Leadership

Growth Forum III: The Fine Art of Leading Gen Y

Part 3 of PROFIT's Growth Forum Roundtable series explores better ways to manage people—including those tricky 20-somethings

Written by PROFIT staff

Managing Generation Y is a common challenge among entrepreneurs. What, if anything, are you doing to work with them successfully?

TAMARA BARKER WATSON: It requires a lot of patience. I’m working with a generation—Gen Y—that just won’t get up in the morning. They’ll give you the seven hours, but then rob you somewhere during that by playing on Facebook or Twitter. They’ll leave you in a heartbeat if someone offers them 25 cents an hour more. There is no loyalty.
And they won’t work on a Saturday. When we had nothing but rain in Halifax, we got so far behind on all our home-building projects because when it rains you can’t shingle roofs, put siding on or pour foundations. Yet, if it’s sunny on a Saturday and we say, “Come on, let’s catch up,” they’ll say, “Oh, no. I don’t work on Saturdays.” Or we might ask, “Can we work a little longer on Thursday evening so we can get this deck finished, get an occupancy permit on Friday morning, then get paid and be out of here by lunchtime?” But they’ll say, “No, I don’t work late.”
You’re wondering, “When the hell do you work?” And you’re grinding your teeth, because you know you need these people and they can always move to Alberta. So, you just smile and say, “Have a good night.”

RANDALL LITCHFIELD: About 60% to 70% of my firm’s employees are Gen Y, and I do find that they’re different to manage. But I think the essential leadership skill, generally, is being able to articulate and communicate your vision—one that resonates with employees. It’s not just about what the company is going to do next; it’s about articulating the company’s culture, and about a vision that draws upon that culture and that inspires people.

BOAZ SHILMOVER: That inspires the like-minded people in the company€¦

LITCHFIELD: The culture has to work for everybody, whether you’re 25 or 50. We try to find things that resonate with all our employees.
One thing that really inspires people is to think beyond what the company is in business to do—to make money—and to get into more altruistic things. We do a fair amount of charity work, and we have fun doing it because we use it as a form of company gathering. We went to the food bank and stocked shelves for an afternoon—all of us. We spent a day with Habitat for Humanity helping build a house. We spent an afternoon playing beach volleyball. We do things like that about once a quarter.

BARKER WATSON: When we did Habitat for Humanity, not only did we have to pay the guys for their time, but they wanted to be reimbursed for their gas to drive to the jobsite. And I’m like, “Come on, guys—please!”

LITCHFIELD: We don’t run into that kind of attitude. But we have had to adapt to younger people who have earphones stuck in their ears during work. To me, if you’re listening to music, you’re not really here. But the HR consultants we’ve hired have advised us to go with the flow. The fact is employees with earphones on do get their work done. And some of them are listening to music to block out the noise from other people’s conversations.

SHILMOVER: What I’m getting at is that if you have like-minded people working for your company, you don’t have to fight them on anything.

LITCHFIELD: Yes, but what makes them like-minded? Is it values?

SHILMOVER: I think so. It’s that we all have the same end goal, even if we’ll get there in different ways.

LITCHFIELD: What gets you like-minded people is your screening process. At our company, everyone goes through a three-month probation, and it’s not me who decides whether they stay or not. The culture either accepts or rejects them. It’s like an organ transplant.

KEVIN HIGGINS: Leaders need to understand that employees need to be proud of their work. I’ve found with Gen Y that if you tell them how to do their work, they won’t work that hard. But if you make them proud of where they’re working, it’s incredible how hard they’ll work. Our company has a lot of 20-somethings, and I’m amazed at how hard they work without even being asked. And they’re dying to have the opportunity to do things beyond what’s in their job descriptions.
With Gen Y, they have to be able to say that they like working at your company. They have to light up if their friends ask them where they work. If they don’t light up, they’re disengaged—and it’s deadly to have disengaged employees.

How, as a leader, do you make people light up about working for your company?

