How to Keep Your Best Executives

By Elizabeth Craig, John R. Kimberly and Peter Cheese

October 22, 2009

Determined to retain your most talented executives? Well, here’s some counterintuitive advice: The best way to keep them from leaving is to prepare them to do just that.

In tough economic times like these, retention becomes less of a priority for many companies as they focus on more-immediate business concerns. But companies that neglect this issue during a downturn may be in for a nasty surprise just as things start looking up: Historically, there is a significant increase in the number of executives leaving their companies as market conditions improve and more job opportunities open up.

That’s why it’s crucial that companies get serious about retention now. And that means giving executives opportunities to take on greater responsibility, broaden their skills and cultivate a network of relationships with their peers. These are the things that executives we have surveyed consistently say they want most from their jobs.

Of course, executives want these opportunities largely because the skills, experience and relationships they acquire make them more valuable on the job market. So there is always the risk that a company may invest in building its executives’ talents only to see some of them take those talents elsewhere.

But our research shows that executives intend to stay longest with those companies that offer the greatest opportunities to enhance their employability. On balance, a company will keep more talent by helping its executives grow than it would by denying them these opportunities. And as a bonus, its executives will be more valuable to the company itself.

Too few companies understand this. We found wide discrepancies between what executives want in the way of professional development and what their companies are giving them. With that in mind, here’s a look at how companies can address that gap by providing the three types of opportunities executives want most.

New Responsibilities
The executives we surveyed ranked opportunities to work on challenging tasks and to take on more responsibility higher than any other factor in career satisfaction. Providing these opportunities not only helps a company retain executives, but also helps the company identify and cultivate its next generation of leaders. That is especially true in times of adversity, like an economic downturn or a business turnaround, when executives have more opportunity to make their mark than they would when the business is thriving.

United Parcel Service Inc. continually creates opportunities for employees to take on more challenging tasks and greater responsibilities. John Saunders, the company’s vice president for human resources, says: “We don’t view it as, ‘We hired you to do this particular job.’ We view it as, ‘This is going to be a 30-year process.’ ”

UPS holds formal reviews with employees to discuss training opportunities, special assignments to work on solving particular problems, and other growth options. They discuss “things like what kind of assignments they need to round them out in preparation for the next promotion,” says Peggy Gardner, director of customer communications. “We talk about their skills, their career objectives and what they want to do next,” she says. “We figure out what we can do to help them achieve their goals.”

Broader Skills
In addition to developing their leadership talents, executives want to increase their value by acquiring knowledge of operations outside their areas of expertise, and by polishing general business skills.

Consider the example of hotel giant Marriott International Inc. In an industry notorious for its high turnover rate, Marriott is exceptionally skilled at retaining managerial talent. One reason is a program that exposes talented managers to business issues and situations that prepare them to pursue promotions to general management roles.

For example, a marketing executive with little experience in hotel operations completed a training assignment in the operations division. To help her get up to speed quickly, she was assigned both senior and peer mentors. Moreover, she wasn’t the only one who benefited from the experience. During her assignment, she shared some of her marketing knowledge with her colleagues in operations, by suggesting ways to attract more customers, for example.

Companies can also profit from offering their executives training in broad business skills like working well with others, understanding and upholding ethical standards and communicating effectively.

Cultivating Relationships
Networking is important to executives for several reasons. It establishes connections that might be helpful down the road in finding a new position, increases their visibility and lets them learn from their peers.

Networking can also help a company, not just by improving retention but also by increasing understanding and collaboration among various business units.

Consider the investment bank profiled in the book “Driving Results Through Social Networks,” written by Rob Cross and Robert J. Thomas and published this year. The authors found that the social networks of the bank’s senior vice presidents were different from those of its junior vice presidents. The senior vice presidents had more-diverse connections—to people “in different business units, with different areas of expertise, and in different tenure groupings.” The junior vice presidents aspired to create this type of network, and it was in the bank’s best interest to help them.

The bank identified its high performers and held several events throughout the year so that these individuals could connect and forge more-productive personal networks. After a year, the retention rate of this group was much higher than that for the investment bank as a whole.

Companies that apply these lessons will be in a better position not only to retain their most prized executives but also to attract new talent as the economy recovers.

One Response to “How to Keep Your Best Executives”

1. Les McKeown Says:
   October 26th, 2009 at 2:10 pm

   This is a particularly timely article, as many organizations will fail to capitalize on economic recovery in 2010 precisely because they will lose many top performers - partially, but not solely, for the reasons given in the article.

   Recent surveys and my own observational analysis confirms that many top performers who have ‘knuckled down’ to help pull their organizations through tough times in 2008 and 2009 will (counter-intuitively) begin actively looking for a career change as they see the economy showing signs of recovery. The reasons for this are not difficult to see: a need to regain a sense of control over their career; the need for a change after so long in the doldrums, and most impactful - a loss of enthusiasm and vision in their current position.

   In addition to the solutions proffered by the authors - indeed, as prerequisites to their efficacy - if senior managers want to retain their top performers in 2010 they must also find a way to (1) re-ignite the top performers vision; (2) provide them with new challenges, and (3) rebuild a sense of trust.

   Les McKeown, President & CEO, Predictable Success

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