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Executive Interviews: Interview with Timothy Keiningham on Organizational Loyalty
November 2009
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By Dr. Nagendra V Chowdary
Timothy Keiningham Global Chief Strategy Officer, Ipsos Loyalty and Lerzan Aksoy, Associate Professor, Fordham University 
What are your reflections on
societal values? Why is there a
chronic and fundamental departure,
in the name of modernity and
progressiveness, from traditionally
espoused values? Are these newly
imbibed societal values at the center
of societal unrest and hollow lives?
Loyalty is critical to our health as a
society, yet right now we are a society
that undervalues loyalty. Without us
noticing it, the world has shifted from
a society of many long-term loyalties
to a society of transactional
relationships and ephemeral
contacts. This is a natural byproduct
of the increasingly dynamic economic
environment in which we live. We
have become more flexible and more
mobile workers, which has made
businesses more efficient. And this
has given us greater opportunities to
succeed, making us wealthier. But it has also made us less loyal.
Because successful organizations are
built on relationships, this actually
isn’t good for business. And it isn’t
good for us as individuals either – it
definitely has not made us happier! You have observed that, “... like
any virtue, loyalty can go too far and
become toxic…” When does loyalty
become toxic and what should be
done to avoid such traps?
Loyalty can become toxic when we
separate the values and ideas
associated with our loyalty from the
individual or institution to which we
are loyal. In other words, we develop
“blind loyalty” to something. And
while blind loyalty doesn’t always
lead to unacceptable behavior, any
loyalty to that requires us to ignore
our moral compass has gone too far.
Therefore, NEVER EVER IGNORE
YOUR MORAL COMPASS! As a part of Why Loyalty Matters,
you have developed a tool,
LoyaltyAdvisor. What is this tool
about and what is its significance?
The book includes one-time access to
‘Loyalty Advisor’, so that readers can
uncover their loyalty strengths and
weaknesses – and what they can do
about them! ‘Loyalty Advisor’, the
product of a global, comprehensive
effort to identify the loyalties most
important to our success and
happiness, provides readers with an
assessment of their relationship styles
and a comparison of their loyalty
levels with national norms. Loyalty
Advisor also allows readers to invite
three or more friends, family, or
professional colleagues to participate
in a confidential evaluation of readers’
loyalty to them. Loyalty is one of the often
misinterpreted words in management
and a variety of loyalties exist. For this
interview, we would be looking at
organizational loyalty (towards its
stakeholders, including the
employees) and employee loyalty
(towards the organization). Loyalty spans several walks of life –
from family, friends, relatives to
organizations and businesses. What
is organizational loyalty? Are there
any defining characteristics of
organizational loyalty? In other
words, are there any criteria that
would tell the manifestation of
loyalty?
The primary distinction is that loyalty
to an organization is more abstract
than loyalty to family and friends.
Our loyalty at work is largely driven
by two complementary needs. First,
many – probably most – of us have
friends at work. And it is our loyalty
to our colleagues and friends that
serve as the foundation of our
attachment to the organization. But our loyalties at work are also
driven by our need to accomplish
something, and to be a part of
something larger than ourselves. In
this respect, our loyalty to the
organization actually supports our
view of ourselves within the society.
Most of us think of our ideal job as
something that allows us to fulfill
some dream. While it is seldom that
our work allows us to do that all of
the time, the reality is that our work
can enrich our lives. In a very literal
sense, what we do can and often does
help us become who we can be. For all the hype around “our
employees are our greatest asset”, in
the name of reengineering or
restructuring, companies often resort
to downsizing. Is it not a case of
abdicating their responsibility to one
of the key stakeholders, the
employees? No company sacks
shareholders when the going gets
tough. Once-loyal employees are told
en masse that the company’s loyalty
to them is no longer economically
viable. And shareholders have
typically responded with increases in
the stock price whenever downsizing
decisions are announced. Do you
think there is a double game in this
organizational practice?
Shareholders react to what they
believe is likely to happen to the
bottom line. Downsizing is done for
the purpose of cost cutting in the hope of improving the bottom line.
So in many ways it is understandable
that shareholders would take this as a
cure that management is serious
about fixing its profitability problems.
Unfortunately for shareholders, this
seldom works out in the long term.
The overriding issue, however, is not
the reaction of shareholders, but
rather the outlook of the company
when it comes to its employees. If
employees are seen as an expendable
asset, this is clearly not in the interest
of the company because it not only
signals to employees that their loyalty
to the company does not mean much.
It also unfavorably impacts the
potential of the company to attract top
talent to the organization in the
future. What organizations too often fail to
realize is that the employees of the
organization – their knowledge and
commitment to their employer’s
success – are the only differentiating
assets that cannot be replicated by a
competitor. It is the talent of
employees that drive an organization
to be successful in the long run. Just the way organizations are
expected to be loyal to their
stakeholders, employees are also
expected to be loyal to organizations.
Should employee loyalty be
demanded or commanded?
You cannot command someone to be
loyal any more than you can
command someone to love you. Real
employee loyalty occurs when
employees feel that company
deserves their loyalty. Employees
tend to return the level of loyalty to
the company that they believe the
company shows to them.
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