In quantum mechanics, the Heisenberg uncertainty principle states that certain pairs of physical properties, like position and momentum, cannot both be known to arbitrary precision. That is, the more precisely one property is known, the less precisely the other can be known.

To me, this simply means that I cannot overcome the effect of the observer on that being observed. The harder I work to “nail down” the so called truth with a capital “T,” the less likely I am to be open to seeing things from another point of view.

There’s a practical application of the Quantum Mechanics and an understanding of Einstein’s theories of relativity to our every day lives: the Global Positioning System. If we did not correct the GPS satellite information for the effects of special and general relativity, the system would be useless to us here on earth. On a more personal level, learning that the world isn’t necessarily as I perceive it and keeping in mind that I cannot escape the fact that I look at the world (including the “business world”) through my own filters makes me at least stop and question what I observe, believe and assume.

For most of us, the old Newtonian view of the world works quite well enough. We don’t need to take into effect quantum effects or relativity in order to function. Newtonian physics that I learned in school isn’t wrong, it’s just incomplete, it’s an approximation. If we want to venture past the normal every day life functions here on earth, or move down into the world of the atom (which we do on a regular basis – for example designing the semiconductor products that make the PC I’m using a practical tool), then someone has to take into account the more accurate view of the world.

I try to use all this as an analogy for business. As long as the market doesn’t change, or the competition doesn’t introduce some disruptive technology, I can use the “rules” I’ve developed to make decisions and strategize my next product or service innovations. At some point though, we may well have to step back, reevaluate the situation, apply some “advanced physics” and come up with new rules, policies and regulations. I think we’re living through such a time.

We misapplied a bunch of advanced math (creating CDOs), thought we new what we were doing, found out we didn’t, narrowly avoided a collapse of the man-made financial world and now must face a new understanding of “reality.” We can discuss the probabilities, statistics, derivatives and/or mathematical principles all we want; the practical results is that we created an unsustainable system. So we now must redesign that system. Wait, who’s “we?”

That would be you, the business leader. What’s wrong or incomplete about your business model? Is it possible, in light of the effects of the near financial collapse, for you to believe previous assumptions and approximations about your market realities are still true? Are your customers going to respond the same way to your products, services, brand and advertising? I’m pretty confident that things have changed significantly and that “old business models” are obsolete now. We have new information, new insights and new “realities.” So the question is – how will you adjust to the new math?

All we do is ask them if they would be open to discussing a potential career opportunity. Virtually 95% of the time the employee replies, “Yes.” Why would anyone not want to know what is going on in the market, have a discussion around their career or just get a feel for current compensation ranges? Even if they are completely happy in their current position, this is good stuff to know.

The important, and I believe the most relevant question is,” Why, out of the 95% that are open to discussing career opportunities, do roughly 10% indicate that they are happy with their job, and although it sounds like a good opportunity, they aren’t interested in pursuing it further?”

What do these 10% have that the other 90% don’t? That is something a recruiter has nothing to do with. They generally have four things, 1) they are learning in their current position, 2) they feel they are having some impact on the company, 3) they are growing, and 4) they respect their boss. When these four things are part of a person’s job, the best recruiter can’t get them to move.

An example of this recently happened. I was jointly interviewing candidates with one of my clients. At dinner one night, my client started asking me about the job market, “Is it picking up?” and “Are any particular industries hiring?” He mentioned that he thought the market was getting better because in the last couple of months he had been contacted a couple of times by recruiters for potential opportunities. Like most, he listened to what they had to say, but in both instances he thanked the recruiter for the call and flatly turn them down.

Why, I asked?

Like most, his answer had nothing to do with compensation. He commented, “I enjoy what I’m doing. I have a great boss and most of all I’m challenged.” Then he added, “When I stop being challenged it is time to move on.” In fact, prior to being promoted to his current position he was looking. If his current position had not come open he would have left the company.

As he explained it, “My last boss treated me like a step child (I used step child. His word did start with an S). The position had lost its challenges, the job was the job, and that was all there was to it.” His boss was rarely around to support him and he was doing the same thing this year as he had done the last three years. Boredom and lack of respect for his boss had set in. The good news was that he worked for an excellent company. BTW, he has been with this company for 12 years and in his current position for 4 years.

