Tulgan said an employee turnover trend is bothering business leaders today. You used to be able to count on the better people to move up the company ladder; the mediocre employees would stay where they were. Tulgan said that today, the best employees — “especially the young, skilled people” — are most likely to leave.

“Why? Because they can,” he said. “A lot of organizations are experiencing this and saying it’s a big problem. I am here because a lot of organizations are figuring out how to turn this problem into a strategic advantage for their business. My aim is to take you one step closer to the strategic advantage lying there in the talent world.

“Here’s what I mean. Look, if you’re not having a hard time recruiting the very best, but your competitors are having a hard time, that’s a strategic advantage for you. If you are not having a hard time training your best people and keeping them up to speed, but your competitors are having a hard time, that’s a strategic advantage for you.”

FREE-AGENT MINDSET

Tulgan touched upon generation gaps that are affecting the business world today. He said the rules that applied to those born before 1946 (the Schwarzkopf Generation, he called them) and somewhat to the Baby Boomers (born 1946-54) are far different from the Generation Xers (1963-77) and Generation Y (1978-85).

“That managed-control-style leadership was designed for a market that was much more stable,” he said about the Schwarzkopf Generation and Baby Boomers. “Things stayed the same for a few days at a time. Things weren’t so uncertain.

“Now we need to go beyond those basic leadership principles, especially with a whole new generation coming into the workforce, a whole bunch of people thinking differently about their working lives, careers, and their relationships with their managers. That calls for a new approach to leadership.”

He said young employees today do not have an attachment to the “old-fashioned career path.” They are familiar with the fast-paced world of today “because it’s always been there.” Meanwhile, older employees are calling this change and are having a harder time dealing with it. Tulgan said his research shows that it’s more than just a generation gap, but the way the younger generation is approaching work.

“We put our finger on the pulse of the new way of thinking about work,” he said. “It’s the idea that no matter where you work, no matter what you do, you are in business for yourself. And Generation X is one of the vanguards of that mindset.…Now that free-agent mindset has spread across the workforce among people of all ages.”

THE FOUR I’s

Tulgan further explained that four key forces are driving the New Economy. His four “I’s” include:

Institution, which is in a state of constant flux (businesses have to be agile, as opposed to stable);

Individuality (that free-agent state of mind, and self-reliance);

Information tidal wave (referring to the Internet); and

Immediacy (the pace of change which has accelerated).

Regarding the latter, he said employers cannot blame Generation X for the fallout between employer and employees, because that generation did not create the current “just-in-time” business atmosphere/model. The roots of this economy began in the late 1980s and early 90s, when downsizing and restructuring took place.

“It hit the workforce like a freight train,” he said, noting that business leaders cut people left and right for the sake of “needed change.” Now you have “just-in-time employees,” he said.

“People just don’t stay at the same company for 20, 30, or 40 years like they used to. Success used to be showing you stayed with the same employer. Not any more. That’s out the window.”

NEGOTIATE

Tulgan said some employers might misconstrue this as employee disloyalty. However, he said because companies have not shown loyalty to employees, “they are loyal, but not the kind of loyalty you get in a kingdom,” he explained. “It’s not the kind of loyalty you get in a hierarchy.

“It’s a new kind of loyalty. It’s the kind of loyalty you get in the marketplace. What do you get in the free market? Whatever you can negotiate, right? And now people are trying to get whatever they can. That’s the biggest change between employers and employees.

“Now relationships between employers and employees are driven by market models. How you manage a market-driven relationship is fundamentally different from how you manage a hierarchical relationship. It’s more high maintenance. It’s day-to-day negotiations.”

It’s why managers today are caught in the middle, said Tulgan. The boss wants more productivity with fewer people, yet front-line employees are making demands. Most managers know that a good worker is better than having two or three mediocre ones, but “the good workers know that, too.

“Even in the midst of rising unemployment, downsizing on the front pages, these employees are saying, ‘You know if you want me to carry my own weight, I want something in return,’” said Tulgan. “They are asking for more money and more flexibility. So you have your best employees in your office making demands.”

Managers, he said, should not be insulted by this. If productivity and quality is what the boss wants, flexibility has to be figured into the equation.

“All they are doing is engaging in market-driven behavior,” he said. “The problem is, managers are being out-negotiated.”

To combat the current state of affairs, Tulgan said, “You start using unreasonable requests like needles in a haystack. There are no fixed deals. There’s got to be negotiations where there is something in it for both parties. That’s how you build a high-performance atmosphere.

“Just know that this can also be high maintenance. Your managers have to step up to the plate.”

According to his research, Tulgan said the most effective workforce teams are the ones with coaching-style management. This involves instant feedback, making it frequent, accurate, specific, and ever so timely.

“You watch somebody perform and you respond. That’s feedback,” he said. “Some people need more feedback than others. Some respond better with a sit-down talk. Others don’t need that.

“That’s the hardest part of coaching, but it needs to be done.…Conversations are not supposed to be therapy sessions. It’s saying ‘Here’s what you did right. Here’s what you did wrong. Here’s what I want you to do next.’

“If you want to create a high-performance environment, the only choice is high-performance managing.”

Contact Tulgan at brucet@rainmakerthinking.com (e-mail).

Publication date: 03/18/2002