Here’s a copy of the short application employees fill out to take part in Blue Cross and Blue Shield of Minnesota’s volunteer program. Following that is a description of the criteria employees must meet to participate.
Dear Workforce What Are Graphic Designers Making These Days
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Underfunded Pensions The Next Big Bailout
Despite encouraging signs of recovery in the stock market and elsewhere, one aspect of corporate health is likely to remain in “critical” condition for some time. The Pension Benefit Guaranty Corporation (PBGC), a quasi-public institution that insures private pensions, continues to face falling income, rising liabilities and expected losses that could exceed its assets.
In addition, the pension programs of the companies insured by the PBGC have alarming levels of underfunding. The General Accounting Office classifies the PBGC as a “high risk” program requiring urgent transformation and reform. Tough luck for pensioners getting ready to retire? Not yet, but someone else–the American taxpayers who guarantee their pensions–should be worried right now.
More failures
During the past two years, falling asset prices and failing manufacturers have eroded the financial foundation of the PBGC, and the crushing weight of the troubled programs it insures portends a potential collapse that would obligate taxpayers to rescue them. The plans of the companies in the Standard & Poor’s 500 that offer defined-benefit pensions face deficits totaling at least $182 billion, and possibly more if the economy performs erratically.
Furthermore, pension failures have been on a rising trajectory. In 2002 and 2003, the PBGC sustained losses significantly greater than its assets and posted the worst deficit in its 29-year history. The PBGC manages more failed pensions than ever before, and the yearly benefits it disburses have more than doubled over the past two years.
In the past, the agency covered bankruptcies with little difficulty because its premium income exceeded the losses. However, losses sustained from completed and probable terminations of pension plans increased nearly 50-fold over the past two years, and the PBGC estimates that it will sustain a $35 billion loss from plan terminations in 2003. Unfortunately, its assets total only $25.43 billion, making its projected losses for the current year 138 percent of its total assets.
Why such huge shortfalls? As interest rates decrease, a company must place more money in its pension program to guarantee its ability to meet its future pension obligations. Most companies did not take this step as interest rates fell during the end of the last decade because the significant appreciation of the equity assets in the funds covered the assumed future decline in returns from a lower interest rate. Because of this poor planning, a study by Goldman Sachs reports, these firms may have to direct $160 billion toward their pension plans over the next two years to reach an adequate level of funding.
Chronic headache
Recent changes in interest rates notwithstanding, certain structural issues surrounding pensions themselves will ensure that PBGC’s headaches won’t go away.
For one, the defined-benefit pension plan is fast becoming a relic of past decades in which workers spent their entire careers with the same company. The PBGC was designed for that rigid employment structure, and is struggling to stay ahead of the changing demographics, which threaten to stretch the agency’s responsibilities beyond its resources.
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The PBGC manages more failed pensions than ever before, and the yearly benefits it disburses have more than doubled over the past two years. |
Further exacerbating the flight from the traditional pension system is the fact that healthy firms, responsibly managing their pensions, essentially cover the losses incurred by mismanaged funds. As a result, these “good corporate citizens” understandably restructure their pension programs into defined-contribution plans to eliminate the cost of subsidizing poor performers through insurance premiums.
Moreover, the average length of retirement increased 20 percent between 1975 (the year of the PBGC’s inception) and 2000. Consequently, the number of beneficiaries supported and the amount of benefits paid by the agency continue to grow at accelerating rates. In the past two years alone, the benefits paid by the PBGC increased by 140 percent.
Where to begin
Clearly, reform is necessary to prevent a taxpayer-financed bailout. One place to start is correcting the PBGC’s pricing to better reflect risks. Current insurance premiums ($19 per pension participant, plus a small charge on underfunded plans) don’t adequately account for the differences in management style among plan administrators.
Conversion to defined-contribution plans to ease long-term fiscal pain is another measure worth taking. This would eliminate the PBGC “risk subsidy” and help end a market distortion that may be dissuading some from making the retirement-benefit choice that best suits their individual circumstances.
Finally, competition should be instituted. This creates healthy market-based pricing, which increases consumer choice and minimizes risks to taxpayers. The modern insurance industry is capable of underwriting pension risks and freeing the federal government from an outdated, unnecessary obligation.