This is a classic example of how one employee went from engaging recruiters to telling them, “Thanks, but no thanks.”

We realize that not every company has the ability to promote someone or move them to another position in order to retain them. However, that doesn’t mean there aren’t a number of things a company can do to help their best talent feel challenged, feel that they are learning, and be respected by their boss. This can happen in just about any sized company.

The best recruiter couldn’t “steal” this person. It all had to do with the job and the person’s boss. The vast majority of people leave because they lose respect for their boss. The best selling book, First Break All The Rules, validates this. This book should be required reading for all managers, regardless of how many years they’ve been a manager. As recruiters for the last 30 years, my partner Barry Deutsch and I, can also validate this is clearly the number one reason candidates tell us they are open to talking about a new position.

To help companies and hiring managers identify some of the things that managers can do to retain their best talent we have put together for you to download our 8 Level Retention Matrix. This matrix will help you identify whether or not your managers are doing what it takes to retain your best talent.

If your managers do some, or most of these, you won’t lose your talent to a recruiter. Your competition will.

You can also download for free our most popular chapter on sourcing top talent from our best-selling book, You’re NOT The Person I Hired. CLICK HERE to download your free chapter.

I welcome your thoughts and comments.

Brad Remillard

Forecasting the future is a fool’s game we all find ourselves having to play if our business is of any reasonable size. How else will we plan for the business? If we don’t forecast, we are likely not to be able to serve our customers. On the other hand, when we do forecast and it is wrong to any significant degree, we may needlessly tie up working capital in inventory and/or capital equipment. To make matters worse, our customers are no better at forecasting than we are. At this point, I’m almost convinced that the weathermen are better at forecasting the weather than we are at forecasting business.

So given that forecasting is a guessing game, although we hope it is an informed guess, then how do we build a culture that will help us hold people accountable for an accurate forecast of our business needs while at the same time making sure we aren’t blind to the reality of just how much the final results may well be outside of our control? This is not an easy question to answer, yet I believe it is a significant issue for many companies.

Like so many organizational issues, this one requires many people to step up and own part of the challenge. As an example, let’s talk about the revenue forecast many companies require of the sales team. The sales team knows that they will be measured at least in part on reaching revenue goals. So the tendency is for the sales team to be conservative in the first go-around on revenue forecasts. That way, they will receive a “low quota” to reach. On the other hand, management will look at the headcount in sales and realize that if the forecast is too low, executives will insist on reducing the headcount to match the revenue. This is a well known, “ancient,” game. And from a pure sales point of view, it all makes sense. However, from an organizational point of view, perhaps there are other issues that need to be considered.

What about inventory, for example? If I forecast low in order to make earning my commissions and bonuses easier for me, I will not have the inventory on hand to serve my customers. After all, the product line will be loaded and inventory will be built based on the expected customer needs. So a low forecast may well result in poor customer service. If sales management “wins” and they keep the forecast high in order to justify headcount (and T&E expense accounts, etc.), then we may well wind up with inventory that won’t be sold and thus needlessly tie up working capital.

It is my opinion that we should seriously look at making sure everyone in the order fulfillment process be held accountable for, measured on and rewarded for customer service, inventory, revenue and profitability. It is the executive’s and manager’s job to make sure that the goals for each are shared reasonably by all (perhaps not the same goals for each department of course) and that the reasons for the goals are clearly communicated. Rather than set revenue numbers from the top down, the forecast should build from the bottom up. The consequences for the forecast should be very clear, and the tension between all parties should be allowed to create the compromise needed to finalize the budget. Only by having everyone focused on all the various parts of running a world class order fulfillment process, and owning the consequences of the decisions, can we have continuous improvement in both forecasting and customer service.

This thought process applies to more business processes than simply the order fulfillment process. It applies to all the major business processes and can lead to very inventive ways of compensating employees. What gets measured and rewarded gets done. Make sure everyone is headed toward the same goal. How does your company manage the order fulfillment and forecasting process? Are the sales people measured on inventory turns, RMA procedures, customer service as well as profitability and revenue goals? What keeps you from having the Marketing People also share in the same goals with a different weight on things more directly in their control? Are you willing to be held accountable for any forecasts you might be asked to provide? Are you willing to be held accountable for the consequences of those forecasts?

