Transcript
Speaker: As unemployment dips below 4%, middle market companies need to focus on retaining employees as well as attracting them. One big opportunity, making millennials feel like they're part of your future. Here's what an expert has to say about how to do that. Welcome to The Market That Moves America, a podcast from the National Center for the Middle Market, which will educate you about the challenges facing mid -sized companies and help you take advantage of new opportunities.
Speaker: Today's podcast is about generational differences in the workplace, yes, the dreaded millennial word, and how middle market companies can make those differences work for them, not against them. I'm Tom Stewart. I'm the executive director of the National Center for the Middle Market at the Ohio State University Fisher College of Business.
Speaker: We're the nation's leading research organization studying mid -sized companies, which account for a third of private sector employment in GDP and the lion's share of employment and economic growth. It is the market that moves America. The National Center for the Middle Market is a partnership between Ohio State and Santros Bank's Grant Thornton LLP and Cisco Systems.
Speaker: Today I've got a special guest, Sarah Sladek, who is a bestselling author, a speaker, the founder and CEO of XYZ University. Sarah is one of the leading researchers on the differences between and among generations and how those differences affect the workforce and the workplace. She's written five books, Talent Generation is the Most Recent, and Sarah, welcome to The Market That Moves America. Thank you. I am happy to be here.
Speaker: Tell us a little bit about XYZ University, which I assume takes its name from the generations. What do you do? Why do you do it? So XYZ University studies some of the behavior shifts in membership engagement and employee engagement. And we've really seen, we've been doing this since the year 2002, and we're really seeing unprecedented demographic and economic shifts
Speaker: And that, of course, has changed engagement as we've always known it in workplaces and membership associations and government and education and beyond. And so we seek to study and really bring awareness to how to bridge these gaps and ensure that we are engaging younger generations. When you say unprecedented economic and generational shifts, what do you mean?
Speaker: We are seeing the largest shift in human capital in history, first and foremost. And this is the first major shift in human capital in over 34 years. Baby boomers were the majority of the workforce for 34 years. And we have seen a transition from really kind of the remnants of an industrial era, which is really focused on hierarchies and processes and schedules.
Speaker: to a very technology -driven, talent -driven economy, which is fueled by ideas and innovation and globalization and collaboration and all these new traits. So it's really a fascinating time, but during this time of tremendous disruption and change, of course, that's challenging organizations as they think about the future and how best to navigate it.
Speaker: So I'm a boomer, and what I hear you saying is that for 34 years, boomers were the majority of the workforce. And we as boomers came into an economy and workplaces that were still primarily organized by the economy. What we saw when we were in our 20s and 30s was still a hierarchical, somewhat industrial kind of organization.
Speaker: And though that is changed out from under us, our minds are still there in some way, because that's what we came into. Whereas millennials come into an already changed place, and now they're becoming the majority, and they're becoming the majority with a different view of what work is like. Is that fair enough? Exactly. Yeah. Exactly. So we have, yes.
Speaker: You know when when boomers were coming of age and they were the largest percentage of the workforce at that time They were raised as America's next great. Hope And that was true Yeah, yes, and it was a post -war era and the economy was booming but so much of what was happening in the workplace was really nearing What had happened during the war era? meaning very organized structured and
Speaker: borrow from military style of management and hierarchy and you start here and you move your way up and yes we have certainly seen a tremendous transition in the past oh 15 20 years and now millennials being the majority of the workforce as at the end of 2015 those types of processes and structures make absolutely no sense to them so you start to see these clashes in the workplace but
Speaker: We're also just simply seeing the evolution of work and it's just pretty fascinating when you step back and think about it.
Speaker: So the cliche, and I think you're going to tell me I hope that there's some truth to the cliche, is that we see this sort of communication generation or communication gap that senior management or older management tends to say, these kids, they want instant gratification. They don't really, they don't understand working their way up. They don't understand loyalty.
Speaker: And the kids, on the other hand, the incoming generation seems to say, these people don't understand what I need and want, and I'm not getting from them what I need to grow. And is that a fair sort of stereotype of the sort of talking across each other dialogue? Oh, certainly. Yes. And you know, throughout history,
Speaker: It's just been really, really when you think about age discrimination, it's the last accepted form of discrimination in the workplace. And it's been that way for many, many years when the youngest generation comes in the workforce, they're criticized because they are representing change. They're really the personification of change. And as we get older, we are more resistant to change. We don't like that idea. And so we really criticize those younger people.
Speaker: So, you know, when boomers were coming to age, they were criticized for being tree huggers and hippies and they were never going to mount to anything. And then Gen X came of age and they were criticized for being slackers. And now we have the millennials are in the workforce. We criticize them for being entitled and difficult.
