On business innovation vs. tenure

Innovation and How Long Your Team Has Been Together

Here’s a concept I don’t think a lot of people think about: we all know it can be bad to work at a place where there’s consistent turnover (people always leaving), because then priorities get skewed and it’s hard to have a “point person” on anything. The people who stick around can constantly feel like they’re playing catch-up or covering for the work of people that just left. It’s a challenge — and that’s supposed to be the doomsday scenario for bad employee engagement, so there’s been more talk of this “OMG SO MUCH TURNOVER” scenario in recent years.

Here’s the flip side: have you ever worked on a team where everyone has been together 10-12 years? That can work well in sports (think the Spurs, for example), but it’s much harder in business. In business, people get used to each other — the good and the bad parts — and they get used to their core ways of doing things (so you hear “… but we’ve always done it that way…” a lot, which is terrible). Cycles get slower, and processes are more ingrained. When a process becomes ingrained, it’s about 100x harder to break or circumvent. That creates a lot of issues too.

So there’s this kind of happy medium needed: you want a team with some new blood and some established blood, with leadership ideally being a mix of those two (if all your leaders are old-school, been-with-the-place-forever, you’re going to be running in some hardcore circles). But … can you actually achieve innovation with a long-established team?

Here’s an article from Harvard Business Review on these topics. Consider where we’re starting from:

Here’s an example. In a prior role, I was heading up HR at a fifty-year-old company. Though we were in tech, the average age of our workforce was approximately 47, and turnover was extremely low.  In fact, it wasn’t unusual for employees to celebrate 30 or 40 years of service. That set us apart from most other Silicon Valley firms, in both good and bad ways. The company was stable largely because of its healthy culture and loyal employees — but I worried about its future. What would happen when large portions of intact teams retired? Where would the knowledge go? Also, the innovation and speed of the R&D teams had begun to decrease. Were these factors linked to tenure, too? I thought they might be.

Right. A lot of companies are dealing with this aspect too nowadays: the retirement of the Baby Boomers. That could leave some places with a real leadership/functionality brain drain, you know?

Here’s more of the problem:

We found that we had a few teams that had been intact for more than eight years without a single new hire. They had, on average, lower engagement scores than teams with more recent changes in membership. (We typically saw a 5 to 15 point difference in surveys.) They also had longer product development cycles, which potentially signaled lower productivity and slower innovation. What’s more, the stagnant teams hadn’t made any plans to add new members. Anywhere from 20% to 50% of their members would be eligible to retire at the same time — in just three to five years.  I was worried.

So … here’s what they did. They brought in interns to these stagnant teams. As you’d expect, the engagement scores and cycle times went in the right direction. Teams seem enlivened! People were getting stuff done faster.

That’s all good, but … here’s the problem:

They’d have the interns for a summer, and if they didn’t see any benefits, that would be the end of the experiment. Even so, the change wasn’t completely accepted out of the gate. I did have to agree to fully fund all the interns from the HR budget the first year. To do this, I had to delay other initiatives in my function, but I felt the risk/reward ratio was worth it.

BAM! There’s the rub.

The managers of these long-established teams? They couldn’t care less. First off, these people coming in were interns. Do you know what that implies to an old-school managerial type? HS/college kid we’re not paying. Those ideas don’t mean anything. That’s where the study becomes flawed. I realize it’s hard to study brand-new hires (full-time), especially in a place where the managerial teams don’t seem to want to hire new people, but … when you’re talking about interns, and you’re talking about interns fully funded from another department’s budget, I can’t really see any managers giving a crap about what happens with their ideas. They’re one-offs.

Here’s Pat Wadors, BTW. She wrote the HBR article:

Can you establish innovation with a long-standing, long-established team? Sure. It’s doable. But I think a few things are probably required:

We often make this stuff way too hard, in large part because we don’t really understand it or care about it: communication breakdowns and stagnant teams have been problems for decades at companies, and those companies are still making money and paying their employees. At a certain point, who’s to really care anymore about issues like “Is our team too entrenched with each other?” (Plus, most people actually would like that: the power of friends at work, you know?)



Ted Bauer

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