Talent Daily Debates: Are Everlane’s ‘Passion Days’ Effective Cultural Onboarding?

Talent Daily Debates: Are Everlane’s ‘Passion Days’ Effective Cultural Onboarding?

Smart executives know that an organization’s culture drives top-line growth, but it can be difficult and time-consuming for new hires to learn the ins and outs of the culture as they get up to speed. Companies are constantly searching for more innovative and effective ways for their new employees to learn the culture. For example, l’Oreal released its Fit Culture App for new hires last year, which uses “texts, videos, employee testimonials, … quizzes, games and real-life missions” to “give each and every employee, from the moment they arrive, the keys to succeed in full alignment with company values such as multiculturalism, diversity and inclusion.”

More recently, Quartz’s Leah Fessler profiled the onboarding program at the ethical clothing company Everlane, which sets the cultural tone from day one by making every new employee’s first day a “Passion Day”:

“It’s called a passion day,” says Michael Preysman, CEO of the direct-to-consumer clothing startup, which hit $100 million in revenue in 2016. Every Everlane employee starts their new job with a passion day, on which they’re given $100 to spend doing something they love. … There are no limits on what the cash can be spent on, so long as it’s outside of the office and legal. And while they’re not warned ahead of time, every employee has to share how they spent their cash upon being introduced to the entire company the following week. …

Passion days are an extension of an already hyper-individualized hiring process. Everyone who applies to Everlane has to complete a project, regardless of their seniority, to evaluate their skills. “One of our core values is to hire people who are entrepreneurial thinkers—people who are creative and passionate,” Preysman says.

Some of our expert researchers at CEB, now Gartner, had different points of view on whether Everlane’s Passion Day program is an idea worth emulating. Here’s what they had to say:

Andrea Kropp, Research Director: It’s great to see companies putting action and money behind their culture initiatives, especially when the culture they are striving for is very different from the norm. The vast majority of new hires have worked somewhere else before, even if just part-time or in a family business, so they’ve already been exposed to someone else’s culture. If you know your culture is dramatically different, you need something attention-grabbing to show new hires that you are serious and not just paying lip service to the idea of being different.

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More Organizations Are ‘Crowdsourcing’ Product Ideas from Employees

More Organizations Are ‘Crowdsourcing’ Product Ideas from Employees

One major consequence of our increasingly digital society and economy is that the next great business idea really can come from anywhere. Companies are increasingly taking this lesson to heart and looking for ways to solicit ideas from their entire community of employees, not just those formally dedicated to the development of new business. Last week, Digiday’s Max Willens took note of this trend in the media, observing the innovative techniques publishers are using to generate product ideas, such as a “Shark Tank”-style competition Politico tried out last summer:

Politico joins other publishers that are turning to their own employees to develop new revenue ideas. Before it was acquired by Meredith last fall, Time Inc. ran a similar internal competition that attracted nearly 60 submissions from employees. The Globe and Mail in Toronto and New York Daily News have run their own accelerator programs for years. Those programs have resulted in The Globe and Mail’s Workplace Awards, a profitable award and events program, and an ad-viewability tool at the Daily News.

Finding new sources of revenue has become a top priority for publishers everywhere. But in these cases, the goal is also to instill entrepreneurial thinking in a mature industry.

This concept is being tried in many industries, not just publishing. In our recent and ongoing research at CEB, now Gartner, we’ve seen many organizations turning to their employees through these types of ideation programs—some of which are much more effective than others. As you might imagine, inviting entire workforces to generate ideas can result in a certain amount of idea or information overload. The more interesting solutions we’ve seen guide employees to focus on and share the most helpful kinds of ideas, creating a sort of self-filtering mechanism.

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Washington State Non-Compete Legislation Dies on the Vine

Washington State Non-Compete Legislation Dies on the Vine

Two bills that would have all but banned the use of non-compete agreements by employers in Washington State did not come up for a vote before a February 14 deadline for moving forward in the current legislative session, GeekWire’s Monica Nickelsburg reports:

The House bill would have prohibited non-compete agreements for employees working fewer than 40 hours per week or earning less than 200 percent of the minimum wage. Independent contractors and employees taking a second job would have also been protected from non-competes.

The Senate bill is broader. It would have prohibited “any contract that restrains a person from engaging in a lawful profession, trade, or business of any kind,” except for an employee who sells all of his or her operating assets or ownership interest in a business entity to a buyer operating a “like business.” Exemptions would also have been made for partners who disassociate from a business partnership.

This is the third legislative session in which Washington lawmakers have tried and failed to pass restrictions on non-competes. Proponents of this legislation say it would help make the state more competitive with California, where the use of non-compete clauses is almost always prohibited, as a magnet for talent and business investment, particularly in the tech sector. However, Michael Schutzler, CEO of the Washington Technology Industry Association, tells GeekWire that this comparison is misleading and that it was wise for the legislature not to rush new legislation in this regard.

