High Performing Organization Case Study – “Too Much of a Good Thing!”

The Problem

TerconPartners was contacted by the CEO of a software company that had
been in business for about ten years and had a successful track that clearly qualified it to be described as an “HPO” in terms of three of the four financial measures of High Performance: Revenue Growth, Profitability, and Customer Satisfaction. And, they were on a growth curve that should lead to a significantly increased Market Share. Yet the CEO had become aware of a worrisome pattern that could eventually derail the company’s aspirations for increased market share, if not addressed quickly.

It is well-known in the high-tech industry that it’s common for a portion of a company’s employees to change employers fairly frequently. This trend, although present before, had increased dramatically in Company X over the past six months. The CEO was baffled because he had taken pains to ensure that pay and benefits were highly competitive, that his employees had the latest technology at their disposal, and that the office environment was state of the art -including free gourmet breakfasts and lunches on a daily basis!

The Solution

Step One: TerconPartners interviewed a cross-section of employees, sat in on a few staff meetings, and talked with key leaders about what they thought was triggering the high turnover.

Step Two: TPl’s High Performing Team Index™ was administered to the
company’s 150 employees.

An analysis of interview and survey data identified the following factors as primary triggers for the recent spike in employee turnover:

1.Fall-out from an Accelerated Pace of Growth. For the first years, the original 9 employees worked as a tight knit group of colleagues who collaborated closely in pursuit of a common goal -the success of the company. When the company “took off” and began adding 10 to 15 employees a month, the original core group no longer existed as an intact team, and the former members found themselves in a new world that lacked the camaraderie of the past. Additionally, the “old guard” began to question whether the technical skills of the “newbies” were equal to the tasks at hand, although they had no information to prove that the newer hires were not technically proficient. The fact was that the “old guard” had virtually no information about what was happening in the company. For example, no one in leadership appeared to think it was important to formally introduce new hires to the rest of the team or create a forum for staff members to get to know each other on a personal basis.

2. Perceived Loss of Confidence in the Company. When members of the “old guard” began to exit, some newer employees began to doubt their decision to come on-board, and some left as a result.

3. Leadership Attention Diverted from the Team. Due to the company ‘s rapid growth, the Leadership Team’s responsibilities had quadrupled and their focus was mainly on technology-related issues and trying to keep customers happy. When the “old guard” employees expressed concerns about their futures in the rapidly expanding company, no one seemed to have time to listen to them or try to understand their concerns.

4. Lack of a formal Change Management Plan. Not enough regular and consistent messaging from management was being received by employees to keep them engaged and up to date. And, importantly, the emotional support needed by both the “old guard” and the new hires during the period of accelerated growth transition was non­ existent.

TPl’s Solutions Framework

1. Improve Leadership Messaging. Ensure that they give people the three things they need most during times of major Change:

a.) Information – What is happening and When is it happening? How will the changes be rolled out? How will it affect ME?

b.) Structure – Who will I be working with? What are my roles & responsibilities? What will the leadership structure look like?

c.) Emotional Support -Leadership needs to encourage people to acknowledge their losses, demonstrate appreciation for employees past contributions, and celebrate the new team and the new opportunities ahead.

2. Implement a Structured Organizational Change Model. Educate the team about the fact that people will be at different stages during a major change initiative. Honor the fact that the “old-timers” may need longer to get on board.

3. Invest Time in Building the New Team and Reinforcing Progress Made. TerconPartners’ experience over many years with clients in multiple industries is that taking time out for periodic Team Alignment sessions keeps people engaged, energized and focused on the right things. Therefore, the change initiative is more likely to achieve its intended objectives on schedule and with fewer unexpected disruptions.

Call TerconPartners for more information about our Change Management tools, customized learning modules and Leader Coaching Programs. Call 1-703-388-0059 or email us at info@terconparters.com.