Time to Stop Judging & Start Mentoring Millennials

Sustaining Innovation in the Millennial Age: Why Everyone is a Millennial

Originally posted on RiseSmart’s blog.  

In a four part series, innovation and “growth hacking” consultant, Lockie Andrews outlines the primary forces that drive millennial engagement – and the surprising connection between millennial-friendly cultures and innovation.

Last month I hosted a RiseSmart webinar (recording available here) in which I presented 5 Ways Innovative Companies Attract and Retain Millennials.

MILLENNIAL RESEARCH

A quick search on Amazon reveals over 5,000 books on Millennials. The research studies and academic papers on this generation are equally voluminous.

It seems everyone has chosen a side in this debate. Are Millennials different from prior generations? Why do they still live at home with their parents? Do they deserve the title of entitled and lazy?

What’s lacking in this debate, and what I plan to contribute, is a forward-looking and constructive analysis on the impact Millennials will have on future organizations.

After all, whether they are different or the same, and whether you like or dislike their behaviors, Millennials are who they are. They will change, like all generations, but change will come slowly- and the business world needs them now.

To build my prescription for Millennial engagement, I based my research on a recent study by Gallup. I prefer Gallup’s How Millennials Want to Work and Live, 2016 because it presents survey results with low bias and judgment.

What’s also compelling about the decades of research from Gallup, is the easy comparison between empirical data sets for Millennials, Gen Xers, Baby Boomers and Traditionalists. There is clear evidence that Millennials are the least engaged generation at work (at this age), and that there are other substantive differences from prior generations.

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I’ve been mentoring and working with this cohort for some time, so these differences have been clear to me.

I’ve spent the last few years figuring out ways to engage and motivate Millennials. Because, honestly, it doesn’t matter what others think about their generation. Our opinions and assessments of Millennials will not change these hard truths:

  • Today, Millennials = 30% of workforce
  • In four years, Millennials will = 50% of workforce

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Given their sheer size and their obvious digital advantages, the business world needs to do a better job recruiting and retaining young people. The fact that Millennials feel disengaged is a problem that belongs to all of us, plain and simple.

HOW TO APPEAL TO MILLENNIALS?

So how have some companies figured out how to build Millennial-friendly work places?

Based on research and experience, I’ve identified five core characteristics that give companies an edge with Millennials.

Principles Driving Millennial Engagement

The first two principles relate to the core DNA of a company. A firm’s values and purpose are factors that are traditionally set by the founders, Board of Directors and owners.

The next two principles are processes the management team creates to execute on its purpose and values. How a company communicates and collaborates is the spinal chord of every organization. Without a healthy and flexible system, the culture, speed and business performance will be hampered.

Interestingly, it turns out that communication and collaboration are also critical enabling factors in highly innovative cultures (more to come on this finding).

The final principle is a modern mindset that appreciates both the professional and personal needs of employees. Companies with enlightened management appreciate work/life balance and show a significant level of empathy towards their employees.

All five of these principles are controllable, and with commitment and focus, can be achieved by any corporation.

SOCIAL PROOF

During the webinar, I took the audience through illustrative case studies on the top five Millennial-friendly companies that ranked highly on Glassdoor’s Best Places to Work list (Airbnb, Bain & Company, Guidewire, Hubspot and Facebook). I will explore these examples in more detail in future articles.

In the interim, do you know any companies (startup or mature enterprises) that have done a great job of appealing to Millennials? We’d love to hear your thoughts. And follow me (Blog, Twitter, Linkedin) to subscribe to this series and be a part of this important conversation!

 

Lockie Andrews is the CEO of Catalyst Consulting (www.catalystconsult.com), a boutique advisory firm to retail and consumer brands, digital, media and technology companies, as well as venture capital and private equity funds. With 20+ years of general management experience, Lockie has assisted high growth companies (e.g. Nike, Lane Bryant, Limited Stores, and various high growth startups) in diverse areas such as strategy, innovation, digital marketing, revenue enhancement, operational/financial improvement and fundraising. Lockie is a speaker, author of an upcoming book on Innovation, and a sector lead for the HBS Alumni Angels of NYC.

Innovation

The Slowdown in Tech Startup Funding

Published on Linkedin May 11, 2016

In this series, professionals at Shoptalk discuss the most pressing issues facing their industries today.

 

Waiting for fundamentals and reason to return to startup investing has been like waiting for daybreak – anticipation of the inevitable awakening. Fortunately, we didn’t have to wait too long for the current market frenzy to subside.

We’ve been here before…?

