Inspiring Loyalty Makes Good Business Sense

Loyalty, where have you gone? We need you.

Loyalty is a powerful force that unleashes energy and commitment that can set the stage for heroic effort, as well as effort that sustains organizations through the most difficult times. However, beyond the business need for loyalty, I believe we all have an innate need to be loyal and to receive loyalty.

Successful entrepreneurial firms have loyalty as one of the common characteristics that contribute directly to achievement. Loyalty provides a foundation for a level of commitment that enables resource-poor entrepreneurial firms to achieve goals and accomplish tasks that most people would view as impossible.

Large companies have also benefited from loyalty. From a project team at Amgen working on a wonder drug that will save millions of lives, to Chrysler being led by Lee Iacocca in trying to survive, to teams at aerospace companies working on our race to the moon, large companies have also experienced and been rewarded by loyalty to the organization, to a project or to a person.

Unfortunately, organizational loyalty is being tested more than ever. Errors in judgment and communications have contributed to the loss of loyalty in business. For example, companies are re-engineering and downsizing to compete in a global economy, but at the same time news of multimillion-dollar CEO compensation and golden parachutes are commonplace.

Clearly, these errors in judgment have existed as long as we have had commerce and will likely continue as long as people are involved. Nevertheless, loyalty is damaged when key employment concerns such as pay, workload, respect or job security are not fairly and consistently shared, in reality or perception, between senior executives and all other employees--particularly during times of layoffs and cost cutting.

The forces of change have compounded the difficulties of sustaining organizational loyalty by increasing the uncertainty and risks of employment. Technology is making jobs and skills obsolete at an ever faster pace while workloads are increasing. From Camarillo to Los Angeles to Oxnard to Chicago, corporate loyalty across industries seems to be disappearing. Worse yet, managers and employees appear to have given up on working to sustain or build loyalty. All too frequently these days, managers and employees express disappointment or frustration at the lack of loyalty, but they largely accept a working environment without loyalty. How awful!

This sets us down a problematic path for the vibrancy, if not the survival of organizations. But all is not lost. Loyalty has not vanished completely. In fact, loyalty can be renewed and sustained by consistent and tangible acts in fundamental areas of employee concern, such as providing personal considerations that recognize the employee as a person or sharing in company success--as well as the challenges.

Patagonia in Ventura is a good example of an innovative and caring company where loyalty flourishes. Patagonia understands that employees have a life beyond work and as a result the company does such things as providing on-site child care. Employees also are given autonomy and respect. This is reflected in Patagonia’s unique surfing policy. When the waves are breaking, employees can and do go surfing during normal working hours and return later to do their work.

You don’t need to adopt an approach like Patagonia’s surfing policy to start the loyalty rebuilding process--but isn’t that an interesting idea? The point is loyalty can and does exist.

Levi Strauss & Co. has begun the rebuilding process. Over the past several years Levi Strauss has gone through a re-engineering process that has hurt loyalty and morale. However, Levi Strauss recently announced a plan to share the benefits of this re-engineering effort that has been described as “unique in its generosity and scope.” The plan will reward each employee with a bonus equal to about one year’s pay if performance goals are met over the next six years. It has renewed employee feelings of good will and loyalty that Levi Strauss has historically enjoyed.

Clearly, rebuilding and reinforcing loyalty is a large and complex challenge, particularly with the increasing pace and impact of technological obsolescence and global competition. This challenge is magnified when past events have created a loss of trust. But loyalty is worth the effort and the cost.

Let’s not lose the commitment, energy, effort and caring that goes hand in hand with loyalty and makes work fun. Loyalty is worth saving. Let’s begin the process.

Gary Izumo is an instructor in the Moorpark College business department and has managed his own consulting practice. He is a former McKinsey & Co. consultant and practice leader for the Strategic Management Consulting Practice of Price Waterhouse.