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Building Tomorrow's Workforce in Today's Economy

When I asked the CEO of a regional hospital how things were going recently, he replied, “Except for a pending flu pandemic, the worst recession in history, the uncertainty around health care reform, and the State just cut our Medicaid reimbursement, things are fine. I mean how many crises can you deal with at once?”

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My New Book Coming.....

        This fall, between speeches and consulting projects, I’m co-authoring a new book for McGraw-Hill with the working title: An Executive’s Guide to High-Impact Talent Management. Our book gives CEOs and senior line managers practical advice on how to:

• Turn the changing dynamics of the workforce into a business opportunity. That means prospering in spite of aging boomers, enigmatic Gen-Ys, increasingly thin leadership pipelines, and serious skill shortages.
• Assess the real risks of a changing workforce needed to implement a specific business strategy.
• Evaluate HR’s proposals for talent management and workforce planning initiatives.
• Assess the performance of your workforce development staff.
• Actively sponsor high-impact talent strategies by setting clear direction, creating urgency, and measuring results.

 

If you’re a senior executive, or are working with one on these issues, and would like to participate in our ongoing research for the book, please contact me at dwdelong@verizon.net. My co-author is Steve Trautman, author of Teach What You Know: A Practical Leader’s Guide to Knowledge Transfer. Participants in this research, get early access to our latest findings on what leading edge organizations are learning as they try to solve these problems.

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Defining New Workforce Challenges

            As organizations try to recover from the recent recession, management perceptions of workforce challenges have changed. Today our clients talk about issues in new ways. For example:

• “How many of our older workers will retire as planned?”
• “Will we be able to retain all these younger workers we’ve hired and
 trained once the job market heats up?”
• “How can we accelerate the careers of our middle managers when
 developmental opportunities are so limited?”
• “Where are we most at risk of developing skill gaps if all our retirement-eligible employees leave us all at once?”

            To understand the complexities of the workforce and leadership challenges you face, this section describes specific problems and solutions we’re finding in our ongoing research and work with clients. How well are you dealing with these issues?

Is Our Talent Management Strategy Paying Off?

            1. How do we know we’re going to have the leadership and workforce talent we need to drive the business in the future?

            Many organizations today are investing millions in talent management initiatives, e.g. succession planning, mentoring, workforce planning, knowledge transfer, etc. – but getting no meaningful return on their investment. Senior executives seem either unaware or uncertain about how to respond to this dilemma. This is a central question we are addressing in our new book being published by McGraw-Hill.

We studied a global consumer products company recently that unexpectedly faced this problem even though its leaders had been investing for a decade to create a “world class” talent management system. After setting aggressive growth objectives for the firm, the new CEO requested a detailed audit of the company’s leadership pipeline. This assessment showed the firm’s talent pool was woefully inadequate to drive the business to the growth levels expected.

The results of the audit shocked top executives into implementing major changes in the firm’s talent development processes. These changes have already led to significant and measurable changes in the company’s leadership talent pool. There are plenty of organizations today getting lots of good press out of their well-publicized talent management programs. But, when it comes to building future leadership and workforce capabilities, measuring expected outcomes in key. For more on this, contact us for a copy of my recent article “Reducing Risk: Building the Business Case for Investing in Knowledge Retention.”

Retaining Younger Workers

            2. How can we retain our Gen-Ys when the economy recovers?

One of the benefits of the recent recession is that it has significantly slowed the turnover of 20-something Gen-Ys, who were job hopping relentlessly before the downturn. Some industries, like health care, have hired a fair number of younger workers in the last year, and they are very concerned that these Gen-Ys will start leaving again as soon as the job market heats up. Two factors that will improve retention of Gen-Ys are the quality of top management communication with employees and helping younger workers build more personal connections within the firm. For insights on how the accounting firm Deloitte is building a culture to retain younger high-skill workers see my new case study “Building a Culture to Retain Gen-Ys”.

