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Winning the Next Generation of Innovators

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How to attract, engage, and retain Millennial talent.

The way businesses need to organize and behave has fundamentally shifted. Across industries, companies, and organizational functions, we have heard many of the world’s most innovative companies echo the same challenge: businesses must urgently embrace a more nimble and entrepreneurial approach in order to stay competitive. We call this challenge of how big companies can leverage scale while staying innovative “big entrepreneurship.” Winning the Next Generation is one of five pieces in our report, Big Entrepreneurship, aimed at deconstructing some of the complex challenges around big entrepreneurship and provide actionable insights for business leaders.

This report was created by Fahrenheit 212, a global innovation strategy and design firm. We define innovation strategies and develop new products, services, and experiences that create sustainable, profitable growth for our clients. We challenge the belief that innovation is inherently unreliable and have spent the last decade designing the method, building the model, and assembling the minds to make innovation a predictable driver of growth for our clients' businesses.

Published in: Business
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Winning the Next Generation of Innovators

  1. 1. How to attract, engage, and retain Millennial talent Winning the Next Generation of Innovators
  2. 2. Big Entrepreneurship The way businesses need to organize and behave has fundamentally shifted. Across industries, companies, and organizational functions, we have heard many of the world’s most innovative companies echo the same challenge: businesses must urgently embrace a more nimble and entrepreneurial approach in order to stay competitive. We call this challenge of how big companies can leverage scale while staying innovative “big entrepreneurship.” This report aims to deconstruct some of the complex challenges around big entrepreneurship and provide actionable insights for business leaders. Fahrenheit 212 Fahrenheit 212 is a global innovation strategy and design firm. We define innovation strategies and develop new products, services, and experiences that create sustainable, profitable growth for our clients. We challenge the belief that innovation is inherently unreliable and have spent the last decade designing the method, building the model, and assembling the minds to make innovation a predictable driver of growth for our clients’ businesses. www.fahrenheit-212.com | marketing@fahrenheit-212.com @fahrenheit212 | #bigentrepreneurship 5Big Entrepreneurship
  3. 3. 20Asageneration,therehasn’tbeenanagegroup asdisruptiveastheMillennialssincetheBaby Boomers.Theyhavedifferentexpectationsof theworldandusecompletelynewplatformsto mobilize,communicate,andcreate.Ofcourse companieswanttoengagewithagroupthatis abouttooutspendtheBabyBoomers,evenwhen only20%ofthegenerationhasreachedtheir peakearningyears.Andtheyaren’tjustcreating trends,theyarecreatingentirenewindustries. 2Big Entrepreneurship Winning the Next Generation of Innovators
  4. 4. Yet, many established brands are failing miserably at sustaining Millennial interest. For companies looking to bring on the next generation of innovators, they will need to become more innovative and quickly prepare to attract this new workforce. Innovation is imperative for revenue growth, but it’s also hugely important for attracting and retaining talent. The longer-term dimension of innovation is the need to maintain a culture of innovation by bringing new innovators in that can continue to evolve the business. To do so, companies need Millennials on their teams. That “lazy, entitled, selfish” generation of workers is quickly becoming a company’s most important asset: attracting the rising generation of talent is necessary for businesses looking to stay relevant into the future. For established companies, this can be a daunting task: Millennials notoriously prefer startups to corporate environments, and appealing to their work culture would mean drastically changing one’s own. How does a large company appeal to the Millennial workforce when 72% of Millennials already want to be their own boss? And with 78% of Millennials stating they are influenced by how innovative a company is when deciding if they want to work there, innovation has become necessary to attract and retain a talented workforce in the future. 3Big Entrepreneurship Winning the Next Generation of Innovators
  5. 5. Millennials grew up more connected to technology, are a more diverse group, are more educated, and are also starting out their lives with higher average debt than generations before them. A unique set of influences impacts their expectations and habits. It’s been easier for businesses to brand Millennials as spoiled and entitled than make the difficult changes that will be required to draw them in. But, Millennials have just become the largest segment of the workforce. The challenge has already changed from “what will we need to do” to “how do we get them here?” Driving Forces 4Big Entrepreneurship Winning the Next Generation of Innovators
  6. 6. 5Big Entrepreneurship Winning the Next Generation of Innovators The journey matters more than the destination Driving Forces Despite the stereotypes, Millennials actually stay with their employers longer than Generation X workers did at the same ages. They are also more educated than any other generation before them. All of these factors have massive implications on their expectations of work and the role that work plays in their lives. They expect work to be more fulfilling, to help them grow, and for the company to give back to them the passion and dedication that they give to it. Stop defining careers by the next promotion and consider the entire journey required to grow them into that next role.
