The New Loyalty
by Kate DCamp

Historically, loyalty has been a major factor in retaining employees. The reciprocal bargain that supports employee loyalty is dependent on a secure career that will provide some advancement, fair compensation and a good working environment.

When large established companies first began using layoffs to resize in the face of global competition, the reciprocal nature of the loyalty bargain was revealed as an illusion. Companies could not afford to promise security beyond the means of their businesses to deliver.

A good example of this is the auto industry. Jobs were secure and paid well, with good benefits, but this structure was ultimately too expensive to stand up to global competition. For a time, large U.S. automakers lost touch with consumer requirements, at least in part due to the internal momentum of years of success, which can block innovation. In addition, advancement came to a halt at some point for virtually everyone, and since advancement and learning were intertwined, development in the organization also stalled.

So what will replace loyalty? With greater competition among employers for a shrinking pool of talent, can companies create an environment that makes people want to stay and also to continue learning and contributing their best ideas and efforts? This challenge is made more difficult by the ubiquitous learning environment the next generation is accustomed to.

Few employees will tolerate highly structured developmental career paths or standardized curriculum. Universities have evolved to address the new generations' expanse of interests with interdisciplinary or individualized degree programs. What can employers offer that optimizes employee potential when there is not a consistent approach that will work with all or even most employees?

Employers have a number of options to leverage the individualized interests of each unique person. Short-term international rotations were used successfully in the GE Consumer Finance business (now called GE Money) to give global exposure and perspective to employees around the world. The simplicity and adventure of a three-month rotation assignment abroad was more appealing than relocating to many people, and administratively simpler and less costly than expatriate projects. A try- before-you-buy approach to new roles or assignments also could increase employee willingness to get back into the learning mode without the risk of the unknown, which is a barrier to internal movement.

A Cisco program that allows high-potential employees to rotate into a full-time philanthropic project has provided employees with a fresh perspective, including how to work with minimal resources. Further, by telling the stories of those who have participated in the program, the talent initiative creates pride that extends beyond the participants and into the organization. Both GE and Cisco showed strong support for volunteering by allowing employees to volunteer during working hours. Logging all of the hours worked across the company, which I witnessed at GE and we added at Cisco, served to create positive competition and was a tangible reminder that the organization itself was doing good.

The common element in these approaches is employee choice. The challenge for employers is to create an environment where employees' ideas are heard and matched to a company need through developmental learning assignments or projects. Job swaps are another potential approach, as are personalized rotational programs that create exposure to core areas of the business but allow each participant to customize the experience.

For instance, if multidisciplinary experience is important to develop general management capability, why not let an individual plan an assignment to get exposure to sales or operations? However, to create an environment with the flexibility to be reciprocal in matching employee interests to company needs, we will need to begin experimenting immediately.

Find an executive interested in alternative employee development approaches and co-develop a pilot program. Share the successes and what was learned with the rest of the organization. Creating new loyalty requires experimentation, and diving in will work better and certainly faster than the planning and administration required for traditional standardized programs.

[About the Author: Kate DCamp is the senior executive adviser at Cisco.]