Re-engaging Older Workers

            3. How do we make sure aging baby boomers, who can’t afford to retire, stay productive?

It’s no secret that many older workers now feel they must stay on the job a lot longer than they once planned. Although they are not too concerned about it today, leaders are going to increasingly need to find ways to keep these veteran employees as productive as possible. One tactic is to help older workers actually develop a plan for their retirement and how they expect to spend their time. This won’t necessarily keep them on the job longer. But one boomer employment expert told me, “When you help people build a vision for what their life is going to be like when they make a transition, then what they’re doing now becomes more tolerable. It creates a sense of renewal and excitement about the possibilities.” We’re continually exploring solutions around this growing problem of increasing the productivity of older workers. See the “Fanning the Flame” case study below to see how one organization has addressed this problem.

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Lessons from the Leading Edge

This section describes what we are learning when organizations implement creative solutions to build future workforce capabilities and accelerate knowledge transfer. This case shows how a hospital in North Carolina has addressed the problem of keeping veteran employees fully engaged and committed to the organization.

Pitt County’s “Fanning the Flame” Program

Pitt County Memorial Hospital (PCMH) has seen lots of changes in the last 20 years. This former community hospital has grown into an 761-bed medical center and teaching hospital, serving rural eastern North Carolina. With more than 6,600 employees, including 1,783 nurses, the hospital’s plans for continued growth depend in part on its ability to recruit and retain skilled healthcare professionals. Of particular concern has been PCMH’s ability to retain its veteran nurses. The cost of replacing an experienced nurse is about $65,000. But that doesn’t include the costs of lost knowledge, having fewer experienced nurses to mentor new staff, and the potential decline in quality of patient care when veteran nurses leave.

PCMH launched an intensive initiative in 2003 to re-engage experienced nurses and help them reframe their work at the hospital in ways that benefit the entire organization.

“Fanning the Flame” is a three-day program run once a year at a quiet seaside retreat for 25 veteran nurses who are nominated by their supervisors or colleagues. Nurses attending the retreat receive three paid education days. The first day of the program is devoted to “de-stressing,” helping participants relax and disconnect from their hectic work and family lives. The program’s second day focuses on reinforcing the value these nurses bring to the hospital as part of an effective team, while also exposing them to new opportunities for growth. Participants hear from other nurses like themselves who have successfully expanded or redefined their roles. Speakers describe the benefits of doing research, taking on leadership positions in nursing organizations, participating in clinical teaching programs, going for national certification in their specialty, or pursuing advanced nursing degrees.

Day three of Fanning the Flame is devoted to “job sculpting,” drawing on the opportunities described the day before. The objective is for participants to create new goals for themselves and to leave the program with a plan of how they want to rethink their practice and their career. Options include choosing to become a clinical teaching associate, to go back to school, to work for national certification, or to more actively mentor new nursing grads. “We want to keep them at the bedside, but we also want these nurses to grow professionally, so we acquaint them with opportunities to expand their practice specifically in the areas of leadership, research, professional development and community service.” says Judith Kuykendall, a facilitator for the program. Of 144 graduates in six years, only four have left the health system. And 73 percent of participants have reported Fanning the Flame influenced their decision to continue working within the hospital system.

This initiative has several important benefits in a multi-generational work environment. First, it clearly improves productivity, as well as retention of more experienced nurses, as evidenced by comments from recent graduates:

• I was just doing my time and getting closer to retirement. But this program gave me incentives to improve myself. It was the difference between keeping a stagnant employee versus one who is now continuing to improve.

• I was just puttering along in my career. I was stagnant. This was presented to me as a reward. And what better way than to send you to the beach for three days and pamper you. It was a spiritual experience. When I got back I was like a new nurse again.

• I’d been at this hospital 13 years when I did the program. I thought I would stay here because that’s just what you do. But after Fanning the Flame I had a different outlook. I realized I could do more, instead of just accepting stuff that came at me. Now I pay more attention to decisions being made that affect the hospital.

