i Carol Warhurst Final Project

FINAL PROJECT: CHANGE INITIATI E FOR HENR! IN"#$TRIE$ INC% A Plan to Re&uce Turno'er (or Future $uccess

)* Carol A% Warhurst

A Pa+er Presente& in Partial Ful(ill,ent O( the Re-uire,ents o( LEA"./0 LEA"ER$HIP FOR THE F#T#RE 1arch 2034

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A)stract Henr* In&ustries5 Inc% 6HII7 is a s,all )usiness that o+erates o'er t8ent* &i((erent locations nation8i&e% With o'er one hun&re& e,+lo*ees an& o'er (our hun&re& in&e+en&ent contractors5 HII su((ers (ro, a cri++lin9 culture o( hi9h e,+lo*ee an& contractor turno'er% In 20325 e,+lo*ee turno'er 8as at .2: an& contractor turno'er 8as a startlin9 /;:% With o+eratin9 costs on the rise an& custo,er contracts continuin9 to s-uee<e out the s,allest +ro(it ,ar9ins (or HII=s ser'ices5 there is a &es+erate nee& (or an or9ani<ation &e'elo+,ent +lan that 8ill re&uce e,+lo*ee an& contractor turno'er an& create a lon9 ter, sustaina)le ,o&el o( )usiness that allo8s (or )etter custo,ers ser'ice throu9h the ,ost hi9hl* -uali(ie& an& satis(ie& e,+lo*ees an& contractors o( HII% The strate9* chosen to acco,+lish this tas> is scenario +lannin9% In an in&ustr* 8ith hi9h le'els o( uncertaint* an& ,ana9ers that t*+icall* ha'e 'er* lo8 a)ilities to +re&ict or a&just to the chan9in9 &e,an&s o( the custo,ers nee&s5 it is i,+erati'e to ena)le lea&ershi+ to )uil& scenarios that 8ill )e the (oun&ation o( the ,ost i,+ortant &ecision (or the co,+anies (uture% $cenario +lannin9 has the a)ilit* to +ro&uce the +ro+er solution )* outlinin9 the real +ro)le,% ?@* +resentin9 other 8a*s o( seein9 the 8orl&5 &ecision scenarios allo8 ,ana9ers to )rea> out o( a oneAe*es 'ie8% $cenarios 9i'e ,ana9ers so,ethin9 'er* +recious: the a)ilit* to re+ercei'e realit*B 6An&erson5 20335 +9% 2;C7%

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A Plan to Re&uce Turno'er (or Future $uccess One o( the ,ain tas>s (or an* Hu,an Resource 1ana9er that ho+es to a&& 'alue to their or9ani<ation throu9h re&uce& e,+lo*ee costs is to re&uce e,+lo*ee turno'er an& increase -uali(ie& e,+lo*ee retention rates% "ue to the (act that the Hu,an Resource &e+art,ent is not a +ro(it center an& ten&s to )e 'ie8e& ,ore as a su++ort or clerical role than a strate9ic role 8ithin an or9ani<ation5 it shoul& )e to+ +riorit* (or Hu,an Resource lea&ers to &isci+line the,sel'es to use stron9 anal*tics an& sho8 throu9h ,easura)le results ho8 the* are a&&in9 'alue to the or9ani<ation% E,+lo*ee turno'er ratios cou+le& 8ith associate& costs an& retention rates can )e +resente& in such a 8a* that 8hat once 8as seen as a )lee&in9 cost center can )e trans(or,e& into a strate9ic unit that hel+s to +a'e the &irection the co,+an* is hea&e& in the (uture 8ith a soli& (oun&ation o( -uali(ie& an& satis(ie& e,+lo*ees% Organization and Background Henr* In&ustries5 Inc% 6HII7 8as (oun&e& o'er t8ent* *ears a9o )* t8o entre+reneurial )rothers na,e& @rett an& @rent Henr* an& )* one o( their hi9h school (rien&s na,e& Ti, @ec>er% HII +ro'i&es &istri)ution center ser'ices5 thir& +art* 8arehousin9 an& s+eciali<e& lo9istics ser'ices (or ,ajor +har,aceutical co,+anies an& ,e&ical su++liers% HII ser'es a lar9e nation8i&e custo,er )ase that inclu&es such lar9e co,+an* na,es as WalA1art5 Wal9reens an& #P$% HII has al8a*s +ri&e& itsel( in )ein9 an or9ani<ation that su++orts the local entre+reneur )* o((erin9 )usiness o++ortunities to in&e+en&ent contractors to (ul(ill the custo,ers nee&s o(