You know the litany: Former New York Gov. Eliot Spitzer was caught with a prostitute after aggressively pursuing the very same crime as a prosecutor himself. Holier than thou Nevada Sen. John Ensign was caught in an affair violating the very family values he preached. South Carolina Gov. Mark Sanford was snared in a simply beautiful irony — committing the same sin for which he excoriated Bill Clinton, all the while misusing state resources in the process. Oh, and when he wouldn’t take stimulus funds for his state. Go figure.

How about the scenes with bailed-out car execs traveling by private plane to beg for money or Wall Street bankers begging aid for themselves but not their customers and now laying claim to outrageous bonuses for their failures. How about Enron, WorldCom, Maddoff, etc.? These insults reinforce our most frequent gripe against the powerful: They are hypocrites.

At least now we can take comfort in knowing this is more than just political wrangling as usual. Nope, it’s scientifically true. According to the Economist, this question of power corrupting was addressed by Joris Lammers at Tilburg University, in the Netherlands, and Adam Galinsky at Northwestern University, in Illinois. They have conducted a series of experiments which attempted to elicit states of powerfulness and powerlessness in the minds of volunteers. Having done so, as they report in Psychological Science, they tested those volunteers’ moral pliability. Lord Acton, they found, was right – power tends to corrupt. But, it only corrupts those who believe they deserve that power.

The reason I am interested in this topic is because of my work in corporate governance and business ethics. I have long given up on politicians. As far as I’m concerned, the equation is simple: Politician = Corrupt. “Hey!” you’ll say, “MY congressperson is not corrupt. It’s those other guys.” Right. If so, s/he is the exception that proves the rule. I am still hopeful about the business world though, and so I give lots of thought to the issue of running ethical corporations. To me that means paying attention to our constituents (i.e. Clients/Customers), paying attention to those who do the real work (i.e. our employees), paying attention to our suppliers and in the case of public companies, making sure we take the long view more often than not despite the market pressures to make quarterly numbers. It also means, in my opinion, making sure we do not have a wide disparity in compensation between those who do the “real work” and those who manage the organization.

So there is a lesson in all this for business leaders. Once we loose our humility, once we become convinced we deserve the organizational power we are given, once we believe we know best what needs to be done without really listening to customers, suppliers, colleagues and employees, then we are susceptible to becoming corrupt (whether you’re a politician or a business leader or a community/religious activist). That may not mean embezzling funds (although clearly that happens), but it may mean we pad the old expense account, we verbally abuse people who work for us, we speak ill of those colleagues around us (who may threaten our authority and power), we embellish our accomplishments (perhaps even taking credit for what others do) and we make decisions that are in our own best interest rather than the organization’s or customer’s best interests.

When I speak of “Shaping the Corporate Culture™“, it is precisely these issues in which I am most interested. Have we as business leaders created a culture in our organization which does not allow for entitlement, hypocrisy, individual greed, large disparity in compensation, individualism instead of teamwork, etc.? Are we as business leaders and/or business owners leading by example? What message do we send when we do not insist on performance and allow marginal employees to stay on? What message do we send when we do not have the customer’s best interest at heart? As business leaders, it is our job to Shape the Corporate Culture for the most effective and sustainable organization. How are you doing on that score?

The first four from Part One are:

1) Verbal Praise

2) Achievement Awards

3) Learning and Development

4) Fun and Recreation Events

Each of these can be done at the department or company level. Each demonstrates a culture that rewards people for outstanding effort, provides a positive culture, and a culture that signals respect for the employee.

The last three are:

5) Company Wide Attention This is a step up from department rewards and recognition. This is at the company level. It is great to be honored or recognized by one’s boss, however, when it is by the CEO or at a company level it is a completely different experience. Examples include, recognition in the company newsletter or on its Website, the up front parking space, a picture on the Wall of Fame, recognition at the annual staff meeting, a medal of distinction, any seemingly small thing for exceptional performance, for performing beyond the call of duty or an event that demonstrates extra effort.

