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The People Factor

A Human Resources Journey to Success

Employee retention is nice. Employee engagement is priceless.


In today’s gaming industry-like other industries-there are organizations that are excited about their current situation and the opportunities before them in the immediate future. On the other hand, there is a significant number of companies that are in deep financial trouble and are rightfully anxious about the days, months and years to come. Currently, and often in the past in the gaming industry, this is correlated to the jurisdiction in which they are located, volume and breadth of regional competition, and the company’s debt structure.

Ironically, the gaming properties that fit into the latter category are in jurisdictions that were once considered resilient to difficult recessionary times. Both Las Vegas and Atlantic City are yearning for the good old days. Most experts seem to believe that Atlantic City’s re-visit to the good old days may be a long time coming, and perhaps gone forever in light of growing competitive pressures. It may not be time to jump on that wagon, just yet.

Changing Times
Change is clearly in the air, and leaders in both the Atlantic City and Las Vegas markets need to follow Abraham Lincoln’s admonishment to “think anew and act anew” in order to have any hope for capitalizing on the opportunities that will arise when general economic conditions begin to improve.
As always, it will take enlightened and capable leadership to reinvent their organizations, and, most importantly, follow Lincoln’s principle above-be innovative!

It is true there have been many innovations in the gaming industry over the past 15 years. However, most of these innovations have been the result of executive management working with external talent to build and/or renovate marvelous monuments and introduce enticing new gaming products, all driven by broad and deep access to capital. With access to capital gone, external partnerships to innovate will be fewer, thus requiring leadership to act anew as it relates to tapping the talent within, by building internal partnerships.

In this context, the next great differentiator for gaming organizations will be the people-the human resources. Candidly, based on the apparent erosion of this “partnership” over the past five years, executive leadership teams have a significant task before them to rebuild trust, the partnership and the commitment to excellence. The organizations that fully engage this untapped potential will have a significant competitive advantage.
Retaining the Best
Retention of talent in all industries has been a hot HR topic for over 10 years. High-level discussions have occured regarding employee retention, managing turnover, recognition, communication programs and the like. While it is certainly beneficial to talk about effective strategies to retain talent, we never really get to the heart of what it really means and how to ensure strategic talent retention is ingrained in the culture of the organization.

The reality is that in our fast-paced, quick answer/quick decision business world, we rarely take the time to think, define, clarify and agree on what we really mean. We make assumptions that are often inaccurate.

What does retention really mean? How do we define it within our company? Do we place enough emphasis on the selection process and job criteria (interpersonal competencies)? How is employee retention aligned to our organization’s vision, mission, values and strategic business plan? Does the executive management team really believe it’s a top priority and act accordingly? Do they truly value the people and believe that they can be a key competitive differentiator?

All these need to be answered in a thoughtful, honest and strategic way. This clarification process, if done inclusively, promotes individual and collective buy-in. Cherish the goal, while enjoying the process.

Retention should not be thought of as just reducing turnover or its cost, providing employment longevity and keeping employees-all of which are beneficial to organizations in most instances. The simple fact that we keep a person employed does not necessarily mean we are realizing the full benefit or have tapped their full potential. Nor does it mean they are engaged and productive. It simply means they are here for now and performing work.

Given the limited options most employees have in light of the current employment environment, merely retaining employees in and of itself may not be a great feat. We can’t automatically conclude it means high employee morale. The better barometers are employee engagement and performance outcomes.

Therefore, retention of talent (to paraphrase Winston Churchill in another context) “is not the end; it’s not even the beginning of the end, but perhaps the end of the beginning.” The real leadership challenge for organizations today is not necessarily retaining employees but selecting, developing and keeping talented and engaged employees by maximizing their strengths and valuing their performance-thus making them the next key competitive differentiator.

People as Differentiators
Southwest Airlines provides the gaming industry a good example to follow. No one can argue that Southwest operates in a highly competitive, volatile and complex industry, like the gaming industry. It is an established service industry that has had perennial financial challenges that sometimes have led to bankruptcy. Even the airline companies that are operating today have rarely seen year-end profits over the past 10 years, except Southwest.

Their secret is no secret at all, as CEO Herb Kelleher readily champions. He is one of those executives who truly believe his people are a key differentiator. The Southwest leadership team has been able to tap the unique personalities and strengths of its team members in delivering delightful, fun and engaging service. More importantly, they’ve tapped their minds as well, in finding innovative ways to improve organization systems, processes, practices, safety and products. It’s not rocket science, not even aviation expertise, just good, old-fashioned leadership that captures the wisdom and talent of its people.

An article published a year ago by Pharos Group in the Morowitz Quarterly titled “Leadership and The Five Principles of Organizational Energy” identified five basic leadership and employee engagement principles applied in the organizations Pharos led. It was the leadership experience at the Claridge Casino Hotel-an Atlantic City casino that from its opening in 1981 operated under the financial challenges that many casinos are experiencing today-that revealed the power of these principles.

How do organizations tap the energy, maximize the strengths, capture the wisdom and engage the organization’s talent, resulting in outstanding performance thus making its people the key competitive differentiator? In answering this question guided by the Five Principles of Organizational Energy, the entire organization will realize a high level of employee retention, and more importantly, engagement.

Build Leadership and Organizational Trust
What does the word “trust” mean in organizational life? In Radical Trust by Joe Healy he believes trust is built around four competencies:

1 Character Trust: the way a leader’s behaviors consistently reflect a common set of core values that are demonstrated in their performance execution and everyday communication. These behaviors confer to the people they lead a high degree of personal integrity, credibility and honesty. This trust reflects who you are.