Speaker: And slackers, too. Every younger generation, they're a bunch of lazy guys, you know? Right. Whereas, really, it's just a different methodology to how you get to the results and how you want to work and how you engage.
Speaker: So, focus this a little bit. One of the things I'd love to talk about is what companies can do to sort of get the real conversation going and get productive stuff going. Ultimately, of course, time is on the side of the young, and so these things will tend to work themselves out. But I'm also thinking that as you think about mid -sized companies, smaller businesses,
Speaker: how do these conflicts manifest themselves, or this miscommunication, whichever it is, and how do the solutions, what's the right way for companies that aren't all that big, with 300, 400 employees, to sort of address these opportunities and problems? Right. So I believe
Speaker: that the most important thing that any size of organization can do is to really get an outsider perspective first and foremost. And the best way to do that is to get the perspective of younger people. So we often recommend at XYZ University, we often recommend that leaders spend 30 days having conversations with 30 people under 30.
Speaker: to really, and it doesn't have to be lengthy or tedious, but just asking a couple key questions of younger people to really understand what's driving this generation, what's engaging them, what they're challenged with, because until you can fully understand, then we continuously have these stereotypes and these gaps and obstacles. So it starts with dialogue, but it also starts with just simply thinking outside of
Speaker: your current homogenous group of people, and I say homogenous because for a long time, organizations being very hierarchical, pretty soon you get leaders that are pretty much all the same gender, same experiences, same backgrounds, and they're reading the same publications, and they know the same people, and pretty soon you get this homogenous group thing,
Speaker: And in today's ever -changing, disruptive world, that homogenous groupthink quickly leads to irrelevance. You're not able to see the forest for the trees. You're not able to see trends that are coming. You become resistant to new ideas and to innovation. So the ticket is to
Speaker: be able to have conversations not only with younger generations, but also even perhaps outside of your industry that you're constantly bringing in new voices, new perspectives. That's really the best and most effective way to ensure you're bridging these generation and communication gaps.
Speaker: It's interesting. As you're talking, I'm thinking about some companies that I've talked to and people I've talked to who a group of friends in business school started the company together. And so they're all roughly the same age. And they age together. And by the way, the accountants and the lawyers and the bankers and the others they work with tend to be also people who've grown up with them. And they may suddenly realize that in their sort of
Speaker: team room or board room. There's not much difference. And I love what you say about talking, not to employees, but also bringing in customers, changing out. Let's see who I can meet at the bank who's younger than the person who's not that I have anything long, but how do we manage this so I'm getting different voices in and sort of doing it in a programmatic way? That's what you're suggesting, right?
Speaker: Right, it is. You know, Steve Jobs referred to it as grassroots intelligence networks, which I love that definition. But you constantly pushing the team at Apple to think outside the box, but also have those conversations with people who weren't rooted in and to try to avoid that homogenous group thing. And I think we also vastly underestimate the fact that right now for the first time in history,
Speaker: Because of all the changes in education and technology, every generation has different skill sets and experiences to draw from. So really for the first time in history, every generation has something to learn and something to teach. And if we could just get more leaders to think about every day when they come to work, what am I going to learn and teach?
Speaker: I think that would really shift the mindset of people that just because you've been there for 30 years doesn't mean you have all the answers, especially right now. You need to draw from the experiences and skill sets of other people and new young people as well.
Speaker: As you're looking around and working with clients at XYZ University, what do you see in family businesses? Something like somewhere between 25 % and 30 % of middle market companies are family -owned, and almost by definition there's going to be
Speaker: intergenerational dialogue in family businesses, although sometimes it can be pretty dysfunctional dialogue. But do you see any patterns or lessons or I guess maybe best practices from family businesses that others should emulate or best practices from other businesses that family businesses should emulate? The number one thing that I hear from family businesses
Speaker: Although I hear this from other sizes of companies as well. But the number one concern I hear is that my child doesn't want to take the business over. And I'm very concerned about that transition in ownership. Or my child has no idea, you know, I've worked so hard to build this company and my child really doesn't want to be a part of it. They want to do their own thing. But I hear this with it actually within a lot of industries.
Speaker: Because there seems to be this, and again, this is part of this evolution that we're observing, there is a transition from what we value in our lives and our work preferences. So there's a little bit of a
Speaker: I would say almost like a culture shift or a brand or perception shift. So when we think about family business, we think about, well, you're on the clock 24 seven. You never escape your company and younger people having been raised during an era where they have observed terrorism and recession and many, many things outside of their control.
Speaker: We find that as they've grown into young adults, they crave an opportunity to control something. So they want to control their time and how they spend their time and who they spend their time with. And again, I think this is true for every type of organization and the same principles apply to every size of organization. Have effective dialogue, be willing to learn and to teach,
Speaker: and be willing to seek the advice and insights of people who aren't in your current culture and have always been in that current culture. Because we have to be able to stay relevant, number one. But number two, we have to be able to have those really effective relationship building opportunities and bridges communication gaps.