Government-sponsored enterprises are renowned for their economic inefficiency, and the PBGC is no exception. Congress must reform its regulation of the private-pension system to ensure the security of pensions (correction), expand the personal pension choices available to employees (conversion), and remove the potential cost to taxpayers (competition). Solving the PBGC’s conundrum may not be as easy as A-B-C, but remembering the Three Cs is sure to save tax dollars and give lawmakers a valuable economics lesson to boot.
An Airport Job Listing Gets an Extreme Makeover
The U.S. Transportation Security Administration is hiring airport screeners, andlists openings on its Web site. But are these ads doing enough to attract the most motivated, enthusiastic and quality applicants as possible?
Workforce Management gave Warren Dunn, southern regional creative director for Bernard Hodes Group, one of the TSA’s job listings to rewrite.
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| As a Transportation Security Screener: You will provide frontline security and protection of air travelers, airports and airplanes. As the frontline defense, you are responsible for identifying dangerous or deadly objects in baggage, cargo and on passengers and preventing those objects from being transported onto aircraft. In ensuring the identification of dangerous objects in baggage, cargo, or on an air traveler, you must perform this essential security mission in a courteous and professional manner. You will use diverse, cutting edge, electronic detection and imaging equipment. Finally, you may participate in or attend meetings where classified information is provided.
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You don’t have to be a soldier to defend our country! Transportation Security Screener: The bad guys are out there. But so are you. Play a key role in keeping our country safe as an airport screener. It’s not an easy job. That’s why we train you–and provide you with some of the world’s most advanced technologies. Count on excellent benefits, solid pay and the pride that comes from keeping people, and our skies, free from terror. In this job, you’ll treat people–even the ones that get upset with today’s increased security measures–the way you would like to be treated, with respect and dignity. If you can keep your focus–even when things (and people) get hectic, if you can stand for three hours as well as lift 70 pounds with another person’s help, and if you’re the type who can make smart snap decisions, then see yourself on the frontlines with us. Defend our country with your eyes, ears and heart. Join the caring citizens who are working to make a living–and a difference.
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The FBI’s Recruiting Ads
Below are advertisements designed by students for the FBI.The ad campaign and related efforts resulted in a dramatic increase in the quantity and quality of recruits that the FBI attracted, including more than 330 new bureau applications from minorities for an array of jobs, including investigators, chemists, computer scientists, electronics technicians and financial analysts.
Three Ways to Find Generation Y
Here are three ways companies are finding candidates who are members of Generation Y.
Go Where They Go
The Swedish furniture maker Ikea is trying a new approach to finding young talented employees: attracting applicants with handwritten ads on the walls of public bathrooms. Spokesman Jimmy Ostholm said that after only four days they had received 60 applications, which was four to five times more than what Ikea would have gotten from a normal newspaper ad. Ostholm added that the unusual campaign was significantly cheaper than a newspaper ad, too.
Ikea has obviously decided to go off the board with its new campaign. However absurd this may seem, the thinking behind it is sound. If you’re going to attract a new breed of employee, you have to be willing to go about it using unconventional means and advertising in unconventional locations.
Ask yourself where the best potential recruits for your organization gather and take your campaign to that locale. Consider the visibility of the local skateboard park, public library or Internet café. Form alliances with key people in key locations and work cooperatively to give your message premium exposure. Since you are competing with video games and the Internet for the attention of this generation, use both to your advantage. Start a recruitment drive on the Web, or take flyers to the local video game store and post them where kids shopping for the latest video game can see them.
Build a Bridge for Your Future CEO
Each year, Hy-Vee, a large supermarket chain in the Midwest, conducts a career-day seminar at its headquarters in West Des Moines, Iowa. Hy-Vee invites several hundred of its part-time, college-aged employees to this impressive meeting.
The objective of the career day is to entice young college talent to view working at Hy-Vee as a strategic career move rather than as just a job. This gives Hy-Vee an opportunity to showcase its very impressive corporate headquarters to those who might otherwise see only the store they work in and to introduce Gen Y candidates to the company’s high-ranking personnel. The students hear personal success stories from company execs and high-paid store managers, many of whom are not much older than the students themselves. Hy-Vee’s CEO, Ron Pearson, who always addresses the students, shares how he too began his career with the company as a part-time grocery clerk.
“This program has been remarkably effective,” said vice president Rose Kleyweg Mitchell. “It gives those students who are searching for a career path the opportunity to see that their dream job may not be that far removed from their present job.”
