Corporate Culture as Antidote to Contact Center Attrition

If you've ever visited this blog before, you're likely familiar with my obsession: corporate culture, established and nurtured by leadership that "gets it." And as it turns out, I'm not completely alone. While most businesspeople are a little slow off the mark embracing a 21st-Century style of leadership, there are a few who are already blazing a trail for the rest of us to follow.

Below is a terrific example from author Guy Winch, a friend I made via Twitter who, like me, is obsessed with how companies can get it right and loves to share how a few of them do.

Floored. That's all I can say about how the article below leaves me. You will be, too. Enjoy Guy's post, and then enjoy his book! I can't wait to get my copy.

Contact centers wage a constant battle against high attrition rates and poor job satisfaction, factors that dramatically affect their ability to provide excellent customer service. Attrition rates of 50% in the USA (and even higher in other countries) are endemic to the industry for numerous reasons; employees’ are monitored electronically and constantly, they must adhere to rigid rules and quotas, and they face regular encounters with hostile customers.

The attrition problem is even more profound in outsourced contact centers whose training is dictated (and limited) by the companies they service. Outsourcing contact centers that want to improve employee satisfaction and lower attrition rates can change only the one ‘unscripted’ variable in their control—their own corporate culture.

One shining example of this approach is Call Yachol (CY), an Israeli call center that does outsourcing for companies such as a leading Israeli telecommunication company and a major Israeli bank. CY has annual attrition rates of 20%, which are far below industry standards. What makes CY even more remarkable is the vast majority of their nearly 200 employees are people with significant physical and mental disabilities such as cerebral palsy, severe visual impairment, PTSD, amputees and many others.

CY’s founder and CEO, both of whom spent many years in the contact-center industry before

opening CY (which is now in its 4th year), have developed an innovative and dramatically effective corporate culture and managerial philosophy: They care about their employees! More importantly, their employees know it.

I visited CY while doing research for The Squeaky Wheel and was immediately struck by the supportive yet extremely professional atmosphere, an incredibly difficult balance for any company to achieve. I watched as the company CEO arrived at work and made his way to his office through a labyrinth of busy cubicles while stopping to greet every single employee he passed along the way.

The caring the CEO conveys by doing so costs the company little yet pays huge dividends in employee performance as it provides the employees a psychological armor with which they can better manage the stresses of their jobs.

CY’s low attrition rates have allowed them to cultivate a more experienced and knowledgeable staff that elevates the level of customer service they provide, a win-win-win (company-employees-customers) for all involved.

CY’s corporate culture of caring is apparent in their managerial training and especially in their long term goals as CY’s hopes to revolutionize the employment of people with disabilities. Their success serves as a double proof of concept; that people with disabilities can compete in the free market if given the chance to do so and that corporate culture alone can turn what seems like an impossible challenge into a thriving business.

Further information about CY’s management training and corporate culture can be found in Chapter 7 of The Squeaky Wheel(2011, Walker and Company) or at the company website: callyachol.co.il (English tab).

2011 Guy Winch Ph.D.

Guy Winch Ph.D.

The Squeaky Wheel (Amazon)
http://www.guywinch.com
http://twitter.com/GuyWinch

By the way: Ever wonder if Tony Hseih of Zappos is really as remarkable a CEO as everyone would have you believe? If so, you've got to read this post from Guy's blog!

The Next Great Extinction Event

Change typically percolates for a long while in the distance somewhere, then sidles into the periphery of the mainstream but doesn't catch on all that fast, and then, eventually, what was "change" a while back starts to gain steam and become accepted. In other words, change is often slow, as most processes are.

Except when it's sudden.

Sudden change is called an extinction event. Think of the dinosaurs. 65 million years ago, they were everywhere, these lumbering beasts that ruled the land, the sea, and even the air. 64,199,000 years ago (give or take), all we had left were some lizards, some little birds, and a few gators, their cousins. There was nothing gradual or gentle about the end of the dinosaurs at all. They were here, and then an asteroid* smacked into the earth, and then they were gone. Just like that.

