Executive Leadership Podcast #179: How to Create Loyalty

Can a leader create loyalty in the people on their team? Today, Chris and Perry talk about things a leader can do to increase loyalty in their organization.

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Perry Holley: Welcome to the John Maxwell Executive Leadership Podcast, where our goal is to help you increase your reputation as a leader, increase your ability to influence others, and increase your ability to fully engage your team to deliver remarkable results. Hi, I’m Perry Holley, a John Maxwell facilitator and coach.

Chris Goede: And I’m Chris Goede, vice president of the John Maxwell Company. Welcome and thank you for joining. If you’re interested in learning a little bit more about the ability to bring Perry in as a coach or one of our executive coaches or facilitators, that’s right, or if you’re looking for some content or just if we can help… Here’s what we’ll talk about. We are in the culture business. We want to help your leaders inside your organizations increase the engagement level-

Perry Holley: Sure.

Chris Goede: … and increase really just kind of the connection between you and your team and the culture side of your business, help them become better communicators. Whatever it might be, any competency around leadership, we want to be able to add value and serve. So if that is true, visit johnmaxwellcompany.com/podcast. There we have a form you can fill out, and our team will be back in touch with you. Also, if you have a question, because we’ve had several questions-

Perry Holley: Very good.

Chris Goede: Very, very helpful. Well, we want this to be relevant to what’s going on in organizations around the world. Put that there. And then Perry and I will see that. We’ll even take the opportunity to talk about it and then even maybe develop a lesson around that. So today’s topic is titled, how to create loyalty. Now, this is something that we don’t talk a lot about.

Perry Holley: I know.

Chris Goede: So what are you thinking?

Perry Holley: A few weeks ago, we did a podcast on The Great Resignation.

Chris Goede: Yeah.

Perry Holley: What’s a leader’s role in The Great Resignation? If you’re not familiar with that, you can see that podcast, just a couple of weeks ago. But I was speaking live last week in an audience, and someone at the break came up and said, “Hey, I really liked your podcast about The Great Resignation. I have a question for you,” Which was, “So are you talking about loyalty in your team? How would you suggest a leader create loyalty?” I thought, that’s interesting. We haven’t ever talked about that, so maybe that’d be a good thing to talk about. She also said, “I didn’t sound this tall.” I don’t know what that meant. But anyway-

Chris Goede: I love it.

Perry Holley: … I thought we’d talk about loyalty.

Chris Goede: Yeah, It’s an interesting question and interesting comment about you not sounding that tall.

Perry Holley: She said, you did.

Chris Goede: That’s right. Like what’s the difference? Yeah, so after that podcast, right? I noticed a survey where it said, “81% of workers said they were willing to leave their current position for a better job offering.” So I started digging around a little bit more, because I think this is just… People can call it The Great Resignation, but that really doesn’t really talk about what’s happening. Like people aren’t just resigning from their current role and then not coming to work, right?

Perry Holley: Right.

Chris Goede: I saw this thing where it’s called the extreme workplace shift.

Perry Holley: Okay.

Chris Goede: I thought, “Oh, okay.” Like that’s what’s happening, right? People are shifting from one place to another. And so what I thought would be interesting is, I had this little graph. Now, there’s all kinds of data and percentages out there. And so this is just-

Perry Holley: You brought this graph?

Chris Goede: Just one of them. And listen, I’m close to being kicked off this podcast and so I thought, I better-

Perry Holley: You might be in the promotion.

Chris Goede: That’s right.

Perry Holley: [inaudible 00:03:16] a graph.

Chris Goede: And so it says, “Hey, why is turnover so high? What’s going on in this Great Resignation of people moving different places.” And so we want to look at this from the loyalty side, but to set that up, here’s a couple of percentages that may not surprise you, but just want to set them. The first one is, this movement of people is for, 41% said, lack of work-life balance. You’re not going anywhere, are you? Because I know that that percent is very-

Perry Holley: Only 41%.

Chris Goede: I was getting ready to say, that number seems a little low for our enterprise. We’re laughing about that, but we shouldn’t be. The next one is, lack of flexible work schedule, I think. But we’ve all been through in the last… Maybe this wasn’t a good idea for me to bring this in. But I think what we’ve all gone through with the COVID and the work from home and the remote, has opened up eyes and people are saying, “No, no, no, this is part of what I want to do, which I think also helps at times maybe with work-life balance.” The next one that they talked about was, 30% said it’s lack of remote work options, right? Why they’re leaving, they’re going different places.

