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The Big Gamble

biggambleCHRO Kawel LauBach took a chance, and it paid off for Mohegan Sun’s employees.

By The Editors

Kawel LauBach understands the high risk—and high reward—of taking a big gamble. The chief human resources officer of the Mohegan Tribal Gaming Authority rolled the dice by going from a managerial role at UPS to a services role at Southwest Airlines—a career restart that required LauBach to use his brawn to load and unload planes. It was a gamble that paid off: He was promoted five short months later, and it was at Southwest where LauBach discovered the business philosophy that drives his strategic decision-making today.

After Southwest, LauBach entered the gaming industry. He signed on to Harrah’s Entertainment as an HR executive at their Louisiana properties in 2003. In 2005, he moved on to Mohegan Sun at Pocono Downs, where he became an integral part of the original management team tasked with opening the first casino in Pennsylvania. After his stint as vice president of administration, overseeing non-gaming operations, human resources, and guest service functions there, he earned his current role. LauBach currently now manages HR and guest services for Mohegan.

LauBach’s innovative approach to business helped Mohegan Sun at Pocono Downs earn the accolade as a premier employer in the Wyoming Valley. LauBach was also recognized by the Times Leader of Wilkes-Barre, PA as a “40 Under Forty” and by HRO Today as a CHRO of the Year nominee in 2013.

On July 21, HRO Today CEO and Publisher Elliot Clark had the opportunity to sit down with LauBach in his Connecticut office to discuss his professional gambles, his business philosophy, how he handles all of his responsibilities in and outside of HR, and how his leadership drives a 94 percent employee satisfaction rate among 13,000 employees enterprise-wide.

HRO Today: What impact does your early career have on you today?

Kawel LauBach: I began my career at UPS and it was truly my indoctrination into business. UPS had a very strong analytics base, but it was a challenging place to work at the time. One of my colleagues, who had left UPS, called me out of the blue and suggested I come work at airline carrier Southwest. It was a huge risk at the time. I was already a supervisor at UPS, and at Southwest, they promote from within—meaning I would basically have to start over. But two things sold me to take the risk: the passion of my colleague and the interview process at Southwest.

Southwest was so leading-edge in their process that I was recruiting them as much as they were recruiting me. During the hiring process, they didn’t ask many technical questions about my resume and professional experience. Instead, they were analyzing me on a social and interpersonal level. They asked me questions about who I am and why I wanted to work for them. Today at Mohegan, we do much of the same. We have behavioral-based interviewing to see how candidates engage themselves in our customer-facing environment. We measure candidates’ friendliness and attitude. We leverage group interviews to get a sense of the potential dynamic between the candidate and employees.

So that first impression through interviewing at Southwest really sold me. I started at the airline loading planes and within five months, I was a supervisor. It was there that I started to get interested in organizational design and culture.

My time at Southwest was the catalyst to my current beliefs in business today. The organization had a unique perspective of human capital that is more common today—the internal brand is the same as the guest brand. Here at Mohegan, job applicants are potential costumers. We strive to be strong on the interpersonal side and have a huge selection ratio. We’ve branded ourselves to offer a strong quality of life.

HROT: Southwest Airlines is an organization that is consistently recognized as a best place to work. What was the culture like?

KL: One instance was a huge game-changer for me. Herb Kelleher, the CEO of Southwest at the time, came up to me on the ramp that I was loading and unloading. I remember him asking me how long I had worked there—it was about five or six months. He thanked me for my work and said he appreciated me being there. He mentioned his name was Herb and that was that. It didn’t resonate until a coworker asked me if I knew who it was. As CEO, Kelleher wasn’t pretentious and didn’t make anyone feel uncomfortable. Some CEOs feel they have to have a certain persona but that persona is contrary to motivation. It’s humility and a servant’s heart that drives profitability.

At Mohegan, we’re in the guest services industry and you can’t drive successful guest services through policy and procedures. The environment and work has to be fun and friendly for our employees, and the CEO and senior leadership also have to embody this culture.

HROT: How did you make the move into HR?

KL: In the ‘90s, there was a noticeable void in HR’s contribution to operations. There was a siloed approach to business and HR was missing the strategic aspect. Kelleher got that and promoted people who understood it too. I started reading about industrial organizational psychology, and eventually studied it at Middle Tennessee State University while with Southwest.

I began to rethink HR. Sure, there were lots of policies and procedures for managing employees, but HR wasn’t creating return on human capital. How do we get employees excited to come to work and want to be at their jobs? It’s fundamentally about reciprocity: If you give your employees a lot, you will gain a lot. People who invest in your organization will end up succeeding.

In an industry where average turnover is more than 40 percent, Mohegan only has 14 percent turnover. From day one, the tribe and senior leadership have always worked to create a culture and environment where individuals enjoy coming to work. We conduct a weekly survey for both guests and employees, and their results show correlation. We have 13,000 team members and hundreds of thousands external guests. Ninety-two percent of guests rate their experience as A or B, and 94 percent of our employees love working for us. Those numbers move together. So if employee sentiment goes up or down, so does guest sentiment. HR and guest services go hand-in-hand.

HROT: What policies and programs drive this engagement?

KL: I have brought a creativity that focuses less on extrinsic motivation and more on intrinsic. Everyone in HR knows that people don’t leave companies; they leave managers. We have keyed in on senior human capital team leaders that provide blow away service to their staff. We have eliminated that “they versus us” mentality on a workforce level. Managers are still employees.

We’ve also launched some incentive initiatives that integrate the employee experience with gaming.
The “employee of the month” award is a typical motivational approach, but organizations end up using all their capital for less than five percent of their workforce. There’s no validity to it.

Recently we created an initiative around attendance where employees with perfect attendance within a time period were given the chance to grab thousands of dollars in a money booth. We started this in the middle of the month, and there was some unease among the employees who had already taken a day off. But we wanted to keep employees on their toes and not play by the old rules. Of course, this wasn’t the only incentive program we were going to do, so there were opportunities for employees to win in the future.

In the end, nearly 20 people had their turn in the money booth. And we weren’t fooling around—there were several $500 bills in there. I saw it as an HR reinvestment and a strong motivator to get people to come to work.

As directors of HR, we need to think about the wow factor. When I was at Mohegan Sun at Pocono Downs, we held an employee rally with a $20,000 car giveaway. There were nine fake keys and one real key that would start the car. There was a lot of excitement around the event. I remember the second to last key started the car, and the employee who won it, really needed it. Even those who didn’t win loved it. We could have spent the investment on key chain or widget, but this really blew the employees away.

HROT: In your role, you handle HR and guest services.
At Pocono Downs, your responsibilities also included security, facilities, food, and beverage among HR and others. We see the role of the CHRO expanding outside of the HR silo. What do you think should be part of HR and how do you see the HR role evolving?

KL: My world is spilt between operations and HR, and I come with a lot of operations experience so it works for me.

Organizations are starting to realize that they really need a strong emotionally intelligent leader. A strong component of being in HR is emotional intelligence.

There is a strategic aspect of business that organizations may miss and they could learn from HR. On an operations side, you have to find strong people to surround yourself with and who can help your entire organization succeed. One of your biggest costs in gaming industry is labor, so it makes sense to find people who understand this strategic aspect.

For guest services, one of the first things I did was launch an enterprise solution so everyone was on the same measurement tool to gauge a guest sentiment. When I first started, each resort approached it differently. But I knew strategically to be able to create an uniform message, there needed uniformity in the measurement tool. We created that survey tool on a brand level. And those surveys show the strength between HR and guest services: If employee sentiment increases, so will guest sentiment. HR and guest services go together.

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