The Secret Life of In Touch-October 2011

The Secret Life of In Touch-October 2011

What do your employees really think? And what do they know that could improve your business? In Touch gets an earful when it sets up anonymous employee feedback systems for clients.

I am an employee on the West Coast, new with the company. Yesterday, I was sent to a store on Ivy Street in Sacramento to help clean up for a visit that we’re supposedly having. I would like to know why managers and assistants were told to hide merchandise in a Ryder truck and park it down the street for this visit. I’m kind of curious as to what kind of company I’ve decided to work for. Thank you.

________

I’m calling to address an issue of great concern to myself and to many other Acme employees. It seems there has been a big secret campaign to rid our property of geese. An incident last week was incredibly upsetting to many of us in Building 4. You see, we have been enjoying the same pair of geese for years. Last week, our pair of geese started laying their eggs. The day after they started, someone strung electric fencing in the planter, right through their nest  . . . .

________

This is what I heard from an XYZ Corporation employee who came to me because of concerns about the misuse of company assets, but fears retribution and did not know where to turn. On August 15, John Jones, an executive at XYZ, hosted a bonfire party at his home. As fuel for the fire, he used $52,000 worth of company-owned taxidermy and other items originally acquired for use in new stores, but no longer needed since retail expansion has slowed. The grand finale for the bonfire was two full-sized brown bears . . . .

Those are all real calls—transcribed, abridged, and with identifying details changed—received by In Touch, a “management communication systems” provider based in Minneapolis.

In the 20 years since he founded the company and started setting up anonymous employee hotlines for corporate clients, Peter Lilienthal has heard it all: drug use by truck drivers, workplace violence and threats of violence, graphic complaints of sexual harassment, construction workers’ allegations that supervisors are doling out favors to pet contractors.

The hotlines aren’t always a conduit for reports of wrongdoing, though. Police officers put a finger on what makes the booking process take so long. Hospital workers point out where better signage is needed. Employees in a service business tell how an operations glitch is frustrating them.

In that sense, In Touch’s hotlines—and these days, e-mail systems and dedicated Web sites—can function as a barometer that forecasts corporate weather. Lilienthal says that if he weren’t bound to protect client confidentiality, he could name two nationally known companies whose filings for Chapter 11 bankruptcy protection probably came as a surprise to shareholders but not to him. The signs were there months earlier in employees’ concerns.

His toughest competition isn’t another hotline provider, Lilienthal says, it’s a pair of misconceptions. One is that hotlines are just for whistleblowers, not for frontline intelligence gathering from employees. The other is that an open-door policy renders a hotline unnecessary.

Lilienthal says a lot of human resources directors are heavily invested in the idea that, thanks to their policies, employees really are unafraid to speak truth to power: “When we call on them and they say, ‘We don’t have a communication problem,’ we say, ‘Have you done an employee survey recently? What’s your number-one issue?’ They say, ‘Well, okay, it’s communication. But if we have this program, who’s going to handle all the messages we get?

In other words, the conversation “goes straight from ‘We don’t have a problem’ to ‘This is going to be overwhelming.’ And you just kind of go, ‘Hmmm . . . .” 

 

What’s Not Working? Listen

In fact, the number of messages is not overwhelming, according to In Touch clients. 

Green Tree Credit Solutions, in its earlier incarnation as Green Tree Financial Corporation, became Lilienthal’s first client 20 years ago and still is one. Today, the St. Paul–based company has 2,000 employees in more than a dozen states. Barbara Didrikson, senior vice president and chief human resources officer, says they use the hotline judiciously; Green Tree receives, on average, about five messages a month. 

Courage Center, a Minneapolis nonprofit that provides rehabilitation services for people with brain, spine, or other traumatic injuries, reports similar numbers. Chief Financial Officer Alice Johnson says that in eight years of complaints and suggestions coming in via In Touch’s service, “a high percentage of them are about whether we are treating a client properly,” and some are compliments. Johnson says she’s cheered by the fact that, when invited to gripe anonymously about anything they choose, it turns out that “our staff’s primary concern is how we’re treating clients and each other.” 