Perry Holley: Right.

Chris Goede: And then the last two I’ll share with you. Another 30% was, employees are switching careers past pursuing passions that they have and the organizations that support that. And the final one, and we’re going to address some of these today, is the 27% said, there’s lack of career growth opportunities.

Perry Holley: Mm-hmm (affirmative).

Chris Goede: And so they’re like, “Hey, I’m going to shift. I’m going to another place, another organization to where I can do that.” Which in turn, when you provide some of those things creates this loyalty for your team members.

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Perry Holley: Yeah, one thing we have talked a bit about here is just realizing that people, they’ve joined your company. When you join a company, you join for whatever the culture, the reputation, the type of work you’re going to do. There’s lots of reasons you join, but there’s really only one reason you leave, and that’s because of your manager. You join the company, you quit a company.

Chris Goede: Very simple. Yeah.

Perry Holley: And the first thing I thought of that really, I think, builds or fosters loyalty in people is that when… And we have talked about this here, it’s about an intrinsic motivator, for most people, it comes about in three parts. And I think we did a whole podcast on this, but is there a purpose? Do they have a purpose, something bigger than them that they’re working with, something that they’re doing, my why for being here? Do they have autonomy in doing the work? Let me know where we’re heading and then let me figure out how to get there-

Chris Goede: Yeah.

Perry Holley: … so I have some ownership, some autonomy in that. And the third one was a mastery, am I growing? Am I getting better? Am I achieving mastery in this space? And I think if a leader is committed, if you think about that, with everybody on your team, are they fulfilling a purpose? Are they connected to your why? Are their why connected to your why? Are they autonomous in how they can do their work? They have some freedom and they’re growing in that. That’s really to me. What do you think? It’s just that their starting point of loyalty to me, was I really want to be here.

Chris Goede: Yeah, I think those are key, that you set up. I think one other thing I just want to add to that is, empowering the people on your team create that loyalty, where if I feel empowered in my work, I feel a sense of loyalty to that work, that team, to my leader. And so remember we can’t just go out and just empower somebody to empower somebody as leaders. You know that we’ve all been burned by probably trying to do that. And so what we need to really make sure is that we model that for them, that we then equip them and then we develop them, right? Again, another process, you can put in place when it comes to empower somebody, but I think if a leader makes an effort to equip and then develop someone, that is a huge, I know for it is for me, a huge factor in being loyal to that organization.

Perry Holley: Yeah, I agree. For sure. I think we shortcut sometimes where I hired you, I put you in your job, now you’re empowered.

Chris Goede: Yeah.

Perry Holley: And I forgot to model, equip and develop you-

Chris Goede: Yeah, good luck.

Perry Holley: … before I empowered you. Yeah.

Chris Goede: Good luck.

Perry Holley: Good luck. I have no sense of loyalty for that.

Chris Goede: Yeah.

Perry Holley: All this points to what I think probably is the largest component of loyalty. I’ll let you speak to this, but the question is, do I have a future here? Is there a path to where I want to go? This means a leader’s got to invest time in what each person in learning, where is it they want to go? What is their career path? In their mind, are they trying to be promoted? Are they trying to climb the ladder? Not everyone will want to be promoted and climb the ladder. I remember the very first excellent salesperson I saw on a team, my very first management job. He was fantastic. I said, “I’m going to get you promoted to a manager.” And he said, “If you do, I’ll quit.”

Chris Goede: Yeah.

Perry Holley: So they didn’t want to do that, but some will. If you know what the future looks like, and for each person, you can help them map out that journey and really identify gaps that they may have in getting there. You want to go from here to there, I don’t think you’re ready, but now we have a plan. I can work on your growth plan to help you with that. And that’s where I think where the equipping and developing comes in. But, if I know where I have a future here, my loyalty component just went up immensely.

Chris Goede: Yeah, and a key part of that is having conversations about what that team member wants their future to be.

Perry Holley: Yeah.

Chris Goede: Right? Because to your point, the example of that salesperson, I know another individual in the financial side of the world where his goal was never to lead one person the rest of his entire life.