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Several New Studies Tie Diversity to Innovation, Profitability

Several New Studies Tie Diversity to Innovation, Profitability

As more research explores the impact of diversity and inclusion on businesses outcomes, the bottom-line case for diversity and inclusion grows ever stronger. Three studies last month added to this growing body of evidence in favor of D&I, finding that gender parity and racial diversity, particularly in decision-making roles, has a meaningful impact on companies’ innovation, productivity, and profitability.

The first study comes from Richard Warr, a professor of finance at North Carolina State University, his colleague Roger Mayer, and Jing Zhao of Portland State University. The researchers’ headline finding is that companies that score well on indicators of diversity tend to be demonstrably more innovative, Fast Company’s Ben Schiller explained in a post highlighting the study last month:

The study looks at the performance of 3,000 publicly traded companies in the years 2001-2014 across nine measures of diversity. That includes whether firms have women and minority group CEOs, whether they promote women and people of color to “profit and loss responsibilities,” whether they have positive policies on gay and lesbian employees (say, offering benefits to domestic partners), and whether they have programs to hire disabled employees. …

The big takeaway: Companies that fulfill all nine positive diversity requirements announce an average of two extra products in any given year, which about doubles the average for a major company (those that tick fewer boxes are less innovative proportionally). Moreover, the researchers find that companies with pro-diversity policies were also more resilient in terms of innovation during the 2008 financial crisis.

The paper does not conclusively prove a causal relationship between diversity and innovation, Schiller notes—companies that invest in diversity may simply be investing intelligently in other areas that impact product development more directly—but combined with what we already know about how diverse teams are more likely to challenge their assumptions and biases, more likely to engage in productive debate, and able to access a wider range of perspectives, the correlation Warr and his co-authors uncovered looks suggestive.

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Study: Innovation Depends on Environment, Not Just Ability

Study: Innovation Depends on Environment, Not Just Ability

New research by a team of economists from the Equality of Opportunity Project complicates the claim that people from certain backgrounds are just not as productive/innovative/creative/analytical as people from other backgrounds, hence their inability to achieve comparable levels of success in the workplace. The study, which Vox’s Matthew Yglesias got an early look at, found that strong test scores in childhood were less reliable predictors of becoming a successful inventor than growing up in an affluent family in a place with lots of other inventors—in other words, the smartest kids from wealthy families grow up to be inventors and entrepreneurs, but the smartest kids from poor families don’t:

[B]y linking patent application data from 1996 through 2014 to federal income tax returns, the team was able to track inventors’ lives from birth through adulthood to understand who is inventing things and where they come from. And by focusing on the geography of innovation, they show that direct exposure to a culture of invention and to role models appears to be playing a key role.

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Diversity Isn’t a Magic Bullet for Creativity

Diversity Isn’t a Magic Bullet for Creativity

A growing body of research indicates that diversity and inclusion are not just matters of corporate social responsibility, but in fact have benefits that strengthen an organization’s culture and can boost the bottom line. One of these benefits is that diversity is thought to enhance creativity and innovation by diminishing groupthink and exposing employees to a wider range of ideas and experiences from their colleagues.

A study last year found that 81 percent of tech startup founders believed that a diverse workforce enhanced creativity and innovation—although most of their companies did not have diverse workforces. This connection is particularly salient in creative industries like advertising, where clients have been pushing agencies to diversify their creative teams so that they more closely mirror the customers they are trying to reach.

The precise relationship between diversity and creativity is not so clear-cut, however: Tomas Chamorro-Premuzik weighs the evidence at the Harvard Business Review and warns that employers who hope to use diversity as the key to unlock their teams’ creative potential may end up disappointed:

There’s a difference between generating ideas and implementing ideas. While diverse team composition does seem to confer an advantage when it comes to generating a wider range of original and useful ideas, experimental studies suggest that such benefits disappear once the team is tasked with deciding which ideas to select and implement, presumably because diversity hinders consensus. A meta-analysis of 108 studies and more than 10,000 teams indicated that the creativity gains produced by higher team diversity are disrupted by the inherent social conflict and decision-making deficits that less homogeneous teams create. …

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Co-Location Critics Question Wisdom of Turning Away from Remote Work

Co-Location Critics Question Wisdom of Turning Away from Remote Work

Earlier this year, IBM revealed that it was recalling much of its remote workforce across the US to regional headquarters in major cities like New York, San Francisco, and Atlanta, which it described as an effort to improve productivity, teamwork, and morale. The change, which the Wall Street Journal reported went into effect earlier this month, raised some eyebrows as IBM was one of the pioneers of remote work going back as far as the 1980s.

IBM is not the only company to have had second thoughts about remote work recently: Yahoo, Reddit, and Best Buy are among those that have co-located their distributed workforces in recent years. But these organizations seem to be going against the grain of the new work environment, as communications and collaboration technologies are making it easier than ever for professionals to get their work done from anywhere. In the wake of IBM’s decision, some observers are turning a critical eye on co-location as a business strategy.

“At the heart of IBM leadership’s intention here is the desire to change employee behavior,” Jeff Boss, cofounder of Chaos Advantage, writes at Forbes. “But that’s not what’s going to happen with the current approach because restructuring just offers more of the same”:

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