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9ettin9 their +ro&ucts (ro, +oint A to +oint @5 t8ent* (our hours a &a* se'en &a*s a 8ee>5 three hun&re& an& siDt* (i'e &a*s a *ear% HII=s co,+etiti'e a&'anta9e lies in the eDcellent custo,er ser'ice +ro'i&e& an& the use o( the ,ost recent a&'ances in technolo9* that allo8 the custo,er the a)ilit* to trac> their +ro&uct an& ,ana9e or control it usin9 to+ o( the line )arco&e scannin9 technolo9*% Recent &e'elo+,ents ha'e 9i'en HII=s contract &ri'ers the a)ilit* to ha'e real ti,e access to the custo,ers &eli'er* nee&s% As soon as a +ro&uct nee&s to )e ,o'e&5 an alert is sent out an& all a'aila)le &ri'ers that ha'e their scanners turne& on to the a'aila)ilit* ,o&e 8ill recei'e a noti(ication that 9i'es the, instant GP$ coor&inates an& i,,e&iate route )i&&in9 access in or&er to &eter,ine ho8 ,uch the* are 8illin9 to +er(or, the jo) (or% Contractors are 'er* eDcite& to )e a +art o( this ne8 re'olutionar* 8a* o( interactin9 8ith our custo,ers nee&s an& HII is -uic>l* lea'in9 its co,+etitors in the &ust 8hen it co,es to technolo9*5 inno'ation an& lo9istical >no8le&9e% E'er* custo,er is treate& li>e the ,ost i,+ortant one an& each contract &ri'er is 9i'en the o++ortunit* to ,a>e his or her )usiness a success% Introduction of Problem/Change/Opportunity/Needs Met It is the nature o( this in&ustr* that the +ro(it ,ar9ins +er custo,er center are (airl* lo8% There(ore5 the costs to run the )usiness ,ust constantl* )e >e+t in chec>% One ,ajor cost that has ne'er )een (or,all* e'aluate& at HII is the cost o( e,+lo*ee an& contactor turno'er% With the ,ajorit* o( the e,+lo*ee=s ,a>in9 )et8een E30 A E3. hour5 it is &i((icult to retain -ualit* lon9A ter, e,+lo*ees &ue to the +a* scale an& the te&ious nature o( the 8or> tas>s in'ol'e& 8ith

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8arehouse +ersonnel5 &is+atchin9 stations an& custo,er ser'ice a9ents% $ince it=s ince+tion HII has create& a culture o( hi9h turno'er an& lo8 e,+lo*ee ,orale% ?Turno'er culture is a +ro&uct o( a nu,)er o( (actors5 inclu&in9 the seasonalit* o( e,+lo*,ent5 the li,ite& career structure in s,aller esta)lish,ents5 the se,iA or uns>ille& nature o( so,e jo)s5 an& (inall*5 the +ercenta9e o( e,+lo*ees (ro, secon&ar* la)or ,ar>etsB 6Turno'er Culture5 200.7% There is not ,uch roo, (or a&'ance,ent 8ithin HII )ecause ,ost o( the ,ana9ers are *oun9 an& the 9ro8th is ,ostl* )orn out o( eD+an&in9 into ne8 ,ar>ets an& 8oul& re-uire relocations% The ,ajorit* o( the jo)s that HII o((ers are se,iA or uns>ille& entr* le'el jo)s5 8hich inherentl* co,e 8ith hi9h turno'er rates as +eo+le 9ain ne8 s>ills5 e&ucation an& eD+erience an& ,o'e hi9her in their +ersonal an& +ro(essional 9oals% Another +ro)le, ste,s (ro, the o8ners lac> o( >no8le&9e o( the >e* HR +rinci+le that has &ri'en ,e to see> a career in this &isci+leF that the har&est an& ,ost har&A8on assets o( an* or9ani<ation is its e,+lo*ees% For eDa,+le5 8ith all the recent Health Re(or, chan9es on the hori<on5 I ha'e ,a&e it clear to the o8ners that 8e nee& to u+9ra&e our li,ite& )ene(it health +lan or 8e are 9oin9 to start incurrin9 (ines in 203C% The (irst re-uest the* ,a&e 8as (or ,e to )rea> &o8n the co,+an* contri)ution cost o( a ne8 +lan 'ersus just +a*in9 the 9o'ern,ent (ines an& stic>in9 8ith the eDtre,el* lo8 cost nonAco,+liant +lan 8e o((er no8% I 8as shoc>e& that co,+liance 8oul& e'en )e a -uestion5 si,+l* (or the sa>e o( e,+lo*ee ,orale an& retention ca+a)ilities 8ith a )etter health care +lan to o((er e,+lo*ees% Ho8e'er5 ,* +hiloso+h* on the i,+ortance o( the e,+lo*ee to the co,+an* is -uite &i((erent (ro, theirs% It has )eco,e clear to ,e that I ,ust create a +lan usin9 stron9