Extinction events aren't that common, but when they occur, they're scary and exciting, all at once. They're unrelenting. And nothing is the same after the event. Nothing.

Social Media is an asteroid. It has struck the earth. 20th-Century businesses... those are the dinosaurs of our time. And their time has come.

The business climate is changing at such a pace that few people can even recognize it yet. Say the words social media, and most people will reply, "Oh yeah, Facebook," without a second thought, followed by, "So what?"

So what? Here and in future posts, I will tell you so what. I've been playing with and studying this dramatic trend closely for two years now, and it's much bigger than I originally realized. To begin:

1. Customers aren't just getting empowered; they now have all the power - and they have only begun to flex it. When a company screws up, they tweet and post and broadcast it throughout their networks in seconds. Within hours, the offending company has a huge, very public black eye that wipes away the effects of millions of dollars of paid advertising.

2. Out of necessity, companies are changing to actually be better, not just seem better. This transformation seems like a glacial event for those of us caught up in it, but just a few years from now, mark my words, we'll look back and the social revolution will astound. "How did companies ever get away with their 20th-Century shenanigans?" we'll ask ourselves. "Why did we ever put up with that?"

3. Recruiting talent is going to transform right before our eyes, as if by magic. For all time, employers have promised the world to new recruits and often delivered very much less once new-hire training lets out. No longer. Though slow emerging from the freeze of the Great Recession, people are once again on the hunt for better situations - and they're relying on their social networks to find out the truth about potential employers. Like it or not, management will have to become more enlightened just to stay in business.

4. One important aspect of this is that management will have to ease its grip on the reins of power. Before this brave new century, information was power. Now, information is ubiquitous. Savvy companies are already using the full brain-power of their staff, solving business issues with social collaboration tools that bring a competitive advantage that old school, command-and-control organizations simply can't compete with. In order to stay alive, firms will have to embrace social for the human talent it unleashes.

These are just a few of the ways social media is already transforming the global economy for the better. Short of the eradication of the Internet (and of electricity?), there's no going back. Dinosaurs, you've only got a short window left to evolve, or it's all over for you.

Your comments, below or via Twitter, are always immensely valuable to me as I continue to develop my thoughts in this direction.

*****

Read Three Trends, One Direction for an earlier post on this topic.

*Asteroid? Disease? Whatever the cause, something killed those big beasts.

Equality, Even If Just for Selfish Reasons

"Injustice anywhere is a threat to justice everywhere." - Dr. Martin Luther King, Jr.

I am a business writer, not a social philosopher. I'm aware you can easily find dozens of outstanding, enlightening essays on this day, in which the United States of America celebrates the life of one of its greatest leaders, the writer, preacher, Nobel Laureate, and conscience of a nation, Dr. Martin Luther King, Junior. I wouldn't pretend to write as masterfully as some of those essays.

But I would like you know that I am taking today off from work, out of respect for the man whose death came just a year after my birth. A man who peacefully railed against out our nation's deepest injustice and thus allowed us to shed it and become better as a people. America is a more moral place because of the life of this mahatma, this great soul.

And I would like to share an idea that the rest of the essayists will not likely mention today: any society that forcibly holds down one portion of its population sets itself at a severe disadvantage. To oppress a minority is to harm the entire society. Morally, yes, absolutely. But also merely in sheer economic terms - which is to say that even the meanest-spirited of leaders should actively work toward equal opportunity for all; yes, for purely selfish national interests.

When women are denied education or employment, that society is removing one-half of its population from helping elevate the economy. It's like fighting with one arm tied tightly behind one's back: who could possibly win such a fight? Oppressing a religious or ethnic or racial minority (or even a majority), as many societies still do today: it's a losing proposition.

This is not an appeal to our better angels, and so I suppose not very worthy of such an important day. But a lot of this blog is an effort to show how doing the right thing pays. Here is yet another example, in my argument against prejudice and oppression.

