Books Take On Loyalty Issue


A.: After a decade of downsizing, is it time to write off the idea of loyalty to an organization? No, say three timely books on the subject:

“The Loyalty Effect: The Hidden Force Behind Growth, Profits and Lasting Value” by Frederick F. Reichheld (Harvard Business School Press, 1996, $24.95). This tome by the leader of the loyalty practice at Bain & Co., a strategy consulting firm in Boston, begins chillingly: “Loyalty is dead, the experts proclaim, and the statistics seem to bear them out. On average, U.S. corporations now lose half their customers in five years, half their employees in four, and half their investors in less than one. We seem to face a future in which the only business relationships will be opportunistic transactions between virtual strangers.”

And it doesn’t get any more lighthearted than that. This book spotlights successful practices at more than a dozen companies, including General Electric, State Farm Insurance and Chick-fil-A, an Atlanta company that has grown from a single diner to a chain of more than 600 quick-service restaurants by creating superior loyalty among store operators.


Reichheld’s message is simple: To be the best and most profitable, employers must inspire loyalty among customers, investors and employees. A lesson for job applicants: Ask about your prospective employer’s turnover rate. Avoid a company that suffers from “churn.”

“White-Collar Blues: Management Loyalties in an Age of Corporate Restructuring” by Charles Heckscher (Basic Books, 1995, $14). Seeking to analyze the tumult facing managers in this era of sociological change, the chairman of Rutgers University’s department of labor studies and employment relations conducted 250 interviews across 14 divisions of eight companies in various stages of restructuring. His conclusion: Corporations and managers stand to benefit if they can reach a middle ground between the corporate paternalism of yore and the instability of a world in which every employee views himself or herself as a free agent.

Mobility, he says, will define the managerial careers of the future. Under his “professional model,” managers would form commitments to companies for specific projects, staying as long as the organization’s vision and the individual’s commitment lead to a sense of mutual contribution.

To put it another way, Heckscher proposes moving away from the traditional community of loyalty to a community of purpose.

“Getting Employees to Fall in Love With Your Company” by Jim Harris (Amacom, 1996, $17.95). This slim, easy-to-read volume provides tips for improving workers’ morale and, therefore, productivity. Harris, a Florida consultant on high-performance workplaces, singles out “best practices” of a variety of firms from TBWA Chiat/Day to Xerox. Among the progressive practices Harris touts are open communication and an emphasis on learning at all levels of an organization.