Yellow House Events Inc.
Five year revenue growth: 1,268%
In 2006, Grail Noble was working to expand her independent event-management consultancy, Yellow House Events Inc. (No. 41 on this year's PROFIT 200). Money was tight—so tight that she couldn't afford to rent office space or pay any employees. So, she invited a young intern who'd studied event planning into her home office, figuring it was one way to expand her business while spending almost nothing on wages.
At least one client scoffed when it found a 23-year-old recent college graduate running its high-profile event. Noble, too, was worried, going so far as to make the intern wear glasses to appear older. But the intern—who would become Yellow House's first full-time staffer later that year—managed the event flawlessly, and has since been requested by the client for other gigs. The young recruit's creativity, technological aptitude and willingness to go the extra mile for clients not only impressed Noble, they inspired her. She hired a few more young staff members and decided to adopt a new corporate culture centred on harnessing the energy of Generation Y: "When I saw the kind of work this cohort could produce, I was amazed."
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Members of Gen Y, also known as Millennials, are often stereotyped as self-absorbed, impatient, flighty and so gratuitously confident they think they can run a company after a few days on the job. The fact that this group—the tech-immersed cohort born between the late 1970s and early 2000s—represents the future of the workforce has no doubt caused sleepless nights among many CEOs. With an aging population and looming labour shortage, companies can ill afford to ignore this age group.
The good news is that Gen Y isn't as scary as it seems. In fact, as Noble's experiences demonstrate, tapping into their needs and motivations can unleash tremendous productivity. Since she started targeting young talent, Yellow House's revenue has grown from less than $200,000 in 2005 to $2.7 million last year. Yellow House has landed new clients—including Virgin Mobile, Revlon and Research In Motion—and differentiated its brand. All this because Noble has learned how best to manage Millennials.
The first step in Yellow House's business transformation was recognizing the unique characteristics of Gen Y. After the first intern proved to be a gem, Noble attended conferences and read up on the habits of today's young workers. She made a point of observing the behaviour of her early hires, then sat down with them to discuss their work preferences. This process taught Noble that Millennials want to be empowered on the job and tend to thrive in an entrepreneurial culture. So, she began treating her staff as if they, too, owned a piece of Yellow House. To that end, Noble adopted an open-book financial policy. "I think business owners who try to shield employees from both good and bad news are making a mistake," she says.
Noble also learned that for Gen Y staffers, there's a blurry line between work and personal life. If they're engaged in their jobs, they're perfectly willing to log long hours in the office or take client calls at 11 p.m.—provided they're able to update their Facebook status and make personal calls at any hour of the workday. (Noble is usually the last person into her office each morning, and sometimes has to kick staffers out at night.) "They don't see their work selves as different from their social selves," she explains. "What can be difficult is that they care more about where they work, what they're working on and who they're working with than did past generations."
Creating a fitting work environment has required some adjustment by Noble. While she prefers working in silence, her young hires like to crank Top 40 tunes and create a veritable party atmosphere as they work. Noble found that it took time to allow herself to forget her workers' ages and relative lack of experience and simply trust their ability to get a job done. And the home office didn't suffice for long. Gen Y staffers typically enjoy working in funky, open-concept spaces, so Yellow House soon moved into an airy office in a 19th-century building in Toronto's Distillery Historic District.
Having created an environment in which Gen Y workers could thrive, Noble hunted for opportunities to harness their youthful energy in ways that would put Yellow House ahead. That meant seeking out as clients youth-oriented companies whose corporate cultures fit with hers. Many of these firms' marketing departments skew younger, and Noble recognizes the value of the social relationships her staff can forge with them. "I might have a great relationship with the CEO of a client, but ultimately most CEOs let the people who hold the budget decide which vendors they're going to hire," she explains. Moreover, event planning is a high-stakes game in which much can go wrong—and often does. Noble needs her people motivated and engaged to create truly memorable affairs. And the best way to do that is to target brands they believe in.
RIM is a great example. Yellow House employees are addicted to their BlackBerrys, so they're huge advocates of their marquee client from Waterloo, Ont. In fact, attendees of RIM events have, on more than one occasion, mistaken hyper-engaged Yellow House staffers for RIM employees. "Those are the clients we look for, because we believe in their product," says Noble. "We're in the experience business, and when you get face to face, authenticity is so important."
This passion-first approach has kept Yellow House afloat during tough times. In late 2008 and throughout 2009, the firm's revenue dropped by 50% as companies across North America slashed their event budgets. Instead of drawing up a recovery plan herself, Noble sat down with her staff and asked a simple question: "What are we going to do to overcome this?"
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Together, Noble and her team came up with several ideas, ultimately deciding to create a list of target clients—growing brands the Yellow Housers admired—and send each one a tiny money tree as a sign of good luck during the recession. One of those firms was youth-focused Virgin Mobile. "They loved the money tree and made a connection with the staffer who dropped it off," Noble recalls. Virgin Mobile asked for a meeting with Yellow House, whose staff quickly impressed the prospective client with their engagement and knowledge of music and pop culture. The cellco signed on as one of Yellow House's flagship clients, helping Noble's firm recover much of the revenue lost to the recession.
Of course, letting staff preferences win the day works both ways. When employees aren't passionate about the work they're doing, it can mean dropping lucrative customers. In one instance, staffers had told Noble they were miserable managing events for a corporate client that represented a large chunk of Yellow House's revenue. After calling a meeting to listen to their concerns, observing their email exchanges and noting her own experiences with the client, Noble fired the firm after completing all the assigned work. "That was a very tough decision," she acknowledges. "But my people are my brand and product. At that point, the money wasn't worth their unhappiness."
To keep her staff engaged, Noble regularly solicits their opinions on almost everything, including new hires; she allows at least two employees to participate in interviews to ensure a candidate is a good cultural fit. She also offers pay increases before each employee's annual performance review; as a result, no one has asked for a raise, and Yellow House has lost only one employee to a competitor.
Yellow House's youthful identity begs an important question: what happens when its staff—which today number nine full- and part-time employees—gets older? Noble is already making adjustments for her maturing staff. For example, one employee with children is assigned to fewer out-of-town jobs. In Noble's view, her staff's talents are such that Yellow House's strong corporate culture can be sustained with regular tweaks and accommodations. "It's become the way we work and live," she says. "As long as you treat one another with respect, care for each other and do great work, the culture will take care of itself."