The retention cost of ineffective onboarding, Think twice before updating your brand & How to effectively build pre-work into meetings
23 October 2022 Newsletter
“I am an old man and have known a great many troubles, but most of them have never happened.” – Mark Twain
Hope you’re Thriving!
It’s been a pretty good week with a quarterly planning workshop and many meetings. Also, there’s lots of activity with the new Onboarded book, experiencing excellent presales ordering. A warm thanks to all of you who’ve ordered already!
You may remember a few months ago; I discussed a good question you can ask during an interview — “What’s your Uber score?”. Well, this week, I had someone message me saying they were interviewing someone for a leadership role and asked the candidate that question.
The candidate hadn’t been asked it before and hadn’t considered that. So they checked their phone and had an Uber rating of 3.1 out of 5. It completely changed the dynamic of the interview. The way a candidate treats Uber drivers and is rated by them is a fascinating data point, especially if they’re applying for a leadership role.
The retention cost of ineffective onboarding
Continuing excerpts from my new book Onboarded which is due for release on the first of November, here’s a snippet about how onboarding impacts retention.
You probably don’t consider the fast-food industry when you think about how onboarding might affect your retention rate. Yet the fast-food restaurant Pal’s Sudden Service from Kingsport, Tennessee, has seen only seven general managers resign in the past thirty-three years.
Furthermore, only four unit managers have voluntarily left Pal’s since 1981. Also, the annual turnover for assistant managers is 1.4 percent. That’s world-class retention in any industry, let alone the quick-service restaurant industry, where the overall turnover rate is about 73 percent.
Beyond this remarkable retention rate, there are other elements to Pal’s business that are world-class. For example, service time is the first and most important metric in a drive-through fast-food restaurant. Service time is measured from when a car stops at the window until it begins driving off, and Pal’s manages it within eighteen seconds. That’s four times faster than the second-fastest quick-serve restaurant in the USA.
The second metric of importance is the error rate, and Pal’s makes a mistake only once in every 3,600 orders, which is ten times better than the industry average. Pal’s has managed to achieve the clear first position in retention and operational excellence by developing a comprehensive onboarding process that helps new hires deeply understand their role.
According to Pal’s President and CEO Thom Crosby, “Pal’s is first and foremost a manufacturer. Our second job is to educate.” And for employees, that education consists of hourly employees undertaking 120 hours of training and learning up to three positions, and managers are required to undertake eight hundred training hours.
It’s likely the first name you often think of from the fast-food industry is McDonald’s, and perhaps you consider that McDonald’s has been very successful with only a fraction of Pal’s onboarding hours for team members. And this is true, but McDonald’s is a franchise, solving this retention and onboarding problem through different means. McDonald’s has optimised their systems to accommodate high employee turnover, with systems that train employees to do a good job and then leave in less than a year.
But for leadership, McDonald’s solves the retention problem by ensuring the store manager is also the franchise owner and being very selective in granting franchises. McDonald’s accepts only around 1 percent of applicants to become franchisees. If accepted, they are required to complete a comprehensive training program that can take between nine and twenty-four months. The training program is undertaken in part at individual McDonald’s restaurants, online, and at the McDonald’s Hamburger University campus in Oak Brook, Illinois. The program focuses on five key pillars — People, Operational Excellence, Sales and Marketing, Financial Growth, and Trust — ensuring that every franchise aligns with the whole system working towards a common goal.
You can be confident that these two industry-leading examples wouldn’t spend this much time and money on new hires without a tangible return. And the first measure we should consider when evaluating the cost of inadequate onboarding is the attrition rate or the rate at which employees leave the firm.
Within my research, I identified that the more likely a person is to agree with the statement “after onboarding, new hires understand most of our company culture,” the more likely they are to agree that their onboarding process affects their attrition rate.
Think Twice Before Updating Your Brand
You may recall last week’s newsletter where I launched our new website.
Of course, this week, I subsequently came across a video explaining why you shouldn’t update your website. But it was actually an excellent video discussing the concept of cumulative advantage. How a brand builds loyalty over time and the idea of staying fresh erodes loyalty. There’s also a great case study of Tide laundry detergent.
Here’s the video synopsis:
“Brands are constantly changing in order to “stay fresh”, but that’s a mistake. Customers stay loyal through habit, not because you’ve forced something new and unfamiliar on them. Roger Martin, former dean of the Rotman School of Management at the University of Toronto and one of the world’s leading thinkers on strategy, says brands shouldn’t be so quick to throw away their cumulative advantage.”
This caused me to compare our new versus old Evolution Partners’ websites alongside one another, as you can see in the image below. I was pretty happy that it evolved rather than being totally different.
How to Effectively Build Pre-Work into Meetings
Preparing for a meeting is important. It enables participants to come with a considered opinion about agenda items the team are planning to discuss.
But, equally for important decisions, often the idea needs to sit in the subconscious for a while to percolate and mature as an opinion.
So it was interesting this week to read an article about building pre-work into meetings. I don’t know if I entirely agree with the concept, but nonetheless, it’s an interesting perspective you may be interested in.
From the article:
“You wrap up one meeting and scramble to find the Zoom link for the next one, sighing with relief as you click “join” just in time.
But that sensation is short lived as you realize that you neglected to do the required pre-work: reading a document, reviewing a contract, or answering some key questions that are to be the basis of the discussion. It’s no secret that the term “pre-work” inspires groans, eye-rolls, and even — during that all-too-familiar moment of realization — a sense of impending doom.
Because of this, and because pre-work so often goes undone, many executives I know have given up on the practice. It doesn’t have to be this way. By embedding pre-work into meetings and carving out the first five to 20 minutes to have participants silently review a thoughtfully prepared, action-oriented document, leaders can reimagine not just the concept of pre-work, but the very nature of how teams gather.”
Read the article here: How to Effectively Build Pre-Work into Meetings
The Growth Whisperers Podcast
What is onboarding and why does it matter? (1 of 4)
What is onboarding, and why does it matter?
In this first of four episodes, we’re discussing Brad’s new book Onboarded, how to bring new hires to the point where they are effective faster.
We discuss what onboarding is, and what it isn’t. We cover how 83% of organisations aren’t realising the benefits of an effective onboarding process and why onboarding really matters to your team, and your results.
Listen to The Growth Whisperers
Or watch it on YouTube
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