Generational Shifts and Leadership

Posted by Kelvin on Apr 8th, 2010 | no comments home title

Learn about the author. Kelvin is the Founder of MontaRosa. He has spent the last 20 years in executive search, most recently managing the global private equity practice at another leading executive search firm. Read more from this author

While the leaders of large global organizations still tend to come from the Baby Boom generation, that day will soon pass. In fact, some of the most talked about companies – Google, Facebook, and others – were founded by GenX or GenY entrepreneurs. As more and more legacy companies look to introduce innovation from outside, they are working with or acquiring firms led by a new generation.

Those of us who help firms think about future leadership need to understand how expectations and assumptions about leaders and leadership change from generation to generation. Each new cadre of executives does not, upon reaching a certain age, don a fedora and adopt the mindset of their predecessors. Donna Fenn author of Upstarts: How GenY Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit from their Success, notes that they come to business from different formative experiences – GenY kids grew up with bicycle helmets, highly structured after-school activities, and “helicopter” parents. “Their ‘wonder years’ were filled with WorldCom and Enron,” she said recently. “They learned that large institutions are not safe or trustworthy. On the other hand, this is also a generation that embraced high-school entrepreneurs. Starting a business in your teens was as cool as being in a band was a generation earlier.”

What does this mean when they come to work? Fenn says that among the most important traits to recognize among members of GenY is that they expect to move around – they fully anticipate changing jobs frequently and will have little long-term loyalty to any one firm. Yet they also expect their workplaces to be extraordinarily employee-centric (remember, these are the people who grew up with lots of activities arranged for them) and they are big on developing transferable skills. In other words, they don’t expect stick around very long and, what’s more, they also expect you to invest in developing them for their next job.

GenY has also developed a reputation for loving the casual: flip-flops as the footwear of choice and a dog as the perfect office companion. “They love a casual feel,” says Fenn. “But that shouldn’t be confused with being relaxed. The GenY entrepreneurs I interviewed for my book were intensely focused and driven. They are committed to creating high-performance workplaces.”

The other misperception that comes with the casual vibe, according to Fenn, is a belief that GenY loves unstructured environments. “Actually they don’t love chaos. They need direction; you can’t just send them off to figure out what to do.”

GenY embraces meritocracies – in their view, everyone’s voice should be heard. This clashes with traditional hierarchies where those who have achieved a certain rank often presume that their stature confers both authority and wisdom. While most companies give lip service to the value of meritocracy and letting the cream rise to the top, GenY fully expects them to deliver on that promise.

Another characteristic of this generation that has particular implications for how we think about leadership is their love of teamwork. This is a generation that grew up with sports leagues where every kid was assured a chance to play and many competitions were structured so that everyone was somehow a winner. That is not how a typical large company is run – they are much more focused on a star system. The most extreme have “rank and yank” or “up or out” policies but even more benign entities often designate certain individuals as “high potential” and fast track them up the ladder. In most organizations today, there are clear winners and losers.

One of the challenges for large legacy companies, according to Fenn, is that they will be competing for the best rising talent against GenY start-ups – firms led by people who know how to create workplaces GenY workers love. Given the propensity of this generation to keep its bags packed for the next move, the traditional big company lures of security, a few extra dollars, and benefits (to the extent these are still offered) will be less powerful than they once were. As always, the most-promising young leaders will have choices and some legacy companies aren’t even going to understand the criteria by which GenY makes its decisions.

GenY is not simply going to learn to fit into our current organizational structures – they are going to change them just as previous generations changed them in their time. Our job is to explore the deeper currents to understand what those changes are likely to be so that the firms we counsel can reap the benefits of this talented, energetic generation.

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