The Covid-19 pandemic was a catalyst for huge change in the way we all live and work. Many companies had to quickly pivot to a work from home model. This resulted in an acceleration of technology adoption / digital transformation by 5-10 years.
Before 2020, the US was experiencing a 40-year decline in entrepreneurship. The pandemic has resulted in a huge entrepreneurial boom. From 2019 to 2020 the number of new businesses created grew by 24%.
Each and every one of us has a unique set of experiences, skills, and values that shape how we approach the world in which we live and work—how we operate both personally and professionally. That is what you want to communicate in creating and promoting your personal brand when you are branding yourself to try to join for your first board of directors.As a director who has often come in after a major corporate crisis to clean up and reinvigorate the board. I share a few thoughts. After a crises boards realize they need to embrace change to mitigate further corporate vulnerability. I think it’s time for us to go “back to basics” and learn from the Southwest catastrophe and visit our crises management approach.
Reciprocity is an important concept in all aspects of life, but it’s one that is often undervalued, overlooked, or scorned in the context of business. However, many people, including us, have found a great degree of success in their careers by using reciprocity both for their own benefit and the benefit of others.
Helping and doing favors or good deeds is one of the basic teachings we learned as children: “Do to others what you would have them do to you.” Doing good deeds has also been proven to release endorphins, which means these acts of charity and kindness make you feel good. In fact, perpetually kind people have 23% less cortisol (the stress hormone) and age slower than the average population.
The role of the board has expanded significantly from the 1970’s traditionally less engaged oversight model where directors provided “rubber stamping” of management recommendations. A modern board must be a competitive asset and an accelerant for the business.
Directors must not only perform oversight, but they must add a perspective that helps move the company forward.
As a new director, you may be wondering how you can quickly come up the learning curve so you can begin contributing and adding value.
Leading company’s in a recession requires grit, perseverance, and determination coupled with IQ/EQ and real time problem solving skills.
As boards look to coach their CEOs and executive leadership teams, I share a few practical / actionable ideas along with a philosophy and approach for consideration:
In times of great uncertainty, it is very important for CEOs and leadership teams to be present, in person, in front of employees.
I believe it is valuable that the CEO is spending a very significant amount of time sharing the vision for the future with employees across geographies and regions.
Layoffs / financial austerity and restructuring are part of the tools many companies will use. Employees need the reassurance they are part of the go forward team.
Employees need to hear the vision and what to expect going forward as the CEO shares the plan and more importantly on the EQ soft side, galvanizes the company around the company’s mission and creates cultural connectedness.
In these difficult times, employees look for positive points of reassurance.
Recognize your employees who are high performing in these difficult times. Employees want to know they are appreciated, valued and that as they tighten their belts and lean in to do the really hard work of getting through this difficult cycle. Find ways to celebrate and recognize incremental small achievements as well as big ones. Perhaps there is a new product feature being released, or a metric being achieved. Think about how you can more regularly celebrate the team’s achievement and recognize your top performers.
On the practical side, creating morale and esprit de corps is key.
Having regular all-hands meetings as well as out in the field in person meetings is very impactful. Think of how you engaged with your team in the early days of Covid.
You may also consider, are there any inspirational motivational outside speakers that can be part of a rotation on all hand’s meetings.
At Wynn ResortsWYNN the company created deeply emotive and powerful internal videos celebrating the Wynn culture.
These videos were very effective, and they showed the wide range of diverse people and diverse roles and functions across the organization capturing the individuals authentic and genuine feelings creating a esprit de corps reinforcing what is special about your culture. Perhaps there are similar video artifacts you can create.
Employee engagement is key to getting through this tough cycle. Look at delegating some authority to managers and look at giving them a budget so they can give small recognition awards to their team members. Small things can range from hats, gift cards etc., but delegating the authority to the manager and giving them a budget is very effective.
Not everyone on the team has the skills, background and resilience to handle both the growth cycle and the current recession cycle.
