Every company that’s serious about talent is wrestling seriously with the same vexing question: How do we hold onto our best people? Minimizing employee turnover now ranks with finding new employees as one of the toughest challenges in this talent-scarce economy. So why are some executives-senior leaders at respected companies-actually celebrating the departure of talented people?
“Losing people isn’t a bad thing,” declares Tom Tierney, 44, worldwide managing director of Bain & Co., an international consulting firm headquartered in Boston. “We attract the best and the brightest. And those people are the hardest to hold onto. Our job is to create a value proposition that gets them to stay another day, another month, another year. But ultimately, it’s foolish to believe you can trap good people. The idea is to stay connected with them after they leave your payroll. How do you turn them into advocates, clients, business partners?”
Sue Thompson, 41, vice president of human resources at In Focus Systems Inc., a fast-growing manufacturer of computer projectors, couldn’t agree more. Her astoundingly successful company, based in Wilsonville, Oregon, consistently ranks among the best places to work in the state. Yet last year, more than 10% of its people left voluntarily. “Bondage is out,” Thompson declares. “We don’t think employees will stay here for life. So we do whatever we can to help them while they’re here-and after they leave.”
Arthur Gensler, 63, cofounder, chairman, and CEO of San Francisco-based Gensler, one of the world’s most influential design and architecture firms, knows that every great person who walks in the door will eventually walk out the door. “There are all sorts of reasons why people might want to leave us at some point in their career,” he says. “A person may say, ‘I’ve got to try a small firm,’ or ‘I want to live in the suburbs.’ If people are good and if they’re leaving to learn something new, it doesn’t pay to try to keep them here. But we do try to keep the relationship going-because many of them will decide to come back. And the people who do return become our most loyal employees and our best recruiters. When they come back, they’re incredibly committed.”
Tierney, Thompson, and Gensler aren’t crazy. They’re just a little ahead of their time in responding to one of the defining challenges in the new world of business. Forget lifetime employment. The new goal is lifetime affiliation. Forget such terms as “ex-employees” and “former colleagues.” The new term of choice is “alumni.” Forget all your old ideas about who works for you and how. The day someone walks out the door doesn’t mark the end of your relationship with that person. It marks the start of a new stage in that relationship.
Roger Herman, 54, CEO of the Herman Group, based in Greensboro, North Carolina, and author of Keeping Good People (Oakhill Press, 1989), argues that how you respond to the departure of top people will shape your relationship with them forever. “Let those people know that you want to keep in touch,” he says. “Be sure to get their new phone number, address, and email coordinates. Offer to send them your annual report or your company newsletter. Explain to them, “You never know when there will be an opportunity for us to use your services, for you to use ours, or for you to come back and join us.” If you draw a clear picture about how you might continue your affiliation with them, they’re more likely to remain a part of your network.”
Which doesn’t mean that you shouldn’t work hard to create a company where great people want to stay. Nor does it mean that you shouldn’t use savvy tactics to make it harder for other companies-especially competitors-to steal your people. (See What to Do When a Valued Employee Quits and How to Headhunter-Proof Your Company) But it does mean that you need to think more creatively about how to keep great people working with you, even after they’ve stopped working for you.
“Our number-one source of high-quality new business is our alumni,” says Tierney. “Walking out the door is just one more step along a career path,” says R. K. Stewart, 45, a Gensler vice president based in San Francisco. “It doesn’t have to be the end of your association with someone.”
Be True to Your Alumni
Bain & Co. communicates with its alumni more often than most companies communicate with their current employees. The firm employs more than 2,000 people around the world – but has more than 1,900 alumni in North America alone. These people receive frequently updated alumni directories. They get invitations to attend cocktail receptions or to participate in panel discussions. They read a biannual newsletter that chronicles developments at the firm as well as the professional achievements and personal milestones of other alumni.
Why pay so much attention to people who used to work for you? Tierney offers a list of answers: “Scott Cook, cofounder and chairman of Intuit. Kevin Rollins, vice chairman at Dell Computer. Greg Brenneman, who left our Dallas office to help pull Continental Airlines out of Chapter 11. Those kinds of alumni send a strong message to people who are thinking about coming here and to people who are already here. The message: We are going to make you more marketable.”
Now, don’t get the idea that Bain is resigned to losing good people for the wrong reasons. If someone is unhappy, says Tierney, “we push the pause button and stop the action. Would this person prefer to be working on different projects? Is the work-family balance out of whack? Is this person’s compensation out of sync with the market?” But if the employee is, as Tierney puts it, running toward an opportunity rather than away from Bain, he or she gets the firm’s full support. “Employees don’t want to see you kicking ex-employees in the behind on the way out the door,” Tierney says. “Because then they’ll know that you’ll do that to them when they leave.”
Indeed, unlike many professional-services firms, where departing employees are escorted from the building with a box of personal possessions in tow, Bain welcomes people who leave the company into its alumni network, which has been up and running since 1985. “People who leave aren’t rejecting you,” insists Cindy Lewiton Jackson, 43, Bain’s manager of career development and alumni relations. “If people want to be successful somewhere else, you should feel great about that. The more successful our alumni are, the more successful we are.”