It isn't savvy to hold others down. It's foolish. And who would choose to be a fool?

Fear Kills Yet Again

CEOs: what would you do if you learned that one of your staff is a tyrant, a leader who instills so much fear in his reports that they refuse to even suggest new ideas for discussion?

*****

So I'm meeting with an operations executive who is only one removed from the CEO of an Enterprise-sized company. They're on a first-name basis (we'll call the CEO John), and said exec. has regular access to the big guy.

While this company is doing well, I was invited to this particular meeting because the company is clear that it can do better. As you can imagine, I'm present to give some advice.

Prospering company wants to up its game. So far so good.

Our conversation leads to the sales organization. The exec says this:

"I've been in operations for years. Variable compensation for our sales force is always our biggest headache. We spend much more time on it than on anything else."

"Why is that?" ask I.

"No matter what we do, the sales reps and their managers figure a way to game the system. So we tweak it, and fiddle with it, and sometimes drastically change it so we can stay a step ahead."

Just to be clear, I say, "So you create incentive pay schemes to inspire your sales force to sell more, and instead a lot of what they do is monkey with the scheme. If I hear you right, they're putting a lot of effort into maximizing their pay at the company's expense, rather than maximizing their sales as you intended."

"Exactly," he confirms. "Which means that we have to go back and close the loopholes they've found, and then they end up finding new ones."

There's nothing new about this at all, as I'm sure you appreciate if you've either been in sales or helped lead a company. So we discussed his very-common predicament, and I brought up Daniel Pink's book, "Drive," which lays out quite nicely the way some companies have embraced the notion that people - even sales people(!) - do not work primarily for money, and so there are much more effective ways to inspire them to perform than through incentive pay.

"Oh, that's a great book," he agrees. "Really terrific."

We discuss some of the finer points and examples at length. It's clear he's read it thoroughly, even discussed it in detail with his co-leaders.

"Have you considered moving from commission pay altogether," I ask, "and trying something possibly more effective to get your sales force to perform the way you tell me you'd like them to?"

He blanches. I swear to God, this grown executive's face loses color at my question!

"If I suggested to John that we take incentive pay away from our sales force, he'd can my ass in a heartbeat!" he told me. "And he should!"

STOP RIGHT THERE!!

This post isn't about incentive pay as a motivating force behind driving desired behavior at work. This post is about fear at work. Specifically, the fear of a top executive to even mention an idea to his CEO that he honestly thinks might work. Remember, he'd told me that himself; we had discussed Pink's book in detail, and he agreed with it.

Leaders, is this you? Are you John, the CEO of this mammoth company? Do you pay your executives hundreds of thousands of dollars a year to help you run your company, then instill in them such a fear of your disapproval that they're unwilling to even suggest new ideas?

The Twentieth Century is over. Fear is just plain inefficient. One leader cannot have all the right answers - and if he does, why does he bother to employ intelligent, experienced, competent adults to help him run his business?

I hope you agree that this company is in trouble. And I don't blame the executive at all, not even one iota.

The fish stinks from the head, as the Jewish saying goes. CEOs, if your company stinks... you are the head. You are the problem. Unfortunately, I don't see much this CEO can do short of firing himself - and I'm not too optimistic about that.

It's a new century, my friends. To compete, we've all got to start obeying a new set of rules. Removing the cause of fear is paramount among them.

Only Three Things Matter

"Running a Fortune 50 company is like steering a tanker ship at sea. All a CEO can do is guide his company culture. The culture does the actual sailing." - Bill, retired CEO of a Fortune 10 company.

In valuing real estate, the old saw goes, only three things matter: location, location, location.

In business there are only three things as well: culture, culture, culture.

Every organization has a culture, a way that things are done. This is passed along to new members primarily through the retelling of exemplary stories, as I wrote here: Stories Build Culture.

