A few days ago, I was having an exchange of views with a Brazilian business leader I highly consider.
The topic was about employees’ turnover. Like most of us, I assume, I considered it as negative if not very costly. In traditional businesses (still the vast majority on Earth), losing someone equates to losing knowledge, know-how, experience, history and, sometimes, the huge investment (MBA and other courses) consented by the company to develop and retain that individual.
Of course, I am not talking here about intended departures, people we let go because their values don’t match the ones of the organisation, or because their behaviour destroys instead of create value, or because, in spite of all efforts, they are not up for the job. In such cases, the question is rather whether or not our selection process was at fault or if that is simply part of the norm. No, I am talking about people whose willingness to leave comes as a shock to us and is considered a real loss to the company!
But… does my way of thinking still hold in the context of the Disruption Economy?
In his “Teams of teams”, retired General McChrystal invites us to challenge the assumption that “seniors know best”, when he recommends the reverse mentoring of senior leaders by younger, more technology astute and free of certain preconceived ideas, young soldiers…
As far as I am concerned, the main value of Inclusion is the creation of a collective intelligence through an open and welcoming culture, capable of rapidly integrating the knowledge, questions, skills and observations that the new entrants bring along with them. Nurturing an Inclusion culture means welcoming those who challenge the status quo, as a sign of engagement. Inclusion doesn’t go without Psychological Safety (without which new entrants won’t dare to speak-up nor ask “stupid questions”, which may prove that the Kings are naked…).
The Disruption Economy, recommends to identify and challenge our long held, unconsciously decided, “Business Orthodoxies”. Some 40 years ago, a study nicknamed “The paradox of Friendship” had discovered that the main reason for creativity and innovation to rapidly drop in teams, after 12 to 14 months, was due to people getting in a sort of colluding mode with each other, whereby people would no longer challenge each other, by fear of retaliation. Rapidly, the teams were coming to their “lowest common denominator”, paying more attention to try and guess how to get along with each other, instead of holding the courageous conversations that were overdue. What the researchers then recommended was a sort of forced turnover by “injecting” a completely odd and different individual in the too comfortable group. It was strongly suggested, nevertheless, that the head of each team should pay particular attention to ensure that this “inoculated germ” would not be “neutralised” by the rest of the team…
So, maybe a high turnover, at certain conditions is a good thing in a disruptive organisation. Here are the conditions I identified:
- Turnover as part of the business model: I am not an “unconditional McKinsey lover” but highly respect their coach up or coach out developmental model. Senior leaders are trained in mentoring. A study made in Australia, once showed young consultants there received an average of 300 feedbacks/year… The rules of the game are very clear: Not everybody makes it to the top, not everybody stays at McKinsey, but people are not fired (unless they deserve to be), people are coached, accompanied up or out of the firm. And I still fail to see, after so many years in the business, an ex-McKinsey consultant spitting in the soup after they left. On the contrary, one of the most inept systems I ever came across was G.E.’s demand that each year, the bottom 10% of any team be let go to be replaced by better people. The first rule is that, rather than being an accident that happens to the disruptive organisation, the high turnover must be part of the business model (as it is for a consultancy) and applied with respect, decency and a developmental aim.
- Inclusion culture: A high turnover will rapidly turn to a disaster, should the organisation not have a strong value and culture of inclusion. For sure, a delicate chemistry needs to be found between those jumping on an already successful train and those who are legitimately proud of its track record. Leaders need to be role models of inclusion, psychological safety and support on the one side, and also protect the legacy, rituals and pride of the past success of the “seniors”. Leaders need to ensure that a bridging culture is nurtured instead of the lethal “bonding” (the seniors feeling disrespected vs the juniors feeling they are not being taken seriously).
- Clarity: The two above, seem to integrate well with the vision of a Disruptive culture but, as I recently experienced, may be counter-intuitive. The fact that a high turnover is desirable and encouraged, should be made clear. The expectation about bonding, mutual respect, inclusion and the creation of collective intelligence should be explicited. The fact that leaving will not be considered as betrayal and that being coached out is not a sign of incompetence should be clearly labelled and lived.
- Celebrate the “leavers”: During the 90’s, one of my favourite garments brand, Levi’s, had to go through the heart-breaking duty of laying people off, due to poor business results. But, contrary to many, Levi’s didn’t discretely invite the unfortunate leavers to exit through a discrete back door: They celebrated them as heroes, who, through their sacrifice, would save the whole company. A community was created, where those people would be kept in touch with Levi’s, its stories and its financial health and they were promised to be the first who would be called, should the company hire again. The latest is exactly what happened and an amazing number of leavers reintegrated the company, even though they had encountered new jobs. Continuing to “treat leavers as members of the family” is an important thing to do, when “turnover is part of the plan!”
- Ensure people leave for the right reasons: When I worked for my ski resort of Villars, I pride myself that, over my five years tenure, none of our people’s departures came as a (bad) surprise. Considering myself as their coach and developer, prior to anything else, I was always the first to know about the opportunities that had been offered elsewhere. In many cases, I warmly recommended they went, as these represented a real qualitative jump on their career path and advised against moving in some other cases. This created a climate of trust and transparency which greatly helped in not being “victims of circumstances” when some of us would leave.
As a symbol of what the capacity to integrate and include “rebels” challenging the status quo, let me offer you an extract of one of the movie that stays top of my list since my 24th year of age. Carlos Saura is one of Spain’s cinema’s “living legend”. In 1983, he created a very original version of the famous opera Carmen. As actors, he invited Antonio Gades, one of the sacred monsters of Flamenco, hated by a part of the establishment for his modernisation of this traditional dance. Another of the stars invited is Paco de Lucia, one of the most brilliant guitarist of all times, also snubbed by the establishment for his novel way of playing flamenco. They are accompanied by an army of other stars, all at the margin of what classical flamenco is. See the magic when an atmosphere of Inclusion and Respect is created…
I thank the leader who, hopefully will have recognized our exchange, for having opened my eyes on an orthodoxy I had fallen into. Leadership is about generosity and encouraging turnover may, in some cases, be an act of generosity!
Enjoy your leadership journey…