This week I was asked to give a talk on how to keep employees, especially the so-called “Millenials” generation (people who turned 18 in 2000 or later). This request forced me to reflect on what makes me and others excited to work. In the end, it boils down to one fact:
We are creators.
In fact, as studies from earlier generations show, companies exist in order to help us make things. If we’re denied that opportunity, it’s unlikely we’ll continue to work for companies.
The Nature of the Firm
The question of how to keep employees is not new. In the 1930’s economist Ronald Coase published “The Nature of the Firm.” In his study he asked the simple question:
Why do companies exist?
His answer, in appropriately economical terms: to minimize transaction costs.
Coase argues that we work for an employer so we can more easily create something. If we are in adjacent cubicles, it’s easy to turn to one another and ask a question or make a plan on how to make something. If we have an employer who tells us when to complete tasks and coordinates all of the employees efforts to create a finished product, we make things faster.
In Coase’s terms, we minimize the transaction costs of finding one another, agreeing on a plan, determining a timeline and coordinating everyone’s work.
What happens however when corporations no longer minimize transaction costs but actually increase transaction costs?
Joy’s Law
Bill Joy, co-founder of Sun Microsystem scratched this itch in the late 1990’s when he noted:
No matter who you are, most of the smartest people work for someone else.
This simple statement was a modern update to arguments made by economist Friedrich Hayek. He noted that unevenly distributed knowledge can’t be tapped by centralized planning.
As Joy prophetically warned, every company (including Sun Microsystem which was eventually bought by Oracle) is at risk of being passed by the superior talent that is not inside the company.
Now that the transaction cost of organizing has been significantly lowered thanks to communication and production technology (read the Internet, social media, 3D printing, etc.), we may be able to create faster and superior products by organizing ourselves, outside of a company.
Keeping Creators
If individuals can find one another and cooperate, what hope does a company have in maintaining talent, especially those Milennials who are so willing to communicate and cooperate online? The answer is simple.
Help them create.
Although the smartest people do not work with them, if employees are provided opportunities to create in addition to their daily tasks, they will have an outlet and opportunity to explore their creative talents.
Ford Motor Company recently did just this. They provided memberships to the local Tech Shop which is essentially a shop with all the equipment they could ever need to build anything they can image. Ford encouraged their employees to go there before or after work and create. They could create anything, toys for their kids, a boat for Lake Michigan or something related to cars.
Amazingly, after one year Ford saw a 50% increase in patentable ideas.
Your employees are creators, be they Millenials, Gen-X, Gen-Y or any other label. Often we forget in the repetition of our daily tasks that we go to work to get something done together. If your company can encourage your employees to create, you’ll be more likely to keep them, find others who want to join and maybe even create something new that can help grow your company.
How do you do it? Provide education, a space to create and perhaps even time to invent and make.
At 9 Clouds, we give our employees 20% of their time for creative endeavors related to 9 Clouds. This has resulted in a social media book, new service offerings and ideas on how to work faster and smarter.
Coase and Joy were both right.
We gather together every morning at work to make something together as Coase argued. We also have the ability to coordinate and make things on our own as Joy noted. However, if an employer supports and helps us create, we’ll be more likely to stay and make our workplace a vibrant and creative place.
BTW…
If you want to learn more about new modes of work, the Makers Movement and read the inspiration for this post, check out Chris Anderson’s Makers.
