January 2016 | Redhawk

Like two warring factions, there is a pro-millennial camp and an anti-millennial camp who rigorously debate the benefits and challenges of a growing Gen Y workforce. On the pro side, millennials are celebrated for their ideals and stubborn vision of disrupting the status quo. On the con side, they are viewed as narcissistic, lazy and entitled neophytes who almost refuse to work a meaningful 40 hours per week.

I have wrestled with these opposing perspectives in real-world applications. Many of my clients have owners that struggle with this emerging workforce as they feel “forced” to hire increasing numbers of millennials. This collision of establishment and new order mentalities leads to strife in almost everything they try to accomplish as an organization. Even office parties can become a blood-letting as opposing views on the importance of cultural sensitivity, dietary considerations and inclusionary activities battle for dominance.

Once you spend some time working in this push and pull between the old guard and new workforce, you start to see where common ground may exist.

Money.

Regardless of age or the corporate cultures you cut your teeth on, money still creates a bridge between the two sides. Despite the popular notion that millennials aren’t driven to acquire material possessions, that just isn’t the statistical truth.

According to Goldman Sachs’ survey of millennials in 2015, 30% said they have little interest in buying a home and 33% said they have no plans to buy a car. For a minute, let’s consider the counterpoint of those numbers. With the inverse nature of percentages, this survey also shows 70% of millennials want to buy a house and 66% plan to buy a car. Additionally, many millennials are carrying crippling student debt and entering an employment market that is increasingly tight as the sharing economy grows without a correlating growth in job creation. Even if millennials don’t want to focus on the accumulation of money or wealth, they are bound by the same economic realities as people twice their age. Even if money may be motivating for Generation X and seen as a necessary evil by Generation Y, they both understand it’s role.

I worked with a client who rolled out a performance plan for all employees that paid an additional 15% of their current salaries as a bonus at year end€”provided they met revenue and profit margin goals. This company is comprised almost 100% of Gen X management and 100% of Gen Y front line employees. Previously, they had not published strategic goals and had no meaningful monetary incentive for reaching specific performance levels. This straight-forward program created a 26% increase in top line revenue, and net income grew 135% in one year.

What we found was a millennial workforce that still had enough need wrapped around money that they worked hard to make this bonus. I also believe the very nature of working toward a common goal provided a sense of purpose and community. For the first time, there was some consensus between the Gen Y and Gen X populations.

Even with some massive checks being written by the owners of the company to pay those bonuses, there was little pain in signing them. The program was a massive success for them personally and professionally. After backing out the bonuses, they still had one of their highest profit margins ever.

I’m not suggesting to simply throw money at a millennial workforce and consider the problem solved. I am suggesting that a thoughtful approach to using it as starting point has merit. Here are some things to think through when considering a profit-sharing program.

Tie the Money to Performance Goals
The business should benefit from the program and the program actually gains meaning when it is tied to some achievement. It helps to create alignment and shared purpose. Without goals to reach, the bonus becomes the corporate version of a participation trophy.

Pick 3 Goals that Everyone Impacts
Don’t pick 12 metrics to hit. That’s just wasting your time. Pick 3 that really matter and that everyone in the organization can impact.

Measure and Share Constantly
Progress toward a goal or series of metrics should be measured and shared as often as possible. Remember, you are working with millennials who are used to information being available on-demand and in real time. Publish the results or progress with the highest frequency possible. Internal social media programs are great conduits for this.

Create Meaning Behind the Goals
Use the opportunity to explain why these goals are important to the employees as well as the company. Revenue improvement can mean expansion and more opportunities for the employees. Excellent profit margins represent ownership’s ability to reinvest in the business which can mean growth in a number of ways. If you spend some time explaining the what’s-in-it-for-me (WIIFM) components to the program, you can maximize the motivation.

It’s important to recognize that many of us Gen X’rs wanted the same things as these “millennials.” We wanted our work to matter, to be recognized for our achievements and have the opportunity for rapid advancement. The only difference is we folded like cheap shirts when our parent’s generation said no. I admire that Gen Y is being so hard-headed. I think many of us old curmudgeons are envious of their resolve.

Again, I don’t believe this is some magic bullet to solve all disconnects between a millennial workforce and Gen X management but it provides one bridge between the two. If you are an owner or manager currently ignoring this dynamic or believe it will go away, consider there are 50% more millennials than Gen X’rs. At some point, if it hasn’t happened already, your workforce will be more Y than X so you need to focus on how you can engage and motivate them.