  7. 7. It is designed to avoid allowing “HiPPO” (Highest Paid Person’s Opinion) to inhibit innovation while also providing employees with the tools and empowerment to share ideas. The results have included Amazon’s shopping cart recommendations, which was rolled out despite a HiPPO who didn’t believe in it. 6Big Entrepreneurship Winning the Next Generation of Innovators There is big value in learning Driving Forces Only 12% of Millennials in North America put an emphasis on being wealthy in life. Yet, 52% of them prioritize growing and learning new things. They consistently prioritize personal growth and a successful career over being wealthy. Companies must embrace this shift in prioritization and become teaching organizations. Provide constant training and leave room for personal development. Not only can this training make them more productive employees, but it can also teach them to better develop and support innovative ideas. Amazon’s data-driven culture encourages employees at all levels to improve the company through customer insight.
  8. 8. 7Big Entrepreneurship Winning the Next Generation of Innovators Gone are the days of the suit, office, and regular hours Driving Forces To Millennials, traditional workplaces stifle their creativity and sense of individuality. However, the workplace can also enable mentorship and guidance. 79% of Millennials want their boss (if they absolutely have to have one) to be a coach or mentor, which can set them on the path towards great leadership.
  9. 9. Unlike past generations, they also actively resist the suit-and-tie culture and that dreary 9-to-5. In fact, self-employment rose 24% between 2003-2013. Not everyone can be making millions in a t-shirt in a Silicon Valley garage, but large companies can harness that spirit, that casual ingenuity, and collaborative work ethic in their offices. 88% of Millennials insist on collaboration over competitiveness in their work culture, which defies the very cornerstone of business culture built by Baby Boomers. 8Big Entrepreneurship Winning the Next Generation of Innovators Gone are the days of the suit, office, and regular hours Driving Forces 88% of Millennials insist on collaboration over competitiveness in their work culture.
  10. 10. 9Big Entrepreneurship Winning the Next Generation of Innovators Collaboration is tearing down cubicle walls Driving Forces Millennials want to be able to suggest new products to companies, and they should be given that kind of access with the proper nurturing. They want feedback, but they also want to be a contributing voice in the company’s future. The Ritz-Carlton brings their hotel staff into their innovation process, providing each staff member a “preference pad” that they carry with them to write down observations from studying guest habits so that they can help better meet guest needs. One new service launched as a result was a debit card for children of guests to use in properties when they are not with parents.
  11. 11. 10Big Entrepreneurship Winning the Next Generation of Innovators New workplace demographics highlight lack of diversity Driving Forces Millennials are more critical of layers of management and operational structures. They are also more conscious of lack of diversity because of their inherent diversity. Another major change is the role of women in the workforce: Millennial women have more education than men, and their rising professional aspirations have put their ambitions on par with their male peers. As these changes in employee demographic become more pronounced, there is no more critical time to ensure that employers consciously address very real issues such as the gender pay gap and workforce diversity. Deloitte recently revealed that one out of five Fortune 1000 organizations still have no formal diversity efforts structured (nearly half of respondents saying they’re “too busy”); unsurprisingly, talent gravitates towards entrepreneurial companies such as Facebook and Netflix who are consciously addressing policies to reflect the realities of the modern workforce. With Netflix’s new unlimited parental leave policy for new parents, they are setting a standard that will see other forward-thinking companies follow.