 

Fanning the Flame costs about $1,800 per participant, which is a good investment compared to the cost of replacing even one experienced nurse, or the hidden costs of an unmotivated older worker. But another benefit of re-energizing veteran employees is the increased availability of motivated mentors to work with the younger nursing staff.

At Pitt County, investing in older generations has proved to be a great retention tool, as well as an unexpected benefit for the next generation. Helping one generation serve another is at the heart of an intergenerational approach to building effective organizations. For more details on this retention program see my case study published by the MetLife Mature Market Institute “Fanning the Flame to Retain Boomer Nurses.”

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Lost Knowledge Stories

(Are You Taking Steps So This Doesn’t Happen to You?)

Failure to identify and preempt threats of knowledge loss costs organizations millions of dollar’s each year. But the problem remains largely invisible to leaders and is not discussed at the Board level. This section contains stories, which we continually collect to illustrate the real costs of this problem for organizations – and individuals. These examples can help sensitize you to emerging risks in your own organization. Stories like these are an essential part of building a business case for investing in preemptive solutions.

• The granddaddy of all lost knowledge nightmares came out of the US National Nuclear Security Administration (NSSA) recently when the agency revealed it had spent $69 million largely because it had failed to maintain its knowledge base for manufacturing critical components of nuclear weapons that are being refurbished. NSSA is responsible for programs that will extend the operational life of US nuclear weapons 20 to 30 years, since new weapons are not currently being developed. But efforts to rebuild the warheads used on Trident missiles were halted when it was discovered that NNSA had lost the knowledge of how to manufacture an essential component of the bomb. According to an audit by the Government Accountability Office, the agency failed to document the original manufacturing process and those with production expertise have retired or left the agency. For more details see GAO report at: www.gao.gov/highlights/d09385high.pdf


• In early 2006, more than 200,000 gallons of crude oil spilled onto Alaska’s North Slope forcing energy giant BP to shut down the largest U.S. oil field. Suddenly, 8% of U.S. domestic oil production was unavailable because of extensive corrosion in BP’s oil pipeline. Follow up investigations revealed that BP had failed to retain its critical knowledge base on pipeline corrosion needed to monitor the state of its pipeline infrastructure. Before a series of leaks were discovered, the job of BP’s senior corrosion engineer had gone unfilled for over a year, which meant the firm no longer had an adequate strategic overview of its corrosion prevention activities. Not only did the company sustain extensive losses in revenues, but it also faced embarrassing Congressional hearings where leaders had to admit that BP had failed to meet its obligations to customers and the public. In addition, the company has been forced to rebuild its corrosion prevention capabilities, hiring expensive outside experts to evaluate existing capabilities and to improve its corrosion prevention policies.


• According to Bill Gates, when Microsoft went to expand its Redmond campus some years ago, management couldn’t find the blueprints for its existing buildings. These drawings were essential for the new project. They called the company’s recently retired head of real estate and facilities to try to locate the plans. This retiree referred them to an electrician who happened to still be working for one of Microsoft’s outside vendors. It turned out this electrician was the only person in the world who had all of the blueprints for all of Microsoft’s buildings. Describing this nearly-lost knowledge, Gates wrote in Business @ The Speed of Thought, “Here we were the largest developer of office space in the Seattle area ...and our entire knowledge base of crucial information was being carried around in the heads of just a few people and in a few stacks of blueprints we didn’t even have on file.”


• A Canadian metals refinery had to overhaul its processing tanks, which is a complex maintenance process only done every 15 years. But the company was unable to bring the tanks back online after the complicated procedure because plant operators had failed to retain critical knowledge of how to complete the refurbishing process when it was done the last time. According to the plant’s general manager, problems in restoring operations cost the firm millions of dollars in lost sales revenues. And these costs will recur the next time, unless management finds ways to retain what operators have re-learned about carrying out the complex but infrequent maintenance process.



For more information on diagnosing the costs of lost knowledge, see our report: Diagnosing the Costs of Lost Knowledge on Organizational Performance

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