Jackson’s job is to show these people just how great Bain feels about their new life. They receive a stream of communication from Jackson’s office. They gain access to online resources that can help them hire other Bain alums for their new companies. They schmooze at receptions held in 12 of the 25 cities where Bain has offices, and they speak at company-sponsored panel discussions. And joining the Bain alumni network doesn’t preclude returning to the nest. In fact, Tierney says, over the past 18 months, more than half of the firm’s new vice presidents have been Bain alums.
Mark Horwitch, 41, is one such vice president. Like Tierney, he started at Bain in 1980, fresh out of Harvard Business School. In 1985, he was promoted to vice president, and in 1988, he left to lead a series of turnarounds in industries ranging from lingerie to plush toys. “I always felt I was still a part of Bain, even though I wasn’t working there,” says Horwitch.
By 1996, what Horwitch describes as the “constant negativity” of turnaround situations began to grate on him. “You’re dealing with things like ‘Which plants do I have to close?’ and ‘Where can I cut expenses?'” he says. “After seven or eight years of that, I wanted to work on more positive things.” He’d been getting periodic phone calls from Tierney, who let him know that he was welcome to come back at any time. In 1997, Horwitch returned to the firm. (He now works out of its Chicago office.)
But Horwitch wasn’t the same vice president as the one who had left Bain in 1988. He brought with him a rich set of experiences at various companies, where he had worked as CEO, COO, or CFO, and where he had developed “an even deeper level of empathy for what operating executives face every day,” he says. “Unless you’ve actually walked in their shoes, you can’t appreciate what it takes to get things done.”
For Bain, the Horwitch case offers the best of all possible outcomes. But Tierney emphasizes that alumni who never return remain part of the fabric of the firm. “We’re building a network of people who share a common heritage and a loyalty to this institution,” says Tierney. “We don’t care where their paycheck comes from.”
Support Your Ambassadors
Sue Thompson hasn’t established a formal, Bain-style alumni program at In Focus. But she subscribes to a similar philosophy. In Focus is a leader in the booming market for LCD projectors. The company generated revenues of $315 million in 1997, and according to an internal study, its revenues-per-employee ($600,000) dwarf those of its competitors. Last year, Oregon Business magazine ranked In Focus as the fourth-best place to work in the state.
None of which means that great people stay at In Focus forever. In 1997, the company lost more than 10% of its people. One big reason: The company’s training programs make its employees irresistible to poachers. Of course Thompson would like to reduce turnover. But she’s just as eager to work creatively with people who have left. Why? Because they tend to wind up in places where they can act as ambassadors for In Focus and as advocates for its products.
Ron Merryman, 39, is a case in point. He started working at In Focus in January 1989, when it had about 40 employees and less than $10 million in revenues. He did stints as corporate controller, director of business development, and general manager of Genigraphics, a division of In Focus that, among other things, produces slide presentations for clients.
He was, in short, a critical employee. But by 1997, Merryman was looking for a new challenge: He wanted to help build a small, entrepreneurial company of the sort that In Focus used to be. So he took a job as executive vice president and general manager of Data Projections Inc. That company, based in Houston, sells, rents, and services LCD projectors, videoconferencing gear, and digital whiteboards. It employs about 70 people and expects to book $32 million in sales this year.
Data Projections also happens to be one of the country’s biggest distributors of In Focus products. And with Merryman’s help, the company is getting even bigger. Since he arrived at Data Projections, business between the two companies has been up by more than 70%. In the first quarter of 1998, Data Projections sold more than twice as many In Focus projectors as it did in the first quarter of last year.
“Those numbers aren’t a result of playing favorites,” Merryman argues. “In Focus is winning market share not because I’m an alum but because I’m communicating about how it can improve its business proposition.”
For example, Merryman persuaded Tim McGarry, director of North American sales for In Focus, to travel to Texas to train Merryman’s sales team personally. Merryman also worked with In Focus to increase the amount of regional co-op advertising that the two companies do together. And Merryman sought his former company’s input on strategic issues such as where Data Projections should open new offices.
“We went to In Focus and said, ‘We need to start breaking out of Texas. Where do you need help?'” That dialogue led to new outposts in St. Louis and Indianapolis.
Merryman exemplifies the concept of turning former employees into future ambassadors. His ties to In Focus are deep and long-standing. (“Part of me wishes I were still there,” he says.) But his commitment to building his new company is equally deep.
And those two commitments work well together. “My allegiance is to Data Projections,” he says. “But I’m also a good conduit back to In Focus. I understand that company’s strategy, and I can be an advocate for our strategy. We spend a lot of time working on goals that we share.”
