is no doubt that the company wants to continue to grow, and more acquisitions seem likely. Logic would say that further growth over time, especially through acquisitions, will lead to dilution of culture, regardless of how strong that culture might be. Our guess is that Lane’s culture will evolve over time, as is only natural, but most of the major attributes of the culture will be carried forward. The culture is so strong at Lane that it is impossible to believe it will totally disappear within the foreseeable future.

* * * * * *

The culture of loyalty is extremely strong at Lane. In our view, it is one of a kind. It took decades to develop, but was certainly guided by the company establishing values that it thought were right, and then living up to those values. While the culture provides a wealth of operating advantages to the company on a day-to-day basis, it does not necessarily create a competitive advantage in the market in which Lane currently does business. However, the culture is strong enough to be a competitive advantage should Lane decide to enter different types of markets. We believe the culture is so strong at Lane that we would not bet against it surviving over the long term. It has already survived through numerous growing pains, business pressures, and economic cycles. In our opinion, the culture and the company will go hand-in-hand for many more decades into the future.

McGee Partners LLC is a professional services firm located in Avon, Connecticut. The firm offers professional services in the areas of business management, financial management, and business improvements. More information about McGee Partners can be found on their website at http://mcgeepartners.net William M. (Bill) McGee is a Managing Partner with the firm and led the survey on loyalty for Lane.

Article Source: http://EzineArticles.com/?expert=William_McGee

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In this episode, Chris McCann, President and COO of 1-800-FLOWERS, America’s largest florist and online gift shop, goes undercover to try and understand what practices the company is lacking in and how to battle the image of his company as simply an internet business.

A little background information: His older brother, James McCann, started his chain of florist shops — at the time known as Flora Plenty — in the New York City Metropolitan area in 1976. In 1986, he made the important decision to acquire the 1-800-flowers phone number and changed the company name. They were reportedly the first company to incorporate a toll-free number into their business name. They were no stranger to leadership.

Their vision of where business was headed had them on the internet in the 1990s. They have been around for 33 years and have grown to a billion dollars in annual sales. They pride themselves on quality and in knowing who their core customers are. And they know how to keep their costs in line. They had 5 service centers a few years ago and were able to cut that down to 2, offering their employees the ability to work from home and make more money. You’ll recognize some of their companies immediately — Fannie May Confections, the Wine Tasting Network, the Popcorn Factory, Plow & Hearth.

They obviously know how to run a successful business, but they wanted to know firsthand where improvements could be made that would benefit the company and its employees. So Chris went undercover, and spent a week going to several 1-800-flowers locations. He discovered the reason why one of their most profitable locations did so well. The woman who managed it, Dee, had built strong relationships with people in the community. She treated patrons like family and their loyalty made them staunch customers. Chris recalls that his brother Jim’s philosophy is to build relationships first, then do business. Chris considered her “fantastic”. In fact, he was so inspired by her, the company named a floral arrangement after her: Dee’s Paradise.

As usual, there are employees here who are of great value. The creative floral designer who paid for her own classes and seminars to keep up with new trends in the industry. The store manager who understands that well-to=-do potential customers are put off by the company name, or don’t realize it’s an actual florist, not just an internet service. When an undercover boss is willing to go to the trenches, he leaves with a bundle of information which, if acted upon, will strengthen the company and create dedicated employees.

P.S. Chris did extremely well with the flowers, but not so good with the Fanny Mae chocolates. It was reminiscent of Lucy and Ethel’s I Love Lucy episode which took place in a candy factory. Neither one of them could keep up with the conveyor belt and ended up stuffing chocolates in their pockets and mouths and anyplace else they could think of.

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In the April 2, 2010 airing of Undercover Boss,  Rick Arquilla, President and COO of Roto-Rooter, goes undercover to examine the daily lives of his workers. Although it’s not a particularly easy episode to watch — sewage, opening drains, pulling out hair and old towels from stopped up plumbing — it is once again a real eye opener for those, like myself, who are  interested in the day-to-day work lives of the unsung heroes of the work world. Heck, I remember one of my own crises only this year, when our kitchen sink stopped up. Who do you think we called? Yep, that’s right – Roto-Rooter! We were faced with dozens of ads in the Yellow Pages, but we didn’t want to fool around. We’ve had experiences in the past with local companies which didn’t call us back or couldn’t come within 24 hrs. In our case, there had been a built-up of grease. Parenthetically, I should say we have septic and well water. What I learned from it is to wipe grease and oil completely off pans and dishes with paper towels and try and prevent it from getting into the system at all.

But I digress. Let’s get back to the show, shall we? We first see Rick in New Orleans, then in Chicago. He’s going under the name of “Hank”. Once again, the employees have a hard time training the newbie. You can see this in their expressions, rolling of their eyes, and their comments. It’s obvious their  opinion is that this newbie is NOT going to make it. What really amazes me is how good most of these people are at their jobs. I’d do anything to hold on to them. For instance, the customer service person who tells him “you talk AT the customers and interrupt them”. He concedes that he has done that a number of times. She explains “I love our customers”. She tells them “basically, you want to be their hero”. He admits ” I gotta be a little warmer and fuzzier”.

I loved it when he was back in New Orleans, and being shown the ropes again at a nursing home with a problem. His “teacher” is obviously frustrated and says “Today’s his first day. Only time will tell — he may be my boss one of these days.” Well, that made me grin. Rick said “This was probably a little more than I had bargained for.”

