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February 2009
Survey Says...
By Ellison Clary
Enhancing the bottom line by building employee commitment sounds simple but is hard to achieve. Morehead Associates uses scientific surveys and sophisticated analyses to help a company or organization pull it off.

     The 36-person Charlotte firm does that for hundreds of clients, primarily in health care, as well as manufacturing and services financial services, utilities, pharmaceuticals, manufacturing and retail.

     Sandy Welton started Morehead Associates as a broad-ranging human resources consulting company in 1979, but changed it in 1991 into an entity that, he says, does one thing very well. “We conduct employee opinion research to help organizations align their human capital with their business performance,” he says.

     After asking employees the right questions, Morehead uses the responses to tell a company or organization where to “fix” employee experiences and thereby enhance customer satisfaction and other business outcomes.

     The survey questions, says marketing and corporate communications vice president Wanda Craig, fall in three “buckets” and are based on Morehead’s empirical model.

     “You ask about the organization, about the manager and about fellow employees,” Craig explains. Combined answers provide a holistic view of employees’ perceptions about the workplace.

     Morehead helps a client build what Welton calls a dashboard, a gathering of critical determinants for success and measures of how human capital—employees—affects them. For example, a bank might track human resource metrics like turnover and employee engagement.

     Morehead has a decided bent toward health care. Welton’s background helps explain why.

     A native Charlottean, Welton spent a decade with non-profits in what today is called “community organizing.” He toiled on Manhattan’s lower east side for what became Communities in Schools and he co-founded the Vietnamese Children’s Fund. He’s long been concerned with race relations and calls Clarence Jordan, founder of an interracial community near Americus, Ga., a strong mentor.

     Welton spent time in the 1970s with First Union Corporation, recruited by then-chairman Ed Crutchfield, to concentrate on changing work force culture.

     “I knew I didn’t want to become a banker and that’s why I didn’t stay,” says Welton. “I wanted to do something more specifically that spoke to me. That’s what Morehead became.”


Clientele Samplings

     With its focus on health care, Morehead regularly monitors and assesses health care delivery on behalf of various entities.

     “Health care is not what it should be in this country,” Welton says, “and yet health care is very expensive here. So there’s a huge challenge for everyone whose task it is to try and change health care. We’re very pleased to play a role in that.”

     Charlotte’s Carolinas HealthCare System appears on the Morehead client list that includes 42 percent of U.S. News & World Report “Honor Roll Hospitals.”

     Morehead’s client list also boasts Harris-Teeter, the Matthews-based supermarket chain. “We want to help them do a better job of delivering better food,” Welton says.

     In manufacturing, Morehead has helped numerous textile firms, but not so many today because of the industry’s decline. Currently on Morehead’s manufacturing client roster is General Dynamics.

     Morehead serves clients nationwide. It has a number of local clients as well, and the southeast has become a big growth area in the last two years.

     A sampling of its products includes surveys related to work force commitment, physician engagement, reasons for leaving, turnover vulnerability, diversity analysis and change readiness.

     Morehead takes on firms of all sizes, says Welton, but the average client has about 5,000 employees. Currently, its largest client has a 60,000-person work force. Yet Morehead has helped smaller companies as well, some as small as 100 employees.

     “I am not sure of the exact number of people we’re surveying annually, but it’s somewhere between a half-million and a million across the country,” Welton adds.

The surveys actually use statements which employees are asked to rate in terms of satisfaction and importance. Some examples: “The person I report to treats me with respect.” “Employees’ actions support this organization’s mission and values.” “I am satisfied with the recognition I receive for doing a good job.”

     To determine what to ask and what to do about the results, each client is assigned a senior consultant from Morehead who is typically an industrial/organizational psychologist at the doctoral level. Working with that consultant is a project manager and a team of specialists.

     “There are three things we focus on,” says Larry Tilson, who joined Morehead in 2001 as vice president of marketing and in 2008 became president. He lists the survey, followed by the information from the survey boiled down to some meaningful metrics, and finally, the most important, the solutions.

     “The solutions are the consulting that goes on around that data with senior management, helping them understand how to respond,” Tilson says.


Getting Real Results

     Morehead operates with two cardinal rules for the process that typically takes six months. “One, share the results with everyone. Two, construct an action plan for afterward,” Welton says. “Everyone needs to take these results and say, ‘Now, what are we going to do about them?’”

     Craig recalls a health care organization with overall employee results that weren’t particularly bad, but the employees were dissatisfied with their retirement plan. The entity put together employee forums and subsequently made significant changes to the plan. Employee participation quickly jumped from 18 percent to 65 percent. Concurrently, the organization markedly improved its overall performance scores against its national peer group.