The First Responder
Gen Y employees who apply for employment at Monarch Ski & Snowboard Area in Southwestern Colorado don’t get a call from management when they are a prospective hire. The first person they hear from is a peer, and the call comes almost immediately. Monarch has decided that the best people to connect with interested Gen Ys are other Gen Ys who are already committed employees. This immediately puts the applicant at ease. If they have any questions or concerns, the Gen Y staff member can address these issues from the perspective of the applicant, letting them know how the job really works–both the pros and the cons. If the applicant has a question that the employed Gen Ys cannot answer, they are referred to management or human resources.
The First Responder program serves Monarch well, while simultaneously aligning it with the specific needs and wants of the Gen Ys.
First, it eliminates lengthy delays often experienced when busy managers must try to work in calls to prospective employees. There’s literally no time wasted between the time of application and the all-important first contact.
Second, it engages the current Gen Y employees, giving them an opportunity to do something they wouldn’t normally do during the course of a typical day, satisfying their needs for change and for more advanced responsibilities.
Third, it creates an immediate ally for the new applicant, helping them feel as if they already have a friend who works for the company. Oftentimes, the Gen Y employee will serve as a mentor or a trainer for a new employee he or she helped to recruit.
Train your top-producing Generation Y employees to be your First Responders to assist you in the initial contact and screening of your applicants from their peer group. Trust them to ask and to answer the type of questions the new job applicants have. Invite your First Responders to sit in on the initial interview. If the applicant is hired, involve your First Responder in the orientation, the training, and the mentoring of the new employee.
From Employing Generation Why? ©2002 Eric Chester, Published Tucker House Books 1410 Vance St., Suite 201, Lakewood, Colorado. Used with permission. All rights reserved.
Feedback on Hispanic Employees and on Undercutting Human Resources
Regarding an item in the last newsletter about improving communication with non-English-speaking employees, Chuck Miller, Principal, Lakeshore Communications, Wilmette, Illinois, writes:
“While having supervisors become Spanish-speakers is a good idea, the best idea is to have all materials, especially employee handbooks, benefit communications and messages from HR and management translated into Spanish.
Plus, all communications, either in Spanish or English, should be in plain language and simply written for ease of understanding. A translation of college-level English may not be terribly helpful to Spanish-speakers with below average skills in Spanish. I’d also use a phrase checklist, where common phrases used by supervisors or HR are listed next to their Spanish translation so a supervisor or HR person could point to or check off a phrase that a Spanish-speaker may not understand.”
Another reader—who did not identify him/herself, also writes in about non-English-speaking employees:
“I am most concerned about the language used by the author from The Herman Group in the answer to the question regarding Spanish-speaking employees. Referring to Spanish-speaking employees as ‘these people’ and asking if they are ‘legal’ is derogatory and draconian…Perhaps this ‘expert’ is unaware that–given the quality, or lack thereof, of the educational system in the United States–there are huge numbers of native-born citizens who reside in this country legally, who do not have competency and/or fluency in the English language and speak most comfortably in their first language, or the language of their parents.
I question if the author would have used the same language if he was referring to German-speaking or French-speaking employees.”
This letter, from Burbank, California, author and speaker Eden Rosen, was also about the item on non-English-speaking employees:
“You stated that it is foolish not to discipline an employee for bragging about the deal the employee just got. For your information, according to the California Labor Law, it is illegal to discipline employees for talking about their salaries and/or raises. If the company is in California, to discipline that employee is illegal.”
Regarding an item in the last newsletter called “How Do We Prevent Division Presidents from Undercutting HR?” the owner of a Massachusetts technology business writes:
“Yes, it was inappropriate for the employee to brag about her deal. Obviously the president made a huge error in judging the total worth of the employee. Additionally, there was no qualification as to what the questioner defined as a ‘significant increase.’
But, more importantly, when did HR start ruling the company? I think it is more an issue of HR undercutting the president. It is the president that has to work with the employee, not HR.
It is the president that knows the employee’s performance (or at least should) both on and off the record.
It is the president who knows the constraints of his/her budget.
It is the president who has to produce based upon the performance of their employees.
It is the president who knows what it takes to produce the service they are selling and what customers are thinking about their relationship with the company.