You may need to make the hard choices of who is not going to make it through the recession cycle.
You need the team members who are motivated for the long term and fired up to go through this tough time.
You may want to ask management to review the employees with the lens of who are the right people for this cycle and to make the hard call of who will not make it early.
Another important thing to ask your CEO and leadership team is to identify the top performers who really “move the needle”. This would be a time to lock them in with differentiated equity and long-term incentives.
Those that are your most important “life boat picks,” should be rewarded and retained in a differentiated way.
When looking at functional groups in the company in a recessionary cycle, one of the learnings that is often cited from other downturns is the importance of customer acquisition and retention.
I think it is worth doing a very deep dive on some of the actual very small tactical things that the best sales leaders like Steve Benson have identified:
It is valuable to look at how you would forward plan the challenges your CROCRO and sales team will be facing in this bad economy, here are some examples from the software industry:
1. Great leaders face a crises and look reality in the eye. In times of great change you need to be action oriented and get an accurate picture of what challenges you think your company will face. Build a plan. Have a positive outlook, involve the team and be transparent about the action plan going forward. Identify your most successful reps and find out their customized playbook they are using. They have figured out how to crack the code. Make that rep the hero and teach those behaviors across the organization.
2. Sales leadership must be very close to every deal and be sure it is getting to the key decision makers. Sales leadership often will need to come in and assist to get the big deals closed.
3. Sales reps will need coaching in the down economy. There are new skills you need to help the team acquire. Assess if your sales leader is spending at least 50% of their time coaching the teams and doing in person joint calls.
4. Maniacally looking at the lead generation and qualified leads in all three sections of the funnel are key. (Understand if your deals are stalling at the middle of the funnel or at the end).
5. Buyers will negotiate tougher terms. Deals may get stuck and not close. It will be important to qualify if the buyer is actually authorized to go forward or if there is a companywide freeze. Deep focus on the sales operations and forecast KPIs so you are sure deals are really progressing to close.
6. Decide if you should change your commission plan. In this time of duress do you want to compensate on revenue, or do you want to compensate on margin? Historically in the software industry reps are paid on revenue. Do you want to consider paying them on profit / margin?
7. Look at upskilling your sales organization on negotiating and retrain the sales organization to sell the benefits of the solution. Plan ahead to defend your margins.
8. Your competitors may well become desperate and do significantly deeper discounting. Some companies will be under such duress they may liquidate inventory. Expect that there will be pressure to give away free consulting or other valuable products/services steal your customers.
In an ideal world you would hope to do one very deep layoff rather than multiple cuts. Given that this recession is new and uncharted for many companies you may be going through the pain of more than one cut. The board should consider the wisdom of encouraging management to do the tough planning to aim for one big cut and to try to avoid doing many frequent small cuts.
I hope reading this list has spurred you to your own tactical learnings and experiences. Think about applying this tactical lens to other functional areas and distilling down the most specific tactical decisions that can be made to move the company from its peacetime growth at all costs cycle to a wartime cash conversation profitability footing.
There is a lot of wisdom your friends, colleagues and board members who have been through cycles can share.
Think about allocating time in your next board meeting for a discussion about what learnings each board member has to contribute having lived through different recessionary cycles. You’ll energize your board by asking them to engage. You’ll be surprised by the vibrancy of the discussion as everyone collaborates to help iterate on which experiences and learnings are most appropriate for your company.
Like many of you I am watching the Twitter saga unfold.
In April it was announced that Twitter had agreed to sell itself to Elon Musk in roughly $44B deal.
On Friday July 8Th Musk announced he was pulling out of the agreement to purchase Twitter given the lack of clarity / information about how many of Twitters users are bots vs. legitimate people. Mr. Musk’s lawyer further clarified and states that this placed Twitter “in material breach of multiple provisions” of the original terms of the agreement.
