Turnover — How To Miminize It

Turnover can be a costly ill. But, can be prevented? No, but it can be minimized. Here’s how.

So, I am speaking with four CEOs of small to medium-sized companies, all less than 100 employees. All the companies are in the “walk” phase of crawl, walk, run. All the CEOs are feeling salty, comfortable in their skins. Bit of wisdom starting to accumulate like barnacles.

We start talking about turnover. I listen carefully, saying nothing. I often do that. I learn a lot that way.

I also stumbled on an interesting blog post from a former client of mine at www.anthonybucci.com on the subject. Anthony was an excellent, high energy CEO who I worked with for more than a year. He took his company to the paywindow and made out very well. I always enjoyed working with him.

I came away with the notion that the issue of turnover for most companies is something they embrace AFTER it happens. Anthony’s blog post spoke to a pizza party — a cultural ritual of which I heartily approve — but it was after the fact. The individual was already on the way out.

So, here’s what I want to focus on — how do you prevent turnover? How do you minimize it?

Preventing turnover

Here is where the focus has to be on preventing turnover.

 1. Hire well

 2. Onboard well

 3. Set clear objectives, keep score

 4. Conduct an Anonymous Company Survey

 5. Appraise performance

 6. Reward excellence

 7. Celebrate victory, count coups

 8. Manage by wandering around


I do not subscribe to the theory of superstar team members. I do, however, reluctantly acknowledge the reality that some folks are more critical to the operation than others. The egalitarian part of my brain doesn’t like to admit it, but it is true.

What people within your company would be mortal losses if they were to depart?

I am also reminded of the comment of Charles de Gaulle: “The graveyards are full of indispensable men.”

[This is a controversial attribution as the sentiment of the phrase is noted to many others such as French Premier Georges Clemenceau. But I digress. Sorry.]

First step, identify those who  are critical to the operation, just don’t use the cliche “superstars.”

Why did these people come to work for you in the first place?

Most CEOs misunderstand what motivates superstars to work for their company. Talking to you, CEOs — YOU DON’T GET IT.

People work for you for the following reasons:

 1. People have to pay their bills, so they do it for money.

 2. People want to be identified with an organization, an effort, a team that is doing great work.

The Rangers don’t recruit. They don’t have to. Soldiers are dying to wear that Ranger tab on their shoulder and that 75th Ranger Regiment patch on their left and right shoulders (you wear it on your right shoulder if you were in combat with that unit).

U.S. Army Rangers with the 75th Ranger Regiment make up the “honor platoon” in a funeral procession to the gravesite of Gen. (retired) Wayne A. Downing during his internment service at West Point, NY, Sept. 27, 2007.

 3. People come to work for you to learn, to grow, to develop their personal skills and talents.

 4. People come to work to burnish their ego (ego enrichment) and to grow their self esteem (self esteem nourishment).

Nobody likes to talk about ego enrichment and self esteem nourishment, but if you want to play in the majors, you better understand this.

Look at those Rangers — do they look like they are fooling around? Do they look like they aren’t proud of themselves and their unit? They blouse their trousers because they are paratroopers. Only Rangers were a tan beret. They were a silver and blue rifle — the Combat Infantryman’s Badge — on thier chests above their ribbons for valor and service.

That is called esprit de corps — in business, we call it company culture. This is what you are trying to create.

 5. People come to work for you because they want to learn a business, an industry as a stepping stone to their own entrepreneurial endeavors.

You have to know why people come to your company to know why they leave. If you know why they come, then you can understand why they leave. If you know why they leave, you can combat that sentiment, fix that problem, erect barriers to that action. Make sense?

Why will people leave you?

Your superstars will leave you for a number of reasons:

 1. They will leave for the “perfect” job.

 2. They will leave to start their own business or to be a co-founder.

 3. They will leave because there has been a failure of some kind at their existing job — it can be compensation, work conditions, recognition, harassment. It may be real or imagined.

 4. They will leave you when they feel their worth to the company is not what they want it to be or what they think it is.

 5. They will leave you for a better deal.

There are a lot fewer reasons why a person leaves than why they join. Remember that.

So, what is a CEO to do, Big Red Car?

The CEO’s job is to provide a work environment in which every person can do their best work.

It is really that simple. Sometimes, it is physical — air conditioning and good computers. Sometimes, it is intellectual — clear plans. Sometimes, it is emotional — recognition of excellence.

It is also the CEO’s job to “run” the organization. That is part owner, coach, and quarterback. It is both leadership and management.

