Engagement, Retention, and Corporate Culture Rich Dec

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Agenda Introduction Trust vs. Engagement The C-suite Wake-up Call HR Leaders’ Evolving Role

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM What is a great place to work?

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM An Engagement Framework

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Trust credibility fairness respect Employee pride camaraderie relationship with other employees relationship to your job relationship with management What is a Great Workplace? Employee Perspective Any workplace can be measured through five dimensions: credibility, respect and fairness (which are attributes of trust), as well as pride and camaraderie.

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Respect via two-way communication Listening: Pulse Point Program: Umpqua Bank At Umpqua Bank the Pulse Point program has evolved over the years as a forum for ideas on issues such as increased operational efficiencies, improvements in customer service, and increasing the bank’s use of "green" practices. Many associates' observations and recommendations have resulted in positive change, cost savings to the bank, and, in some cases, a monetary reward. For every idea submitted to Pulse Point, there is a two-way communication between the associate submitting the idea and the executive manager of the appropriate business division. Whether the idea is selected for implementation or not, the mutual communication helps build relationships and a sense of empowerment among associates.

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Respect via leadership development and local decision making Behavior Change: Dealing with Behavioral Inflection Points Issues with unhappy customers and gaps in service in 00s Failure in other efforts to drive employee willpower Role playing through inflection points until new normal Ability for autonomy in stores—strengthening of trust and “willpower muscles” Resulting in better service and personal life skills ( as outlined in “The Power of Habit” by Charles Duhigg”)

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Credibility and Camaraderie Dealing with a Crises Over extended coming out of ‘08 credit crises Up front candor Asking for help Broader organization truly empowered to develop and implement solutions during the crises Trust levels increased during this crises

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM C-Suite Waking Up

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Why focus on Trust and Culture? Greater economic turbulence Turbulence strikes more frequently than in the past. > More than half of the most turbulent quarters over the past 30 years have occurred during the last decade. Turbulence has increased in intensity. > Volatility in revenue growth, in revenue ranking, and in operating margins have more than doubled since the 1960s. Turbulence today persists much longer than in preceding periods. > The average duration of periods of high turbulence has quadrupled over the past three decades. Source: BCG, “The Most Adaptive Companies 2012: Winning in an Age of Turbulence”, 2012

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Best leaders make it a priority “Ninety-five percent of my assets drive out the front gate every evening. It’s my job to bring them back” -Jim Goodnight, CEO and Founder of SAS “Our whole belief is that if we get the culture right, then most of the other stuff, like delivering great customer service or building a long-term enduring brand, will just happen naturally on its own.” -Tony Hsieh, Zappos CEO “Great companies have very strong and great cultures. A huge part of a leadership role is to drive the culture of the company and to reinforce it.” -John Chambers, CISCO CEO

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Trust delivers superior shareholder returns During this most turbulent era, companies with the highest levels of trust outperformed the market by a factor of 3.

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Turnover at Best Companies United States

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Best Companies: Better Customer Service, Cooperation and Commitment Better Custom Service Better American Customer Satisfaction Index ratings Ratings for Best Companies were 2.3 to 3 points higher than average (out of 100) Within the same service industry, Best Companies had ratings 4.2 to 4.6 points higher than their counterparts “You can count on people to cooperate.” Best Companies: 86%. Lower 100 of applicant pool: 70%. “People here give extra to get the job done.” Best Companies: 86%. Lower 100 of applicant pool: 70%. More employee cooperation and commitment

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Why focus on it: Talent flight & shortages Looming employee flight: Almost two million Americans quit their jobs voluntarily in May, up 35 percent from January (Source: BLS) Nearly one in three (32%) US workers is seriously considering leaving his or her organization at the present time, up sharply from 23% in (Source: Manpower) Shortage of talent: Relative to the broader workforce, high potentials are almost twice as valuable to an organization, and are three times more likely to succeed as future leaders, but their numbers have dropped by at least 48% in recent years. (Source: Corporate Executive Board)

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM How are great workplaces built

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Starts at the top Strong commitment from CEO and senior management Leaders walk the talk High levels of trust between employees and management A genuine belief that people are indispensable to the success of the business A greater consistency of experience across groups Active communication forums between employees and management Perception of a special and unique culture; “we are not like others”

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Make difficult decisions Regularly and Effectively Change in Response to Culture Assessments—So Well That They Do Not Even Need to Wait Until The Survey Make hard decisions in a highly trust-building way Have zero tolerance for people who behave counter to the cultural values, regardless of the person’s other strengths or role in the organization.

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM HR’s role continues to evolve Source: Vosburgh, “The Evolution of HR: Developing HR as an Internal Consulting Organization”, Human Resource Planning Journal, 2011

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM HR functions differently in effective culture change Broader leadership team owns culture initiative vs. HR solely HR leaders strategic partner to the c-suite Focused on consistently, not just during less “turbulent” times or “slower” parts of the year Mix of program related initiatives and effectively embedding behavior change

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Common Culture Change Traps Event versus process Mandated to them, lack of incentive for doing Senior leaders above them not working on things themselves, senior leaders not sharing what they are working on Focusing on too many things Outsourcing to subordinates Not including subordinates in developing potential solutions Viewing Action Planning as the way to achieve successful culture change Over analyzing the data Over-emphasizing the tool Waiting until next survey to assess progress Not linking to broader, well defined change approach Transactional actions versus focusing on trust-building “how”

2012 S TRATEGIC T ALENT M ANAGEMENT F ORUM Final Thoughts Workplace culture is a critical talent advantage HR’s role continues to evolve as the C-suite focuses more on culture Trust remains a constant foundational element of a high- performing results-driven culture Changing technologies and economic conditions demand a strategy-driven culture Implementing culture change requires focus and effective culture change approaches Any organization can become a great place to work