It’s only been 7 years since the end of the Great Recession and 13 years since the carnage of the dot-com bust. Despite the short timing, investors seem to have forgotten the lessons from prior downturns.

Anytime technology startups are likened to mythical creatures – thus the aptly named Unicorns; privately held startups with ZERO dollars in profits, but implied valuations of $1+ billion – that should serve as a wake-up call for sophisticated investors/advisors of an impending bubble:

An economic bubble exists whenever the price of an asset that may be freely exchanged in a well-established market first soars then plummets over a sustained period of time at rates that are decoupled from the rate of growth of the income that might reasonably be expected to be realized from owning or holding the asset.

Watching the Unicorn proliferation felt like reading a textbook.  Hopefully, the coming market correction won’t be as bad at the dot-com bust.

Dot-Com Era Revisited

In the early 2000s, the initial public offering (IPO) market was the “well-established market” that foolishly priced immature companies at astronomical levels. The dot-com startups’ growth prospects did not justify the valuation forward multiples, causing a severe market pullback.

Once investor funding dried up, dot-com management teams sealed their own fate by spending irresponsibly and prioritizing growth over profits. The rest is history.

Does any of this sound familiar?

Despite the striking similarities between the dot-com and tech startup eras, some people are questioning the current slowdown in VC investment.

So what happened in Q1 2016?

Well, I believe the first rays of enlightenment are starting to illuminate the landscape.  I am hopeful that this wake-up call is a return to reason.

Depending on which venture capital authority you trust, the market seems to be signaling that something is afoot. According to Thomson Reuters, Q1 2016 was the strongest quarter for VC dollars raised since 2006!

  •  U.S. venture capital (VC) firms raised $12 billion during Q1 2016
  • a 59% increase in dollar commitments over the same period in 2015

Now despite healthy coffers, VC investment in startups during the same period was mostly flat.  So why the disconnect?

Perhaps it’s due to the realization among investors, academics and journalists that Unicorn valuations and growth prospects are unreasonable.  Only time will tell.

Here’s the good news.  Unlike prior bubbles, Unicorns are still privately held, so VC firms and institutional investors will bear the brunt of falling valuations.  Yes, startups will suffer more closures, layoffs and belt-tightening, but the fallout will mostly be contained.

Reason vs. Unicorn Fantasies

The return to reason has already begun.  Since Q4 2015, we’ve seen signals of investor caution.  The decrease in the number of Unicorns, the down rounds and the well-publicized write-downs offer additional clues.  I am encouraged by my recent retail/consumer angel investor due diligence meetings, where the focus has shifted to questions around profitability, business model and sustainability.

In hindsight, it makes perfect sense that investors took a less analytical approach when evaluating pioneers like Facebook, Google or Amazon.  However, let’s not confuse ourselves, or be convinced by the founders of the tenth “me too” startup that their primary focus should be on growth, not profits.

Yes, now that dollars and sense are a guiding force, I’m excited to meet the last startups standing.  The winners will be startups with viable business models and loyal paying consumers.  The losers will be startups with limited addressable markets and no path to profitability.

Much like the NCAA during March Madness, what is emerging is a new breed of Cinderella startups.  Founding teams that glorify grit and avoid chasing fads and vanity metrics will come out on top.

A New Day Dawns

Of course, plenty of transformational opportunities remain.  We are still just scratching the surface in the consumer industry on artificial intelligence; virtual reality; big data; and leveraging the power of technology to automate retail.  Evaluating investments in the aforementioned sectors will take time and will likely breed a new class of Unicorns who blaze a path.

For the vast majority of tech startups in more mature sectors, nightfall lasted too long.

I’m looking forward to being a conduit for those deserving entrepreneurs with good ideas, amazing work ethic and the humility to learn from mistakes. Likewise, I’m relieved to see an end to the entitled mindsets looking for a quick exit.

Thank goodness that no matter what happens in the dark of night, dawn always comes in the morning.

@LockieAndrews is the CEO and Founder of Catalyst Consulting www.catalystconsult.com, a boutique consulting firm to retail and consumer brands, digital and technology firms, and venture capital and private equity firms.  With 20+ years of general management experience, Lockie has assisted high growth companies (e.g. Nike, Lane Bryant, Limited Stores, Concrete Platform) in diverse areas such as strategy, innovation, revenue enhancement, operational/financial improvement and fundraising.  Lockie is also a sector lead for the HBS Alumni Angels of NYC.  She will be moderating the “Beyond Venture Capital Investment” panel at @ShopTalk in Las Vegas in May 2016.

 

Sources: Dealogic, Wikipedia, CB Insights, Thomson Reuters

Startups