Some cultures are weak, with a lot of differentiation in how things are done. One branch or division may be driven and competitive, another a miserable slave-ship, a third an upbeat but unfocused place to work. At one location, innovation may be the life-blood uniting the entire group, while at another within the same company (possibly even on a different floor of the same building!), the workforce is just keeping its collective head down and putting in its time till the bell rings at five o'clock.

Don't confuse weak culture with diversity, because it's anything but - they're completely unrelated. Weak culture means that the company is unfocused and poorly-led. Weak cultures founder and get acquired at bargain-basement prices. They churn not just workers but leaders. Weak cultures are slow-motion train wrecks.

Strong cultures, on the other hand, are typically incredibly profitable. They're also much more likely to be iconic. Disney has a strong culture. Nordstrom. 3M. GE. Apple and Cisco both have very strong, though quite different, cultures. Microsoft and Google have powerful cultures - yes, I chose these two bitter rivals on purpose, to illustrate a key point: that not all winning cultures are alike. Indeed, far from it!

CEOs, your job is to craft and guide culture. That's it! "Vision" is great, too - you've got to know where you're going, and you've got to share that with your staff so they can help you get there. Duh! But then what? Seriously. You see the future. You plot a course. And...?

...And for the next 3 or 5 or 20 years, you have to get to that Utopian vision you've dreamed of, that goal you've set for your company. Getting from the thoughts in your head today to the cover of Fast Company next year and Business Week in five: that's what a strong, healthy culture will do for you!

If you want to attract top talent on a consistent basis across your entire organization, you're smart. How are you going to win the Superbowl with a team you recruited from St. Mary's School for the Lame? A winning culture will attract the talent you need.

How do you build a winning culture? Focus on the culture. A CEO who focuses her attention on cost-reduction or building plans or next year's investors' presentation is not doing CEO-work.

But don't take it from me. Ask one of the hottest (and unlikeliest?) leaders going, the (un)Celebrity Tony Hsieh, CEO of Zappos. During the Great Recession he sold his 10-year-old online retail company to Amazon for a billion dollars, maintaining full control all the while. How'd he do it? He didn't. He let his company's culture do it for him. All Tony did was build and maintain and refine that culture.

Don't believe me? Read his book, "Delivering Happiness." He'll tell you himself.

Talent Magnet: Catching Up

CEOs: Do you want to turn your company into a most-desirable employer, so that you can truly attract top talent and the competitive advantages it brings? You've come to the right place!

We're in the middle of a series on that very topic. Following are links to the posts I've written so far on the subject. Two more are coming this week. But for today, best to catch up to the conversation.

Build a Talent Magnet

Don't Get Stuck with the Leftovers!

Don't Just Win. Crush.

Be Fair... Or Be Left Behind

Unfair Workplace? Here's Why

CEOs: You Don't Get a Vote

That's already more than the five posts I originally envisioned for this series, but your comments and tweets inspired a deeper dive on the vital subject of being Fair at work, so... hopefully, no one will object.

On our next post, we'll turn our attention to the (potentially) fun and exciting topic of creating a Winning Culture at work. See you soon!

CEOs: You Don't Get a Vote

CEOs: do you truly want your company to be seen as Fair by your employees? Honestly?

If so, then you'll have to throw out one of the most cherished of 20th-Century values, the concept of tacit consent.

The Fallacy of Tacit Consent goes like this: "If a person does not agree with something, they'll speak up." At work, it plays out thus: "If employees are silent about management decisions, they obviously agree. Silence = buy-in."

I was raised on this ethic. My parents taught me that to agree or speak up were valid choices. To disagree but remain silent was not. My experience tells me that most leaders buy this logic. But as the term "fallacy" implies, the logic is faulty.

Here's the thing: how many of your employees are ready to quit or risk being fired right now, today? Especially in today's still-moribund job market?

...So what happens when leadership makes a decision that employees find unfair?