Mr. Musk’s response was to tweet a series of photos of himself laughing and pointing out that in order to force him to complete the deal, Twitter will have to now publicly disclose the number of bot accounts in court.
On Tuesday July 12th Twitter filed a lawsuit in the Delaware Court of Chancery in an effort to force Mr. Musk to follow through and purchase the social media company.
Twitter said in its complaint that, “having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away.”
Having served on a large number of public company boards (34 boards) and having been through my fair share of boardroom kerfuffle’s and crises, the question that comes to mind is: why doesn’t Twitter very rapidly try to negotiate and settle the dispute with Elon Musk?
Imagining you’re a Twitter director the question is what is the fastest way to settle and get to a resolution?
Historically, approximately a third of all public companies are being sued at any given time from a range of plaintiffs with a range of class action suits most don’t even hit the radar of the public and are handled by the GC and negotiated with a D&O policy.
The exposure for Twitter’s shareholders, advertising clients, and ongoing business concerns loom large if this dispute continues.
Shares of the social media platform were down 5% in early pre-market trading Monday July 11th. Shares were already well below April’s agreed-upon purchase price of $54.20-a-share purchase price, closing at $36.81 after Musk’s announcement to pull put of the purchase agreement.
It is hard to imagine that the plaintiffs are not scouring public statements made by Twitter to their shareholders in quarterly and analyst communications as well as public marketing collateral where they have stated they have some specified number of millions of customers.
It would seem to me that the plaintiffs’ bar will bring suit alleging that the number of customers Twitter says they have is not an accurate number.
Without a third-party independent verification source like a big four accounting firm how is it possible that Twitter can verify the number of active real customers vs software bots? Twitter has stated that they have approximately 5% software bots, this lacks verisimilitude. Mr. Musk believes the number of software bots is significantly higher.
A second set of commercial lawsuits that I anticipate Twitter may face are from their biggest advertising clients… Certainly Twitter will have told those clients they have an explicit number of millions of active users and now it seems dubious that that number would be accurate.
One can imagine a company that has spent heavily on advertising will want to claw back many years of advertising revenue that was based on inflated numbers.
However, there is a much more pressing issue: If the Delaware courts permit Mr. Musk to walk from the deal there could be foundational contract law issues. Mr. Musk signed the 75 page acquisition agreement and Twitter has no obligation to provide additional information post agreement. The specific commercial performance terms will likely be litigated in excruciating detail. But if the business community feels the Delaware courts are not holding up basic M&A contracts, might companies move to incorporate elsewhere? This case has the potential to set a precedent for companies walking away from M&A commitments.
It is hard to believe that if Twitter truly wanted to find out the number of users, they have they could not ascertain this. There are many standard pieces of enterprise software that have very close adjacent functionality that one could imagine using to help identify the number of real customers.
For example, if one looks at the full range of security software there are many companies specializing in identity management software. Additionally, there is a breadth of security and risk management software companies specializing in KYC for financial compliance as well as anti-money laundering software. Again, these are adjacent software’s that ascertain / verify identity.
Look at the breadth of marketing automation / marketing tech software out there that is in the broad commercial sector used to personalize and target all of us when we search for products on Google, Facebook, Amazon.
Again, standard adjacent and complementary technology that one could imagine could be applied to the challenge of identifying the actual number of real Twitter users.
One can only imagine that it may not be in Twitter strategic corporate interest to have a verifiable number of customers.
Twitter has already had activists in the stock in the past and as of now it does not appear there are any activists interested in acquiring a position in Twitter which is a market signal that it is unattractive and on a negative trajectory of diminishing value.
Once a situation like this occurs, and a company is “in play” often there is a white knight in the wings who will swoop in to acquire the company at a bargain price. Again, it is very telling that there does not appear to be any interest from the private equity or hedge fund side of things.
Uncertainty in a corporation is a bad thing. Your best employees leave. The corporation is unfocused and distracted. The value of the company is rapidly and negatively impacted.
