Generational Differences and Identity Politics

Generational differences are a hot topic for organizational behaviorists. Is this a real issue, or is it just the current management fad?

“Never in history have we seen four generations together in the workplace.” That line starts thousands of articles and hundreds of presentations. A Google search of “four generations in the workplace articles” yields almost 2 million hits.

What is so different? It isn’t like we suddenly see people entering the workplace in their twenties, or staying active into their 70s. That has always been the case. Why is it different now?

We have seminars on generational differences; how Boomers should manage Millennials, and on how Millennials should understand Boomers. There seem to be few, if any, seminars on how GenXer’s work with others.

generational-gearsPart of this “phenomenon” is the truncating of Generation X. Sociologists (I guess that’s who labels generations) have decided that GenX was  a “shorter” generation than any other. Where previous generations are consistently of 20 years duration, GenX is less. Most measure it from 1965 to 1982, although I’ve seen some that claim it only applies to people born from 1966 (lengthening the Boomers’ reign to 21 years) to 1980 (starting the Millennials a full 5 years early.)

That would leave a whole generation that was 50% the size of those coming before and after it. The “baby bust” was dramatic, but statistically it wasn’t that dramatic. Shortening the generation makes a 20% drop in birthrates look like total collapse.

It is interesting that the Boomers have had three presidents (Bill Clinton, George W. Bush and Barack Obama), while the “Greatest Generation” (1905-1924)  had seven, controlling the White House for 28 years, from 1961 until 1989. The “Silent Generation” (1925-1944) had none.

If either Hillary Clinton or Donald Trump serves two terms, the Boomers would claim Presidential membership for 32 years. There might be another generation skipping event. That would fit with my musings about GenX as a Lost Generation back in 2012.

Does any of this matter in your business? It probably does, if only because we are so conscious of our generational identities today, and they are about to become a political football.

When I post articles about the generations, I’m taken aback by the vitriol in some comments. Nasty cracks are to be expected, but these run to a common theme. “You Boomers frittered away our birthright, spent us into bankruptcy and are leaving us (GenX and the Millennials) holding the bag.”

Wait a minute, The Boomers fueled the longest period of sustained economic growth in our history. As workers, they funded the retirement and medical care for two generations who had put little or nothing into the system. The social programs they paid for were clearly created long before 1989. Why should they take the blame for a system they didn’t create, and kept afloat for the last forty years?

Because the bill for those programs is coming due, and paying for it going to be a huge, long-term burden on our economy. Someone must be to  blame, and there is no satisfaction in hanging it on Grandma and Great-grandpa.

The youngest Boomers are turning 51 this year. We will be business owners for another fifteen to twenty years. In another three  years, roughly half of our workers will be Millennials.

The “Generational Differences” seminars that business owners need aren’t just about how to deal with employees who think differently and hold different values. We need some idea of how to deal with workers who are facing a sluggish economy and higher taxes, and who are being told that the blame rests squarely on the boss.

Do you know a business owner who would enjoy Awake at 2 o’clock? Please share!

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3 Responses to Generational Differences and Identity Politics

  1. Eugenia says:

    The boomers and the millennials should appreciate the strength, knowledge and understanding of each generation, by so doing an effective structure can emerge which could yield high valuable growth and benefits for both generation.

  2. Bradley Chilcote says:

    I believe it all comes down to empathetic listening on each generational level. This takes active listening to another level where you connect with another’s core emotional being, in addition to understanding the message. Seek first to understand and apply the platinum rule (treat others the way they want to be treated). Working with multiple generations also requires informed leadership styles: not the leadership based on the “seat of your pants”, but leadership that is adapted based on the study and application of leadership principles. Yes, different generations are products of their political, economic, and cultural environments; but this isn’t a bad thing. It has been established through many studies that the more diverse a team is, the stronger it is!

  3. Ted Leverette, The Business Buyer Advocate says:

    I’m adding my two cents to elaborate on this in your article: “The “Generational Differences” seminars that business owners need aren’t just about how to deal with employees who think differently and hold different values. We need some idea of how to deal with workers who . . . are being told that the blame rests squarely on the boss.”

    Okay, first a warning: Millennials probably should not read my comment or listen to my podcast: Some millennials are among the kinds of employees increasingly destroying small businesses. (And undermining larger employers.) Not all of them, but a certain kind. At the risk of offending some people, but with the intent of helping employers, my brief podcast may be enlightening (it’s on my website): http://partneroncall.com/kinds-of-employees-increasingly-destroying-small-businesses/

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Employee Gratitude isn’t Loyalty

Most of us have heard something like this expression of employee gratitude. “I’ve enjoyed working here. You taught me so much, and you’ve always treated me well. But the company down the road is paying a lot more for people with my skills and training. I’m sorry, but I just can’t turn down this opportunity.”