So, let’s explore the nuts and bolts, shall we?

Preach, Big Red Car

OK, here’s how you attack each of the items noted above.

 1. Hire well — When you hire team members, have a clear job description with the first six month’s objectives laid out. Ensure the company has a clear Vision, Mission, Strategy, Tactics, Objectives, Values, and Culture.

New team members want to join a good team. Convince them you have a good team. The better the team member, the more critical the hiring process is going to be. This is typically a huge failure. Sweat the details.

 2. Onboard well — The first second of the first minute of the first hour of the first day can never be recaptured. Be at your front door in your best suit — talking to you, CEOs. Say, “Today is a very important day. Today you have joined our team. There is nothing — NOTHING — more important than you and your joining us today.”

Then go quickly through the new team member’s job description, the Vision, Mission, Strategy, Tactics, Objectives, and Culture. Leave Values for last. Give your new team member two copies of your Values.

Then, say, “We were a good company when you walked in the front door today. You are going to help me make this a great company. Are you with me?”

 3. Set clear objectives, keep score — People want to join a going concern or be involved with the creation of a going concern. Once you have the company’s planning under control, then you have to focus on the Objectives of each individual.

When you hire a new team member, you have to hand them their first six months objectives with their job description. Is it hard? Yes, but it is this hard work that gets the new team member into the swing of things.

Use these objectives as the basis for appraising performance. It all ties together.

 4. Conduct an Anonymous Company Survey — This is the simplest thing in the world to do. It is a thermometer into the company’s guts. Your objective is to identify systemic shortcomings and failures. Believe me, you will find them.

Here is an easy way to get started. There is an exemplar of an Anonymous Company Survey attached to this blog post.

Anonymous Company Survey

 5. Appraise performance — Performance appraisal is all about engagement, aligning individual assessment of performance and management’s view of performance. I have never seen a good company that did not have a good performance appraisal system. I could write about this for a long time. There is a right way to do this. We talked about how to do this here. There is also an examplar to get you started.

This dialogue is an opportunity for you to ask a team member, “What’s keeping you up at night? What’s on your mind?”

You are trying to bubble something up before it transforms itself into a call to action.

Pro tip: Always, always, always deal with compensation during the performance appraisal. Never separate performance and comp. Always ask, “Is your compensation fair?” Do not dodge this important step. This is where pay dissatisfaction is combatted. In this simple, direct manner.

Performance Appraisal

 6. Reward excellence — Whatever behaviors you reward will be repeated. This is why a good comp plan has salary, benefits, short term incentive comp, long term incentive comp, and something special as part of its structure.

Short term incentive comp is where the reinforcement of excellent happens on a regular basis. Again, this is tied into the attainment of objectives and is coordinated with performance appraisal.

Create a company talisman — I always used an eagle sculpture in metal — and award it with a fistful of cash. These behaviors will be repeated. I promise you.

 7. Celebrate victory, count coups — Part of a healthy company culture is celebrating victories. They don’t have to be huge. Again, whatever behavior you celebrate will be repeated.

Counting coups comes from the Naive American culture wherein they would meet around a campfire to celebrate their fierceness in battle and count scalps.

Get some scalps. Count them.

 8. Manage by wandering around — A CEO should take a small group of her people out for an impromptu lunch.  Violate every aspect of the chain-of-command. Take the accountants, but not the Controller and the Chief Financial Officer. Get everybody to relax and than ask them, “What do you think I don’t know I should know?” [A must question for the Anonymous Company Survey.]

You are trying to get them to open up to you. Follow up with questions about their family and their personal situation. “What’s new on the home front?” Be prepared for some unusual answers.

I cannot tell you the number of problems I have headed off by this simple technique. It doesn’t have to be lunch. It can be a cup of coffee. I do not recommend alcohol or going to a bar. Sorry, that’s just me.

Bottom line it, Big Red Car

Team member turnover is a preventable ill. Sure, some of it is unavoidable. If someone wants to go start their own gig, more power to them, but if they’re going to the shop down the road because you failed to engage — shame on you.

This will work. I promise you.

You are trying to engage before the team member has transformed whatever is in their head into a call to action. It will take a bit of work on your part.

You will receive an enormous dividend in stability. I had virtually ZERO turnover over thirty-three years of CEOing with thousands of employees.

So, dear reader, there you have it. If you do nothing, then you get what you deserve. If you consider and try these tactics, it will work out for you.

But, hey, what the Hell do I really know anyway? I’m just a Big Red Car.