Shareholder value: is there common ground? - employee training during financial tough times

T+D, July, 2002 by Gary L. May, Bill Kahnweiler

That speaks to CEO-type interests and needs in terms of the focus on customers and the concept of not building overhead by using outside expertise. One of McLagan's reports, "Success With Customers," offers plenty of support for selling such an initiative to senior management. For example, empirical research shows that reducing customer defections by 5 percent can double profits. Frontline employees are the key success factor in customer retention and it's their people skills, nor technical knowledge, that make the difference. Are you familiar with Customer Relationship Management as a best practice?

We can take a similar approach in addressing CEOs' concerns about attracting and retaining a loyal, productive workforce committed to organizational goals. But, again, notice the difference in perspective when compared to the Common Ground Statements, which are heavy with notions of humanitarianism. So, how can we build a bridge between two apparently divergent agendas and meet business needs while remaining congruent with our professional values?

To begin with and in the spirit of finding common ground, we need to discard the notion that the CEO agenda and our agenda are divergent, or even in direct opposition. For example, a considerable body of research clearly demonstrates that loyalty to an organization won't happen unless the organization (management) offers something of value in return for employee loyalty. The something has to be truly of value to employees rather than something that management assumes will be of value.

The same could be said of productivity. Again, research makes clear that short-term rises in productivity occur as a result of using "negative motivational techniques" such as the threat of impending downsizing and restructuring. But, eventually, fear-based tactics produce employee resentment and lower productivity. So, when CEOs clamor for higher productivity or greater loyalty, they have to he willing to compensate people for delivering on those demands and let them know ahead of time what the payoff will be. Our profession is in a uniquely advantageous position to advise and influence CEOs about numerous ways to increase productivity, loyalty, or both, through effective people practices.

Parts of several Common Ground Statements are pertinent. Take a look at "... creating organizational cultures that recognize the need for promoting a healthy balance between work life and personal life." That statement can be linked clearly to a CEOs' desire for employee loyalty.

Many organizations are discovering how flexible job structures, work-family programs, and so forth attract and retain desired talent. Such practices aren't just "nice to have" benefits but are driven by real business needs, such as to stem the talent drain (especially to competitors) and retain the skills the business needs to succeed. There are concrete and visible ways to enhance loyalty if the organization's culture truly values work-life balance.

Likewise, "valuing, propagating, and effectively applying intellectual capital" in one of the Common Ground Statements may sound lofty, idealistic, and useless to a hard-minded CEO. However, when you tear through the fabric of that statement, what it says is that if an organization taps into its huge brain trust, the organization and the people whose brains are tapped will benefit.