Speaker: You've mentioned a couple of times a term that I'd love you to expand on, which is talking more about membership than about employment. And the idea that millennials and younger workers want to feel, not that they're employees, but that they are members of something. What do you mean by that? Or how does that manifest itself? Right.
Speaker: So when I refer to employee engagement, what I'm really referring to is the emotional tie that people have to their organization. Because when you have an emotional tie, that means that you will willingly show up and do the work. You feel as though you belong. And when we joined an organization and we have that membership mentality, we want to belong to a group.
Speaker: whether that is a professional group or a social group or a golf club. But that membership mentality means you're purposely choosing to pay dues to be part of a group and you want a great return on investment. And part of that return on investment is that feeling that you belong and you have an emotional tie. So as we have seen this evolution in the workplace,
Speaker: We hear all too often, young people say, I don't feel like I'm respected. I don't feel like my opinion matters. I don't feel like this organization is going anywhere. It feels like it's stuck. I don't feel like I belong. And what we find, and this is part of that job hopping that we're seeing throughout the workforce, young people are willing
Speaker: to leave an organization much faster than a Gen X or a baby boomer to find a place where they feel like they belong. So that sense of belonging is incredibly important to millennials and now Generation Z. And so we have to start thinking about how do we create better ties, emotional ties, really listen and get to know people personally and professionally so that they feel like they belong.
Speaker: And as the labor market tightens up, of course, anybody whom I want to hire, I most likely have to take from someplace else, which means, therefore, that my employees are being sought after.
Speaker: more than they were eight years ago. We have a situation. So I guess what I'd love to do is think about, are there two or three specific things that you can say that will help create that sense of membership so that I can keep these people and let the other guy poach them?
Speaker: Yes, so referring back to our workplace even, yes, just 10 years ago or so, really throughout most of the 20th century, our workplaces were focused on profitability. So profits came first, people came second. Now we're seeing a real shift that needs to occur. So my first piece of advice, if you want to keep your talent, you have to put your people first.
Speaker: And that means making sure people feel like they have a voice, a sense of ownership in the organization that they feel valued, appreciated, and again, that they feel like they belong. That has become, you know, we've moved into a very talent -focused economy and talent -driven economy. We need the skill set and the people, especially in the midst of a huge retirement wave.
Speaker: things have changed. And now people say, this isn't just a job that I punch in and out of, but it's an extension of myself and I want to make sure that my work is meaningful and happy. So people first, not profits. And the second thing I would really encourage an organization to do is to be very future focused. So throughout most of the 20th century, we held on to traditions and processes and security.
Speaker: Those really were the pillars of the workforce in addition to profits. But now things are happening so fast and so disruptive and innovation is an absolute necessity. So I feel that based on our research, we find that organizations have to spend a certain amount of time really thinking about the future.
Speaker: Who is coming next? What is coming next? Will we be prepared? Are we a generation ahead or are we a generation behind? And we find through our research that the most successful organizations spend and carve out time at least once a quarter to think about and talk about and plan for the future. Interesting.
Speaker: Interesting. We did a study of talent planning in the middle market, and a couple of things that we learned were interesting connect straight to this idea. One, this idea of voice, which means listening, which means engagement. One of the things we found is that middle market companies often could do a lot better job of providing mentors, for example.
Speaker: and specific paths for people to have, people both to listen and to be listened to. And second, thinking about the future, there were a couple of interesting things we found. First of all, that, again, middle market companies could do a better job of
Speaker: of creating career paths, whether they're hierarchical or not, that in many cases smaller companies sort of think it's implicit, everybody can see it, but actually saying, Jane, John, this is what your future might be is very helpful in being explicit about it. And third, sort of at a larger corporate level, fitting to what you just said,
Speaker: is most of these companies are really good at being able to identify their key players, but not really good at having succession plans or being able to identify their future talent needs. So I know who I've got, I know how good they are, but who I'm going to need, what kind of person I'm going to need, or what I would do if somebody got poached or hit by a bus. They're not so good at workforce future planning, and those three things
Speaker: of organized ways to engage and talk, individual ways to talk about careers, and collective ways to think about future workforce planning might really help solve that problem.
Speaker: Sarah, this has been a terrific conversation, and I would love to invite people to check your website out. It's xyzuniversity .com. And Sarah Sladek, who's been talking to us, who's the CEO of XYZ University and an expert on intergenerational issues.
Speaker: in the workplace. Thank you all for listening to The Market That Moves America. Never miss a new episode. You can subscribe to the podcast on iTunes, Stitcher, Google Play, or wherever fine podcasts can be found, which includes, you can subscribe and learn more about us at our website, middlemarketcenter .org. Thanks very much.