One has to think about the Twitter boards concerns surrounding challenges of their business judgement in entering into a potentially risky deal with Mr. Musk and their confidence in the break up fee guarantee.
As public company directors we have to ask ourselves what would we do if we were sitting in the Twitter boardroom?
When we think of the complexities of the business judgments that Twitter board members need to make here is a little refresher:
I recognize we have all embraced the concept of “stakeholder capitalism,” but as of today Delaware law and the Delaware Court of Chancery puts the interest of the shareholders first.
All of this comes together as the boards key deliverable or responsibility which is to make “business judgments” on the topics that impact the corporation both short and long term.
The goal being to maximize the value and health of the enterprise.
The Twitter board did not initially appear to want to sell to Mr. Musk, but board members have a fiduciary duty to get the best outcome for shareholders, and at a certain premium, the directors must exercise their business judgement to take the deal that balances return vs. risk.
Now the Twitter directors are faced with a stalled / disputed acquisition and complex commercial contract issues surrounding the interpretation of the acquisition contract and break up agreement.
With managements input and guidance, ultimately it is up to the boards business judgement to make the decision on what is the best business outcome for Twitters shareholders and stakeholders.
Clearly the Twitter directors are in the hot seat with the world watching and second guessing.
The boards’ role now is to chart the path and continuously iterate and make a large number of business decisions on the strategy and tactics of when to engage and negotiate with Mr. Musk vs letting this go the full way to a court decision.
You don’t want to risk destroying the future value of the enterprise by prolonging the dispute to get what might be a marginally small additional number of dollars if the court adjudicates in your favor vs reaching a settlement that gets you 90% of the way to a favorable economic result.
Most M&A disputes end in a negotiated settlement as it’s more expeditious and the board / management will want to balance the negative of having the enterprise distracted and losing value against getting the best monetary outcome for the shareholders while keeping sight of what is best for the overall enterprise.
The Twitter board now has the challenge of handling the most visible acquisition case of the decade and we will all learn from how this unfolds. Regardless of the outcome, the Twitter board now needs to have courage under fire and stand by their decisions as the world watches.
The nature of CEO communication on social topics over the last two years has significantly changed. The event of George Floyds death and emerging movement of Black Lives Matter was a major catalyst for change following on the heels of the business roundtables 2018 shift from shareholder to stakeholder capitalism.
The embrace of the definition of stakeholders and the ESG movement with special focus on diversity equity and inclusion was particularly catalyzed by George Floyd.
We see the recent Ukraine war triggering another public round of companies taking positions on whether they will do business with Russia.
All of these events have brought up the question of just how much should corporations join in on social-political discourse?
On the other side of the argument in favor of companies opining publicly on social issues we see Coinbase COIN -11.3% CEO Brian Armstrong telling his employees that the companies intranet is not the vehicle for political debate, that they should please do that elsewhere i.e. Facebook, Twitter, etc. and focus their energy while working on the corporate goals, of course, in alignment with the companies values and principals.
Boards need to ask themselves, when it comes to taking stand on social/political issues, where is the line for their CEO?
For example, the recent press on Disney who first faced backlash for not taking a public stance on Florida legislation which would ban schools from teaching students in third grade and below about sexual orientation and then faced more criticism for their response to the backlash and the proposed legislation. Perhaps the situation could have been handled with more diplomacy taking into account the various positionings of the multitude of their stakeholders; when making a public statement you cannot just reply to one constituency i.e. only the employees or only the customer base.
Netflix NFLX -1.8% has recently made headlines after sending a memo to staffers highlighting how Netflix values the “artistic expression” of its content creators over each employee’s personal beliefs / lifestyle. Netflix states that they produce a variety of stories even if some of the content created may be in opposition to their own personal values. “Depending on your role, you may need to work on titles you perceive to be harmful,” the memo stated. “If you’d find it hard to support our content breadth, Netflix may not be the best place for you.”
