Should Businesses Quit Cold Turkey

I had breakfast with a group of CEOs not too long ago, and the subject of giving turkeys to employees for the holidays came up. "I'll never give another Christmas turkey," said one friend, the owner of a boxed-chocolate company. Turns out he had once terminated a factory worker just before Christmas and, feeling bad, handed him a turkey and said, "We still want you to have the annual Christmas gift." The employee pushed him aside, walked out the door of the loading dock, and threw the frozen bird in the river that runs behind the factory -- as the entire warehouse crew watched in disbelief.

This anecdote began a game of one-upmanship among my friends from the Utah chapter of Young Presidents' Organization. Another breakfast mate recalled a CEO neighbor who took tremendous pride in his holiday poultry largesse, frequently boasting that he gave turkeys to each of his 1,300 employees. That is, until one year when unexpectedly robust yearend sales required extra shifts on Christmas Eve. The CEO awoke Christmas morning to find 1,300 turkeys on his front lawn.

Many people have a Christmas turkey story, usually variations on the theme that employees find the tradition insulting, and managers are frustrated that the gesture isn't more appreciated. Why all this fuss about turkeys?

Business traditions, important as they are, tend to hang around long after their expiration date. But when we look more closely at expired traditions, they often point to something we need to change in the workplace, some fundamental flaw in our thinking. In the case of the holiday turkey, we find that the way businesses relate to their employees has failed to keep pace with the changing environment.

The convention of businesses giving turkeys to employees appears to have started in America around the Depression when a turkey would have made a significant impact on most families. But the need to boost calories in the average American's diet has long since subsided. Despite this, employers still give turkeys, $100 gift certificates, or other similar "bonuses" -- and resent the fact that the gestures are not more appreciated.

However, in 1935, a factory worker made about $64 a month. A 20-lb. turkey back then cost $4, so the bonus represented about 6.25% of the employee's monthly salary. Add to that the emotional impact of giving away food at a time when many families were starving, and the 1935 turkey was a compelling benefits package.

A factory worker now makes $2,200 a month, and you can get a turkey at Costco for $16 (and this ignores the fact that many grocery stores now simply give turkeys away with a purchase of $100 or more). So a once-substantial gift now represents a mere 0.73% of a worker's monthly take -- which is, to quote the most common reaction to the gesture, "a joke."
So what's to be learned from the turkey conundrum? I'm certainly not arguing simply for more generous handouts. Rather, I believe businesses need to change the way they relate to workers to match the changing environment.

In 1935, the average outfit didn't need much more from employees than good attendance and attention to their production-line roles. Today, companies have to be faster, more innovative, more global, and more technologically savvy than their competitors. That requires a real effort from practically everyone in the organization. We ought to be cutting employees a bigger share of the pie and help make that pie bigger -- not for the sake of being nice, but for the purpose of being competitive.

The idea of profit-sharing has been around for years, but few concerns ever get it right. Why? First of all, most companies have only a fuzzy understanding of their business model, so the thought of promising, in advance, 5% to 15% of profits to employees is understandably frightening.

Second, despite all the lip service, too few employers really believe in "bigger pies," and fewer still have internalized the tools of continuous improvement that can actually bake them. In the rare situation that we find a leader who has nailed a business model and is engaging employees in optimizing it, there are plenty of profits to go around (and no Christmas turkeys, by the way).

Expired traditions tend to accumulate like barnacles on the hull of a boat and create serious drag on an organization. While some are merely annoying, others are downright destructive, like the outdated way most companies do strategic planning (more on that next time).
I have a consultant friend who talks about the importance of so-called disengagement strategies. He says if a business doesn't periodically identify actions that no longer make sense, it won't have time to focus adequately on the truly critical.

In our work, we ask corporate clients to identify at least one new disengagement strategy each quarter -- to "toss out a turkey," so to speak. They struggle at first because it's tough to pinpoint those once-good ideas whose usefulness has run its course. But as leaders practice the discipline, momentum develops, and they become ruthlessly proficient at pruning their companies' activities down to the truly essential.