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anal*tics an& ,easura)le results as it +ertains to turno'er rates an& lo8erin9 co,+an* costs is ,* onl* o+tion (or hel+in9 HII to e,)race a chan9e initiati'e to +re+are (or the (uture% Comparison of Strategies Considered for the Initiati e When co,+arin9 the 'arious strate9ies a'ail)le (or creatin9 this chan9e inititati'e5 I (elt that there 8ere ,an* 'ia)le o+tions )ut none that see,e& to (it this +articular nee& 8ithin this eDact in&ustr* li>e the strate9* o( scenario +lannin9% ?It is in contrast 8ith strate9ic +lannin95 in 8hich an or9ani<ation &e'eo+ls its o8n +lans (or its (uture5 an& ris> ,iti9ation or contin9enc* +lannin95 in 8hich an or9ani<ation +lans (or a sin9le (uture e'ent that ,a* or ,at not ha++en% A scenarios is also not a 'ision state,ent5 8hich is an or9ani<ation=s &esire& (uture state5 is )ase& on its 'alues5 an& is inten&e& to ener9i<e an& ,oti'ate or9ani<ational ,e,)ersB 6An&erson5 20335 +9% 2;27% What scenario +lannin9 o((ers that none o( these other strate9ies &o is the a)ilit* to (ocus in on one >e* issue5 li>e re&ucin9 e,+lo*ee turno'er5 an& i&enti(*in9 the as+ects o( the initiati'e that are ,ost i,+ortant to the (uture success o( the co,+an*% The +lan (or this initiati'e is to create hi9hl* &etaile& an& cre&i)le scenarios to +resent to the lea&ershi+ tea, (or anal*sis% One scenario 8ill +lot the course o( the or9ani<ation i( thin9s re,ain eDactl* as the* are 8ith the current turno'er rates5 >ee+in9 thin9s li>e co,+an* )ran&in95 la)or +ools an& contractual re-uire,ents in ,in&% Another scenario 8ill in'ol'e in'est,ents ,a&e )* the co,+an* to re&uce turno'er% These (i9ures 8ill )e real an& ,easurea)le5 accurate an& re+resentati'e o( chan9es that can actuall* )e ,a&e in the near (uture% This +lan 8ill inclu&e cost re&uctions 8hen turno'er &ecreases an& HII )eco,es a +lace that +eo+le reall* 8ant to

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8or> an& sta* e,+lo*e& at (or the lon9 ter,% It 8ill )e clear insi&e these scenarios 8ho has the &ecision ,a>in9 +o8er an& 8hat the +rojecte& outco,es o( those &ecisions 8oul& )e% Ob!ecti e or "oal The ,ain o)jecti'e o( the 9oal to re&uce turno'er is to create a +lan (or the (uture o( HII that 8ill re&uce costs an& increase e,+lo*ee ,orale throu9h a 8ell thou9ht out initiati'e% 1a>in9 s,all chan9es is clearl* not enou9h% Creatin9 realistic jo) +re'ie8s 6RJP7 an& eD+ectin9 that to 8ee& out the short ti,ers (ro, the lon9 ter, e,+lo*ees is a lon9 shot at )est% The 9oal nee&s to inclu&e ,uch ,ore than just one or t8o &i((erent scenarios an& shoul& consist o( an o'erall +lan that is &esi9ne& to enrich the entire e,+lo*,ent eD+erience at HII% ?Turno'er scholars ha'e 'ali&ate& jo) enrich,entAincreasin9 the intrinsic re8ar&s o( a jo) )* eD+an&in9 s>ill 'ariet* an& e,+o8erin9 incu,)entsAas another ,eans to +ro,ote jo) lo*alt*% In&ee&5 a ,etaAanal*sis conclu&e& that jo) enrich,ent is ,ore e((ecti'e than are RJPs (or +ro,otin9 retention5 su++ortin9 WanousGs ,aDi, that RJPs cannot su)stitute (or 9oo& jo)sB 6La)or Turno'er5 200C7% The 9oal is si,+leF enrich jo)s (or e,+lo*ees5 re&uce the turno'er an& &ecrease costs (or the co,+an*% #imeline $ Barriers The +ro+ose& ti,eline (or this initiati'e 8oul& )e as soon as +ossi)le% $tartin9 the scenario )uil&in9 i,,e&iatel* an& creatin9 -uanti(ia)le &ata that can )e +resente& to the lea&ershi+ tea,% Then there 8oul& )e a &e(inite &ecision ,a>in9 +erio& 8ith a 8in&o8 o( t8o