  12. 12. Nadira Hira, author of the forthcoming book, Misled: How a Generation of Leaders Lost the Faith (And Just What You’ll Need to Get It Back) “Foster a culture that mirrors what start-ups do best: be the kind of place that evaluates constantly and stays ready to react when big challenges or possibilities present themselves. Encourage ideas, empower employees, hire high-energy managers — 11Big Entrepreneurship Winning the Next Generation of Innovators
  13. 13. 12Big Entrepreneurship Winning the Next Generation of Innovators An entrepreneurial culture does not happen by accident Driving Forces Employees get 20% of their time to spend on personal projects that align themselves with the objectives of the company. A great opportunity for the employee, 20% time has also been equally as rewarding for the company. Gmail, the email service that almost 1 billion people use, is a product that came out of 20% time. Rajen Sheth pitched the idea not after spending 10 years in the company, but at his interview. With the help of mentors and peers, Sheth was able to develop Gmail initially as a side project under the codename “Caribou.” The result is one of the most important and successful services that the company offers. Mature organizations that grew from startups have built themselves to be more flexible, creative, and collaborative. As they grew, that culture had to be purposefully maintained. Not surprisingly, Google is the number one company that Millennials want to work in. The benefits that attract employees revolve around a great culture of innovation, including their 20% time policy. Giving employees the equivalent of one work day a week to spend on personal projects may sound crazy to most business leaders, but the reality is that the flexible, creative time works to their advantage.
  14. 14. 13Big Entrepreneurship Winning the Next Generation of Innovators Incentives must go beyond the cash bonus Driving Forces Like with other aspects of their lives, Millennials are looking for experiences. So while cash bonuses and fiscal rewards have worked well as incentives in the past, Millennials are looking for slightly more creative set of incentives and perks from employers. They want their employers to also offer them experiences, learning opportunities, and fresh perspectives. Tony Hsieh, CEO of the billion-dollar online retailer Zappos has always been known for his zany office antics, but in 2013 he took things to the next level by establishing his company as a “Holocracy,” that is, a self-governing operating system where there are no job titles and no managers. His radical experiments with company culture may not be for everyone, but Zappos remains featured as one of Forbes’ Best Companies to Work and is projected to generate $97 million in profit in 2015.
  15. 15. 14Big Entrepreneurship Winning the Next Generation of Innovators Technology is a cornerstone for collaboration Driving Forces For this tech-savvy generation, a Jetsons-like office isn’t necessarily the answer. However, technology has facilitated personal interaction and collaboration for a large part of this generation’s lives. Millennials have almost always had a way of being constantly connected to each other. In the 90s, it was AOL Instant Messenger and email. Today, it’s any combination of SMS, Facebook Messenger, Snapchat, WhatsApp, Line, or Twitter. These constant streams of communication are a basic expectation for the way they live the rest of their lives. This trend is hitting desks (and coffee shops and apartments) through new professional services that help streamline and enable remote workplace collaboration, such as Slack, WeWork, and Box.
  16. 16. 15Big Entrepreneurship Winning the Next Generation of Innovators Technology is a cornerstone for collaboration Driving Forces Across fields, the move towards more lean and agile approaches is changing the ways Millennials prefer to work. Slack is being positioned as the “email killer,” which aims to take employees out of Outlook (and a range of other services) to focus on connecting with each other more efficiently and effectively. Looking to take on PowerPoint, Bunkr is a presentation tool that enables any visual content to be collected and simply organized through a web app. Even in the digital product development realm, services like InVision make it easier to show ideas and prototype on the fly; long gone are the days of doing a big reveal of the concept at the end.
  17. 17. Taking Action A new approach to attracting, developing, and retaining this and future generation of employees is inevitable. But it isn’t impossible. 16Big Entrepreneurship Winning the Next Generation of Innovators
  18. 18. 17Big Entrepreneurship Winning the Next Generation of Innovators 01 A good paycheck is not on its own a big enough carrot. Millennials are seeking a meaningful experience in their work. Leverage the workforce to help improve processes and contribute to company growth. The company will gain fresh perspectives while employees will gain experience and feel engaged. 03 Value results over tenure Set Millenials free Help your talent grow 02
  19. 19. 18Big Entrepreneurship Winning the Next Generation of Innovators Mentorship, education, and travel are some of the most sought after methods of personal growth, but the inherent quality in each of these methods is flexibility. The 9-to-5 job is a tired formula, particularly for future generations who expect to be constantly connected and able to communicate and collaborate freely. To accommodate this need while still encouraging productivity, give Millennials concrete targets and clear timelines, but don’t stress about the tactics they employ. Provide them with collaboration tools and the means to work remotely, with global teams, and more effectively. 03 02 01 Value results over tenure Set Millenials free Help your talent grow
  20. 20. 19Big Entrepreneurship Winning the Next Generation of Innovators 03 02 01 Value results over tenure Set Millenials free Help your talent grow Career advancement has historically been driven by seniority and length of service to the company. Millennials take on a completely different mindset, championing results over tenure. Help your company battle HiPPOs by rewarding for results, not time. As Millennial workforce expert Nadira Hira advises: “make your Millennials feel like partners in that mission; there’s nothing we won’t do—from putting in crazy hours to turning down great offers elsewhere—when we have a sense of ownership.”
