5 reasons why your ‘old-school industry’ needs to care about a culture of innovation
Innovation isn’t about the latest technology trends. It doesn’t happen just because you have a Ping-Pong table and a keg of Spotted Cow in the break room. It happens because you have the right culture in your organization. Culture is about the people.
Let me explain. Today was a jam-packed day with a reoccurring theme throughout. Most of the companies I met with consider themselves working in “old-school industries” and for this reason the companies “don’t really care about culture.” I understand what it means to be in an old-school industry because I’ve worked in them. The workforce in the industry may be full of employees who are days away from retirement; they cringe at using a CRM like Salesforce, or switching from a notebook to an iPad. I can understand the aversion to new technology. What I don’t understand is why this would cause a company to not care about its culture. If anything, it should prompt the company to care — and do something about it.
Often we forget that we are human beings, not human capital or a number on a spreadsheet — we aren’t being inducted into an organization. Beyond the superficial, why should these companies or industries care about their people? What is their competitive advantage for the long term that “protects” them from disruption? There is almost no mid- or long-term protection in this day and age. Laws and regulations may have once protected an old-school insurance company from change, but new agile companies emerge with innovative solutions ready to disrupt the establishment. It’s innovate or die, based on culture not tech.
Prime examples are companies like Kodak or Blockbuster. Kodak’s historic tagline was “share memories, share life.” What if they would have done something with this, like created an app where I could share an image with the world. Maybe today it would be a $1 billion division of Kodak that Facebook would purchase. Oh, and is there anywhere for me to return a Blockbuster VHS with the “Please be kind, rewind” slogan on it?
If you don’t invest in your people, then your culture will suffer, your organization won’t innovate, and you’ll enjoy your Kodak moment.
So, what are the five reasons why an old-school industry should care about company culture?
- On average, a millennial is willing to give up $7,600 in salary each year to work at a job that has a good culture. This should be a wake up call to companies that work in an old-school industry because …
- By 2020, nearly half of the workforce will be millennials. Currently, millennials have the largest share of the American workforce. Gen Z are the new kids on the block that we should be discussing because of how they differ from millennials.
- Millennials value culture more than any other generation in history. This trend will continue to increase over time with future generations. It’s more than a few posters on the wall. It’s about meaning, value, and connection.
- Seventy percent of employees are disengaged at work, which contributes to a $750 billion loss to the U.S. economy due to overall disengagement.
- Who will you hire when the older generations retire? The torch must be passed at some point. You will need to hire younger employees or your organization will go out of business. You need their buy-in. Part of culture is trusting them in shaping the vision, mission, and operations.
Disrupt, innovate, and do your dishes
Depending on what research you look at, the average lifespan of a company is less than 20 years, down from 60 years in the 1950s. Richard Foster of Yale claims the lifespan is only 15 years today, and that in less than 10 years three-quarters of the existing S&P 500 firms will be replaced by new firms. In talking with hundreds of organizations during our research for ThirdSpace, I found that many companies had innovation labs or teams, but failed to see the results. They could talk the talk but couldn’t walk the walk. It’s ironic because someone at some point in time took a risk to start that company. Someone once gave every ounce of willpower — maybe even mortgaging their home or going bankrupt — to start that company. They need to recover that feeling, ambition, and hustle. It’s no wonder why startups pop up and wipe other companies off the planet. They are right in this stage of “ultimate innovation” and have that hustle and determination to succeed.
Culture is a part your organization whether you guide it or let it foster on its own. It reminds me of the pile of dishes that sometimes sit in my sink. I love to cook and with that comes dirty dishes. It’s inevitable — I have to do the dishes. If I wash the dishes, things in my kitchen start to clear up. If I do nothing, they are still there lingering around, but it’s just dirty and gross and, quite frankly, I’m a neat freak so it disgusts me. This is the same with culture. Whether I do nothing about my culture or if I choose to actively take a stand, culture is there. Just because someone is in an old-school industry doesn’t change that fact. If you don’t invest in your people, they won’t innovate. If there is no innovation, there will be no company.
I realize this is a huge challenge to tackle, but it needs to start with someone or some organization, somewhere. If you are reading this blog, you think of yourself as residing in an old-school industry, and you don’t like that fact, be the change. Disruption should not be viewed as a threat. There is even a worldwide organization dedicated to disruption. It helps organizations and industries transform. Disrupt your organization. Disrupt your industry. Pave the way for future generations to come and enjoy the meaningful work that they do.
Zach Blumenfeld, is co-founder/COO of ThirdSpace, a Madison-based startup developing online tools to improve employee engagement. He is also the founder/executive director of CultureCon, a conference with a mission to impact the workplace by spreading positive change around organizational culture. He can reached on Twitter at @ZachBlum or by searching his name on LinkedIn.
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