2 Execution Trust: the leader’s ability to get things done both individually and through influencing others. The leader’s credibility to execute is rooted in his/her level of technical and interpersonal competencies. This trust reflects what you do.

3 Communication Trust: enables people to trust what leaders say and what they learn from them. Communication trust is built and maintained one conversation at a time. Therefore, think before you speak and always attempt to leave the person(s) energized. Additionally, walk the talk, be open, admit mistakes and actively listen. This trust is reflected in what you say.

4 Loyalty Trust: people believe that their leaders will look out for their interests and well-being. This trust has moved to the forefront in recent times as the basic needs of employees seem to be in jeopardy-wages, benefits and security. Interestingly, past employee surveys indicated these needs were not at the top of the list for retention and engagement. Based on the current economic conditions, they are a concern. This trust reflects how they feel.

Create a Vision and Plan
Why is this important? Generally, people need to believe that their efforts and commitment are contributing to something that matters and will make a difference. “Legacy leaders” have an uncanny ability to connect the organization’s vision with the expectations of others, thus instilling ownership, common purpose and energy. The process of creating a vision should be as inclusive as possible, soliciting input from others and benefiting from their experiences.

The creation of a plan through collaboration identifies the roadmap for the collective journey. More specifically, the plan encompasses the strategies and tactics that will be executed to attain long- and short-term goals. Since the plan is a real working “document,” it needs to begin with broad organizational goals, strategies and tactics and supplemented with division/department goals, strategies and tactics that are aligned to the “bigger picture.” From these efforts, the leader connects the organization’s strategic and execution activities, laying the foundation of a collaboration culture with focused energy toward achieving an aligned set of results-driven goals.

Empower the Team
To many, the single most frustrating, energy-sapping experience is not being able to utilize their talents and maximize their strengths because they are micro-managed. Not just front-line staff, but senior executives, including COOs.

If a leader does not trust the people to do the job they were hired to do, the leader can’t possibly gain the respect of the team. This lack of mutual trust and respect erodes talent productivity, stifles innovation and fosters mediocrity. To tap the energy within, select and develop the right talent, lay out the game plan and turn over the play book to the person or team to execute. Then, get out of the way, until they need or ask for help.

Align Everything
It is essential to demonstrate consistency, reliability and credibility in all our actions. The organization’s decision-making practices, policies, communication and behaviors must be aligned to the core values, vision, plan and goals of the organization. Remember, loyalty trust is earned through everyday actions, and a belief that the leader and the organization can be counted on.

We are what we repeatedly do. Excellence therefore, is not an act, but a habit.

Communicate Effectively
We explored this principle in communication trust. People only trust and believe people they feel they know. There is no such thing as over-communicating. While spontaneous communication has its place and value, a communication plan or strategy should be created to ensure the leader and organization can measure that communication is taking place, its effectiveness, its completeness and that it is accomplishing its intended results.

The types of communication incorporated in the plan should be limited only by the leader and organization’s creativity, curiosity and capability. In today’s diverse workplace, all methods, social media, forums, organizational communities and key communicators should be considered as valuable communication resources. Nothing fails to disengage and de-energize employees faster than insufficient or inadequate communication. The reverse is doubly true.

Making A Difference
When industry leaders truly consider the people factor a key differentiator and act accordingly, retention and engagement are a foregone conclusion. The cold, hard facts indicate that turnover and employee disengagement are costing companies billions of dollars a year. The U.S. Bureau of Labor Statistics estimates that replacing an employee costs employers from one-half to five times the employee’s annual salary. Therefore, if an employer’s annual turnover resulted in 200 employees leaving, and the average pay was $25,000, using a conservative one-half times employee salary formula, it would cost an employer approximately $2.5 million a year to replace employees.

According to a Gallup study on turnover (which included 44 organizations and 10,609 business units), nine of the 12 workplace elements of “great managing” consistently predict turnover across business units in all organizations.

These nine elements are: (1) having clear expectations; (2) having the materials and equipment to do the job right; (3) having the opportunity to do what you do best every day; (4) the belief that someone at work cares; (5) the belief that someone encourages your development; (6) a sense that your opinions count; (7) the mission or purpose of the company makes you feel your job is important; (8) a belief that your co-workers are committed to quality; and (9) having the opportunity to learn and grow at work. If these nine needs are met, turnover is usually very low and employee engagement is usually very high.

Additionally, based on a Gallup 2007 “Cost of Disengagement” survey, of all the U.S. workers 18 or older, about 24.7 million-or roughly 18 percent-are actively disengaged. Gallup estimates that the lower productivity of actively disengaged workers costs the U.S. economy about $382 billion annually.

The latter statistic illustrates the reality that employee retention is just the starting point for the CEOs, GMs and CHOs of gaming organizations that are looking to think and act anew. Las Vegas has demonstrated an ability to adapt to change and reinvent itself over the years, so it may be able to be innovative in tapping into the people factor.A Human Resources Journey to Success
by Frank Bellis and John Ceresani

If Atlantic City’s aim is to redefine itself as a destination resort, it will need to deliver destination-like service, all the time. This will require a workforce that is talented, engaged, energized and valued. We know that these people exist in most gaming organizations in Atlantic City and throughout the country, because we have seen them with our own eyes. They just need a reason to believe! The leadership team that provides that may just be the Southwest Airlines of the gaming industry, and operate on a completely different competitive footing. 

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