HR does not have responsibility or accountability over any of these areas. Therefore the job should be left to the people that know what they are doing and have the responsibility for it.”
More Training, Fewer Scandals
For months, and maybe years, a young reporter named Jayson Blair filled the pages of the august New York Times with news stories he often made up. After investigating why he got away with so much fabrication for so long, a Times committee laid some of the blame on an unexpected source: lack of training.
The group’s just-released report concluded that Blair’s superiors had been promoted to their positions on the basis of their own news-gathering ability, and they had never received proper guidance on how to mentor and manage the hundreds of aggressive journalists in their charge.
In response, the Times announced last month that it would hire its first-ever assistant managing editor in charge of training, career development, recruitment, promotions and evaluations. Times spokesman Tony Usnik says the paper hopes to fill the position by this month and will follow the committee’s recommendation that the post “be invested with unambiguous authority to oversee the implementation of programs” to correct managerial shortcomings.
The new training and career-development editor faces a host of problems that go beyond the recent rash of scandals. An internal Times survey conducted last year “suggested that many employees didn’t have a high level of trust in their managers and did not believe the current system would truly recognize merit and advance their careers.” Many veteran Times newspeople have never had a performance review.
James Naughton, president of the Poynter Institute for Media Studies and a former Times reporter, says the new training editor will have to have the promised “unambiguous” authority in order to succeed. “Newspapers have already cut their staffs to the bone, and editors don’t want to allow their people to spend time on anything that doesn’t help fill the next day’s paper,” Naughton says. “The training editor will need the authority to require that mid-level editors be given sufficient time for training.”
Naughton believes that the unique, insular culture of the Times would make it difficult for someone brought in from outside to succeed in the position. The training editor, he says, should be a current senior editor who is already respected throughout the organization. To earn the support of skeptical newspeople, Naughton says, the content of the training programs must be practical rather than theoretical. And in the long run, newspeople must see that those who advance through the organization have received training.
The training problems at the Times are hardly unique. In a national survey conducted last year by Princeton Survey Research Associates, American journalists said lack of training was their primary reason for job dissatisfaction, ahead of low pay and benefits. The news industry spends an average of 0.7 percent of payroll on training, compared to 2 percent by all American companies, according to the Knight Foundation, a journalism group in Miami.
“Lack of training is an artifact of the newsroom culture,” says Eric Newton, director of journalism initiatives for the Knight Foundation. “Newsrooms are filled with people who are paid to find things out. So, historically, there’s been a feeling that reporters don’t need to be trained because they can just find out whatever they need to know.”
But experts say newspapers are realizing that journalism managers are no different than their counterparts in other industries—and the skills necessary to motivate and supervise employees don’t come through osmosis.
Workforce Management, September 2003, p. 15 — Subscribe Now!
Do it Right or Risk Getting Burned
Employees are never happy to learn that they’ll have to pay more money for health care, pension and other benefits. And employers abhor delivering the news. Still, it’s a problem that must be addressed, industry experts say. Recognizing the value of good, early communication can significantly smooth the way for benefit take-aways. Ignoring it can lead to misunderstandings, morale problems and even lawsuits.
The corporate landscape is littered with problems and bad headlines stemming from proposed benefit changes that blew up on the companies that made them. A strike early this year at Lockheed Martin is blamed in part on copayment increases in the company’s drug-benefits program. A proposed change in IBM’s pension plan has created a public relations nightmare. American Airlines, after extracting promises of wage and benefit cuts of $1.6 billion from its unions, nearly blew its strategy to escape bankruptcy when it was revealed that the airline was planning to give top executives bonuses and bankruptcy-safe pensions at the same time it was cutting other employees’ pay. The ensuing uproar caused the airline to back away from the executives’ perk package.
Softening the blow
Just how many of these problems could have been solved with better communication is uncertain. But what is clear is that better communication can soften the blow when it comes, if not eliminate harmful aftershocks. Experts say it boils down to this: Do it right or risk getting burned.
Attorney Bruce Schwartz, a member of the Jackson Lewis benefits practice group, says that because of a widespread retrenchment, communicating benefit changes is a constant challenge. And one often not given enough attention. The first step, he says, should be to run the changes by the legal department.