I recently engaged in a Quora discussion with someone about the “real” value consultants provide to businesses. I often get asked when a consultant should be hired. Until now, I have avoided writing about it because I fear it will read like some thinly-veiled endorsement of consulting as a business practice or of Redhawk Consulting itself.

After watching a few of my colleagues succeed in misusing consultants and people getting paid for consulting who provide zero value, I figured it was worth taking that risk.

This article is aimed at entrepreneurial companies and not larger organizations. Big companies hire consultants for far different reasons than SMBs. For some publically-traded companies, MBB (McKinsey, Boston Consulting Group and Bain) add a level of credibility to management from the perspective of board members and shareholders. The quality of research and mental horsepower the MBB companies can provide are world-beating. Nothing signals you are taking something seriously more than dropping $2 million in fees with one of the big three firms.

Instead, I want to focus on the specific circumstances entrepreneurs face.

I have engaged several founders who recoil purely out of fear or ego at the idea of using a consultant. They argue that a consultant couldn’t possibly understand the complexity of their business, would cause too much disruption or will tell them things they already know. The juice isn’t worth the squeeze.

In reality, founders are often just scared a consultant is going to call their baby ugly. They know their (fill in the blank) process or system is fundamentally broken and that (fill in the blank) was a terrible hire six months ago. They aren’t excited about someone else seeing the growing pile of stuff that’s been strategically ignored. These entrepreneurs have invested the blood, sweat and tears; they know it’s not perfect but they are pouring their very soul into this endeavor every day. It’s easy to see why working with a consultant could seem almost insulting.

Professional service firms can descend on entrepreneurial businesses like vultures so founders become wary of anyone trying to “help” them. It’s unfortunate but completely understandable. One of the challenges owners face is separating the worthwhile partners from the succubae. That gauntlet can produce some mental calluses where even valuable consultants are assumed to be another parasite.

Consultants working with SMBs should return almost immediate value. The work they do should be deadline-oriented and revolve around specific deliverables. Most of the value from consultants for entrepreneurial businesses comes in one or more of the following three forms.

Expertise

It’s not feasible to hire people for every possible skillset and talent. Most organizations are better off finding contractors for specific projects where their expertise can be “rented” rather than owned in the form of full-time employment.

Perspective

This is a well-worn concept but there is legitimate value in having someone come in to look at processes and systems within your business who don’t carry the baggage of office politics or institutional inertia. This can be especially helpful to founders or owners when they are deadlocked in opposing views of how to move through or past an obstacle in their operation. Good consultants don’t care which owner owns 55% of the company.

Resource

Founders and owners who also act as chief executives run out of time far sooner than they run out of ambition. A trusted consultant can act as a plug-in resource, get projects done or design solutions on behalf of those founders. This creates a force-multiplier and while those consultants cost far more per hour than a typical employee, they should only be there until the engagement has been successfully completed. Meanwhile, the leadership has continued to tackle other opportunities.

There is, of course, the flip side where consultants should be avoided. Engagements that have no deadlines, metrics to measure success or timelines should be avoided like a virus. Unfortunately, there are consulting firms that act like ticks. They make their home in the company by digging under the skin and “uncovering” more and more projects that need their attention. The hours keep getting billed and they end up as an over-priced de facto employee. Firms that focus on working with entrepreneurs should always be working themselves out of job.

The other type of engagement to avoid are those where the consultant or firm must provide ongoing facilitation of the process or system they are introducing to your organization. Entrepreneurs need programs that can be internally perpetuated. The client should own a functional work product that doesn’t require further billing hours.

Be aware of the recently unemployed “consultant.” There is a troubling trend on LinkedIn where people are listing their current position as “Consultant” rather than “Currently Looking.” I understand that consulting offers income for someone while they find their new job but it dilutes the effort and reputation of dedicated consultants. Remember that an LLC costs less than $500 to set up and can be completed online in just a few hours. The barrier of entry to start a consulting firm is really low so check for references.

My firm was started like many where I was able to secure my first customer by deeply discounting my rates to create credibility and work product. I bartered services with other startups and volunteered my time with non-profit economic development programs. If you are considering a new firm, check for these things because that’s how many legitimate startup consulting practices pay their dues.

Consider what you can get out of engaging a firm and have a clear expectation of what a successful project will create. Any consultant worth their salt will be happy to engage in conversation even about potential projects so if you are willing to have an open-minded conversation with a well-respected firm, have one us buy you a cup of coffee and figure out it its worthwhile to work together.

All babies are beautiful, even the ugly ones.

Month: January 2016

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When a Consultant Adds Real Value

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