HIGGINS: We believe one thing you must do is fully adopt open-book management. We share our finances down to exactly how much money we make each month.
Also, we make sure that people enjoy coming to work. We do many things to show our employees that we care about them. One simple thing is that we have a kitchen where they eat together at lunch—a large bar table with 16 stools around it. It’s amazing how much that builds our company culture. We don’t require that people eat lunch together. But, speaking of culture rejection, you can see that those people who leave on their own every day to have lunch somewhere else aren’t fitting in.

Sylvain, what does your company do to encourage employees to stick around?

SYLVAIN BOUCHER: One thing we do is offer perks, which we choose according to what our people like. For instance, we obtained VIP tickets to a Metallica show in Quebec City from a TV station we advertise on, and we made a point of giving those to our technicians and other employees. That was a huge hit with our Gen Y employees. We went the extra mile for them, and they’re still talking about it.

BARKER WATSON: It’s very important that you shared those VIP tickets with your people. This sort of thing gets passed down the line. If you had instead just taken advantage of the tickets for yourselves, the resentment would have started to build.

BOUCHER: Exactly.

Do today’s leaders need to be more trusting, allowing employees to fully employ their skills and knowledge? In other words, should you let things happen more organically rather than using a “command and control” approach?

HIGGINS: Trust, but then verify. Also, you should give a lot of feedback. I think most companies give only 10% as much feedback to employees as we should.
There has been a lot of focus at companies on recognizing people’s strengths. And I say, “Absolutely, you should tell people how great they’re doing, because that will give them confidence.” But if you don’t also help them with whatever they’re not doing well, they won’t become skilled. You wind up with people who are confident but unskilled.

SHILMOVER: Most people don’t like being in a confrontational situation in which they tell an employee, “You know what? You’re not succeeding at this.” But that’s not a bad thing to do. There could be a good reason why they’re not succeeding, and you could find out that the employee isn’t enjoying the situation. You should tell them, “If it’s not working out for you, what can you do to move to the right direction?”

HIGGINS: It’s amazing how feedback helps. Our company has 20 employees and is 10 years old, but we’ve had only one person resign over that time. We help our employees figure out how to be successful. And, if they’re not being successful, we help them figure out where they can move in order to become successful.

What do you think are the key traits of today’s most effective business leaders?

BOUCHER: Leadership is about the context, about being able to adapt and be flexible with different kinds of people. Good judgment is also important. Sometimes, different people in your company will see things differently, even if they have the same data, environment and context. At the end of the day, having good judgment is part of being a good leader. And beyond that, it’s all about communication, about making people willing to follow your lead.

Even someone with excellent judgment will make mistakes. Do you think that today’s leaders have to be transparent and confess when they’ve made a mistake?

BOUCHER: That’s not easy for me, and it’s probably the most challenging part of leadership. You do make mistakes. And if you have to face your employees or your board, it’s not the greatest feeling.

SHILMOVER: There are a lot of average leaders who take credit for success but never take responsibility for failures. Leadership is the other way around. Then, people look at you and say, “This guy’s willing to take responsibility when things go south.”

BARKER WATSON: At our weekly meetings, I’ll say, “Oh, man, I screwed up so bad! I forgot to include that custom shower in the contract. I’m taking responsibility, and I’ll pay for it.” The guys figure that if I can admit to having made a mistake, they won’t be afraid to admit theirs.
Also, we make sure to recognize our people for doing a good job. We bring all our guys and their wives to the annual awards banquet for home builders. Our guys get all dressed up, and we don’t even recognize them: “Who are you? You shaved and combed your hair.” We’ve never received fewer than four awards at this awards banquet, and when we receive one, we’ll say, “That was your project, so you go pick up the award.”

BOUCHER: And that’s priceless.

Every manager in the world struggles with how to hire good people. Kevin, you make a point of hiring great people rather than good people. How do you accomplish that feat?

HIGGINS: One thing we’re doing a lot more of now is testing. We do two kinds of tests. One is a behavioural test through a sales-recruitment consultancy called Caliper, which is fantastic. They do a test of about two hours with the job candidate, and then you have a conversation with one of their assessors. They haven’t even seen this person, but they can describe him to you from his behavioural tests in a way that makes you say, “Were you in the interview room with me?” The other kind of test we do is around the job, getting the candidate to show you how she would do some of her work. For instance, we test salespeople by having them make prospecting calls.
We also assess job candidates on how good they are at taking feedback. For a salesperson, we’ll give them a scenario, put them in a room and give them time to get ready. Then, we’ll have them phone down the hall to what they think is one person, but is actually three people who listen in and evaluate them. Then, we give them feedback and have them make another call. Partly, we’re looking for the quality of the first call; but more important is how well they implement the feedback when they make the second call.