Do small numbers of messages mean that In Touch’s services aren’t all that useful? Even one message can avert a costly problem, Lilienthal says. He cites—again preserving client confidentiality—a government contractor that learned of falsified expense reports, which would have resulted in fines had an external auditor discovered them; a transportation company that got wind of safety problems with its new truck fleet; a hospital tipped off to simmering racial tensions on its staff and plans for a high-profile public demonstration.

But his sales pitch centers on another cost: employee turnover. In Touch charges a minimum fee of $1,500 annually (though it charges nothing to Courage Center and other nonprofits). Costs range from 55 cents per employee for a bare-bones hotline that takes messages about finance and accounting in compliance with the Sarbanes-Oxley Act, to $1.50 per employee for a channel that takes all kinds of suggestions and complaints, to $3 per employee for a broad package of services that includes exit interviews and dialogues arranged between management and employees. A top-end client with 10,000 employees might be spending $30,000 a year. 

Lilienthal points out that the average cost of replacing even a moderately skilled employee is about two times salary. If just one employee is prevented from leaving because he or she gets action on a complaint via In Touch, the service will have more than paid for itself, his argument goes.

It’s a compelling one to Julie Watkin, senior vice president of human resources for ABRA Auto Body & Glass. The Brooklyn Center company has 108 repair shops in 11 states, 76 of them company owned. All 1,400 employees at the corporate shops and more than half from franchise shops have In Touch available to them. Auto body technicians are highly skilled and hard to replace, says Watkin, who’s used In Touch since 2008. She can think of several cases where the service has allowed ABRA to keep a person who she believes would have quit otherwise. In Touch made it possible to deal internally with situations that could have escalated outside the company to attorneys, she says.

Watkin can see where communication breaks down within the company based on hotline calls. A painter or auto-body technician “may not understand how work is being distributed, because the manager hasn’t explained why jobs are being divvied up the way they are.”

“Fairness is a common thread,” she says. Having a pipeline to employees’ thoughts “reinforced for me that people want to understand what’s going on. They want to understand why decisions are made and what their role is. And they want to be treated fairly.”

 

Management Is Always the Last to Know

In Touch was Lilienthal’s sideline when he launched it in 1991, while he was still vice president of finance and administration for Hamline University in St. Paul. But the idea grew from his experience elsewhere.

He came to the Twin Cities in 1973 with a Harvard MBA in hand and worked in senior finance and administrative positions for Toro, Jostens, Tonka, Munsingwear, and other companies. And everywhere he went, he noticed the same phenomenon: “Executives and the board of directors were always the last to know.” 

Last to know what? You name it, Lilienthal says. Whenever a fire broke out, top managers seemed to be the only ones who hadn’t noticed the smoke. “People on the production lines and people in the sales office knew what was going on,” he says. “But there somehow wasn’t a good connection to management or to the board.”

The concept of employee hotlines was by no means new. The Network, Inc., of Norcross, Georgia, and Global Compliance Services of Charlotte, North Carolina, two of the three biggest players in the industry, were both founded in the early 1980s. (The third biggie, EthicsPoint, Inc., of Lake Oswego, Oregon, dates to 1999.) Then and now, however, those companies put their focus almost exclusively on illegal activities and code-of-conduct violations, with calls handled by live operators at in-house call centers. Lilienthal envisioned a broader informational pipeline, in which whistleblower calls would be only a fraction of the messages. His service would be, simply and literally, a way for management to stay in touch. 

With no call center of his own, Lilienthal says he “scrounged around” to find a service that provided an 800 number where people could call to record messages, anonymously or otherwise. He would get the messages transcribed—no recorded voice for anyone to recognize—and forward them to his clients.

