Executive Interviews: Interview with Timothy Keiningham on Organizational Loyalty
November 2009 - By Dr. Nagendra V Chowdary

Timothy Keiningham
Global Chief Strategy Officer, Ipsos Loyalty and Lerzan Aksoy, Associate Professor, Fordham University

• The irony seems to be that when the going gets tough (recession, an economic crisis, a company crisis, etc.) employees want to be with their companies ‘at any cost’. However, during boom times, employees tend to be sophisticated job-hoppers. Why do employees not stick around with the company during good times and why do they wish to be sticking around during bad times?
  The reality is that they have more choices during times where the economy is booming. A bad economy often makes employees hostages. But by fostering the genuine employee loyalty, an organization holds onto its employees in good times and in bad.

• How do you think employee loyalty should be fostered? What according to you and from your elaborate research, are the contributing factors for employee loyalty?What is the role of leadership in nurturing organizational loyalty?
  Building a loyalty-driven organization won’t just happen as a natural course of events. It requires questioning some current beliefs and changing some longstanding behaviors.

1. Start with a self-assessment. Building loyal relationships professionally and personally should always begin with a valid selfassessment. Improving connections with others invariably begins with improving oneself as a leader, manager, and colleague.
2. Measure employees’ perceptions of the organization. Collecting information on employee loyalty is simple. All it requires is a good survey process. The key is to provide a forum where employees feel comfortable sharing their real feelings without fear of a negative backlash.
3. Know the goals and dreams of your colleagues. No one goes to work to make someone else rich. Managers need to help those who report to them, and those with whom they work directly to get greater fulfillment from their work.
4. Avoid the blame game. Unfortunately, many managers are slow to identify members of their teams except when it is time to assign blame for something gone wrong. Playing the blame game is the most corrosive acid known to relationships. The reality is that everyone fails, unless they take risks. And a company that never takes a risk is a company that will fail.
5. Recognize excellent performance. What you reward gets repeated. Every parent knows this firsthand. We need to get into the habit of finding people doing the right thing and then recognizing it immediately. By doing this, we demonstrate that we not only know but really appreciate these individuals in our lives.

• What (if there are any) are the differences between loyalty and commitment?
  Loyalty and commitment are interrelated yet distinct ideas. You need commitment to be loyal but commitment is not enough to be loyal. Loyalty demands that you recognize the bonds that you have with others and act in a way that reinforces those bonds. As a result loyalty requires action, not just commitment, which is primarily the emotional bond you feel.

• Does too much of loyalty hinder honest feedback? How to draw the lines between desirable and undesirable levels of loyalty?
  The correct answer to the first question should be no. Famed economist Albert Hirschman noted that there are three core responses to declines for firms: Exit, Voice, and Loyalty. Clearly, we can defect. But those who care about the firm and what they perceive as a potential decline can voice those concerns. In fact, the most loyal voice their concerns because they don’t want to see the organization fail. The problem is that too often, we as managers brand voicing concerns as disloyalty. The real undesirable loyalty is cronyism. This kind of loyalty is toxic to an organization. If success is based on being “in” with the bosses rather than on the quality of your work, then there is no incentive to improve things. As a result, it is a recipe for inefficiency and financial ruin.

• What is the role of business schools in inculcating a high degree of loyalty quotient amongst their students? What is the best way to sensitize them to the efficacy of loyalty, at all levels and definitely at an organizational level?
  The recent economic crisis resulted in part from decision makers making the wrong calls by being loyal to the wrong things. It is the role of business schools tomake sure thatmanagers of the future are inculcated with the right virtues of how to run a business, rather than extol easy or quick ways to make lots of money. Business schools need to instill the importance of ethical values in their students so that when they graduate this outlook is instinctive in every decision they make. Loyalty is an important part of ethics, but it requires recognizing and being loyal to the right things.

  Furthermore, on a more focused topic, the right way to manage for customer loyalty and employee loyalty needs to be covered in the curriculum, and the relationship it has to the bottom line clearly demonstrated. In this way, students can clearly see that it really is good for businesses to be good to one another.