If you lose the Millennials – you lose!

 

Corporations with long tenure in mature industries often operate based on a number of principles that is reasonably stable. The most important one is that the future success of the corporation is based on the same principles as the historic success. The leads to an operating principle focusing on continuous improvement: Evolution over revolution or small incremental changes to what was done last year. The model is also based on a view of the market as a place with stable boundaries and actors that are quite similar and unchanging – a place of competition.With the rise of first the internet and later the revolution of social networks, unlimited power of the cloud and the rapid move to mobile technologies, no industry is immune to disruptive changes.It is well known that the disruption can come from a change in product offerings, like the iPhone changed the mobile industry. It can also come from outside the market boundaries like Google’s absorption of advertising budgets or it can be a disruption of the supply chain the way Blockbuster died from Netflix competition. Most mature companies are aware that they need to keep an eye on changes in the market structure, customer preferences.
There is however a significant change underway that will fundamentally change the way corporations has to operate in order to succeed independent of what industry or market they operate in. The rise of the Millennials or generation Y as people born in the 1980 -2000 time span has been categorised. This is not a surprise to the marketing departments of consumer based corporations – they know Millennials are different customers to the prior generations (generation x and baby boomers) and work hard to position offerings attractive to them.
What seems to come as a surprise is that Millennials are also becoming a significant factor as employees. 

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Before 2020 Millenials and younger generations  will become the dominant part of the labour market everywhere, and most of them will work in an environment designed by generation X for generation X. This is likely to fail, just ask your marketing department.

 

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survey done by beyond.com shows that the gap between Millennials perception of themselves and that of HR professionals are very different, This indicates the expectations of the corporations based on Gen X thinking and that of Millennial employees are very different – a recipe for disaster.
The problem has still not become visible as very few corporations has been in talent acquisition mode since the financial crisis but as Gen X moves towards retirement it will become an issue
It is easy to point fingers at HR and HR policies and blame them for not adapting to attract and retain the new employees but the problem goes a lot deeper. Millenials don’t see work as a chore like the baby boomers and they don’t see it as means to an enjoyable life outside work like generation x. They are hard workers but not motivated the same way as earlier generations. Millennials want freedom, trust, support, fun and they need a higher level purpose to really engage. Corporations need to develop a purpose above and beyond profit and revenue. To attract and keep Millenials, it is imperative to create an environment of personal growth, equality, Social/Environmental responsibility, freedom and team spirit.

Are your company’s policies designed to enable employees or limit them?

This might sound alien to companies firmly based in command and control thinking but it is already being implemented by successful companies in the new economy. Google, Amazon, Netflix, Tesla and similar companies are ahead and design their people policies very different.

You are not only competing with these companies for the consumer
You are also competing with them for the employees.

The 6 Drivers of Employee Engagement

The world of management is still obsessed with the mechanistic view of employees as resources, something that can be acquired and exploited in the quests for profit. This has been covered up by improvement in working conditions, benefits and skill training programs and it has even made the executive wall: People are our greatest strength. Despite this apparent progress most corporations still treats people as a commodity. HR departments are tasked with getting the best resource, shaping the resource with skills training, keeping the resource with competitive compensation packages and finally getting rid of the resource if it does not live up to expectations.

The employee is seen as something that has certain characteristics that can be changed (skills) and something that cannot (personality and motivation). When something goes wrong the problem is assigned to the employee rather than the corporation and the personal improvement process starts often resulting in a termination and a search for more appropriate resource.

Assuming that employees are  “good” or “bad” and corporations are always “right” makes the life of management a lot easier but not necessarily the company more effective and profitable. It is not going to be possible to find Engaged employees and hire them. Employee Engagement is a strategic process that creates an emotional relationship between the company and the employee. The best of companies understand this an know that Engagement is the responsibility of the company - not the employee. When successful Employee Engagement creates significant intrinsic motivation in the employee and a feeling of being part of something important and worthwhile.

 

Employee Engagement is impacted by 6 main drivers:

Fairness:

The concept of fairness being important for employee engagement is not new. What is often forgotten is that fairness is completely subjective and changes over time. People don’t see their parents work contract as fair. For younger generations, the concept of fairness goes well beyond the psychological contract between the corporation and the employee – it involves the fairness towards all stakeholder groups. An important part of fairness that is often forgotten is the relative fairness - people can be happy with what they got until they find out somebody gets more.

 

Identity:

Through the development of social psychology it has become apparent that people’s decisions are heavily influenced by social settings and what group people belong to. As work represents a significant part of most people’s lives they derive a lot of their identity from work. Great corporations understand this and create jobs and an organisation that individual are proud of being associated with. 

Identity is significantly influenced by what other people think of you, what you do and your role. This is not people inside the organisation, the view of your friends and family matters.

 

Growth

Being appropriately challenged and given the opportunity to learn and grow is a key element in employee engagement. Is the corporation a place where mistakes are seen as learning opportunities or where they are punished? Is HR and their policies and procedures seen as enabling people or limiting them? Do employees have the opportunity to be promoted at appropriate points in their career or are they locked in their current position.

Getting people on a path to mastery is a powerful motivator and a key driver of Employee Engagement. Great corporations know that growing people is the responsibility of the corporation.

 

Purpose

The days of pure focus on shareholders are over. Money, profits and growth is not a purpose – it is an outcome of successfully pursuing a purpose. Being the very best “x” in the “x” industry is a very common vision, but not a powerful purpose. A powerful purpose is in its essence something that benefits many if not all stakeholders of the corporation – a purpose that benefits society and humanity. This might sound soft to hardnosed finance people but customers and employees do not get engaged by cost cutting and headcount reductions in a race to zero margin as most mature companies are engaged in.

Companies that believe in people and in their ability to create value for customers and society have the potential to rally all stakeholder groups around a strong purpose and will prosper as they will create engagement in all groups.

 

"Think of your work as a calling with a mission that matters." Lazlo Bock, Head of People Ops, Google

Culture:

The company culture has a significant impact on Employee Engagement. It is not just the stated culture hanging on the boardroom wall but also the lived culture. What Enron said and did were two completely different things. It is also important to understand how measurements and rewards interacts with culture: Individual bonuses and a culture of teamwork are working against each other. Culture is not something that has been written on stone tablet and remain fixed in time. Culture needs to change as the strategy changes.

 

"You’ll see culture mostly talked about as stories or anecdotes. It’s a vague concept that people sort of know is important, but they don’t quite know how to apply."

"You need  to get the people, structure, metrics, and culture aligned with the strategy." Charles A. O’Reilly, Stanford

Leadership:

The most important source of Employee Engagement is the direct manager. Even though the creation of Employee Engagement is a strategic process, it is vital to make sure the middle managers are trained and supported to create highly Engaged Employees. Direct managers are responsible for defining a reality and a purpose for the employee that creates motivation. Then create opportunities for participation, growth and involvement in decision processes.

51% of managers are not engaged; 14% are actively disengaged

 

Managers who work for Engaged Leaders are 39% more likely to be Engaged

 

Employees working for Engaged Managers are 59% more likely to be Engaged Gallup