3 Ways CIOs Can Ease Turnover Impact
Silicon Valley’s Fight for Talent
California’s GDP recently surpassed $2.7 trillion, making it the world’s 5th largest economy. A single state of the American union producing more value than the entire country of India (a tech powerhouse in its own right) is impressive. Yet this immense value is not produced by technology alone. People are what power the Californian economy, and consequently, skilled people are in very high demand.
With business demand outstripping workforce supply, The Valley has become a candidate’s market; a fact each and every worker knows very well. Free meals, unlimited vacation, and daycare are just some of the perks employees have now come to expect as standard fare when workers hold all the cards. Yet with so many companies offering lavish benefits, a counterintuitive phenomenon is emerging: worker loyalty is actually declining. Employees’ insatiable craving for greener pastures– fueled by a constant stream of tantalizing offers pitched by poaching recruiters– has created an astronomical turnover rate; 13.2% to be exact, beating out both retail and media/entertainment sectors.
Call it greed or supply-and-demand economics, the fact is, employee churn is here to stay. And while HR departments continue their attempts at fixing the problem through retention programs and exotic workplace perks, I assert we need to adjust for turnover. In other words, accept turnover as a fact of life and build mechanisms to minimize its disruptive effect. The good new is, the office of the CIO may hold the keys to success.
How the Talent War Impacts Productivity
Recruiting top talent is hard. Sadly, retaining top talent is even harder.
Talent on its own is practically useless without the context of institutional knowledge. One can hire the very best coders or user interface designers in the world, but they will be far less effective if they cannot grasp “how things really work” within a given organization. Coders need to understand the release management process so that their code may be properly deployed into a highly customized CICD pipeline. User experience designers need to understand personalized brand messaging before building new interfaces. These and countless other examples exemplify the importance of organizational context.
We can think of an organization as an enormous cargo plane carrying a priceless payload of knowledge. While these enterprise aircraft will always endure some degree of air turbulence, the revolving door of employee churn blasts irreparable holes into the vessel’s wings; preventing it from achieving its full airborne potential.
As employees walk out the door, a costly data leak of institutional knowledge shadows their departure. This data leak becomes obvious when “knowledge transfers” and “new employee onboarding sessions” become an epidemic. Not only are the new employees nonproductive during their first few months of onboarding, their drain on productivity is practically viral in that they seek understanding by absorbing time from veteran (and otherwise productive) knowledge workers. This drain on productivity is very real and can be measured quantitatively in numerous ways; from countless hours spent in extraneous meetings to costly project delays.
At the organizational level, institutional knowledge loss often equates to operational outages and project deadline lapses. This is due to a combination of insufficient resources and a lack of contextual understanding around organizational inner-workings. Take the example of losing even a single Salesforce.com administrator and the profound ripple effect as she walks out the door. Even if a dozen alternate Salesforce-certified candidates line up to take her place, only she understood the intricacies of how the sales organization is structured; perhaps a complex hybrid formation of geographic territory and vertical market assignments. A single threaded / high-value employee leaving may also cause delays in a strategic initiative such as a next-generate configure-price-quote (CPQ) implementation, or could lead to major operational outages if she was the only person who had the API keys to the firm’s quoting cloud tool, which coincidentally, rotated keys shortly after her departure!
Three Ways CIOs Can Help
The information technology department, with its slew of cross-functional business technology services, is a defacto knowledge center. Sure, internal business strategy groups or external business consultancies may have a “high-level” understanding of how your enterprise operates, but it is the IT department that understands how the business runs at the nuts-and-bolts level. In other words, IT understands how the business actually runs, which presents an immense opportunity in environments otherwise plagued with institutional knowledge loss.
To combat the effects of turnover, IT can and should consider “productizing” its knowledge and tooling to ensure knowledge continuity. Here are three ways to do exactly that:
1. Build an Expert System
An expert system is a decision-making platform that is typically powered by a combination of artificial intelligence (AI) and some type of knowledge base (KB). A sophisticated, yet practical example we often see today are chatbots that are connected to frequently-asked-question (FAQ) knowledge bases. The same design pattern can be attached to institutional knowledge bases, such as enterprise architecture repositories, or to more tactical assets like auto-created code documentation repositories. The goal of course is to minimize the disruption of fledgling employees from bogging down veteran employees with time-consuming, rudimentary questions and knowledge transfer meetings.
2. Hold Executive Boot Camps
Executives are expensive; especially when they’re new and still learning the lay of the land. Moreover, executives often bring in new underlings, who in turn, need time to ramp up. Each level of turnover (executive, mid-level manager, and individual contributor) creates a “wave of inefficiency.” By the time the third tier of individual contributors are caught up, the first tier of executive level management rotates yet again, and the entire cycle of chaos recommences.
IT has an opportunity to turbocharge executives’ time to proficiency by sponsoring executive boot camps. These are highly-focused sessions designed to run through key enterprise artifacts such as the business model canvas (what the company makes, who its customers are, etc), business capability maps, and the enterprise business application portfolio just to name a few.
A two-hour executive bootcamp session may easily host multiple executives at once, and avoids dozens if not hundreds of aggregate work hours by covering the top twenty or so common questions while simultaneously providing a relatively standard “lay of the land” perspective from the ground level. Moreover, IT can prep executives with key challenges the organization faces, such as external threats or internal capability gaps.
A fringe benefit of IT-sponsored executive boot camps is the immense credibility it lends to IT. Demonstrating business acumen to key business leaders can galvanize trust and confidence in IT, which in turn can pave the path to faster IT/business partnerships.
3. Sponsor Communities of Practice
Communities of practice are like grassroots, yet decentralized centers of excellence. (While CoEs are common in “mature” organizations, their centralized nature typically does not bode well in engineering / startup cultures.) Communities of practice often form around specific subject matter areas which may be tied to either cross-functional processes or domains of expertise. Common examples include data analytics, new product introduction, and so forth.
In the best of times, communities of practice are a great way to cross-pollinate information and best practices among the various internal teams and departments. In the worst of times, communities of practice provide some degree of “knowledge redundancy” in the face of inevitable turnover.
The information technology department should spearhead such initiatives by identifying high-risk / high-reward domains or processes and build perpetual knowledge sharing sessions around them. The sessions should be designed with in a way that continuously delivers business value, and should be able to operate even without IT sponsorship. After all, even IT is not immune to turnover!
The scorching-hot job market in Silicon Valley has catalyzed employee turnover into a persistent risk, and the traditional risk avoidance tactics of employee retention programs must now be augmented with a different risk management strategy altogether; one of risk acceptance.
Although employee turnover has become a reality, CIOs are well positioned to build solutions that minimize the impact of turnover and knowledge loss. The CIO and the information technology department are inherently cross-functional, and therefore already possess key technology, processes, and knowledge that is highly valuable to both new and veteran employees alike. This knowledge transfer can be operationalized into standardized programs that are relatively inexpensive to instantiate low effort to maintain.
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About David Torre
David Torre is a business technology veteran with years of experience coupled with degrees in both information systems and business intelligence. This combination of skills has enabled David to provide enterprise solutions to well-known companies who face some of the toughest challenges in the business world today.
David currently resides in the San Francisco Bay Area where he runs Center Mast, LLC.