Although companies can debate whether to break the news during a town hall meeting or send a written message, Schwartz says, either way it boils down to good, clear communication. “Clarity is the most important thing,” he says. Companies have to speak with one voice. And not just with a voice that makes all the necessary legal points. Schwartz has seen many cases of benefit-plan booklets or written announcements that contain all the necessary information but are almost impossible for anyone to figure out except those who are experts on the subject.
“It always comes down to a good written product,” Schwartz says. “Good writing takes time, and I don’t think people give it the time they should. There is nothing worse than an employee who has an expectation of something other than what the benefit is.”
Consultant Mitchell Lee Marks, author of Charging Back Up the Hill, says that communicating benefit changes is similar to the challenges companies face when they are recovering from mergers, acquisitions and downsizing. At such times, employees are suspicious and cynical about management’s intentions, and they crave information. At the same time, senior executives are wary of saying too much to employees. His advice to companies is to begin communicating with employees honestly and openly well before there is a need to transmit bad news. A crisis “is not the time to build your credibility,” he says. “This is the time to ride on your credibility. If you’ve established credibility, you have a buffer.”
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“The truth is often less negative than the worst-case scenarios that employees imagine. You have to get out there, be honest, say what’s going on, be as specific as you can.” |
Information, please
Failure to keep workers informed will only provide fuel for the rumor mill, Marks says. “First and foremost, be honest. Just say what it’s about. It’s amazing how well employees will listen,” he says. “In most cases, the rumor mill is much worse than reality. The truth is often less negative than the worst-case scenarios that employees imagine. You have to get out there, be honest, say what’s going on, be as specific as you can.”
Marks encourages companies to tell workers what other employers in their industry or region with similar benefits are doing, an approach that he says is ignored too often. He also suggests periodic assessments to get a fix on whether the workforce hears the same message that management thinks it is sending. It’s better to over communicate than under communicate, Marks says. “You’ve got to say it over and over again. There is no substitute for saying things over and over again.”
Finally, Marks says management should let the workforce express its feelings. If employees don’t have an outlet for their anger inside the company, it may be transferred to customers. “Give people a chance to vent internally instead of externally,” he advises.
One of the companies most active in studying–and delivering–benefit changes is Medco Health Solutions, Inc., which generated $33 billion in revenues last year and is among the largest pharmaceutical-benefit managers in the world. Medco knows as well as any company the problems that can arise from delivering benefits. The company is battling two whistle-blower lawsuits and an investigation by the U.S. over claims, dating back five years, about drug pricing.
David Halter, a Medco vice president, says that information about plan changes is one of the most difficult messages to deliver. He compares the process to having a root canal. Figuring out how to communicate the change is just as important as the technical aspects of the plan itself, he says. Some companies rely on a one-time communication during their annual open-enrollment period, which he believes is a mistake. What is even worse is when employees hear about changes in prescription plans when they go to a pharmacy to have a prescription filled.
Letters are a start
Medco’s research shows that employees would much rather learn about benefit changes in letters. But the company’s internal research also shows that a multifaceted approach, including telephone calls and e-mails, is important. Companies that effectively communicate plan changes will get a significant return on investment, Halter says. Ineffective communication, on the other hand, leads to higher service costs, member dissatisfaction and delays in acceptance that can cut into potential plan savings.
As an example of a successful new plan, Halter points to a Fortune 500 manufacturing client that tripled copayments on its drug plan without an open employee revolt. The company realized an annual savings of $250,000. Facing big increases in benefit costs, the company hired Medco to come up with a plan for communicating the changes to employees. Under the old plan, workers could buy 100 pills at retail pharmacies with one copayment, enough for a three-month supply. The new rules limited prescriptions to a 34-day supply, effectively tripling the copayment.
But Medco developed a way to ease the pain. It told members of the prescription drug plan how they could achieve significant savings by having the drugs delivered to their home via mail. Using home delivery, employees could save $24 per brand prescription and $10 for each generic prescription. The home-delivery plan works best for patients with chronic medical conditions who have an ongoing need for daily medications, exactly the client group most likely to buy three months’ worth of medication at a time.
The success of the plan depended on a significant change in employee behavior. Medco announced the changes through direct mail. “It was a fairly straightforward message,” Halter says. The commonly held notion that plan members don’t read written materials is a myth, he says. Letters announcing the plan went out during open enrollment. One selling point was that with home delivery, members would have to reorder prescriptions only four times a year. If they continued to buy medicine at a pharmacy, they would have to make 12 separate trips. “The plan was a complete success,” Halter says. “The client said they did not receive a single complaint.”