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8ee>s +er &ecision%

$o,e o( the ,ajor )arriers to this initiati'e are 9oin9 to )e o'erco,in9

the o)stacles 8ith current e,+lo*ees that ha'e alrea&* )uilt u+ hi9h le'els o( )itterness an& intolerance (or the hi9h turno'er culture that HII su((ers (ro,% An* ne8 hire joinin9 the or9ani<ation a(ter these initiati'es ha'e starte& to ta>e +lace an& the +lan is co,in9 to9ether has less o( a ris> o( )ein9 &issatis(ie& 8ith their jo) an& the co,+an* culture% Ho8e'er5 the &i((icult tas> 8ill )e sellin9 the chan9e to the incu,)ents% ?Jo) &issatis(action +ro,+ts e,+lo*ees to )e9in thin>in9 a)out -uittin9% "issatis(ie& incu,)ents neDt e'aluate their +ros+ects o( o)tainin9 e,+lo*,ent else8here an& the costs o( -uittin9 6e%9%5 loss o( seniorit* )ene(its7% I( attracti'e alternati'es eDist an& turno'er costs are lo85 &is9runtle& e,+lo*ees (or, intentions to search (or other jo)s an& acti'el* +ursue other 8or>% A(ter securin9 other jo) o((ers5 these e,+lo*ees co,+are the, 8ith their current +ositions% I( this co,+arison (a'ors an alternati'e5 the* 8ill ulti,atel* -uitB 6La)or Turno'er5 200C7% "eter,inin9 8ho is ,ost at ris> an& e'aluatin9 the nee&s o( those +articular in&i'i&ual cases 8ill nee& to )e +art o( the +lan in or&er to retain the ,ost talente& +ool o( e,+lo*ees% %eaderships &pproach #hrough 'ach Phase In the +ast5 the lea&ershi+ a++roach (or ,a>in9 this t*+e o( +lan (or chan9e in'ol'in9 e,+lo*ee turno'er an& ,orale has )een non eDistant% The e'i&ence has al8a*s )een +resent )ut the Hu,an Resource &e+art,ent 8as not seen as a critical role to or9ani<ational success until recetnl*% It is clear that lea&ershi+ cannot continue to ,o'e throu9h each +hase o( this +rocess 8ith such co,+lacenc*% ?The (ailure 6or re(usal7 o( a lea&er to (oresee ,a* )e 'ie8e& as an

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ethical (ailureF )ecause a serious ethical co,+ro,ise to&a* 68hen the usual ju&9,ent on ethical ina&e-uac* is ,a&e7 is so,eti,es the result o( a (ailure to ,a>e the e((ort at an earlier &ate to (oresee to&a*=s e'ents an& ta>e the ri9ht actions 8hen there 8as (ree&o, (or initiati'e to actB 6$+ears H La8rence5 200.5 +9% 3007% $i,+l* )ecause no one on the lea&ershi+ tea, has ta>en the ti,e to e'aluate the turno'er rate an& +ole the e,+lo*ees a)out their jo) satis(action5 &oesn=t ,ean the +ro)le, has 9one unnotice&% It has onl* not )een acte& u+on% Ar,e& 8ith the ri9ht in(or,ation an& a soli& +lan (or the (uture5 i( lea&ershi+ shoul& choose to i9nore this nee& no8 it 8oul& )e )or&erline unethical% Full coo+eration is nee&e& an& eD+ecte& throu9h each sta9e o( this +rocess% &nticipated (esults and Measurements for Success At the en& o( e'er* -uarter5 e,+lo*ee an& contractor turno'er rates 8ill )e ree'aluate& an& the lea&ershi+ tea, 8ill )e in(o,e& o( the +ro9ress% $uccesses 8ill )e cele)rate& an& results 8ill )e co,,unicate& to all sta(( ,e,)ers so the* can share in the +ri&e o( )ein9 a +art o( an or9ani<ation that stri'es to 'alue its e,+lo*ees% The ,ost i,+ortant as+ect o( an* antici+te& result is to )e a)le to +ro+erl* use (oresi9ht to un&erstan& 8hat the +otential scenario +lannin9 8ill ,ean (or the or9ani<ation% I( HII continues to &o nothin95 it 8ill not )e 8ithout >no8le&9e an& (oresi9ht o( 8hat the outco,es 8ill )e% The +lans that are turne& into action line& &ecisions 8ill )e )uilt on the in(or,ation that is +resente& throu9h scenarios +lannin9% ?It 8oul& see, then that the enor,ous co,+leDit* o( our ,o&ern or9ani<ations lea'es us inca+a)le o( eDercisin9 (oresi9ht5 ther)* sentencin9 us to ethical (ailures as lea&ers% This 8oul& )e true i( 8e e-uate&