Perry Holley: Right.

Chris Goede: Like he just wants to be an individual contributor, extremely incredible at it, can do things financially that I cannot, but they desire not to be able to do that. Now, if you were trying to force that individual into a career path role, you may lose them for that purpose. Remember, going back to the percentages that we shared, almost 28% of your team, they’re looking for this or they’re leaving because they don’t have this. And so make sure that you continue to do that.

Perry Holley: Well, thinking about a person like that, let’s say that, I want have a future here. I want to be here, but I don’t want to climb your hierarchy here. I just want to do what I’m doing. That doesn’t let you off the hook.

Chris Goede: Right.

Perry Holley: But for loyalty now, what is the growth path for that person?

Chris Goede: Yeah.

Perry Holley: Is it mastery? Go back to the three mode.

Chris Goede: Right. That’s right.

Perry Holley: Is there a purpose?

Chris Goede: That was what I was going to say.

Perry Holley: I mean, what am I going to do to help that person feel that loyalty that you have a future here. Yeah.

Chris Goede: Even don’t want to be promoted, you just want to be the best you can possibly be at that. What can I do to help you with that?

Perry Holley: Yeah, that’s good. And remember, John says that they’re going to join your team for one reason, but they don’t stay for that same reason. So what are we continually doing to think about adding value to them, whether they want to leave or they don’t, and we got to make sure that we’re focused on that. So the other thing too, I’ll add here, that I think is really important to consider is generational differences-

Chris Goede: Mm-hmm (affirmative). Yes.

Perry Holley: … that may be present in how people view loyalty, generational loyalty.

Chris Goede: Actually, I think it’s bigger, kind of-

Perry Holley: It’s different. Yeah, and you got to understand their perception of what loyalty is and what looks like in order to be able to do that so that you can make sure maybe it is this life work-balance. Maybe it’s more around purpose. But you got to know the end state of the individual and what loyalty means to them. Now, we’re not saying, go and sit down and say, “Hey, Perry, what’s it mean to be loyal around here?” Right? Like you got to ask the question about… Of course, you got to do a little bit of discovery, a little bit of reconnaissance mission to make sure that you understand, but man, it is different for generations. Especially younger ones, what we’ve found is, it’s more about the purpose and they don’t necessarily stay in one place too long, especially if they don’t see the value of them and their purpose, maybe like you and I did it, or maybe I know for sure, our dads, right? It’s just completely different.

Chris Goede: I thought you were going to really stick me there with the, “Hey, Perry, but your generation…”

Perry Holley: I was not. I’m trying to be nice to you.

Chris Goede: Yeah, you were. But to your point though, my generation, whatever that might be, to stay long term with a company was kind of expected. You didn’t really think about moving unless there was an obvious reason.

Perry Holley: Right. Right.

Chris Goede: I noticed my kids coming up, they don’t accept a lot of loyalty toward a company, but they do have loyalty toward that feeling of purpose, that feeling of wellbeing of that balance. They said, that’s where loyalty comes in with them. And if I, as a company, as a leader can provide that, then their loyalty then would look toward me.

Perry Holley: Yeah.

Chris Goede: To do that, it’s really, I think the generational thing’s a big deal. Let me ask you this. I was just thinking about it. Culture, we talk a lot about culture, but what does culture in your mind have to do with how loyal someone’s going to be?

Perry Holley: Yeah, before I go there, I was having this thought just a minute ago where we’re talking about different generations, your kids, for example, that the loyalty is towards the course, the purpose more than the organization. I wonder even too what their shift would be like of their loyalty towards leaders that lead them down to courses and purposes and all kind of stuff. And where that may show up, when a leader goes to a different organization and they’re jumping and going to a different organization because of the impact of that leader. So just the thought of, it’s different, it’s different from everybody. And so you need to kind of be aware of that.

Chris Goede: Right.

Perry Holley: So as we think about this from a culture standpoint, we talk about the definition of kind of culture, for us, is how do we think act and interact inside with each other? And remember, Perry, and I say all the time, your culture’s going to happen. Whether you design it or not, it’s going to happen and you don’t want it to happen by default. And so how are you continually communicating your core focus, your core values that supports the mission, that supports the purpose, that aligns with people and why they’re inside your organization? Because when that alignment happens, I think their engagement level and their loyalty increases. But when it doesn’t align, they’re going to check out on you.

