Tenure versus Loyalty

by Mike Myatt

If your organization confuses loyalty and tenure there is trouble on the horizon. If your business highly values tenure as a measure for employee evaluation, it is time for you to consider updating your talent management practices and procedures. So, what's wrong with tenure you ask? In principle very little; but in practice virtually everything. Think of any organization that has mediocre talent, where management has frustrated you with consistent under-performance, or where cavalier attitudes and a sense of entitlement overshadow a focus on productivity and performance, and I'll show you an organization that embraces tenure.

An old business saying that sums-up my feelings about tenure goes like this:


"The only thing worse than an employee who quits and leaves is an employee who quits and stays."


You see tenure is not synonymous with loyalty, but rather is a more often a measure of compliance and survival. Ask yourself this question: Who is more loyal - an employee who has been with the company a long time but is an under-performer, or a less tenured employee who always goes the extra mile and consistently exceeds expectations? The following are the top reasons why tenure as business practice simply constitutes flawed business logic:

1.Tenure is Outdated

• In case you haven't checked your calendar lately it isn't 1950, it's almost 2010. Outside of government and academia (this should be more than enough proof that tenure is a bad thing) most people don't work for 30 years for the same employer.

2.Tenure Suppresses Talent

• Just because 'Employee A' has performed a task longer than 'Employee B' doesn't necessarily mean that 'A' is more skilled than 'B'. Furthermore, just because 'A' has been with the company longer than 'B', doesn't necessarily mean that 'A' possesses more talent, upside, knowledge, or adds more value than 'B'. When an organization promotes based upon tenure, and not based upon recognition of talent, merit, performance, etc., the company is not leveraging its true talent base. Not recognizing, developing, and rewarding talent is the fastest way I know of to drive talent out of your organization and directly into the hands of your competition.

3.Tenure Breeds Obsolescence and Mediocrity

• The sad reality is, that with very few exceptions, if you have someone on your payroll who has been with the organization in a similar role or capacity for an unusually long period of time, you likely have a mediocre employee producing mediocre work. Here's an example. Even in this day and age it is still not that uncommon to find large corporations and government agencies with IT silos built upon mainframe computing solutions. These silos are staffed with legions of 'tenured' COBOL and C++ programmers, as well as 'tenured' IT managers overseeing the operation. Walking into these organizations is often like traveling back in time 20 years. These companies have placed themselves far behind the technology curve because tenured managers hire employees with obsolete skill sets and together they create mediocre solutions.

4.Tenure Inhibits Change and Cripples Innovation

• Organizations that favor tenure also tend to be prone to majoring in the minors. The mandates for compliance along with the accompanying maze of bureaucratic processes and procedures, will often take precedence over doing the right thing. Tenured organizations also tend to embrace comfort zones and are often built upon the "DITWLY" (Did It That Way Last Year) principle. All of these traits preclude the advancement of change initiatives and cripple innovation.

5. Tenure Kills Brands

• As an organization expands and continues to promote mediocre talent up through the ranks, you'll notice that growth will eventually slow, quality and customer service suffer, and eventually these negative attributes will be reflected in declining brand equity. Think of any negative brand connotations you have, and you'll likely find an organization that embraces tenure. The Costco experience isn't what it used to be, US auto manufacturers continue to struggle, the Comcast brand has been hammered, the banking industry has been crippled, and government agencies (pick one - IRS, DMV, etc.) often evoke feelings of hatred at the mere mention of their name.

The bottom line is this...as an employer you need to possess an extreme bias toward performance. Reward talent, innovation, loyalty, attitude, creativity, work ethic, contribution, and leadership ability...not tenure.

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Mike Myatt, is a Top CEO Coach, author of "Leadership Matters...The CEO Survival Manual", and Managing Director of N2Growth.

Frequent Diner's Club

The coupon is as American as apple pie, and American shoppers love a good bargain. Some people love to clip coupons and some feel that it is beneath them, that somehow using a coupon makes them less of a person. I'm not quite sure I understand that one, but to each his own. Despite American's aversion to haggling, there is no doubt that there are a lot of goods and services in America with variable prices. It is just that in most cases, instead of asking for a deal, you have to know about a deal ahead of time. This usually means knowing where to find the coupon.

Similar to the stories of three people in a row of airline seats having paid vastly different prices for seats next to each other, in the same way, three diners may all be paying different prices for the same entrees. Whether companies want to admit it, the same is true for many other products and services as well.

The internet intensifies this phenomenon of variable pricing and has the potential to spread your coupon beyond those you intended to give it to. The most famous story is the story of the free iced coffee coupon that Starbucks distributed to some of its employees encouraging them to share it with friends and family. The problem is that one or more of those friends and families posted it on their websites and suddenly Starbucks was facing more redemptions than they anticpated. They chose to stop accepting the coupons altogether, touching off a negative PR firestorm.

So, how can restaurants make technology work for them instead of against them? The first thing that all restaurants should be doing is trying to identify their most frequent patrons and engaging them in a meaningful dialogue. In order to have this kind of dialogue the restaurant must be careful about the kind of communications they send, and seek to offer personalized opportunities that occasional diners do not get. Imagine a restaurant that is used to having 70% or more of its reservations for the evening full by 6pm and the rest of its capacity filled by walkups, but one evening it is only running at 30% full by 6pm. An ordinary restaurant would just suffer through a poor night.

A smart restaurant might take advantage of their preferred diner program to text the members that live within ten miles of the restaurant to let them know that if they come in this evening that they can choose a special price on the evenings' special or have the evening's special appetizer or dessert for free. This helps the restaurant fill spare capacity, helps loyal customers feel special (and even more loyal), and will the reduce the amount of food waste.

A restaurant that tracks preferred diner's tastes, might be able to organize special events that speak to the preferences of different customers on slow nights, or possibly allow the restaurant to draw in certain customers on nights that certain specials are offered that might please a certain group of customer's palettes. There is also no denying that pulling in customers on their birthdays (with a free meal or glass of wine) tends to pull other people along with them. Are there other occasions that you can think of an offer that you could provide that might encourage the preferred diner to bring others along with him or her?

Are you using your loyalty program to fill spare capacity?

Are you really using it to reward and encourage loyalty?

@innovate