Alumni

Why the Best Leaders Want Their Superstar Employees to Leave

When it comes to superstar employees, many extraordinary leaders have built outstanding companies not by hoarding great people for themselves, but by mastering the flow of talent through their organizations, writes Sydney Finkelstein.   PHOTO: ISTOCKPHOTO/GETTY IMAGES

When it comes to superstar employees, many extraordinary leaders have built outstanding companies not by hoarding great people for themselves, but by mastering the flow of talent through their organizations, writes Sydney Finkelstein. PHOTO: ISTOCKPHOTO/GETTY IMAGES

By Sydney Finkelstein

Should bosses try to hold on to their star performers?

For most of corporate America, the question might seem like nonsense. Star performers are seen as so valuable that managers should pull out all the stops to keep them—or else see their companies take a big hit in productivity.

Yet some of the best managers not only allow their top performers to leave, but actively encourage it.

I’ve spent the past 10 years studying the world’s greatest bosses across 18 industries, luminaries such as Ralph Lauren in fashion, Julian Robertson in hedge funds, Norman Brinker in casual restaurants, Larry Ellison in technology, Michael Miles in packaged food, Jay Chiat in advertising and Tommy Frist Jr. in hospitals, to name a few.

As I was surprised to discover, these extraordinary leaders achieved outstanding results in large part because they abandoned conventional thinking about keeping the best employees.

They weren’t afraid to lose their best people. On the contrary, most willingly unleashed their top performers onto the world, going out of their way to help them land outside opportunities. The leaders I studied built iconic businesses, transformed entire industries and in a number of instances became billionaires not by hoarding great people for themselves, but by mastering the flow of talent through their organizations.

Doing so will make an organization far more resilient, sustainable and successful over the long term. The talent-flow strategy is also better tailored to many of today’s abiding business realities, including volatile markets that demand more dynamic workforces; a generation of millennials less inclined to stick around for loyalty’s sake; and an entrepreneurial, gig economy that encourages frequent shifts in employment over the course of an individual’s career.

Not joined forever

The stories of these bosses reveal a crucial shared belief: You’re better off having the best people for a short time than average people forever. (Read More...)

 

Alumni networks allow ex-staff to still work for a company

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Corporate alumni networks are growing in importance as employees spend less and less time at a single company.

Mainstream employment is gradually giving way to a gig economy, where temporary or freelance positions and short-term contracts are rapidly becoming commonplace. Last year, millenials — those born between 1981 and 1997 — became the largest generational group in the US labour-force, according to the Pew Research Center. The demographic shift is helping create this broader employment model and a mobile generation where connectivity is key.

Tony Audino founded the Microsoft alumni network 20 years ago and is now chief executive and founder of Conenza, a company that builds and manages alumni networks. He sees companies facing a loyalty challenge as they compete for global talent. He believes an effective alumni network offers huge benefits to both the organisation and the alumni. An organisation’s former workers can act as promoters for its “talent brand as well as its overall corporate brand”, says Mr Audino.

Companies also can use alumni networks as a resource for recruiting former employees. Annabel Rake, chief marketing officer at Deloitte UK, refers to returning workers as “boomerangs”. “These are people who come back with a new set of skills and experiences that we find very beneficial,” she says. About 20 per cent of Deloitte’s hires each year are boomerangs. Returning employees are a proven benefit of the Credit Suisse alumni network, too, says Markus Simon, global head of the bank’s talent development shared services and online academy, as well as its alumni network. Like Deloitte, roughly 20 per cent of Credit Suisse recruits are rehires, he says. Companies can save money in recruiting using alumni networks. Further savings are made when an alumni network generates referrals of talent and business. (Read More...)

Corporate Alumni: Gone but not forgotten

More firms are seeking to stay in touch with former staff

COMPANIES do not like to be abandoned any more than lovers do. Workers who quit are sometimes escorted out by security guards, their smartphones confiscated and their e-mail accounts deactivated. But in the professional services, former employees are increasingly treated as assets, not turncoats. Borrowing the concept of “alumni relations” from universities, such firms are trying to stay in touch with departed workers, hoping to turn them into brand ambassadors, recruiters and salespeople.

The notion was pioneered by McKinsey, a management consultant. Its up-or-out promotion system generates a steady stream of staff leaving on relatively friendly terms, many of whom go to work for potential clients rather than rival consulting firms. McKinsey has an online database of 27,000 former consultants. They are given access to a website which posts alluring job vacancies and regular presentations on business trends from the firm’s analysts.

McKinsey’s closest competitors have embraced this model. The Boston Consulting Group (BCG), for example, refers to its leavers as “graduates”. It helps them to find new jobs, and even to negotiate a good contract with their new bosses. Once they have left, they continue getting free strategic advice from the firm’s partners. In return BCG asks alumni to help it recruit new graduates, and to brief them on the state of the industries they are now working in. And of course, it hopes they may send a bit of work in its direction. (Read More...)