Boards along with management may want to go through the exercise of thinking through the best course of action when a social issue comes up. Perhaps run through this list of questions as a starting point:
1. Do we need to say anything? Often when you say something on a controversial topic you will cause offense or polarization with one set of constituencies. Rarely do you get criticized for being quiet (there are exceptions).
2. Who are you speaking to? Your employees’, customers, investors? And why do they need to hear from you on this? If you are an oil and gas company your consumers employees and investors do want to hear your position on climate change, but they may not need to hear your position on other topics.
3. Another question to ask yourself is: “who are your current and future target customers and employees?” If you are a consumer brand especially your current and future customer cohort may be the born crypto born digital millennial gen z cohort where your views on social issues are expected and the norm and they may not engage with your brand if you are not taking a position.
There are also anomalies that you may want to consider when thinking this topic through since there are always tradeoffs when it comes to publicly commenting on any social / political topic.
We often see many glitzy Silicon Valley tech companies commenting frequently on these topics but keep in mind that Silicon Valley is a unique bubble in America and may not be the example your company should be following.
There really is no clear absolute right answer, but having the discussion and clarifying the parameters is important.
Additionally, there are cycles in communication in PR to be sensitive to.
One of the most difficult things in this highly engaging discussion is to separate your own personal politics, preferences, and passions, from what should be a corporate policy.
One of the best foundational starting points that I have seen is to go back to your company’s first principal of what are your values. Re-affirm and reclarify what is your company’s purpose and mission.
Based on these foundational building blocks then look at layering on what is the right framework for your CEO to speak on highly sensitive social issues.
The pandemic resulted in a massive shift in the culture of work with many employees dubbing working from home as “the new norm”. Companies had to be nimble in getting a workforce set up with the proper tools and procedures to work from home effectively while maintaining a strong company culture from distributed environments.
Now as life is slowly returning to pre-pandemic levels and some of the workforce has been transitioning back to in person work either fulltime or a hybrid work from home model. There is tension between employees and employers on what the work model should look like as employers strive to have maximum productivity, while employees want to keep their flexible schedule and prioritize their personal lives. This has contributed to the “great resignation” as employees are shifting jobs in search of better benefits.
There’s a lot of instability in the never before tried hybrid work model, and we are coming into a time of adversity. Many of the fantastic innovative companies we see today have been born in the last 20 years and have not really had to face a lot of adversity in the market as it has been a strong economy and bull market cycle. Cost money has been low enabling us to borrow build and expand businesses. Many leaders have not been through a cycle of inflation or face a difficult market environment. The IPO market is not attractive, lending rates are going up, investor mindset has shifted from growth to profitability.
We are now entering a cycle of adversity and it will we will all have to hone our leadership skills. We need to rethink how we engage with our employees, how we build our culture and build a strong cohesive enterprise that executes and operationalizes the strategy in this challenging and adverse cycle.
Here are some of the things that my pattern recognition has taught me:
1. The CEO and leadership team needs to show up in the office. If you show up others will follow. Everybody wants to be where the power is. They want to learn, they want to grow, they want to be seen, they want to be recognized. If ever there was a time for mentoring and coaching it is now. If you show up the rest of the team will come back. FOMO is real. If you come, they will come.
2. The little things matter in this time of adversity. Many peoples stock options are underwater. We are still in the great war for talent and the great resignation. Little things matter. Sitting with people, coaching them, helping them learn and develop their skills will make all the difference in their loyalty to you.
3. Lead with empathy It is more important than ever to appreciate your employees and recognize their contributions. Encourage your team leaders to recognize and acknowledge the challenges the team is working through, whether it’s having to restructure or do more with less budget, whether it’s reprioritizing and keeping to scheduled commitments… it is a time of pressure and it is important to recognize your employees who are performing under pressure.
4. Clarity is key. Make the decisions. Explain the tradeoffs. Align the OKRs and deliverables. Be in touch daily / weekly. Debrief, learn from the losses and celebrate the wins.