     Yale New Haven Health System, a part of Yale University, has worked with Morehead for more than a decade, according to Kevin Myatt, its senior vice president of human resources. In April and May 2008, Morehead conducted a complete employee opinion survey for the system’s three locations encompassing 13,000 employees. The system is using the results to address areas of concern with operating unit supervisors and managers, urging development of action plans for improvement.

     “We appreciate Morehead’s level of service, their familiarity with products, and their willingness to run specialized reports the way we need to have them run,” says Myatt. “They’re really tailored to meet our needs and they are very customer-focused.”

     By contrast, Welton readily admits Morehead sometimes encounters ugly situations. He remembers two instances where survey responses were so negative that company executives buried them.

     “We don’t really want to do a survey with someone if they’re not going to share the results with the employees,” he says. “It’s counterproductive. It’s why people have cynical attitudes about employee opinion surveys.”

     That marks a difference between what Morehead offers and the typical employee surveys of decades past, he says. He uses the term “rear-view mirror” to describe older-style assessments that reported to management: “Here’s what you have been like, based on what employees said, so here’s your good news and bad news about what they think of you.”

     Morehead goes far beyond that by using advanced statistical techniques and other lessons learned through the years. Indeed, Craig calls what the company does a science.

Tilson picks up on that. “It’s a science in that we know what to measure,” he says. For hospitals, for example, Morehead uses advanced statistical methods such as structural equation modeling to look at employee behaviors that drive positive outcomes for patients. “You’re allowing the client to increase the probability of an outcome,” Tilson explains.

      Another way Morehead uses research, both its own and what is available in the field, is to identify factors that cause employees to stay with an organization. In the industry, it’s called “embeddedness,” Tilson says. Measuring those factors for a client, Morehead can predict where it might be at risk of losing employees.

     That emphasis on why employees stay is new and valuable, Tilson says. “Once you know that, you can begin to look at what’s going on in your organization and be proactive rather than reactive.”

     Welton picks up the theme of using statistical analysis very creatively for unusually good results. “It’s a dynamic field,” he says. “Today, our clients will buy multiple products and services whereas 10 years ago they were buying one product and that was ‘How satisfied are our employees?’”

     Remembering his roots, Welton feels many clients, in a de facto way, seek to build a socially just organization. “The concept,” he says, “is whether everyone who works here is going to be treated as valuable as opposed to being treated as someone we can use and throw away.”


Setting a Good Example

     Operating in 10,000 square feet in a former warehouse on West Morehead Street, Morehead boasts several progressive internal practices.

     “We’re an open book company,” Welton says, explaining that every employee can see all financial details except individual salaries. Further, there are no executive perks. Welton has devised his own program for employee ownership, and shares of the firm are available for everyone within a year of employment.

     “It’s not a gift, because I consider it earned,” Welton says. “But you don’t pay for it. It’s performance-based.”

     Morehead has invested heavily in technology. “Three years ago,” Tilson says, “we made the decision strategically that technology was no longer a back office, peripheral system. It had to be moved to the forefront and merged with our science for our value to be sustained. We did begin investing and have a proprietary technology platform that gives us a lot of flexibility.”

     Welton stresses work-life balance, in contrast to many consulting firms that keep key personnel on the road from Sunday night until Friday evening. Yet he does value a strong work ethic. “It’s management’s job not to abuse that,” he says.

     Now 64, Welton last year made Tilson, 51, president and put him in charge of Morehead’s daily activity.

     “It was a pretty big deal for me,” Welton says. “I was chairman, CEO and president for 29 years. I think Larry is a wonderful person for this time and for the future of Morehead. Everyone in this organization respects Larry. They trust him.”

     Tilson names Welton as his mentor, acknowledging that Welton taught him a bias for action. “I lean a little bit on the analytical side. There comes a point when you stop analyzing and act.”

     Welton calls Tilson “a genius model builder,” praising his acumen for building the processes and business models for the firm.

     “We’re a fast-growing company,” says Welton, citing a 23 percent annual revenue growth from 2006 through 2008. Given the recession, that could drop to 15 percent this year. Still, he projects Morehead will double its size in four years.

     Geographic expansion is likely. Morehead already operates a small office in San Francisco, reflective of a strong west coast client base. Welton wants a presence in Chicago and New York and maybe other strategic spots.

     But expansion won’t be haphazard. Showing his analytical affinity, Tilson says the firm will be deliberate in building its capability and size. He emphasizes careful growth.

     “That transition from a small, entrepreneurial company to a more fully managed, mature company,” he says, “that’s been something we’ve been very focused on in the last couple of years.”

Ellison Clary is a Charlotte-based freelance writer.
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