Our first reaction as an owner is usually “What? After all we’ve DONE for you?”

It can be frustrating to see your investment in an employee walk out the door. He or she knew little when they arrived, and you spent many hours and lots of dollars teaching them to be good at a job. You may have paid them more than warranted until they had enough experience to legitimately earn that salary.

It’s especially galling to lose them to a larger organization that doesn’t hire inexperienced people. Instead of investing over time, they just pay more for someone who is already at their desired skill level.

Small business is the training ground for most of the entry-level employees in the US. If a first job is in high school, or as a college student, it is probably somewhere where few skills are needed to be hired. The business teaches those skills, in return for an entry level wage.

new-job-gameboardOnce an employee has mastered the basics; showing up every day, starting on time, following instructions, they quickly move on to a “real” job. They begin seeking a career path. Most understand that the next step may take years instead of weeks or months.

They do, however, expect a next step. Mastering a position is satisfying for a short time. If that results in recognition through additional responsibility or higher production incentives; that works for a while as well, but it isn’t very long.

Why are you a business owner? At whatever point in your career you went into business for yourself, whether it was by purchasing a company or bootstrapping a bare bones startup, you were probably working for someone else at the time. Perhaps it was a bad employer, but maybe it wasn’t. You just wanted more than the job offered.

Where was your employee gratitude? If, like most of us, you went into business doing something you already knew; who taught you? Do you feel remorse for going out on your own?

Have you ever been in a company where no one has ambition? Where the employees do the same job for decades, no one advances and no one leaves? It’s awful, and I’ve yet to see such a business that could be considered a high-performing organization.

You want employees with ambition. The people who tackle a job with enthusiasm and are hungry to learn are the same ones who most want to advance. Unless you have very rapid growth, you can’t satisfy them all.

Retention strategies help. You can document a career path, demand promissory notes for training costs, or even offer equity in your company. If you are smart and lucky, you can retain the best of them for most or all of their careers.

But if you are hiring right, and teaching them well, many will move on to greener pastures. The same traits that make them good employees also make them a flight risk. Acknowledge it and counter it with tangible action, but don’t depend on employee gratitude to keep them around.

If you enjoyed this column, please share it with another business owner!

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One Response to Employee Gratitude isn’t Loyalty

  1. Mike Wright says:

    Spot On. If you want loyalty get a dog. If you want a good performing business hire people who are ambitious, responsible, hard working and learn new things fast. Have a process to get them productive as soon as possible. Then try to keep them engaged and challenged as long as you can. Keep making them as valuable to the company as possible and pay them proportionally. When they leave, you will feel the impact, but the ability to repeat these steps can be a very valuable CSF for a highly successful organization.

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Is Your Business Built on Individual Heroics?

Great employees are a wonderful gift, but individual heroics aren’t healthy for your business.

Someday, you will start thinking about leaving the business. Perhaps you already do. When you begin planning for your transition, what will your company systems sound like when you describe them to a critical buyer?

“Yes, we have a process for that. It hasn’t been updated, but Martha knows it like the back of her hand.”

“We really don’t have anyone cross-trained on that machine. Bucky likes to work alone, but it’s okay because he hasn’t taken a vacation in three years.”

“We always use Andy on that route. There are lots of traffic snarls, and he’s the only one who seems to be able to finish on schedule.”

You are getting the point. When an employee is especially productive or reliable, it’s easy to become dependent on his or her individual heroics. It’s one fewer function of the business that you have to watch.

heroic workersIt is ironic that the very behaviors that make your life easier appear to be threats in the eyes of a prospective buyer. You know that they could pose a problem, but they haven’t so far. Why fiddle with what’s working?

The answer is because individual heroics discount the value of your business. A buyer worries that key workers might not like his or her management style. As a new owner, he might be immediately approached for pay increases. Worst of all, if one of your heroes’ performance heads south, he may not be able to fix it, or even know what is happening.

For just a moment, look at your best employees as threats. Do you have a contingency plan for each? Can Martha’s process be documented so anyone can do it? Is Bucky just a loner, or is he trying to make himself irreplaceable? Can Andy’s mental map be duplicated by routing software?

And in case you didn’t realize it, “I can do any of those jobs myself. ” is the worst of all possible answers. Those kind of individual heroics will send the buyer towards the exit instead of you.

Dependable high performers are invaluable, but they are frequently protective of their status. Recognize them, but make it plain that that their work needs to be duplicable. (Although, “Of course, not at the level you perform.”)