When facing times of adversity, a CEO has to shift their mindset from being a visionary peace-time growth-focused CEO to become a wartime, crisis management, operationally focused CEO.
Adversity calls for a wartime leader. You need to build a clear crisp vision of what your goals are and what success “feels like”. You have to weave a tight team who will go on to the battlefield with you. They need to feel your courage, clarity, and conviction about winning to follow you into this phase of your company challenges as you work through adversity.
When you look at some of the attributes of great leaders, the attributes that allowed them to gain followership are:
1. Integrity: A great leader always acts with integrity and earns the respect and trust of their team.
2. Decisiveness: The ability to quickly take in data, evaluate the options, and make an informed decision rapidly will enable the company to keep moving forward.
3. Knowledge: Staying up to date on the latest industry trends, and having a finger on the pulse of the socio-economic status will enable the leader to make the right calls.
4. Endurance: The ability to endure hardship and not let losses deter you or shake your confidence in the mission and vision for your organization will enable you to propel the business forward.
5. Self-Awareness: A great leader must have the self-awareness to know their strengths and weaknesses so they can surround themselves with the right team to augment them where they are not as strong. Do not be a leader that tries to cover up weaknesses, rather focus on flexing your strengths and have the wisdom to rely on those who are stronger in other areas guide you (stay humble).
When going through a challenging time, be sure that you have empowered all of your employees to make decisions, be accountable and give you feedback and view your team as true thought-partners. Foster camaraderie amongst the team. You must be a visionary and inspire the team to see the end goal with you so everyone know they will be winning together as a team.
Followership is key when leading through adversity. If your people feel you view them as anonymous employees, they will not be motivated to dig their heels in and stand by you through the hard times. Your team needs to feel that you are their greatest ally and advocate and that you are genuinely rooting for each of their individual successes, not just the success of the company.
This is an opportunity to grow as a leader and maximize each colleagues’ abilities. Be inspired by George Patton’s mantra for leading through adversity, “A good plan today is better than a perfect plan tomorrow!”
The retention of human capital is one of the biggest priorities for boards this coming year. Leadership is laser focused on this issue and it has been a hot topic in the press with headline grabbing statements such as “the great resignation”.
Perhaps boards should reframe the narrative and look at the shift in the workforce not as the “great resignation” but rather as the “great reassessment”.
Employees are deeply reassessing their values, priorities and more than ever before want to work for a company that aligns with their values and gives them a sense of purpose.
As the war for talent rages on, boards and leadership teams must be ready with a plan.
I was recently part of a great discussion group with brilliant colleagues, and I share my learnings from this insightful conversation.
Here are some actionable “tactical” topics for boards and leadership teams to discuss and consider implementing.
One of the ways that we can reweave our connectivity to our employees is to try and engage them with the opportunity to build their skills and career paths and come up with some continuous learning opportunities by creating an online syllabus and most importantly by recognizing and rewarding the continuous learners. The learning opportunities should be related to the company’s industry business objective i.e., things like digital transformation where employees learn skills that are valuable for the next gen of business.
Another big opportunity to consider is the fact that as your workforce reflects on their work from home experience as they begin the transition back to in person work either full time or in a hybrid environment, your workforce is thinking about how they really want to spend their time; and what are their skills and talents and what they want the next phase of their career to look like. Many people have felt a sense of frustration at things they can’t control ranging from inability to travel, wanting to work at home or return to the office when that’s not available. This feeling of lack of control in certain facets of people’s lives has culminated in a need for change in other areas. This I believe has been a contributor to the massive shift in the workforce. One way to acknowledge the need some employees feel for a change (without losing your most talented employees) is to make hiring internally a priority before looking for external candidates. Urge your managers to encourage their teams to look at internal mobility. Make it simple and accessible for your employees to apply to new openings within the company. Taking on different roles and learning new skills can fulfil your employees need for change and help them weave a deeper connection to the company.