1. They can protest, and risk being fired, or at least being blacklisted for future promotion.

2. They can quit immediately.

3. They can update their resumes and leave when the time suits them.

4. They can remain on your payroll, but stop caring.

5. They can suck it up and go on as before, realizing "You win some, you lose some."

Your most valuable workers will choose one of the first four options, each of which means you will lose the very thing that gives your company its most essential competitive edge: your talent! Know who will opt for number five? With very few exceptions, it will be your leftovers, your least-valuable players.

Seriously - you're a leader, which means you're a winner, right? What would you do?

Take this scenario: you are promised a performance bonus. You perform. Your company comes up with a loophole to keep from paying you and others in your situation. This loophole has been right in the rules all along, so top management tells itself it's fair.

But you and the rest of the company - those directly affected and observers as well - know better. And now you realize that you can't rely on the company to pay out future performance bonuses, either. Incentive pay has become disincentive pay.

You're a winner. Which of the first four options do you choose? I can guarantee, you will not choose option 5. My guess is you're going to land on option 3: you'll leave as soon as it suits you. Am I close?

...But meanwhile, to your CEO and other top executives, the scenario looks much different. Because they lack the immediate feedback of eighty percent of their workforce walking out the day an unfair decision is announced, they miss their people's reactions. Because they are victims of groupthink,* they convince each other that everything is fine; that their decision was fair. Because they believe in the Fallacy of Tacit Consent, they think their reasoning for the unfair decision has been accepted by their workforce. The company will muddle on, hemorrhaging its most talented staff and accruing more and more leftovers all the while.

How can a 21st-Century leader get around this mess?

It's painfully simple, and it's incredibly hard. I don't expect many current leaders to follow this advice. Which is fine. Champions do what the masses find too arduous. I only want to help champions.

CEOs: the way to make sure your company is seen as Fair by its workers is to ask them.

And to shut the hell up. You don't get a vote. Your opinion is completely unimportant. You can no more convince your staff that you are indeed Fair than you can convince a person to change favorite colors. People have an innate sense of justice - it's part of being human. You can assuage your conscience with excuses, you can surround yourself with sycophants who tell you how beautiful your new clothes are (Mr. Emperor), but you with can't convince the rank and file who are running your company for you that you are being Fair when you are not.

*****

This is third in a three-part series on being Fair at work.

Part one is Be Fair... Or Be Left Behind.

Part two* is Unfair Workplace? Here's Why.

Please note: not everyone will agree, on any topic. It's impossible. But if you honestly try to lead a Fair company, and strive for continuous perfection, that's a pretty good start.

Unfair Workplace? Here's Why

Wednesday's post on Fairness at work elicited a few great comments but a tremendous number of tweets about unfair management decisions. Clearly, I struck a nerve.

There are a lot of unfair bosses out there. Yikes!

It got me to thinking, as your comments, tweets, and emails always do. Are that many managers and executives really just plain bad? Is it the norm for leaders to screw over the led?

Maybe. I don't want to discount that possibility. But here's the thing: for years now, my clients have been leaders, mid- and upper-management in companies large and small. Now that I'm in my forties, quite a number of my childhood friends are now C-level leaders and vice presidents as well. Surely not all of these people are cynical enough to be actively unfair to their staffs. Truly, not even most.

There's a different reason so many companies make profoundly unfair decisions all the time. It's called groupthink.

The fundamentals of groupthink go like this:

* There has to be a very powerful leader, someone who holds all the decision-making power. A person at whose desk the buck clearly stops. A CEO, for instance.

* That person often has a powerful personality, one that others gravitate to and want to please.

* If that charisma is combined with the ability to fire, promote, and give bonuses, all the better for this perfect storm of bad decision-making.

* For groupthink to occur, the members of this advisory group are typically selected by the leader. In a groupthink scenario, that leader chooses subordinates who share his or her opinions and outlook to begin with. Sound familiar?

* Finally, the physical presence of the leader in all or most meetings serves to squelch debate. The leader's decisions are ratified, not scrutinized.