Steve Brady, 40, another In Focus alum, has become an unofficial advocate for the company’s products. As the data-warehouse program manager at Intel’s operation in Portland, Oregon, he spends much of his time traveling to other cities and delivering presentations on the merits of data warehousing and data mining. And he always uses In Focus projectors in his presentations. In fact, the company lent him two projectors to use on a recent eight-city tour that he undertook for Intel.
“I would compare leaving In Focus to moving away from home,” says Brady, who began at In Focus as a senior financial analyst and rose to become its head of management reporting, before leaving in 1996. “You know you have to leave, but it’s sad just the same. The company has awesome products, and it has created a very family-oriented environment.
“I probably have more credibility as a spokesman for In Focus today than I did when I was working there,” Brady explains. “I’ll be in a meeting, and when I pull out a tiny projector from my computer bag, people start gushing about how small it is, how bright it is, how light it is. I’m not out selling In Focus products anymore. I’m just trying to use them effectively. But I think that has a stronger, more subtle effect than actively trying to sell them.”
Don’t Drop Your Boomerangs
Alumni. Ambassadors. Advocates. These are some of the words that you can use to describe people who once worked at your company-and who still work for your company. Laurie Dreyer-Hadley, 37, vice president of human resources at Gensler, wants to add another term to your vocabulary: “boomerang rate.” She defines it as the percentage of your current employees who have returned to your company after spending some time away.
“Boomerangs are our most loyal employees,” says Dreyer-Hadley. “They’ve inspected the grass on the other side of the fence, and found it not so green.”
Gensler’s current boomerang rate is a remarkable 12%. Dreyer-Hadley says the presence of these once-and-current employees has helped to stabilize the firm-even as it has more than doubled in size, to 1,400 people, over the past three years. In 1997, gross revenues were $170 million, up by more than 30% from 1996. With offices in 16 cities around the world, Gensler services a blue-chip client list that includes General Motors, Federal Express, the Gap, and Xerox. “Boomerangs understand and appreciate the environment here,” Dreyer-Hadley says. “And when they return, they become the standard-bearers for our culture.”
Bruce Campbell, 54, now a vice president in Gensler’s Los Angeles office, was the firm’s first designated boomerang. He left in 1979 to join a friend in a business that designed small residential and commercial projects. Eventually, though, he realized that he missed the resources of a larger organization and the challenges of working on a large scale.
So in 1981, he returned to Gensler. “I discovered that I loved being a player on a large team,” Campbell says. “The time away helped me figure out what I liked best about this profession.”
Shortly after Campbell’s return, at an office Christmas party, Gensler employees participated in an anonymous gift exchange. A new employee drew Campbell’s name from a hat. After learning that Campbell had worked for the firm before, the newcomer gave him a boomerang; painted on it were the dates of Campbell’s first tenure at Gensler-and the date of his return.
“I hung it up on my wall,” recalls Campbell. “And I liked it so much that when others in our Los Angeles office would leave and then come back, I’d get them boomerangs. Eventually, when people would leave, they’d often say, “Maybe I’ll be a boomerang someday.” Then [Gensler President] Ed Friedrichs suggested that we give out boomerangs nationwide. Today we do it worldwide.”
Former employees who return to Gensler now get an official company boomerang as well as a letter from Campbell, whose signature identifies him as “President of the Gensler Boomerang Club.” The letter reads: “All Gensler Boomerangs enjoy a very special relationship with each other and with the firm. They’re our prodigals returned, the old dogs who teach all the tricks to the new pups, the elite corps that we rely on and are delighted to welcome back. This boomerang is a token of our thanks-a frivolous reminder of the serious value we place on our association.”
By embracing its boomerangs, Gensler manages to solve a growing problem-one that involves the increasingly difficult arithmetic of talent. “There are only so many good people out there,” Arthur Gensler says. “If you cross off the ones who have already worked for you-well, that’s very limiting.”
But there are other benefits as well. Because boomerangs have done a previous tour of duty with the firm, they can hit the ground running when they return. “My time gets freed up when we bring in boomerangs,” says R. K. Stewart. “I don’t have to spend much time articulating the process to them. We can focus on content. Boomerangs understand the value we place on sharing information. They understand that we emphasize client service rather than the ego of the designer. They also understand more mundane things like paychecks, policies about continuing education, and time slips. There’s very little ramp-up time.”
Boomerangs also bring a wealth of new ideas to Gensler. “They keep our culture from getting stale,” says Stewart. “They promote cross-pollination, introducing us to new building materials, new contractors, new processes.” As an example, Stewart cites an office assistant who left Gensler, got an architecture degree during her eight-year absence, and then returned to the firm, where she now manages multimillion-dollar projects.
“To embrace the boomerang mentality, you need a certain amount of confidence,” concludes Stewart. “You need to feel that people are going to want to come back. Sure, the organization is hurt when somebody leaves. But the joke here is ‘You’ll be back; we’ll just let someone else use your desk for a while?’ This isn’t ‘Goodbye.’ It’s just ‘See you later.'”
Scott Kirsner firstname.lastname@example.org, a Boston-based business and technology writer, contributes regularly to Fast Company.