It is often these small things that have the biggest and lasting impact.

6) Impactful and Meaningful Work This is one of the biggest reasons top talent contact executive recruiters. Top talent must be constantly challenged. They want to know what is expected of them. When clear direction is consistently lacking, they become frustrated and disengage. However, when top talent have a target to hit they will not only engage but strive to hit the bull’s eye.

Giving your best people additional challenges doesn’t mean you have to constantly be expanding their responsibilities. There is a lot of ground between saying, “That is your job and that is all there is.” to time-to-time challenging them with a special project, taking something off of your desk and giving it to them, allowing them to serve on an ad hoc project, stretching them with some strategic thinking, or involving them in an inter-department project. We find that all it takes is as little as 5% of top talent’s time to be focused on impactful and meaningful work to make a difference.

7) Feedback This seems so obvious but many managers fail to do it. This is not the “good job” feedback discussed earlier. This feedback is at a much higher level. This is feedback that all top talent want and few get. This is what we call, 1-2-1 time. These sessions can be as short as 20 minutes a month. These 1-2-1 sessions focus on their growth, on improvement, build rapport, show genuine interest by the manager, and give time to demonstrate a personal interest in that individual. In our experience, when a manager takes the opportunity to conduct a 1-2-1 on a regular basis, the employee feels a part of the organization. They have the opportunity to be involved in the department, they can give and get feedback, participate, and be heard by their supervisor.

The 1-2-1 can be one of the most powerful experiences for an employee and their supervisor and it can be done in just 20 minutes a month.

Doing one or all of these seven things can dramatically impact your department or organization. In these difficult times any one of these will cement the loyalty of those top performers to you and your company. They will stand by you in difficult times and excel in great times.

Do you have a culture of performance and feedback? To evaluate your culture, download our free Culture Assessment Worksheet. See if everyone in your company would describe your company culture the same. CLICK HERE to download.

Is your hiring process effective at attracting, hiring and retaining top talent? You can do a self assessment of your hiring methodology by downloading our 8 Point Hiring Methodology Self Assessment Scorecard. CLICK HERE to download.

If you have an idea that we missed I welcome your input and comments.

Brad Remillard

With our candidates, their primary concern is focused on non-monetary issues. Most of the time it evolves around their boss or the company. This is not to say compensation isn’t important to them, but it isn’t the primary motivator to listen to a recruiter.

The reverse is also true. When potential candidates decide not to listen to a potential opportunity, it usually isn’t because they feel they are overpaid and that no other company will pay them as much. Rather it is generally that they have a great relationship with their boss and love working at the company.

After listening to so many potential candidates turn us down because they were so happy working where they are, we have come up with 7 things these companies consistently do to create a culture that retains their talent. You don’t have to do all of these, but if you aren’t do any of them you might want to reconsider.

1) Verbal Praise - These companies give what we call, “Standing Ovations” for outstanding performance. They take the time to recognize when someone goes above and beyond the call of duty. They also give praise or even a simple thanks when someone does a good job. This is sincere praise and thanks, not just given as a matter of fact. The contrast is a culture in which the employee’s performance is viewed as, “just doing their job” or “isn’t that what we pay them to do.”

2) Achievement Awards – Another form of praise. These achievement awards are earned. It is not about sooner or later everyone will get one, so everybody feels good. That loses all of their meaning and significance. These awards take different forms in different companies. Some examples include a reserved parking space, employee of the month, a trophy prominently displayed in the person’s office, certificates, mention in the company newsletter, a pin handed out by the CEO, lunch with the CEO and executive team, take a break and cake on Friday afternoon, etc. The important point is that the employees appreciate the recognition and don’t take it for granted.

3) Learning and Development – Top performers want to continue to learn and develop their skills. Does your company encourage on-going learning for your employees? This might include giving them some time off to attend classes, bringing a topic expert in to speak to a group, allowing them to attend a workshop, have an on-line training program they can complete, or encouraging involvement in professional association and trade associations. These types of programs generally don’t take a lot of time or can be performed outside of working hours and the ROI to the company can be huge.

