A Freight Forwarding Company in the process of re-inventing itself needed to deal urgently with the extremely high rate of employee turnover – 58.5%– a major obstacle to the re-invention process.
Apart from the costs involved in recruiting and training, there was an increasing cost as a consequence of low customer satisfaction scores from poor quality of service. Customer turnover numbers were also significantly on the rise.
A breakthrough project was created to fit with the CEO’s overall intention to grow the business, increase customer satisfaction, and win business from competitors amongst the most demanding global corporations. If those intentions were to be made real turnover had to be 10% or less, and that level had to be sustainable.
- The leadership team wrestled with the logical disconnect between the best efforts of the past and the CEO’s intention for the future. Reluctantly, they had agreed to align with the CEO’s intentions
- There was a mood of resignation about the possibility of making any significant improvement in this condition - a catalogue of the efforts undertaken over time to improve the situation were offered as evidence that that the problem was not solvable
- Although high, this rate of turnover was not out-of-step with the industry. Industry statistics were used to demonstrate that turnover is just part of the “cost of doing business” in their relatively low skilled workforce.
- An executive who was passionate about the need for a breakthrough in the turnover rate asked the CEO that she be accountable for the project
- A project team was assembled and membership criteria were established. They included: a passion to create a breakthrough; every constituency of the organization represented; part of team member's KPI’s and compensation tied to the performance of the project
- Monthly and weekly milestones were created back from the future intended outcome of 10%, visibly displaying the delta’s
- These delta's were formulated as a series of time-bound problems to solve, with specific and measurable outcomes, week-by-week, month-by-month, that when solved, directly forwarded the intended outcomes.
- The existence of the project, the intended outcomes and the importance of its success to the whole re-invention initiative were widely publicized throughout the organization.
A Critical Design Element: Breakthrough projects have to be time-bound, with specific measurable outcomes, so we are inventing against clear boundaries.
- At the end of the twelve months' span of the project, the turnover was at an annual run rate of 9.8%
- Hiring criteria, consistent with the new strategy of the organization were clearly articulated
- New employee training programs were institutionalized and ongoing training, mentoring and coaching were instituted
- A culture of surfacing and dealing with problems was established. It was no longer acceptable to just “put up” with what our client called “unworkability”
- Visible displays of actual results against milestones became a company-wide practice and “breakdowns” were flagged every time a milestone was at risk or was missed and a series of steps was initiated to produce the needed “breakthrough”
- Finger pointing and blaming was "outlawed" and replaced with “after action reviews” to learn from every instance when efforts did not produce desired results
- Reasons, explanations and justifications gave way to promises of action to produce desired outcomes
- Teamwork, inclusion, and mutual support scores improved, as everyone was included in “open forum” work sessions to help resolve the turnover problem. These “open forum” sessions became one of the institutionalized practices for idea generation and problem-solving
- Practices were established to institutionalize what were identified as best practices from the after action reviews
- Values, particularly those that had previously been espoused but not lived, were either supported with behaviors or acknowledged as window dressing and as a consequence dropped.
After the fact, many on the leadership team conceded that at the start of the project they thought it unlikely they would actually get to 10%. They thought that the result, by attempting to produce a breakthrough, would probably do better than the predictable 55% that past-based logic told them was probably doable - but definitely not 10%.