The most famous example of groupthink remains the Kennedy Administration's meetings leading up to the Bay of Pigs fiasco in Cuba. John Kennedy's cabinet operated precisely under the rules outlined above, and disaster struck. It was one of America's - and Cuba's - darkest hours in the Twentieth Century.

Kennedy and his staff learned from their mistake. They purposely did not repeat the groupthink blunder leading up to the Cuban Missile Crisis not long after. Debate in cabinet meetings was heated. Opinions varied widely. And most notably, President Kennedy absented himself from many of the cabinet meetings. He had learned the perils of groupthink, and took steps to avert it. The Cuban Missile Crisis was a stupendous success for American foreign policy. Indeed, how Kennedy handled it is as instructive and inspirational as his earlier blunder in Cuba was disgraceful.

Back to business; back to companies making unfair decisions.

I agree, there are some unscrupulous leaders out there, too short-sighted to realize that screwing over their own workforce will destroy their company more surely than any competition or Great Recession will ever do.

But there are many, many more leaders who think their decisions are perfectly fair because they are making those decisions with a team of like-minded reports: if not yes-men and -women, then certainly people chosen for their likeness to the CEO, rather than for their individuality.

I've had countless discussions with top leaders; it's more than my job as a leadership author, it's also my hobby. Most aren't actively evil. Most are just talking to themselves, when they need to talk to their people.

Tomorrow, in "You Don't Get a Vote," I'll share with you how 21st-Century leaders turn the groupthink tendency around - to the delight of their shareholders!

*****

This is part two of a three-part series on Fairness at work.

In a few days I'll return to my five-part series on attracting and keeping top talent at work (of which Fairness is arguably the most important part).

Be Fair. ...Or Be Left Behind.

CEOs: want to attract and keep top talent? Not just keep that talent on the payroll, but keep it engaged and actually psyched for work? Your company has to be fair. And here's the thing: you and your direct reports don't get a vote in this. Your mid-level managers who have been drinking the company Kool-aide don't get a vote, either (and your front-line managers are likely too scared to vote honestly.) The only people whose opinion counts in this matter are your front-line employees.

* Do they see your company as fair?

* Does leadership have their best interests at heart?

* When the rules stink, does management disregard them in order to bring fairness back into play?

We could keep going and talk about customers and vendors and community - all very important if you want to run a fair company. But for today, let's stop and make sure we've covered the first and most important of management's constituents: the rank and file who are actually running your company.

Do they see your company as fair?

"Fair" is a tough word for a lot of leaders who made their way up in the 20th Century. Fair is squishy to business or accounting or engineering majors. I've spoken to a lot of folks who confuse "fair" with "the rules are the rules." That's nice, but... a little morally retarded. We can do better.

Sure, being Fair means treating everyone equally. I will never abide nepotism or its ugly sibling, favoritism. But there's more to Fair than that. Fair also means correcting clear injustice. It means that, when things go according to the rules and the outcome is clearly not what anyone would have chosen, that the same people who set the rules then step in and fix the rules.

Here's just one example of a million to give you something to sink your teeth into, cuz Lord knows we authors can get too theoretical if we aren't careful.

Management sets a number for sales, an annual quota, and says, "Surpass this number and you win a contest." Pretty standard stuff. Only this year, no one in the whole organization even comes close to that number.

Is it fair for management to say, "Well, the number's the number"? Is it fair for management to admit their number was too high, but there's always next year? Or to come back and say, "Wait a minute! If we'd set the number too low, and everyone had won the contest, who would be complaining then?!"

A key component of management's job is to protect employees from unintended, stupidly-unfair outcomes. I'm fairly certain they don't teach that in any course in most business schools, but they should.

If you want to attract and keep top talent, your people have to see the company as fair - and that means leadership has to step in and defend staff from its own unfortunate decisions from time to time. Otherwise, you might be "right," but you'll never be beloved.