Workforce Management, September 2003, pp. 80-83 — Subscribe Now!
Sound the Retreat
Decked out in T-shirt and tennis shorts, Howard Atkins, the chief financial officer for Wells Fargo & Co., balances precariously on two wobbly wooden planks stretched between two boxes. If he and the dozen other corporate honchos gathered on a sun-splashed lawn at a luxury hotel in Sonoma, California, successfully have worked as a team, Atkins will make it across the jerrybuilt bridge without falling off. With a final lunge, he triumphantly makes it to the other side. His team of senior financial execs clap and cheer.
The banking leaders are part of a larger group of 73 financial executives, risk managers, accountants and group presidents that Atkins has pulled together for team-building exercises during a three-day retreat that also included more conventional business meetings with reports and presentations. The top company players are participating in seemingly silly activities for a serious purpose: improving teamwork to achieve better business results. Atkins describes them as “very high-powered, very capable, very technically skilled, very competitive people.”
Although they are top performers, the CFO says he wants an even higher level of performance. “They are very individualistic in their approach to their work,” he says. “What I have been trying to do is get them to see the power of acting more like a team.” By the end of the day, Atkins is clearly pleased. “It’s really a terrific success,” he says, adding that Wells Fargo in recent quarters is showing double-digit gains in income and earnings, which he credits in large part to the bank’s people programs. “Success more often than not is a function of execution, and execution is really about people, so we invest pretty heavily in our people.”
When business is down
While Atkins chose relatively low-stress challenges involving activities such as balancing on planks, building tents blindfolded and stepping through complex webs of ropes, other companies use whitewater rivers, rock walls, treetop rope bridges and even fire pits as metaphors for the business world. The idea is to get people out of the office, stretch their boundaries and create some fun, all the while reinforcing serious messages like the value of team-building and pushing personal limits. But the value of off-site retreats and physically challenging exercises is a source of considerable debate, particularly in a weak economy that puts extra scrutiny on every discretionary program that can’t show solid ROI. Retreats are billed as leadership training, brainstorming or strategic thinking, but can those really be accomplished on a mountain climb, a fire walk or a whitewater rafting trip? Are companies building loyalty? Or lawsuits over seared soles and dunked human-resources directors?
Retreat reputations were also called into question last month with the resignation of U.S. Postal Service Inspector General Karla Corcoran. She was accused of wasting public money on $1 million-a-year retreats at which employees dressed in costume, participated in mock trials and recorded testimonials to Corcoran.
Although some companies like Wells Fargo continue to invest in team-building events, other companies are backing away. Break-out numbers on how much is spent on team-building are not available–they get thrown into training and development budgets, which are down. A study by the American Society for Training & Development published earlier this year said that training expenditures dropped from 2 percent of payroll in 2000 to 1.9 percent in 2001, reversing an upward trend between 1999 and 2000. Susan Harper, a business psychologist who runs rock-climbing programs for corporations through her company, Synergy Consulting, is one of those who feels the pinch. While other parts of her consulting business remain strong, “team-building has definitely gone down,” she says. “People are reluctant to spend money on what they think is not an absolute necessity.” With a recent uptick in the economy, her business has improved.
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“I know intuitively the payback here is huge. It’s a very small investment |
Harper charges rock-climbing clients from $2,000 to $4,000 or more a day, depending on the size of the group. Other events can cost from $500 for a few hours with a stand-up comic at a corporate meeting to $10,000 and up for a team of professional facilitators pushing executives through physical challenges. Atkins estimates it cost Wells Fargo about $50,000 for three days and two nights at the Sonoma Mission Inn & Spa. That included a fee of $13,000 for Adventure Associates, which brought in six professional facilitators to organize the half-day program that had the CFO walking the plank. Atkins does not try to guess what kind of dollar return Wells Fargo might expect on this people investment. For one thing, the financial managers are not directly accountable for producing revenue for the company. But the CFO is convinced that teamwork can help other parts of the company make money. “I know intuitively the payback here is huge,” he says. “It’s a very small investment to make for the payback we are going to get.”