4) Fun and Recreational Events – My daughter works for a private university. They recognize that they don’t pay at the industry level. They overcome this in many ways, but one way is that either her department or the administrative team will do some fun thing that takes an hour or two. Some examples include, a putting contest in the office, a picnic at the park for lunch,one time her department took off an hour early to go see the filming of the Tonight Show, they went bowling during lunch time, they will take a few minutes late in the day and play a game of charades or Pictionary, etc. These are just fun things that make it a great place to work. To the workers this is worth making a few dollars less because they enjoy the people and their efforts are recognized.

Part 2 will cover the final three non-monetary rewards you can do to retain your best talent.

A free audio recording from our radio show that discusses these in more detail is available on our Web site. CLICK HERE to download a copy.

Join our LinkedIn Group, Hiring and Retaining Talent for additional discussions and articles. CLICK HERE to join.

If this article was helpful to you, please pass it on to others so they can also benefit. I welcome your thoughts and comments.

Brad Remillard

That’s the way those who will thrive despite this economic re-set are thinking. How do I get a bigger glass and still keep it half full? With so many business shrinking or going out of business, there should be room for enterprising entrepreneurs to pick up market share. None of this is easy however.

In the present economy, it is difficult to get the investment cash to grow the business. And it is very easy to grow the business too quickly and thereby draining the cash necessary to fund operations. Organic growth is almost always a slow process.

So how will you ensure steady organic growth? Will you simply try and pick up the clients your competitors abandon? Will you try to make the glass a bit bigger by offering new services or products? How will you fund the growth?

I was listening to the discussion around the latest Hyatt fiasco. I don’t know all the facts around this except as I’ve heard them in the discussions and in reading about them in the news – certainly a suspect way of getting the “real facts.” Based on my experience, however, I would be willing to bet that the folks at Hyatt screwed up and the housekeepers have unrealistic expectations.

From what I can see, Hyatt was pretty calloused in the way they effected the reduction in force and were a bit underhanded in how they went about training new employees. They deserve the condemnation they are receiving for those actions. Still, they do have to respond to the present economic reality. Employees are often one of if not THE biggest expense that businesses have. Any significant reduction in costs will almost certainly include sacrifices on the part of the employees. Businesses will do well to use forethought and compassion in these difficult decisions. Hyatt seems not to have done some basics the right way, at least as far as communications and PR is concerned.

One woman who was very distressed at losing her housekeeping job complained that she has a son who needs medication and now she has no benefits. She has found no jobs available for her, especially at the $16.00 per hour she was making at the Hyatt. She is distressed that Hyatt outsourced the work to a Georgia company, Hospitality Staffing Solutions, where the workers will be paid around $8.00 per hour. She clearly felt that because she had a son with medical needs and needs to earn $16/Hr to provide for her family, she should not have been let go.

Yet I am very confident that if she was given the opportunity to leave Hyatt to go to work for a neighboring hotel for $17/Hr with comparable benefits, she would have given her two weeks notice and not thought much about it. All the training she was given by Hyatt and the disruption to them would not have dissuaded her. So let’s call this what it is – at will employment, and within reason, that should apply to both parties. Hyatt has no special obligation to this woman simply because she has a son with medical needs or a need for a certain level of income. Rather, the company has an obligation to make sure that the entity survives. If they can also be compassionate and take care of this woman and the other employees, then that of course would be best.

On the other hand, Hyatt cannot expect to enjoy wonderful Public Relations when they pull bone-headed stunts like they did with the way they handled the move to outsourcing their housekeeping staff. They may have seriously damaged their standing with the community. There are enough people who are out of work who will relate to these housekeepers and enough people employed who know they could soon be in the same position that Hyatt may well have a huge negative result from these actions.

I would also be interested in knowing how much of Hyatt’s executive staff has lost their jobs or had their pay reduced in order to share the pain. Was this all done on the backs of the housekeeping staff? If so, then there is definitely a chance for a well deserved backlash over management’s handling of the outsourcing. Heads should roll at the top.

How do you handle the necessary reductions in force? Are you sharing the pain in an equitable fashion? What do you do to communicate the facts, sense of urgency and logic behind what you choose to do? Are you needlessly making a PR blunder or are you being open, transparent and compassionate?