Joseph Lassen –
Management teams must choose carefully when deciding where to headquarter their business. As I see it, there is a chasm developing between two distinct types of office spaces in the business world today; venture capital-backed spaces with ping pong tables, beer kegs, and scooters zipping around, and the exact opposite: offices that serve as reminders of the 1950s white collar nine-to-five. Each of these office environments imposes upon employees a subconscious expectation of how to treat one another and how to conduct business with the outside world. This exogenous impact is usually too subtle to be felt until the cumulative cultural result is too ingrained within the employees’ attitudes and behaviors to be changed. The transformation from the ‘old codgy’ offices to ‘hip new’ ones is being driven by a larger cultural shift that managers and business owners ought to take into consideration.
The differences between workspaces can be stark: anyone who contrasts the environments of a bulge-bracket M&A firm in NYC with a group of engineers working at a Silicon Valley startup will have a good idea of what I mean. With the advent of the ‘connectedness’ Internet era, a drastic change has occurred in the expectation of workplaces as a response to – or perhaps as a result of – the types of people operating and working in these businesses. This change, largely driven by a new crop of younger people looking to change the status quo, must be understood if management teams hope to succeed in attracting the best talent. As has always been the case in business, in order to be competitive in new and ever-changing economic and cultural paradigms, businesses need to constantly attract and retain the best and the brightest. Younger employees, who are on the cutting edge of evolving business practices and technology, are propagating significant changes in workplace expectations.
“I find it repetitive and frankly quite boring. From my observations it seems that two major facets of existing in the ‘corporate cubicle culture’ are a horrifying combination of complacency and a vacuum of creativity – neither of which appeal to me…. One thing has become very clear: the only way to be successful (fulfilled) is to pursue a dream that excites to the point where working toward that dream no longer becomes work.”
The above is an excerpt from an email I wrote Doug in December of 2014 while still working in the banking world. My guess is that the paragraph will resonate with a large majority of people who have recently entered into the working world. In the cube-world, as I will call it, my colleagues fell into two categories: one, they worked as diligently as possible to move into more fulfilling positions – as I write this, most of them have moved into roles in non-profits, multi-national consulting firms, or into other more interesting parts of finance – whereas the second group, the majority of whom are still there, were bored and regularly self-medicated with alcohol and drugs in order to cope with the mundane and uncreative day-to-day work that the bank required. Literally every day the conversation among my colleagues revolved around sports or a television program that was on the previous night; there are only so many times a person can talk about whether or not Pau Gasol will reach 550 or 600 field goals by the end of the basketball season or if the Bears would finally decide to trade Jay Cutler this year, without losing your sanity. Not once was there an exciting idea circulated or a sense of entrepreneurialism present. Don’t get me wrong: there are people who prefer this type of work environment, but the point of my writing here is to explore how the majority of workplaces have begun to change as younger employees begin to proliferate in the entrepreneurial and corporate worlds.
As the prevailing attitudes of employees change due to the growing number of younger people, businesses that retain employees that have no sense of engagement or interest in their work will decline rapidly. Older managers take note: your younger employees desire input, significance, and the ability to work on interesting problems. In fact, according to recent studies, younger employees desire these aspects even more than higher pay… but obviously if you can offer both, even better. Generally, startup companies are working to solve more interesting problems, their employees are paid more, have a better work/life balance, and enjoy much more autonomy in their work. Employees in these cultures are more empowered to make change and drive their organizations forward; these types of organizations have environments that reflect this change. Although ‘traditional’ cultures do serve a purpose, these too will need to evolve to meet the new expectations of incoming employees or they will perish.
Beginning with the advent of Silicon Valley, a noticeable shift in the geographic location of young talent and capital concentration has become evident. Sure, there are still tons of hedge funds and ‘traditional’ private equity firms on the East coast and elsewhere, but it is impossible not to notice that startups around the country are attracting the best and the brightest away from Wall Street. The juggernaut venture capital funds like Kleiner Perkins Caufield & Byers, Andreessen Horowitz, Google Ventures, and Sequoia all exist because of the crescendo of the ‘startup culture’, which has resulted in new ways of thinking about business. Asking ‘why’ and modifying the way that society imagines business has led to innovative environments that help to stimulate ideas that shift the very ways in which humans live. For the past 10 years, Stanford has dominated the rankings of the best MBA programs in the country in both general ranking and salary upon graduation, largely driven by their high percentage of placement into companies in Silicon Valley.
Because of the ever-growing divide between the two ideologies of what an office space should be, managers and investors need to be increasingly conscientious about the environments that they are creating or supporting. The environment in which a business exists has a profound impact on the business itself, so ensure that the type of environment you create serves to keep your employees happy and engaged. This will be reflected in the culture and subsequent performance of the business. So, although it isn’t the right answer for some companies, the STIGA table, pinball machine, video games, and keg of IPA in the break room might just offer that extra incentive needed to snag your company’s next key hire.