SHILMOVER: So, are these working interviews?

HIGGINS: Yes. And we’re starting to think about taking it even farther, having them spend a full day in that job. We already have job candidates meet a lot of our employees—on average, 10 of them. And then we get input from all those employees, asking them, “Is this someone we think can be successful here?”

Tamara, how do you identify the right people to work for you?

BARKER WATSON: I had to outsource that, because I used to keep looking for people who were like me. And that was a failure.

Did you hire an HR agency to help you?

BARKER WATSON: Yes, I hired a recruiter. Also, I went right into the schools where they train tradespeople. We were trying to get some younger people into the business, but almost no one is going into the trades these days. When my husband was studying, there were 25 carpenters in his class; but this year, just five carpenters graduated. Every company is going after those five guys. So, we went to the schools to identify people earlier and get them to know who we were.

Sylvain, how do you get people on board?

BOUCHER: We adapt according to the kind of job we want to fill. For executives and higher-level management, we’re a lot more sophisticated than we used to be. We went through a session about hiring with Geoffrey Smart [a specialist in the topgrading method developed by his father, Bradford Smart]. That was really an eye-opener.
We learned how to use specific scorecards for each position that define what someone in that job is accountable for and what top performance looks like. We also learned about the different kinds of processes in hiring people, such as screening and interviewing them. That was really good for higher-level management jobs. And for lower-level or technician types of jobs, I’m a strong believer in testing.

SHILMOVER: I sit down with my candidates for an interview that’s a two-way street. At the same time as I’m interviewing them, they’re interviewing me about the company. I start by giving a history of the company, and we don’t start talking about them until about 40 minutes into the interview. I tell them how the business started, the good and bad times, where we are now and where we’re heading. I really hope to see some kind of spark in the person that gives me the feeling that they’re going to join us and go after the same end goal.

Do you interview every candidate for every job?

SHILMOVER: I do for all our office positions. We have about 20, so it’s not difficult.

Once you’ve hired an employee, your next challenge is onboarding—something most companies do poorly. How do you manage that?

HIGGINS: You need to pay attention to the cycle time that’s needed to get up to speed in a specific job. In our company, we’ve summed that up as 3/6/9/12. We say that it takes three months to get up to proficiency for desktop publishers or admin positions, six months for project managers, nine months for consultants and 12 months for salespeople.
For each position, we break that time down into milestone markers. So, for consultants who take nine months to get up to speed, here’s where they have to be after one month, after two months, and so on—all the way up to nine. And that’s critical. You’re always going to make some mistakes in hiring, but the question is: can you get rid of mistakes made in onboarding? You’re trying to avoid having a good person you hired not make it because she wasn’t onboarded correctly.

SHILMOVER: Right. Because three months is only enough time to tell if somebody is truly incompetent.

HIGGINS: It depends on the position.

SHILMOVER: I agree. For instance, with our project managers, we bid on jobs that are six or nine months out, so a new hire might not start on a project for a long time.

HIGGINS: Yeah, it can take a long time to figure out. One of our best salespeople has been with us for five years. But even after 18 months, we were still thinking, “Maybe this isn’t going to work.”

LITCHFIELD: Really?

HIGGINS: Luckily, we held on.

The Growth Forum roundtable series was produced by PROFIT with the support of BDC.

Read Growth Forum I: There’s Always Work Out There about economic uncertainty and how to prepare for whatever’s ahead

Read Growth Forum II: How to Get the Cash You Crave about how smart entrepreneurs finance growth—and find good bankers

Read Growth Forum IV: How Companies Prosper in Tough Times about how leading companies sell in a weak economy, build their brands and market online

Watch videos of PROFIT’s Growth Forum roundtable series

Originally appeared on PROFITguide.com