Chapter 7: Keeping and Growing Smart Partners

OVERVIEW

Any idea… that my visit would bolster the morale of these men was overshadowed by the effect the visit had on [me]… Each man had a cheery word… [My] misgivings that these men would weaken under the hardships of their cramped position and the adverse weather… faded away into nothing.

—CHARLES BROWN MACDONALD, COMPANY COMMANDER

A large telecommunications company we work with is in trouble. While business appears to be growing at a steady rate, employee turnover has swelled considerably higher than the industry norm. As CEO, Paul is confused and concerned. He believes he has created a workplace environment that is both challenging and fun. He feels that wages are competitive and that company-provided incentives are both generous and attractive. As an example, he cites the Chairman's Award, a ten-day Mediterranean cruise given to top performers. Truly baffled by the high turnover rate, Paul wonders why the people in the office always seem frazzled and demotivated. When we reviewed with Paul the events of the past year, we recalled a vivid episode related to us by the marketing vice president, Cindy.

Partnering Culture

NO LEADER IS AN ISLAND—PAUL'S STORY

Paul had hired Cindy, a smart, experienced woman who is a master at marketing strategy, and given her the mission to build a marketing and sales platform for growing the business based on two fundamental strategies: incremental improvements in product design and delivery, and consistency in service. In fact, Cindy had surrounded herself with some of the "coolest" people in the industry, co-workers who not only understood technical trends in telecommunications, but, more important to their market, also had a handle on fashion trends. It seems that teens and twenty-somethings wouldn't want to be caught dead with an "ugly" mobile phone. These young people consider how a phone looks as important as its operation, its technical features, and the number of monthly minutes that come with a particular billing plan. Also fancying himself as a hip guy, for a fifty-something, Paul felt he had his finger on the pulse of the younger generation.

While checking out the latest wireless phone gadgets at a vendor conference, his eye caught a glittery purple phone he knew in his bones would fly off the shelves. Without consulting Cindy or anyone else on the executive team (such as the vice presidents of customer service, engineering, or finance), or anyone else on the marketing and sales team (such as the director of sales or retail store managers), on the spot Paul ordered five thousand of the purple phones. The vendor at the conference was so pleased with the order that he gave Paul the floor sample to take back to show his team.

Paul strutted into his next executive staff meeting like a victorious Roman emperor, holding the glittering object of his affection high above his head, proudly announcing that this purple phone would be the next hottest thing on the market. He could hear cash registers ringing, even as members of his team stood frozen in disbelief. Just two weeks before Paul bought the five thousand purple phones, the marketing team had agreed on the styles and colors of the new phones they would be featuring in the spring promotion; the marketing team had hired an ad agency to start work on marketing collaterals, signed contracts with handset vendors, and booked media slots. Gently, Cindy tried to probe to determine the extent of the damage Paul had caused. When Paul proudly blurted out that he had captured the market on purple phones, Cindy and her executive team colleagues were dumbfounded.

As tactfully as they could, she and her colleagues expressed the concern that the executive team had already endorsed the product offerings for the spring promotion and that the promotion launch was well underway. Paul, sensing resistance to his plan and to his five thousand beloved purple phones, went into a rage. Berating the executive team for lack of inventiveness and insisting that he had found the Holy Grail and that they were too blind to see it, he ranted and raved for twenty minutes. Finally, the defeated executive team agreed to include the purple phone in the spring promo—as if they had a choice.

The redoing of the ad plan was expensive enough, but what really hurt was how the team felt after Paul's public berating. The post-executive team meeting—with Paul not there—revealed why the employee turnover rate had grown so high. Angry and resentful, three executives had become so personally frustrated with Paul and his inconsistent management style that they were openly talking about leaving. However, to a member, not one of them would confront Paul. Rather, they would meet privately with each other, complain about Paul and his erratic behavior, then go back to their offices and sulk about him and the messes he created, all because he could never stick to plan.

This was not the first time Paul had ridden roughshod over his team and changed the direction of their plans. In fact, people had become used to Paul's constant interference in the planning of everyday events. It's not that Paul was a micromanager, because in fact he wasn't. But Paul would get an idea and pursue it with a vengeance, regardless of what others around him thought. Once, when he insisted on green rather than blue print in newspaper ads, his bullheadedness created such a stir that two people in market communications resigned. Of course, he was glad to see them go. After all, he had said, "They are being petty, and we don't need people like that around here."

None of what Paul did in and of itself was a horrible thing. Truly, he wanted to make things better and cared about the people in his business. But Paul forgot that he needed to do more than just buy the loyalty of his employees. He did not understand that how he treated them was just as important as what he paid them. In retrospect, how Paul handled the introduction of the purple phones to his staff could have made all the difference in the world. Paul made a decision in isolation and then, without consideration for what his team had already accomplished for the spring promotion, unleashed a new element that totally upset their launch plans.

When we spoke with Cindy and the executive team afterward, they were beyond angry. Cindy summed up their feelings: "Paul does these things to us all the time, and people are fed up with it. We plan a whole seasonal promotion, and then he waltzes in with a hare-brained idea. He expects us just to ‘adapt.’ No wonder we're losing staff. Who wants to work under these conditions?"