Monday, March 14, 2005

"People Quit People Before People Quit Company"

"People quit people before people quit company." I'm not sure where I heard this first. When I tell others that I don't work for money, they'll snap back "yeah, but you're different". Am I? I might be on the extreme end of the spectrum, but I believe most people are--in most way--like me. We work because we feel appreciated; and that by working harder, we will learn more and therefore, the more we will be valued by our supervisors and our company.

Harvard Business Review, February 2005
Transforming an Industrial Giant

"First was the very simple message: Be number one or two in each business, or you will not be successful ... The second thing I admired about GE is that people are really the most important thing. I always wondered why they have such excellent people. Was it just that they pay more in the U.S.? I realized it was their people development program--Section C.": Heinrich von Pierer--CEO, Siemens AG

Harvard Business Review, April 2004
How Fleet Bank Fought Employees Flight

"The results of the analysis seemed to suggest that inadequate pay and heavy workloads were the key drivers for turnovers. Management tried to address some of these concerns by tracking market pay more systematically and by offering more flexible working arrangements ... Yet to Fleet's surprise, turnover rates continued to rise rapidly. Indeed, many companies have found little relationship between what employees--particularly departing employees--say motivates their behavior and what actually does.": Haig R. Nalbantian, Principal, Mercer Human Resources Consulting, and Anne Szostak, Executive VP and Director of Human Resources, FleetBoston Financial.

So Fleet utilized some kind of a "Design of Experiment" method by changing several variables and observing the impacts of the variable changes on turnover rates. The following is the top 5 variables that reduced Fleet's turnover ratio:

1. Promotion within the past year reduced turnover rate by 11%
2. Incentives reduced turnover rate by 8%
3. Continuity / same group supervisor within the past year reduced turnover ratio by 7.5%
4. High school educated employees on average had a turnover rate that is 5% lower than their college-educated counterpart.
5. 10% reduction in layoffs reduced turnover rate by 3%.

On the other hand, the following variables had less than 1% impact in reducing turnover rate:

15. 10% market pay adjustment
14. One-point increase in regional unemployment rate
13. One year increase in tenure
12. Increase in local market share from 10% to 20%
11. 10% reduction in worked / scheduled hours

Money does matter, but not as much as how it matters. Promotions and incentives go a long way in telling people how much they are valued, while a simple market pay adjustment might convey the message that "we have been underpaying you all along".

Sunday, March 13, 2005

A Taboo on Taboos

Are we in a commodity business; should we compete on price, or should we be competing on quality and customization? Are our Marketing and Research & Development adding value, or are they the unncessary evil? Can we be Intel, or should we become a Dell?

Harvard Business Review, February 2005
Breakthrough Ideas for 2005

"A reporter sniffing around PeopleSoft's user conference last fall was surprised by what she didn't smell: fear. Despite the sword of Damocles suspended over their investments by Oracle's hostile takeover bid, customers discussed 'comfortable subjects regarding PeopleSoft's business administration programs, such as new features they'd like to see in the next version--rather then whether there will even be a next version' ... The worst thing about elephant in the room is that if you ignore them long enough, they become invisible. That's what happens when companies avoid subjects because they are politically dangerous, socially unacceptable, or just too dire to contemplate. The result can be a failure to anticipate predictable developments and consequent errors in the strategy.": Leigh Buchanan, HBR, Senior Editor

Thursday, March 10, 2005

Two Sides of the Brain

I was recently accused by my close friend of sacrificing a long-term dream for some short-term gains. My thought-process and the discussion were a lot more complicated, but yes, I might have made some impulse decisions. Which, according to The Wall Street Journal / adapting a report from the Fortune magazine, was a human-nature:

"Why is it so hard to save for retirement? It may have something to do with how our brains are wired. When researchers at Princeton University's psychology department ran brain tests on undergraduates, they discovered that humans are of two minds, writes Justin Fox in Fortune magazine. The research showed that when it comes to money matters, part of the brain is hard at work making calculations and weighing options. But when participants in the study opted to get their money now, the more primitive limbic system of the brain 'lit up as if it smelled dinner.'"

Friday, March 04, 2005

Wanted: A Continuity Champion--The Case for Staying On Course

Don't get me wrong: I have often been praised (and cursed, too) for my persistence in driving changes.

But sometimes, I can be (and need to be) stubborn too. I believe there are times when you can't change just for a change's sake. And this includes my job. Sometimes there are disagreement, and sometimes you don't get treated fairly. But you will get this everywhere in any job.

Harvard Business Review, February 2005
Breakthrough Ideas for 2005

"The ability to champion change is the very mark of a leader, we hear. Change agents are sexy by business standards. They battle strong vested interests and mankind's reluctance to rock a boat, even (or especially) if it leaks. Change will not happen without their heroic assistance ... the defenders of status quo too often appear to be--and are--knee-jerk naysayers who champion the wrong continuity. It's more glamorous to be Napoleon (who gained and lost an empire in little more than a decade) than Hadrian (who gave the Roman Empire a stability that endured for generations) ... But 'coping with change' can mean standing firm against a tide. 'Setting direction' can mean staying the course. Part of the leader's job is to evaluate the threats and opportunities that change creates.": Thomas A. Stewart, Editor, HBR

And sometimes, the discussion also turned to my present career. Some people think that I would be better off doing something different, because some think that I have accomplished quite a lot. Well, I take that as a compliment, but, really?

I recognized that I had done many good things. But humbly, I too recognized that I might not have done them as well without the support of the team and the environment that I currently had. And this is why I do not seek always seek change just for a change's sake.

Harvard Business Review, May 2004
The Risky Business of Hiring Stars

"Our data showed that 46% of the research analysts did poorly in the year after they left one company for another. After they switched loyalties, their performance plummeted by an average of about 20% and had not climbed back to the old levels even five years later ... Most of us have an instinctive faith in talent and genius, but it isn't just that people make organizations perform better. The organization also makes people perform better ... When researchers studied the performance of 2,086 mutual fund managers between 1992 and 1998, they found that 30% of a fund's performance could be attributed to the individual and 70% was due to the manager's institution.": Boris Groysberg (Assistant Professor, HBS), Ashish Nanda (Assistant Professor, HBS), Nitin Nohria (Professor, HBS)