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(oresi9ht 8ith ,a>in9 accurate (orecasts a)out the (uture 68hich is i,+ossi)le to &o7% Fortunatle* (or us5 (oresi9ht is a)out )ein9 a)le to +erceie'e the si9ni(icance an& nature o( e'ents )e(ore the* ha'e occurre& 68hich is achie'a)le7 6$+ear H La8rence5 200.5 +9% 30/7% It is achie'a)le to )e a)le to use >no8le&9e an& (oresi9ht to e'aulaute the alternati'es an& )e9in to chan9e the hi9h turno'er culture at HII% In or&er (or the co,+an* to +ro+erl* +lan (or (uture successes5 there ,ust )e a +lan to chan9e the 8a* e,+lo*ees are seen an& treate& co,+an*A 8i&e% Conclusion HII has ,an* stre9ths that are 9oin9 to hel+ to lea& the or9ani<ation in (uture successes (or ,an* *ears to co,e% E,)racin9 technolo9* inno'ations to sustain co,+etiti'e a&'anta9e an& usin9 state o( the art lo9istics &e'elo+,ents are 8hat currentl* hel+ the, 9ain that e&9e o'er the co,+etition% $u+erior custo,er ser'ice is so,ethin9 that has set HII a+art since its ince+tion in 3II3% Ho8e'er5 it is i,+ossi)le to +ro'i&e eDce+tional custo,er ser'ice i( *our e,+lo*ees are &issatis(ie& 8ith their jo)s% Historicall*5 e,+lo*ees treat the or9ani<ations custo,ers the 8a* that the or9ani<ation treats the,% It is ti,e to ,a>e a chan9e at HII an& create a culture o( lo8 turno'er5 increase& e,+lo*ee ,orale an& satis(ie& e,+lo*ees% @* i&enti(*in9 the +ro)le, usin9 ,easura)le ,etrics an& +re+arin9 the lea&ershi+ tea, (or the &ecisions that nee& to )e ,a&e to +re+are (or the (uture or9ani<ations success )* usin9 scenario +lannin95 there 8ill )e a clear cut +ath (or achie'in9 these 9oals an& o)jecti'es% As results are ,easure&5 recor&e& an& co,,unicate& e'er* -uarter5 HII 8ill continue to stri'e to )e the lea&in9 lo9istics s+ecialist in

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the in&ustr* )* +ro'i&in9 the 9reatest custo,er ser'ice 8ith the ,ost relia)le an& +ro&ucti'e sta((%

Re(erence An&erson5"%620337 Or9ani<ational &e'elo+,ent: the +rocess o( lea&in9 or9ani<ational chan9e 62n& e&%7 Thousan& Oa>s5CA: $a9e Pu)lications5 Inc% @each5 L% R% 6200J7% Leadership and the art of change: a practical guide to organization transformation. Thousan& Oa>s: $a9e Pu)lications La)or Turno'er% 6200C7% In Encyclopedia of Applied Psychology% Retrie'e& (ro, htt+:KK888%cre&ore(erence%co,%e<+roD*%sc>ans%e&uKentr*Kesta++lie&+s*cKla)orLt $+ears5 L% C%5 H La8rence5 1% 6200.7% Practicin9 ser'antAlea&ershi+5 succee&in9 throu9h trust5 )ra'er*5 an& (or9i'eness% 63st e&%7% $an Francisco: Josse*A@ass Inc% Pu)% MTurno'er Culture%M International Encyclopedia of Hospitality Management% Lon&on: Routle&9e5 200.% Credo Reference% 3; June 200;% We)% 2. 1ar% 2034%