In today’s economic climate, it is tougher to find and win new business.
Corporates adopt a range of business development initiatives to win new work and develop new relationships. One of the most cost-effective and invaluable sources of referrals and potential new business can come from the people who know your firm best — your former employees, your alumni.
Life-time employment rarely exists in today’s working environment and most organisations will find its ex-employee population outnumbers the number of current employees. Organisations are beginning to realise that employees who leave (even if they move to a competitor organisation) are not ‘traitors’ but are still valuable assets to the organisation.
You can look at this from another angle: when an employee leaves, they take with them the years of learning, development and knowledge that your organisation has invested in them. This applies to leavers of all levels and grades — from newly qualified staff to retirees and non-fee earners. If they had a good experience or if they move on trusting and respecting the organisation, they will serve as great brand ambassadors and could become a client or referrer in the future.
Who are your alumni?
A paper written by First Tuesday Zurich and sponsored by Xing, Powering Relationships, defines alumni networks as: “…organisations whose members are the former employees of a particular company. Beyond this basic characteristic, they vary widely in terms of size, longevity, origins, purpose, governance, authority, structure, activities and even membership criteria”.
On the point of membership criteria, in my experience, corporate alumni programmes sometimes focus purely on fee-earners. However, the holistic, inclusive approach can work better. By including all former employees (i.e. contractors, those in business support functions and part-timers), the breadth and reach of the firm’s extended network is significantly widened.
Corporate Alumni Programmes
As mentioned above, corporate alumni programmes vary widely in structure and approach. Some organisations have opted for informal programmes — alumni are invited to attend networking receptions to catch up with old friends and colleagues and the upshot of ‘reuniting’ may lead to new business opportunities for your organisation. These progammes tend not to be driven as central business development initiatives, and engagement with such programmes is usually dependent on current staff and leadership enthusiasm.
At the other end of the spectrum, there are alumni programmes which are fully integrated across the business, from support functions such as IT, HR and marketing through to the fee-earners. These programmes are approached as a way of driving business development opportunities and maintaining access to intellectual property as well as supporting talent management strategies. The main objectives of these programmes are business related and they are measurable. They focus predominantly on the bottom line — what and where are the business opportunities? How can we maximise our return on investment with our alumni programme?
Education, engagement and return on investment
In simple terms, to maximise the success of an alumni programme, it must:
- Educate: keep your alumni informed and involved with your organisation. Your business will be constantly evolving and it is important to keep your alumni up to date with where the firm’s strengths lie, what services are offered and where the organisation is heading.
- Engage: keep your alumni engaged and ‘in favour’ of your organisation. This means providing benefits to them. Are you providing them with a reason to engage with you? These can be both personal and business related tools. Some examples might be keeping them up to date with relevant technical updates, extending your organisation’s employee reward schemes to this community, providing a searchable online alumni database and offering a recruitment referral scheme.
- Return on investment: in addition to education and engagement, there is a third objective — probably the most critical — establishing a relationship that compels alumni to hire or recommend your organisation when and where possible. This relationship will be based on intangible assets — trust, loyalty and your organisation’s values. Just because you are a former employee does not mean they will hire you or refer work to you. Referrals and new business will come to you based on the investment your organisation has made in them throughout their career with you and after they have left and their emotional feelings towards your brand, which will have built up over time and experience. If you can get the relationship right, then the monetary value and ‘return on investment’ can be demonstrated by the revenue generated as a result of new business referrals or the reduction in cost for rehiring and candidate referrals.
There are many ways of measuring engagement with the programme, a number of which you will want to address. An alumni programme is not something you can pick up and put down at your leisure - it will need enduring commitment in line with your organisation’s values to maintain the trust and loyalty you are seeking to nurture with your alumni. Other metrics you may consider measuring:
- The number of engaged alumni in your programme
- The money you have saved on recruitment through referrals of new employees
- The number of times your online portal is visited
- The percentage of leavers who sign up to the programme, and so forth.
A good example of nurturing these relationships is recorded in a paper written by David Maister and Jack Walker (ex-managing partner of Latham & Watkins LLP). They reported that in the mid-1990s Latham & Watkins LLP made a calculation that almost 50 per cent of their business came directly or indirectly from their alumni. They reported that this was a result of the way the firm changed its behaviour towards their leavers — instead of ignoring and neglecting their leavers, they began nurturing and building up friendships. They were able to transform their leavers into customers and business referrers.
Organisations who find success with their alumni programmes will have created a sense of family, belonging and purpose that endures the process of leaving the organisation and supports the alumnus further down their chosen career path.
This is an area of untapped opportunity for most. From my experience, alumni programmes can often be seen as a ‘nice to have’ rather than a profitable, revenue generating, cost-saving initiative.
For anyone who is struggling with the idea of alumni programmes try looking at it this way: alumni are your friends and they can be so much more with some focused investment of time, effort and engagement. What easier way is there than to build your new business referral network from people you want and enjoy spending time with and who are already predisposed to help you…if you give them the chance?
This is a free no obligation discovery call designed to uncover whether an alumni programme would work for your business.