How Frequent Turnover in Top Leadership Can Turn an Organization Toxic

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Jul 27, 2015

A few months ago Amtrak faced the worst train accident to ever hit the northeast corridor.

Though still under NTSB investigation – it is likely that no one single issue caused the crash. It was a sequence of events that lead to the Amtrak disaster, and not all of them occurred onboard the train the day of the accident. Many of the events leading to the accident stemmed from problems within the Amtrak organization itself.

The Philadelphia Inquirer published Turnover at the top on July 12, and in the article they point out that Amtrak changed its president eight (8) times since 1971. Since 1993 they’ve had five (5) presidents in charge. That’s a lot of turnover and a lot of lost institutional knowledge.

To put this in perspective, we’ve had three (3) U.S. Presidents since 1993.

Recipe for a toxic work environment

With a management team constantly in flux, no organization can possibly function in a productive and safe manner. This type of turnover is usually the sign of larger organizational issues that, if ignored, can have a direct impact on customers – and in the case of Amtrak, a very serious impact.

This is also further proof that an organization does in fact achieve success (or failure) through their people. If your people are not engaged and operating at peak efficiency, they are often not paying attention to or concerned with the details that matter the most.

I agree with the article in The Philadelphia Inquirer. Amtrak’s management team was more concerned with keeping their jobs than actually doing their jobs well and this behavior stemmed from organizational and operational issues.

That is what I call a toxic work environment.

High turnover within your organization can cost you more than just 1.5 times their annual salary (2 times if they’re an executive). It has a direct impact on employee engagement and on customer satisfaction.

So how do you prevent high turnover within your organization?

1. Communication

Create a culture of transparent and open communication. Maintaining open lines of communication between leadership and employees goes a long way to increasing employee commitment.

Employees need opportunities to feel heard. Allowing for interdepartmental communication – reducing silos – also makes employees feel less isolated. Open communication also helps employees see how their work contributes to the bigger picture.

2. Recognition

I’ve said it before and I’ll say it again – recognize, recognize, recognize! People have a fundamental human need to feel valued, heard and appreciated, particularly when they feel they’ve done a great job.

If you’re not sure how to recognize for a job well done – ask your people. Without an understanding of your people, behaviors, and what engagement and rewards strategies work best for your culture – reducing turnover can be even more difficult.

3. Processes

Your people are just as likely as your customers to get pissed off by poor or redundant processes.

If you want to reduce turnover, develop transparent and easy to follow processes and train your people on how to execute them. You want to design processes that help bolster a safe high performance culture – not inhibit one.

4. Leadership

According to one study, 80 percent of employee turnover resulted from the environment created by a manager as opposed to the company at large.

As is the case at Amtrak, if leadership is unhappy it’s likely to trickle down directly to employees or those next in line for leadership positions. It’s critical to work closely to make sure there’s a consistent open line of communication between executive leadership and managers and managers and employees.

Leaders and managers need to be working collaboratively and positively with their employees to reduce turnover. Trusted relationships are key. Leadership should be authentic, approachable, engaged, honest, and supportive.

5. Training

For employees to remain engaged and committed, they need to feel they have the skills to do their job.

To help determine what type of training may be needed, think about what types of knowledge and learning opportunities can help them better perform their jobs? Most employees don’t want to perform poorly, they often just haven’t been provided with the training needed.

Ask what types of knowledge and learning opportunities make them feel challenged as individuals? Collect the data and act on it. Offer options based on employee input. One of the quickest ways to reduce turnover and increase performance is to increase engagement.

It saddens and frustrates me to see such tragic events occurring partly because of organizational and culture issues. However, when I read this article in the Inquirer, it was too powerful  for me to not share some lessons learned.

The truth is that organizational and operational issues such as high turnover can cost you – and in some cases – more than just money.

These types of problems can’t be ignored forever.  This incident is a reminder that you need to take care of your most important budget item – your people.

This was originally published on the Tolero Think Tank blog.

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