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These companies' policies have completely gone against the grain of traditional management strategies, yet innovation is flourishing and millennials are flocking to interviews. What is the secret behind these companies’ irresistible weirdness? It's time to take a deeper look into how these companies have evolved their work cultures and their approach to performance management – to meet the demands of millennials.
Zappos has put the weird in weird company culture. Tony Hsieh’s penchant for everything llama-related has led him to create his own commune in downtown Las Vegas, where they roam free amongst luxury employee trailer homes. The design of the offices includes everything from jungle themes to Star Wars. How does Zappos stay weird while continuing to grow?
One method is by hiring the right people. Rather than just working to attract top talent, Zappos hires for company culture fit. In fact, the company offers new hires $4000 to leave Zappos to ensure everyone is 100% integrated into the culture. According to the Society for Human Resources Management, losing an employee due to company culture fit results in a loss of 50-60% of the employee’s salary. This is a particular risk with millennials who are known for their lack of company loyalty.
In fact, Deloitte's 2016 Survey found that millennials place a strong emphasis on their personal values when choosing a potential employer, with 56% ruling out working for certain organizations. Even if you have the best of the best applying at your company, if they don’t fit the culture, you won’t see the expected returns in the long run.
At Zappos, they’ve additionally pioneered a new organizational system of self-management called Holacracy. This system empowers employees with more autonomy over their work, rethinks traditional job descriptions, and makes organizational structures flatter. While it’s not a completely flat system, “lead links” (the closest form to a manager) only assign roles to employees and provide support. Meanwhile, employees are given space to use their own creativity and discretion to accomplish tasks.
According to Deloitte’s 2014 survey, 78% of Millennials want to work for a company that encourages innovation and creative thinking, yet most say they’re not getting this at their current company. In fact, they believe the top two barriers to innovation are management (63%) and organizational structures and procedures (61%). For this reason, companies that eschew conventional hierarchies and stress employee freedom tend to attract young independent minded talent.
Created in the 70's by outdoor enthusiasts, “Let my people go surfing time” has been a standing policy at Patagonia. This policy effectively allows employees to leave the office when there’s a perfect surf or for other outdoor activities, even during office hours. Located not too far from the beach in Ventura, California, it’s not uncommon to see managers and employees catching some waves before a big meeting or taking some time out to go rock climbing. There’s even a daily updated surf report and a stock of Patagonia towels provided.
Other than helping to refresh the mind, encouraging employees to leave the office for outdoor activities fosters a strong belief in the product they’re selling, with employees being encouraged to test out their apparel regularly. If an employee really believes in the product, it will come across to the client. Hiring environmentally conscious employees allows them to think like their clients, and means they’ll be on board with the more extreme marketing techniques Patagonia employs.
Going against anything you might learn in marketing 101, Patagonia has followed extremely unorthodox marketing campaigns including its ‘Don’t buy this jacket’ ad, which aimed to actually discourage people from buying new clothes during the holiday season. Another is its Footprint Chronicles, a shockingly transparent report of how their products are made. The company has also done substantial work in actual Patagonia to preserve the environment. With these actions, they’re not just promoting a product but a lifestyle and set of values.
Deloitte's 2014 Survey shows that millennials don’t just want great jobs, they want their jobs to have a social impact. According to the 2014 millennial survey, 71% believe companies should do more to address global issues, such as resource scarcity (68%), climate change (65%) and income inequality (64%). In fact, in its 2015 survey, 6 in 10 millennials reported that having a sense of purpose was one of the reasons they decided to work for their current employer. Out of those who worked for a company with a strong purpose, 69% reported positive financial performance in the past year, 57% reported high employee satisfaction and 63% said many new hires had joined in the past year.
Patagonia was also one of the first companies to offer on-site child care facilities in 1981. This means that employees and their families can grow along with the company. Meanwhile, other companies risk losing experienced employees by not providing enough options for a better work-life balance. In Deloitte's 2016 Survey, millennials revealed that the most important thing a potential employer should offer them is a positive work-life balance.
Business Review Weekly named Atlassian the best place to work in Australia for the past two years in a row. Perhaps the most extreme aspect of their people management policies is the (paid) time off they give to employees to devote to fun, charity and their own personal development. Even before new hires begin work, they’re given a travel voucher for a ‘Holiday before you start’. Once they’re relaxed and are ready to work, employees are also given five days of volunteer leave a year to help out with their favorite charities.
Based on FedEx’s guarantee to ship packages in a day, Atlassian challenges their employees to devise new ideas in 24 hour ‘Shipit days’. During these four days a year, employees are told to drop their normal work and spend time on any creative project they can come up with. The policy has produced innovative results from new product features to a mini arcade for the office. In his TED-talk, Dan Pink explains that more and more we are finding that economic incentives are not as effective at encouraging creativity as autonomy, using Atlassian’s Shipit days as an example. Over fifty companies have now incorporated this strategy into their own development plan. Google calls its own version 20% time.
To keep Atlassians engaged, the company has devoted its attention to creating a space in which employees feel recognized and supported. One way is through their system of giving each other ‘Kudos’ or handwritten cards and gifts from HR in recognition of great work. Atlassian’s MoodApp was a Shipit day invention that allows employees to rate different aspects of the workday.
The company is also now using a new web based and mobile solution to encourage real-time 360 degree feedback between employees and managers. While giving more autonomy to employees has proven to boost creativity, in order for it to be effective, companies must also keep up effective methods of communication. Continuous feedback allows colleagues, managers and executives to check in with employees and provide support without compromising their independence. Allowing employees to in turn provide managers with upward feedback ensures everyone's voice is heard and everyone has the opportunity to develop.
In Deloitte's 2016 study, millennials saw employee satisfaction as the top value that contributes to an organization's success. The 2014 study revealed that much of the reason why millennials see managers as barriers to innovation is their unwillingness to take risks and their tendency to stick to familiar products and business practices. They additionally cited lack of a formal process to encourage innovation and poor communication as barriers. In particular, it revealed, “only about half of Millennials feel the organization they work for encourages its people to suggest new ways of doing things or rewards them for innovative ideas.” Atlassian’s policies prove that risk-taking in the name of creativity can show significant returns.
Is it time to have a deeper look at your company's culture? See our further posts to find out more about why organizational culture matters and 5 factors that could negatively influence your company culture.
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