As with past shows, he gets to have a one-on-one conversation with one of the workers. Chris reveals his past problems and recovery from alcohol and drugs, something that almost destroyed his life. Rick can fully sympathize, because his own father was an alcoholic, and it destroyed his life and impacted on his children. You watch Rick experience very emotional reactions, and he is clearly in tears hearing the worker’s story. In the end, he confesses “You taught me how to be a better person”.

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I have just watched – for the first time – an episode of Undercover Boss, a program that is aired by CBS. This episode, which aired Feb. 28, 2010, followed Dave Rife, one of the owners of White Castle (the hamburger chain) in his one-week undercover quest to experience and understand the day-to-day workings of the average White Castle and its employees. His experience covered a number of skill sets in different positions and at various White Castles around the country, from working at grilling to manning the take-out counter, to packaging for frozen food distribution.

He bungled most of the jobs and admitted later that he hadn’t realized just how hard they were. Along the way, he discovered that:

• Bureaucratic directives did not always accomplish what they set out to do
• Employees many times improved the process on their own initiative, even though they were afraid of being fired for not following corporate protocol
• He discovered, to his own surprise, some very special people who brought their own great insights and talent to the job and were ready and able to take on more responsibility. Several of them were awarded grants due to Dave Rife and White Castle – either for college scholarships or other needs
• There were some programs White Castle could put in place that encouraged career development

Disclaimer: I don’t watch a lot of TV, and when I do, I like travel and cooking shows, documentaries, that kind of stuff. I never watched any reality shows at all. My medium is books and internet. The only reason I watched this show was because of a blog post I discovered through LinkedIn. I’ll be watching some more of it, though, because I have a great deal of admiration for leaders who can make the jump to get down there with the producers of their product and out of the board room for awhile. It’s way too easy to forget what it’s like down in the ditches.

You can watch this and other episodes of this show here: Undercover Boss

On a personal note: Gosh, I loved White Castle when growing up in the Bronx, NY. My brother Bob, a navy man [now gone from us] would come home on leave and I swear, he could eat 16 White Castle hamburgers all by himself. Funny thing, to the end of his life he was thin as a rail and I remember as a young girl that he was just gorgeous in his navy whites.

It was not unusual for him to come over with a fellow navy guy and go out and order 4 or 5 dozen hamburgers from White Castle for all of us. This show brought back fond memories of our White Castle mania days. I haven’t had one since the Bronx, many many years ago. Of course, today I have diabetes, so it can’t be on my menu anyway. Even if that were not true, there is no WC near me [maybe thank God!].

I fully intend to watch future shows and, if you are interested in leaders who really want to understand how their businesses work, you will too.

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Part 1: Employee Engagement Research

First, Break All the Rules: What the World’s Greatest Managers Do Differently
is based on 2 Gallup Research Studies taken over the last 25 years. – the largest study of its kind ever undertaken. The first one zeroed in on Employee satisfaction and productivity, and asked “What Do the Most Talented Employees Need from their Workplace?” The answer was that talented employees needed great managers. Gallup recorded interviews with over 80,000 managers at different management levels, with different styles of managing, and a million employees, to find out the core attributes of great managers and employee performance.

Their findings regarding employee engagement are intriguing. One conclusion is that key employees do not fit a mold. You should not, and cannot, try to make them all behave the same. They bring their own core values and behaviors to the workplace, and each one contributes their own perspective and way of doing things. They may react differently to the same treatment. Thus, if you do not see them as individuals, with inclinations and behaviors formed by their unique selves, you may lose the best part of each of them.

If organizations view employee satisfaction as not being critical to the company’s success, consider these eye-opening facts stated by Gallup:

“Actively disengaged employees erode an organization’s bottom line while breaking the spirits of colleagues in the process. Within the U.S. workforce, Gallup estimates this cost to be more than $300 billion in lost productivity alone. In stark contrast, world-class organizations with an engagement ratio near 8:1 have built a sustainable model using our approach. As organizations move toward this benchmark, they greatly reduce the negative impact of actively disengaged employees while unleashing the organization’s potential for rapid growth.”

“Through rigorous research, we have identified 12 core elements – the Q12 — that link powerfully to key business outcomes. These 12 statements emerged as those that best predict employee and workgroup performance.”

In deference to the Gallup Organization, I won’t lay out those 12 elements here, but I provide a link from Gallup for you to uncover them yourself.

Employee Engagement Overview

Stay tuned for Part 2, where we’ll discuss Gallup’s research into great management.

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Even in today’s economy, companies need to focus on getting and keeping good employees. In fact, with the workforce getting smaller, it is more important than ever to retain the most productive, team-oriented, creative employees.

Key Factors in Creating Job Satisfaction in Key Employees

• Eliminate boredom. Many people move on simply because they have lost interest in doing the same thing every single day. Involve them in new and interesting projects. Ask for their input on improving processes. Send them for training in new software or other work-related practices.
• Communicate! Don’t leave them guessing about what you’re thinking and doing, as well as what the company’s plans are, its financial status, and any projects under consideration.
• Reward special efforts. If you respond the same way to special and intense effort as you do to day-to-day work habits, you will take away their self-satisfaction at going above and beyond the norm.
• Compensate according to skills and creativity, so they’ll know the company is fair and recognizes excellence. You’ll end up with excellence.
• Talk to them. Be involved with them and the parts of their lives that have nothing to do with their jobs. Are they having difficulties? Did they enjoy their weekend? What do they like to do in their free time?
• Does the team work well together? If not, uncover the reasons behind this so you can eliminate them. Nothing kills job satisfaction like a team that doesn’t “fit”. Nothing does more to guarantee successful project development than an enthusiastic and well-integrated team.

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