...And if your employees don't love and adore your company, you've already shot yourself in the foot.

CEOs: Don't just be a leader. Be a champion - of your people!

*****

I love how The Nordstrom Code is phrased. Check it out:

Use good judgment at all times.

There will be no additional rules.

See what they did there? It isn't, "Use your best judgment." Your best judgment might suck. Use good judgment - which speaks to a higher, probably more objective, standard of quality.

This is a customer-facing guideline, directed at front-line employees. But today, let me urge you to use it throughout your organization. The higher up the corporate pyramid, the more important it is to let good judgment, rather than blind adherence to rules, guide your decision-making.

Don't Just Win. Crush.

So you want to turn your company into a talent magnet?

If so, you're savvy. You realize that the best companies attract, keep, and continuously inspire the best people - and that everyone else gets the leftover people, and so the leftover results.

Yesterday we discussed pay as a threshold issue: "threshold" because generous pay is necessary, but not sufficient, to get top talent through the door and keep it long enough to make a difference.

Let's stop right here to think about that, shall we? As a once and future employer myself, I'd rather pay double the going rate for top talent than any amount for leftover staff who lack the skills and drive to make my company successful. In fact, when we ran our language school we did better than that: we paid more than triple the going rate for our part-time teachers, and were far more generous than the market required for our full-time staff as well. Far more. Our CFO wanted to hate it, but the results were impossible to argue with.

What results? We had our pick of the best teachers in the Boston area, which meant we crushed our competition in the results we delivered our clients and, thus, we kept winning business from our competition, while never once losing an existing client to our competition.

Sound like the type of results you'd like for your company? Don't just do as I say - talk is cheap, and nowhere cheaper than on the web. Do as I did, and as I will happily do again when I launch my next endeavor.

But as I said, pay is a threshold issue only. If you really want to Build a Talent Magnet, read the post by that name I wrote recently for the Achieved Strategies blog. Then come back tomorrow for part 3 of this series, when we discuss the role of fairness in business. (Hint: it's everything!)

Don't get stuck with the leftovers!

I've read repeated reports over the last year or two that eighty percent of us - 80%! - don't like our current jobs.

The other day, a friend shared another as-yet-unverified statistic, that 84% of American workers plan on switching companies in 2011.

Employers: nervous yet? You should be. The economy is already showing some significant signs of recovery. Companies will be hiring over the next year - finally. Your top talent is already being wooed. Pretty soon, even your second-tier talent will find it has options.

If astronomical turnover won't be crippling enough, consider this: who will opt to stay? The leftovers, that's who. Is that really who you want operating your company? The leftovers?

In case you haven't noticed this about me, I am anything but the doom-and-gloom type. I'm a man of action, and I wouldn't give you a dire prediction if I didn't also supply you with a ready way to protect yourself against it.

This, then, is part one of a five-part series on how you can protect yourself from the curse of mediocrity.

Step one: realize that pay is a threshold issue for your staff.

* Pay me adequately for my needs, and I'll stay for a while. ...Until a better offer comes along.

* Pay me fairly, and I'll stay a bit longer. I'll also put more of myself into my work.

* Pay me more than I feel I can get elsewhere, and (all other things being equal) I'll stick around for a good long time. I might even feel appreciated.

* Pay me just a bit more than I feel I deserve, and - again, all other things being equal - I will be grateful! I'll do anything to prove you invested wisely.

Pay is a threshold issue because it starts the conversation: it gets employees over the threshold of working for you, or of staying with you. Talent will find its way to the highest bidder, and there isn't much you can do to fight that. Indeed, if you don't compete on wages, you're unlikely to even get a second look from the most talented workers out there.

And who can afford to employ any but the most talented workers in our competitive landscape?!?!

...But as I said, pay is only a threshold issue. We needed to discuss it, and get it out of the way, if we're ever going to get to the heart of how you'll be building your successful team.

That conversation begins next time, in part 2 of this series.