Many companies are now starting to think about how to get their workforce to return to the office. Some interesting ideas being used is to have “carrots” to return to the office such as small incentives like meal cards that employees receive when they badge in. This not only is an incentive and perk for employees, but it can also help local restaurants keep their doors open and make the office feel like more of a lively central hub. Employees will not be motivated to return to work if they feel trapped in a cubicle all day because local businesses are not open, and the business district feels dead. It is important to make the workplace feel like a central hub to exchange ideas, work collaboratively and have social connectivity instead of “just work”.
At a high-level, boards may want to have the conversation to actively evaluate / rethink: What is the company’s overarching value proposition to recruit and retain talent? What are the company’s specific plans to encourage retention?
Rather than be reactive to a disgruntled employee base, is there a way to understand your employee base in a more refined / segmented way? Don’t look at your total employee base holistically. Consider using a traditional consumer technique of micro-segmenting your employees into different buckets or teams. For example, perhaps certain geographies or functional groups are more vulnerable and need earlier attention on career pathing. Some employees are in your organization because they want career paths whereas others only want a part time job. Look at it and assess it in different segments perhaps by interests, motivations, demographics, generations, etc. All these different groups will react to and value different incentives.
Do not underestimate the value and importance of employee surveys. Look at your employee survey data and look for future leading indicators on where you may have a problem down the road. Typical questions that are strong indictors of employee morale are their willingness to recommend the company to a friend as well as their likeliness to still be at the company in 18 months. I’ve heard anecdotal statistics that as much as 75% of your employee base might be receptive to a job offer at any time. This is why weaving a strong connection between employees and company values and culture is so critical and can prophylactically immunize your organization from experiencing high turnover.
Another component for boards and leadership teams to evaluate is compensation structures. Everybody has understood that tech companies are experiencing especially high turnover and massive burnout. Different compensation structures are already being employed for critical tech teams.
Boards ought to look at key jobs they “must have” if the company is going to remain competitive….in other words, if the company cannot recruit and retain this set of talent, the company will not win. Understand what your highest value areas are. Think about them differently. Identify which jobs you must really overpay for and offer outsized packages.
In this critical time the board and management should discuss how much time is being spent on the top 100 employees just below the CEO reports. Challenge your leadership team to explain how they are developing career paths and communicating to this critical group how leadership sees their contributions going forward.
Do not underestimate the critical importance of your front-line workers as well as middle management layers. Each layer of an organization has employees that are internal influencers who have an outsized impact on their fellow employees. These are typically your employees who are the most enthusiastic and dedicated; when you lose these people there is typically a disproportionate domino effect fall out.
Suggest that your leadership team specifically engage with their managers cascading down, to understand who the most influential people are who could trigger a mass exodus.
Be sure employees at every level of the organization fully understand their compensation packages and the full range of benefits being offered.
Employees very often as you go deeper into the organization don’t understand all the upsides of their packages. You should assume your employees are potentially being recruited and contacted regularly and being presented competitors compensation packages that at first glance may seem appealing. Be sure you re-communicate all the value of their current full compensation and benefits package.
In such a critical time of talent retention look at empowering your leadership at the lowers level where frontline and second line managers have some small pool of capital they can use to reward, recognize, and retain people. Empower your mangers at the lowest possible level with flexibility to spot and reward high performers. Empowering your management team will also retain and motivate your management team. Driving your decision making down by allowing flexibility within pre-agreed upon parameters has been increasingly effective in driving up employee morale.
Consider how an unexpected bonus is typically more exciting and immediately can improve an employee’s current circumstances vs a small increase in pay that is quickly forgotten. It is important employees feel management recognizes and appreciates their critical contributions and great work.
Boards should discuss with management human capital retention strategies and find creative and innovative solutions to attract and retain the best talent. You do not want to risk finding yourself short-staffed during a critical time of rapid growth or increased demand from customers.