Productivity boost
Author and professional retreat organizer Merianne Liteman thinks it’s a mistake to try to assess benefits in dollar terms. “Where good retreats have a quantifiable effect is on retention, on morale, on productivity,” says Liteman, co-author of Retreats That Work. Given that the widespread use of electronic technology, e-mails and cell phones provides filters to keep personal contact at a minimum, Liteman thinks the benefits of bringing people together in one place can be invaluable to an organization.
Daryl L. Jesperson, CEO of RE/MAX International, a real estate company based in a Denver suburb with 85,000 franchised agents, says he sees a payoff in productivity. “We think if you work together, play together and stay together, things work better,” he says. He believes that senior management’s average stay with the company of 17 years is a direct result of an esprit de corps stemming from company-sponsored whitewater rafting and scuba-diving trips, and outings featuring golf and NASCAR races. “There is a productivity boost anytime you have one of these. People feel better about themselves, they feel better about the company, and as a result will do a better job.”
Depending on the degree of danger involved–or the bonds of friendship that can develop–these events can define a corporate culture. Jesperson says that off-site adventures are part of his company’s DNA. It goes back to the 1970s, in the company’s infancy. Money was so tight that RE/MAX executives couldn’t afford to fly to a national Realtors’ convention, so they rented a motor home and partied all the way. “This is a group that has stuck together through thick and thin.” But a lot more goes into the mix. “Retreats are only one part of it,” he says. It begins with hiring. “We are particular when we hire. We hire personality and attitude.”
The attitude among some of Harper’s rock-climbing clients in the late 1990s was “high fun, high risk, high energy.” These were New Technology companies, and were a nice fit with rock-climbing. Even today, clients will sometimes hire her for new-employee orientation that can include a rock climb. “It can be daunting to walk in on the first day” and see a 100-foot rock face, she says, even though no one would be asked to climb that high.
Tarzan meets Gandhi
Cornell University’s team-building program, which has a client list that includes Corning Inc., J.P. Morgan Chase and Procter & Gamble, started out with programs designed to introduce incoming freshmen to the school and each other. Now it has expanded to provide help to corporations needing to integrate corporate presidents and vice presidents under one roof after mergers. Among the outdoor courses Cornell offers is Tarzan Meets Gandhi, a three- to four-day workshop that includes climbing a network of treetop ropes coupled with discussions about self-awareness, balance and vision. Hiking and rock-climbing are often the order of the day. “Outdoor expeditions often succeed or fail because of the lack of teamwork and leadership, not technical expertise. The same is true for corporations,” says Karl Johnson, Cornell’s team-building director.
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“If a group wants to build a team, it’s more important to figure out what’s hampering them–dealing with real workplace issues–than to say because I climbed a wall with someone, I now feel I am part of a team.” |
Liteman, who has designed off-site retreats for Fortune 500 companies as well as public and nonprofit agencies, is sold on the value of retreats, but not on physical activities. She thinks they waste too much valuable time. “If a group wants to build a team, it’s more important to figure out what’s hampering them–dealing with real workplace issues–than to say because I climbed a wall with someone, I now feel I am part of a team.” She says workers may end up liking each other better but still not being able to work with each other better. “Good retreats are a lot of fun. They are not serious, plodding, heavy things. People laugh, people engage their creativity. Even when you are designing with that fun in mind, it should be for business’ sake. Let it be about business,” she says.
Fire-walking hard to sell
While Liteman may not think fire walks have a place in a business setting, others do. Some retreat organizers are still living down the bad publicity that developed in 2001 when a dozen Burger King employees burned themselves during a fire walk. One was taken to an emergency room; others were treated for blisters on their feet. Headline writers had a field day, writing about “flame-broiled feet” and other similar themes. Cork Kallen, who organized the Burger King fire-walk fiasco, says his once thriving business is so bad that he derives most of his income these days from selling teak furniture in the Philadelphia area. “Unless a CEO wants a fire walk, they don’t happen,” Kallen says. Still, he and others believe in the power that comes from overcoming the fear of walking barefoot over 1,100-degree coals laid out over an 8-foot-long fire pit or strip of grass.
Four-day sessions featuring motivational speaker Anthony Robbins, perhaps the world’s best-known advocate of fire-walking, still sell out. Fire-walking occurs on the first night of the Robbins events, held in venues like the Meadowlands Exposition Center, near New York City. Individuals, rather than large corporate groups, buy most of the tickets to these events, which cost from $695 to $1,290. “The experience is empowering,” says Walker Fenz, Robbin’s spokesperson. She says that the experience sets the stage for his message.
