BFF: Is the Idea of Company Loyalty Dead?

My father had the same job for 52 years. He was a railroad engineer for the Chesapeake and Ohio railroad company. He started work in 1916 when he was 17 years old (He lied about his age) and fresh off the farm in Virginia. There was no such thing as leadership training. If you were the manager or supervisor, you were the boss. Period! But, he loved his job. That is, he loved the work, his buddies, the excitement. Back then railroading was kind of glamorous. It was hot, hard, dangerous work but it paid well and took you to all kinds of exotic places, like Cincinnati and Hinton, West Virginia. You seldom hear of this kind of corporate loyalty today. Teens and tweens sign their texts and tweets with a touchingly optimistic BFF (best friends forever) but we all know such relationships seldom last more than a few months (weeks, days, minutes, tweets). The same is true in the workplace.

Despite all the management-speak about the corporate mission, its dedication to its employees, its commitment to teamwork, and so on, few employees see their first or second (or any) employer as a place where they will spend their entire career. Maybe the whole idea of loyalty is quaint and old-fashioned like my father’s allegiance to his job at the railroad. After all, he wasn’t always 100% positive toward the company and its management. There were difficult times. He lived through, and worked through, the great depression. I believe that he always felt a sense of obligation because of that opportunity. There was a sense of balance, a give and take that sort of sealed the relationship for a lifetime. He was more angry about being forced to retire at age 70 than any of the other bad things (There were many.) that his managers did to him during those decades. Even in challenging economic times like these, such faithfulness is not expected. People move. Things change. There are always other opportunities. So, on to the next big thing! We are, after all, a nation of fiercely independent citizens. “Change, growth, renewal, ever onward,” are attributes that we admire and encourage.

leadership training company loyaltyWhat is the most useful way to address this idea in leadership training? The word, “loyalty” is used a lot. Every major airline, hotel chain, department store and grocery store has a “loyalty” program. It is, apparently, obvious to managers that customer loyalty is important. But, it is not so evident when it comes to employees. The thinking seems to go, “If they don’t like it here, let ‘em go!  Who needs ‘em? There are lots of people out there who need jobs.” Certainly, it is no setback for the company to see an unproductive employee leave.

But, a poor economy is not a guarantee that the ones who leave will be the ones you want to see go. In fact, the first ones to leave as the economy rebounds will be the best performers. The evidence seems to suggest that is already starting to happen. The January 2011 report from the Department of Labor reports that the number of voluntary quits exceeded the number of layoffs during the last half of 2010[1]. Certainly, greater optimism about the economy explains some of this, but the question for employers is, “Who is quitting?” That’s right. The top performers! Where’s the loyalty? I think we need to look at this question from the other point of view. What have these top performers seen their companies do during the recession? Did they believe that the company had their best interests at heart? Did they believe that the company was fair in the way they handled layoffs when necessary? Was there a sense of loyalty to their employees? Andy Grove, Intel CEO, who believes that everyone is expendable, says, “Until very recently, if you went to work at an established company, you could assume that your job would last the rest of your working life. But when companies no longer have lifelong careers themselves, how can they provide one for their employees?

As these companies struggle to adapt, the methods of doing business that worked very well for them for decades are becoming history. Companies that have had generations of employees growing up under a no-layoff policy are now dumping 10,000 people onto the street at a crack. The sad news is, nobody owes you a career. Your career is literally your business. [2]” In fairness to Mr. Grove, he has done little more than put into words what many managers believe. But, what are the consequences of this kind of thinking for your organization? It is hard to argue that Intel has not been successful, at least financially and technically. But there are certainly successful businesses where their employees are truly treated like team members. Effective leadership training should promote a longer term vision.

How will the behavior of your organization’s leaders today impact your company in five years? Ten years? Leadership training that encourages your organization’s managers, supervisors, and team leaders to do more listening, respectful confrontation of unproductive behavior, and win/win conflict resolution will pay off in reducing turnover, especially among your best team members. The costs of high turnover are well known. Recruiting, training, productivity loss, learning curves, and increased error are factors that add up to serious dollars. Reducing that rate can become a competitive edge. Plus, the added value of team members who understand the company’s culture and processes is an extremely important asset. Sales people who can truly present their company’s services and products with genuine enthusiasm will sell more and create more customer loyalty than those who are just paying lip service until they can find a better job. Manufacturing operators who are vigilant about detecting glitches in the process before they become problems can prevent scrap and major repair costs. Employees who say good things about their company to their friends and neighbors contribute to the bottom line.

I believe that we underestimate the value of such loyalty. No one believes that companies should provide lifetime careers for people. Few college students are looking for that kind of life. A certain amount of change is good. It keeps the system fresh. It gives the individuals an opportunity to grow and expand in ways that experience in a single company could not. But, the organization that keeps its team members for an average of four or five years is likely to be more profitable than one where the entire workforce turns over every 12 or 18 months. So, loyalty doesn’t have to mean BFF, but loyal team members will stay with you longer and cost you less. Leadership training needs to encourage participants to recognize the importance of making each team member’s tenure a meaningful one. Learning the kinds of leadership skills that promote trust, openness, and constructive problem solving will beat the “me first” approach every time.

[1] Bureau of Labor Statistics, U.S. Department of Labor. “Job Openings and Labor Turnover Survey Highlights,” January 2011
[2] Grove, Andrew. Only The Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company. Random House, New York, NY 1996.
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