If you don’t, start looking at them as liabilities rather than assets.

Do you know a business owner who would enjoy Awake at 2 o’clock? Please share!

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Maximize Resources – Use What You Have

Every owner wants to maximize resources. The whole concept of profitability is based on doing the most with the least, but we often are trapped in the prevailing thought pattern about how things “should” be done.

building cranesWhen taking a car service to the airport in Denver on Friday, I noticed a new hotel under construction out on the prairie. There were 6 building cranes huddled around it like mother storks over a communal nest. (Or perhaps that is why we call them cranes?)

The construction had progressed to the second or third floor. Certainly using heavy equipment capable of lifting material over one hundred feet into the air wasn’t an especially efficient method, but I understand the logic. Placing the cranes at the beginning of the job saves time. Having six of them makes sure that crews aren’t idle while waiting for material. The builders are trying to maximize resources.

But I have to contrast the scene with what I’ve observed in China, where building seems to be at a breakneck pace almost everywhere. The demand for apartment blocks around the cities is extreme, and their construction is ubiquitous.

In China they build five or six apartment blocks simultaneously. There is one crane in the middle, and the buildings are arranged in a  circle around it. One mother stork; six nests.

It looked odd until I realized their logic. Labor in China is cheap and plentiful. Heavy equipment is expensive and scarce. The best way to maximize resources is to staff six projects at one time so the crane is always busy. If crews are idle, it is no big deal. Their time isn’t a major factor in the cost of production.

How do you maximize resources in your business? Do your salespeople sell all of the time; or do they, like many, spend half their time documenting what they did during the other half? Are you paying an employee $500 a week to perform a manual process when $50 per month software would free up half her time?

And how careful are you about your most expensive resource – your time? Do you have managers who can run the business from different vantage points, speeding up decision making and keeping everyone productive?

Or are you the crane in the middle, with everyone waiting until you can get around to them?

Do you know a business owner who would enjoy Awake at 2 o’clock? Please share!

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Good Customers Can Be Bad

When can good customers be bad? What could be wrong with a customer who buys a lot, pays promptly, and never has a service problem?

They might be buying too much. No matter how strong or comfortable a sales relationship is, it could end. You may be confident that the customer is yours for life, but therein lies the problem. Someone who buys the business doesn’t have the same level of confidence that the customer will be around for a whole new ownership lifetime.

Many mid-market companies rode one horse to success. There were bringing in a few million dollars in revenue when the landed “the big one.” Perhaps they had to scramble to add capacity and ramp up talent, but the seized the opportunity and met the challenge.

As these companies grow, the owners always say the same thing. “I know that it’s bad to have my eggs in one basket. I’m going to find other customers to even things out.”

big and little businessmenBut the good customer keeps buying more. They are twenty times your size, and an increase of 2% for them translates into 40% more for you. Businesses in this situation aren’t necessarily complacent. They are just scrambling to keep up.

This good customer brings many other benefits along with its dollars. They ask for plans and budgets, so you develop capabilities to meet their requirements. They coordinate packaging a shipping, so you learn more about logistics. They ask for detailed reporting, so you upgrade your tracking systems.

Your company’s increased capabilities translates into more business with large customers. You can show your ISO certification or online reporting. You deliver specifications or scope of work statements as professional as those of much larger competitors.

But you never quite catch up. You are like the dog that caught the pickup truck. You don’t have any control, but you can’t let go, either.

There is an obvious risk of good customers having a change in management or strategy, but for the most part the relationship is favorable. The problem arises when it is time to exit your business.

This issue is specific to mid-market companies. In a Main Street sized business, an entrepreneurial buyer (one who is purchasing a job) will often look at the steady income from a large account favorably. If you’ve grown large enough to attract a professional buyer, however, the “Quality of Earnings” audit will bite you.

Quality of earnings analyses are done by larger accounting firms for mid-market buyers, particularly private equity groups. Those firms typically charge between $20,000 and $60,000 for the audit. Not surprisingly, the client wants a return on that investment. That comes by way of discounting profitability associated with the “risky” business.

If the letter of intent is offering five time earnings, the price reduction is of course on a 5:1 ratio to the profits. Not to belabor the math, but if a $40 million company had $4 million in profits, and 40% came from one account, a 35% discount for that account alone would be $2,800,000 off the purchase price.

That’s when good customers can be bad.

Do you know an owner who would enjoy Awake at 2 o’clock? Please share!

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One Response to Good Customers Can Be Bad

  1. allen james says:

    exactly i was thinking a day ago when i faced this problem

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