When Generation X (those born between 1965 and 1979) entered working life in the early 1990s, the chain of command was still clearly defined: what was decided at the top was not questioned further down the line. That generation lacked the necessary courage, but also the time; after all, the work-life balance concept had not been introduced, and college graduates were busy climbing the ranks as quickly as possible in a quest to outperform one another. The mantra of Generation X was 'work comes first'.
However, Generation X – the established generation of leaders – is now confronted by young managers who want to shrug off the old hierarchy. They will only perform if their work is deemed satisfying; that is, work that does not rely entirely on progression through the ranks but takes a much more holistic approach to this work-life ethic.Even at an initial interviewthey will confront HR managers with questions about opportunities for parental leave, part-time working and sabbaticals. Many companies find this rather disconcerting, indicating as it does a radical shift in what being a manager means. But where does this behavioural shift come from?
Career motivators for managers have changed substantially over the past three generations. While Baby Boomers, that is today's 50- to 60-year-olds, valued long-term prosperity and security in retirement, Generation X, now in their mid-40s, focused much more on the short term, on making the best possible career for themselves and acquiring status symbols to match. Generation Y, however, is primarily motivated by a good work-life balance, followed by a desire for (work) content driven self-realisation. Only then do they name career ambition as a motivator.
Odgers Berndtson has conducted many polls and international studies in recent years that substantiate these claims. Our global study After The Baby Boomers, looked in detail at how companies can prepare themselves for a new generation of leaders by talking to 100 senior leaders of global companies. At Odgers Berndtson Germany our 'Manager Barometer' interviews some 1,200 executives a year about their career motives, commitment and personal work-life balance, highlighting the degree of change in the career motivation of young managers.
A full 62 per cent of the leaders surveyed in the latest 'Manager Barometer' study stated that their greatest motivator was being able to apply their personal strengths and talents and developing their professional potential. Enjoying the role of leading, which used to be the top motivator, has dropped to second place (58 per cent). In fact, for Generation Y managers, leadership comes in only fourth on their list of career motivators.
The fact that Generation Y is less keen to pursue careers than Generation X has also been confirmed in a survey we recently conducted among the 500 largest companies in Germany. More than 70 per cent of recruitment managers surveyed noted a sharp drop in the willingness of junior managers to put professional goals before private interests. They also said that, compared to their own generation, the younger managers were less willing to abide by established values and behavioural norms in the workplace (65 per cent), to take responsibility for decisions (37 per cent), or to be geographically flexible about where they would work (37 per cent).
Only time will tell whether this means that Generation Y will subsequently refuse to pursue careers as such. So far, they are still young and only just setting out. Could it be that the strengths this generation has will prove to be of great value to their companies? Will the young, internationally trained and highly networked Generation Y managers turn out to have precisely the skills their company requires down the line?
After all, it should be remembered that, alongside this seismic generational shift, world economy is undergoing dramatic change. The main drivers are 'disruptive technologies'. Agile and other novel types of enterprise, generally built on technology-driven or internet-based business models, are challenging traditional ecosystems and creating new ones. In order to survive this massive change and to be in a position to take advantage of the opportunities it provides, many international companies are currently working very hard to transform and innovate their business models to integrate global processes, organisational units and IT systems.
Michael Diekmann, CEO of Allianz Group, one of the leading integrated financial services providers worldwide, says:"Digitalisation is a key need for Allianz's business model. New technologies will enable Allianz to meet the evolving needs of its clients, develop new products and tariffs and become more efficient and competitive."
Timotheus Höttges, CEO of Deutsche Telekom, is even more explicit: "The creation of value will be driven by software, not from traditional value chain competences … everything that can be digitalised and connected will be digitalised and connected."
What global leaders increasingly require are leaders and young talent that can think disruptively while cautiously transforming existing organisations. Even if the recruiters say that Generation Y needs to do some catching up in terms of building expertise, being willing to lead and developing career ambition, they also unanimously praise this generation's better foreign language and internet skills as well as its distinctive team working and networking abilities. Generation Y managers bring a considerable degree of cultural fluency, technological affinity and networked thinking to the table. As digital natives they are used to dealing with rapid changes and have learned to help shape them.
How can global companies attract this talent and retain them over the long term? One thing is certain: Generation Y managers won't be steered by the companies' current incentive models. A bigger office, more staff responsibility or a higher salary are no longer sufficient to keep Generation Y on board or to motivate them to accept leadership roles.
Standard staff development models no longer meet the expectations of young managers. In the future, companies will have to tailor development programmes to suit this younger breed of staff. Their first priority should be to address the increasing degree of leadership fatigue among managers by getting to know them better on a more individual basis.
A manager's desire for more individualised, personal career development is also evident in the findings from our 'Manager Barometer'. Not only do the managers we interviewed want to be more involved in systematic career and management programmes (60 per cent), they would also like to receive closer guidance from experienced senior executives – for example, through coaching (49 per cent), mentoring (37 per cent) or institutionalised knowledge transfer from 'old to young' (35 per cent). In addition, the respondents want more in-depth preparation for their leadership tasks, and would like the line managers closest to them to bear that responsibility.
The Generation Y cohort is clear on one overriding thing: it knows what it wants in the workplace and expects companies to respond to its demands if they are going to get the best out of them. Even if young managers have some workplace lessons to learn, the great challenge in the coming years will be for companies to develop a better understanding of this new generation of managers, and to adapt working conditions and HR development goals to accommodate them. Only by embracing such change will companies survive the current upheaval and remain truly competitive on the world stage.
The 'Manager Barometer' and 'After The Baby Boomers' studies are available for download at odgersberndtson.de and odgersberndtson.com.
New Manager Barometer by Odgers Berndtson shows high approval ratings for the still young leaders...
By Paul Butterworth MNI, Global Head of the Maritime & Shipping Practice at Odgers Berndtson