Chris Goede: Yeah.

Perry Holley: And I know we’ve seen this where, we do some cultural assessments on the front end, working with some organizations. And in there, we talk about one of the sections is, their values, what they desire them to be. And then what they actually are or how they’re living them out. And oftentimes, we see a pretty big gap in that assessment.

Chris Goede: Yeah, for sure. I thought I just mentioned to some of the characteristics of leaders who I think encourage loyalty on their team.

Perry Holley: Mm-hmm (affirmative).

Chris Goede: And any follower of ours, you know this is stuff we talk about a lot, but your own self-awareness and the humility that you put forward, authenticity, being honest, teachable, approachable, vulnerable. I’m just thinking about the buy-in that you generate, the connection you generate with people. We talking about going from level one, people follow, because they have to, giving you permission at level two to be their leader. That generates a lot of loyalty when you are someone that someone on your team, I want to buy into.

Perry Holley: Yeah.

Chris Goede: I bought into you in that connection. And also think about that inclusive leader we talk about that people, when I’m with you, I feel safe, welcome, valued, relevant, that generates a lot of loyal feelings as well. So I don’t want to overlook the characteristics of just great leadership.

Perry Holley: Yeah.

Chris Goede: John says everything rises and falls on leadership. Well, loyalty rises and falls on leadership as well.

Perry Holley: It does. And as you become this leader where there’s that loyalty also… Perry gave us a great list, but one of the things too is make sure you’re giving them feedback. Make sure they’re having constant communication with where they’re at. Oh, man, I don’t want to get started on this about annual reviews, but you shouldn’t just do it annually. Right?

Chris Goede: Right.

Perry Holley: And if you do and you walk in, they shouldn’t be surprised by the conversation you’re having. And so what is that on a real time basis so that you can give him feedback? You can help coach them through that. This reminds me of one of our thought leaders, Jeff Henderson, to where he’s like, “Hey, people on the team need to feel that the leader is for them, not just wanting something from them.” He also talks about it even from an organizational standpoint with our customers and our end users. It’s an incredible course, credible content. Again, it’s just something that we deliver to organizations.

Chris Goede: Yeah, it’s great thinking about generating loyalty, where people buy in and people want to be a part of you and what you’re doing, spectacular, but let’s wrap it up for us and-

Perry Holley: Yeah, so we talked about some negative percentages and kind of like, “Oh man, what happens if they’re not loyal?” And I gave you some data on the front end. Let me give you some maybe a little encouraging data on the back end, 94% of employees would stay at the company longer, if the company invested in them personally. Again, there’s a bunch of different data out there. So this one says 94%. So man, just think about how are we developing our people? How are we adding value to them?

Perry Holley: The other side of is, the turnover is so expensive. We often have leaders that are like, “I don’t have another budget for that.” Or, “What’s the return on investment?” And I go, “Can I see your turnover percentage?” Because the average cost of your turnover is about 30% of the individual’s salary or compensation to make that turnover switch. So I’m like, “Can we add that number up real quick?” Because we could probably help you reduce that number. And so man, 94% of our team would want to stay if we are investing in them. And I give you that status because if we invest in them and we develop them and we do some of these things that Perry and I talked about, you’re going to create loyalty in those team members.

Chris Goede: Right.

Perry Holley: Fantastic. Well, great stuff, Chris. And thanks for bringing charts and figures, that was quite-

Chris Goede: Don’t expect it.

Perry Holley: You got an A for today.

Chris Goede: Don’t expect it.

Perry Holley: Well done. You get an A today too for joining us. Thank you so much. If you want to know more about 5 Levels or 360 or anything that we do, our coaching and offerings, you can go to johnmaxwellcompany.com/podcast. You can leave a comment or question for us there. You can also download the learner guide show notes from this episode. And also just a reminder, we did episodes on feedback, probably two or three. If you know more about feedback is such an important point that you added there.

Chris Goede: It’s good.

Perry Holley: Again, so thank you for doing that. And thank you for joining. We’re always grateful that you would spend this time with us. That’s all today from the John Maxwell Executive Leadership Podcast.