  21. 21. Do we have the right metrics in place for measuring impact and growth? Do we have the mechanisms in place for promoting personal and professional growth? What does our entire employee journey look like? Why do certain office protocols exist? Do they need to? Do we have a problem with HiPPO syndrome? 01 0302 04 05 20Big Entrepreneurship Winning the Next Generation of Innovators Key considerations for big companies
  22. 22. The Paradox of Scale Incubating Innovation Winning the Next Generation of Innovators The Rising Billion The Chief Innovation Officer, Redefined Big Entrepreneurship 01 02 03 04 05 67Big Entrepreneurship Winning the Next Generation of Innovators Mary connects with innovators on a global scale to create and share Fahrenheit 212’s stories. As a Millennial, social media advocate, and writer, Mary helps drive conversations and offer insight on innovation with various global audiences. She has harnessed the power of social media to communicate with journalists overseas as well as translate and fact check breaking news. In addition to her role at Fahrenheit 212, Mary also writes frequently for travel and culture publications [wherever] magazine and Warscapes. Her love of writing has allowed her to travel to over thirty countries as a researcher and journalist. Thanks to social media, she continues to bring people and ideas together on the web. About the author Mary von Aue Content Manager mvonaue@fahrenheit-212.com
  23. 23. Fahrenheit 212 defines innovation strategies and develops new products, services, and experiences that create sustainable, profitable growth for our clients. We challenge the belief that innovation is inherently unreliable and have spent the last decade designing the method, building the model, and assembling the minds to make innovation a predictable driver of growth for our clients’ businesses. www.fahrenheit-212.com marketing@fahrenheit-212.com @fahrenheit212 #bigentrepreneurship New York 665 Broadway, New York, NY 10012 +1 (646) 654 1212 London 31 Great Sutton St, London EC1V 0NA +44 0 20 3567 0820 Copyright © 2015 Fahrenheit 212.
  24. 24. Time, “Millenials: The Me Me Me Generation” (2013) http://time.com/247/millennials-the-me-me-me-generation/ Instagram, https://instagram.com/p/5psO-RpcwN/?taken-by=fahrenheit212nyc Forbes, “What Millennials Want In The Workplace (And Why You Should Start Giving It To Them)” (2014) http://www. forbes.com/sites/robasghar/2014/01/13/what-millennials-want-in-the-workplace-and-why-you-should-start-giving-it- to-them/ Harvard Business Review, “What Millenials Want from Work, Charted Across the World,” (2015) https://hbr. org/2015/02/what-millennials-want-from-work-charted-across-the-world The Council of Economic Advisors, “15 Economic Facts about Millennials” (2014) https://www.whitehouse.gov/sites/ default/files/docs/millennials_report.pdf Fast Company, “How treating your employees like turtles can smother innovation” (2012) http://www.fastcompany. com/3002484/how-treating-your-employees-turtles-can-smother-innovation Business Insider, “The 9-to-5 job is dying” (2015) http://www.businessinsider.com/the-9-to-5-job-is-dying-2015-6 Forbes, “What Millennials Want In The Workplace (And Why You Should Start Giving It To Them)” (2014) http://www. forbes.com/sites/robasghar/2014/01/13/what-millennials-want-in-the-workplace-and-why-you-should-start-giving-it- to-them/ Fortune, “100 Best Companies to Work for 2015” (2015) http://fortune.com/best-companies/zappos-com-86/) Zappo’s CLT, http://about.zappos.com/press-center/media-kit Flickr, “Zappos Office Tour” https://www.flickr.com/photos/techcocktail/ Slack Brand Kit Photos, https://brandfolder.com/slack References

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