Even when corporate adventures don’t turn out as planned, they have the desired effect of bringing people together, proponents say. Whitewater rafting trips, which can range from half-day outings to overnights, may represent the least predictable of the corporate challenges. George Johnston, human resources director for a group of community health centers in California, discovered that a half day on the Kern River was about as much as most members of his group could handle. Ten clinic executives started the rafting trip, which was organized by one of California’s oldest river-guide firms, Whitewater Voyages. Only two hardy members of the original group of 10 returned for the afternoon session after several of the morning group went headlong into the river, chilled by Sierra snowmelt. In whitewater rafting, getting wet is just part of the experience. Still, Johnston says it was worth it. The group worked as a team, and had fun, he says. “We had a heck of a nice time together. We’re still telling stories, weeks later.”
Business consultant and Whitewater Voyages alum Jib Ellison says: “Whitewater rivers, by their very nature, are analogous to business situations.” Like business, rivers are dynamic, he says. “In rapids, you can’t stop and figure things out. You have just got to deal with things in front of you. You have to learn by your mistakes and move on. Feedback is incredibly swift, one way or the other. You are either in the boat, dry, or upside down, wet.” Ellison, managing partner of The Trium Group in San Francisco, says rafting is terrific for team-building. With uncertainty, hazards and dangers lurking downstream, he says, there is a constant need for teamwork. As for the danger, Bill McGinnis, Whitewater Voyages founder, says that there is an element of risk to any outdoor adventure, but perceptions are usually worse than reality. “The truth is that when done with professional guides, rafting is actually safer than the drive to the river.”
Proving its worth
On this mid-July day, a platoon of Wells Fargo honchos, clad in a scruffy collection of shorts, T-shirts and running shoes, gather uncertainly after lunch on the lush green lawn at the wine country resort. They cautiously eye a half dozen challenge setups that look like garage sale items–boards, string, helmets, bits of pipe, nylon straps. Atkins, the Wells Fargo CFO leading the retreat, has to reassure some of the financial officers that they won’t be put in danger. “We’ve taken a couple of opportunities to reassure people that they are not going to be forced to fall out of trees and be caught, and things like that,” he says.
For the next four hours, under a canopy of sycamore, pine, ficus, olive and maple trees, the bankers’ patience, their dexterity, and their imagination and good nature are put to the test. Six facilitators from Adventure Associates run the show. They are wearing shorts and knit shirts carrying their company’s logo, giving off the appearance of some sort of uber camp counselors. Ed Tilley, president of Adventure Associates, and his wife, Rebecca Tilley, are on hand. So is Don Taylor, associate dean of San Francisco State University’s College of Health and Human Services, who participates in corporate training exercises as a facilitator during summer breaks. The well-established firm, based in a suburb of San Francisco, has put on events for a long list of corporate clients, including AT&T, Yahoo, Hewlett-Packard and Charles Schwab.
A risk manager joins hands with an accountant to make what looks like a human pretzel, an exercise designed to break the ice and promote physical contact. Taylor, a friendly sort with tufts of gray hair poking out from under a baseball cap, tells a group of 30 bankers to form a perfect square. After several tries, they succeed. “Sometimes in a leadership role we have to follow,” Taylor says. “Sometimes we have to take direction.” And sometimes, “the way to go fast is to go slow.”
As the day wears on, blindfolded bankers will set up tents, guided by the verbal commands of team members. They will roll golf balls down narrow handheld tracks of plastic tubing or split garden hose, trying to keep the ball alive until it can be dumped over a finish line. The idea is to have fun, but with a decidedly hard-nosed goal in mind. “They know each other, but they don’t work together very often,” Taylor says. “So they are trying to learn to be more effective in the way they interact, especially around communication and trust.”
The retreat doesn’t end in the Sonoma countryside. Ruth Ross, a senior vice president of human resources for Wells Fargo who helped Atkins shape the program and also was a participant, says the day’s ultimate success will depend on how much is remembered about building teamwork and communication. If a retreat serves only as a party, Ross says, “then I think it’s going to be a failure, and you are not going to get a return on investment.” Only time will tell if the lessons that began with webs and planks have really built a team.
Workforce Management, September 2003, pp. 38-48 — Subscribe Now!