That’s still a method many clients choose today, though the tape recordings have been replaced by an interactive voice response system, or IVR. Other options are e-mail boxes that offer identity protection, dedicated Web sites, and live operators, which eventually became “something you kind of had to have,” Lilienthal says. He contracted the live work to BHR Worldwide, a St. Louis organization whose primary business is mental health hotlines. 

“It was a perfect combination,” he says. “Everybody who answers the phone there, just about, has a master’s degree or above in behavioral science—psychology, counseling, or social work.”

The IVR system is practically unique in the industry, says In Touch Director of Operations and Client Support Peter Le. Green Tree, ABRA, and Courage Center all use it exclusively. With IVR, In Touch can take and translate calls made in any language. It also can bring translators from BHR Worldwide into live, three-way conversations.

Between automation and outsourcing, In Touch has only four full-time employees, including Lilienthal, all working in a single office suite on West Lake Street in Minneapolis. It’s “a very low-stress business to run,” he says.

“Why Are You Putting Up With It?”

In Touch had just seven or eight clients in 1996 when Lilienthal left Hamline to make a go of his firm. A column that fall in the Wall Street Journal described what he was doing, and “a deluge of phone calls came in.” 

Another turning point—for the entire hotline industry—came in 2002 with the Sarbanes-Oxley Act, a congressional response to corporate debacles including the meltdown of Enron Corporation. Sarbanes requires, among other things, that employees of publicly held companies must have a confidential and anonymous way to communicate directly to the board of directors any suspicions about improper accounting or internal auditing.

“The market just exploded” in Sarbanes’ wake, Lilienthal says. “I got a bunch of new competitors . . .
and this became an order-taking business.” The opportunity to grow exponentially was there. But having undergone quadruple bypass surgery in 1998, he says, “I had kind of made up my mind
that if I could just generate a comfortable level
of income, I don’t really want to run a big organization.”

Nonetheless, In Touch has more than 200 clients today, in industries from health care to coal mining. They include giants such as FedEx and Land O’Lakes. Some global clients extend their hotlines to employees in countries from Brazil to China.

All of which is to say that for two decades, Lilienthal and his staff have been an open ear for the uncensored voices of a broad cross-section of working people in the United States and abroad. What insights does he draw from what he’s
heard?

The first that comes to Lilienthal’s mind is “how many people are unhappy. You read some of [the recorded transcripts] and say, ‘Why are you putting up with it? Why don’t you quit and go do something else?’ But they have so much invested in what they do that moving on is hard.”

Another is “how much control a manager can have over a person’s life.” A single mother, for instance, needs to work the day shift to coincide with child care. A manager assigns her to the night shift, maybe to pressure her for sex, maybe because he simply dislikes her. Either way, Lilienthal says, “the manager can control [employees’] lives by controlling their schedules. There’s a lot of that. Some managers kind of like to think of themselves as kings or queens.”

And one more: “We get an amazing number of spouses, who may or may not work in the same workplace, who call and say, ‘My spouse is having an affair with person X,’ or ‘My spouse is using drugs,’ or ‘My spouse is threatening me, and the company should know that.” Trying to get your current husband or wife fired from a job “seems like cutting off your nose to spite your face,” Lilienthal says. “So I’d say we get a very surprising number of those calls.”

Le, who’s been with In Touch since 2005, takes a different perspective. “I suppose I was naïve, but I always assumed that the corporation would be the bad guy in any dispute with employees,” he says. “A lot of companies are putting forth real effort to try to do right by their employees.”

More often than he would have guessed, Le says, the same individual will call a hotline repeatedly, pretending to be several different people to give weight to false or frivolous accusations. It’s not the norm, he says, but “there are some bad employees out there.”

For a hotline to have credibility, however, the company has to follow up appropriately on all messages. That can be difficult if a call was anonymous, though In Touch systems allow callers to pick a code number as their ID, which enables a back-and-forth exchange of messages between employer and employee. 

The next step depends entirely on the situation. But there always has to be a next step, Watkin says. Some complaints can seem trivial, she concedes, “but we take every one seriously.”