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Creating a work environment for tomorrow's workforce

By IMD Research Fellow Dr. Karsten Jonsen, Stephanie Weg and Rafael Martin - June 2011

Digital natives, termed by some as Generation Me, [1] are now entering or preparing to enter the labor market. This generation’s personal habits and behaviors, shaped by growing up in a digital world, will have implications for the future of business and the interactions between employers and employees.

So, who are these digital natives and what makes them different? Are they an opportunity, a threat or both? How can business use their specific behaviors and mindsets to operate successfully? We explore some of their key characteristics to help answer these questions.

Playful: Generation Me has grown up in fat times. The availability of resources and the security they experienced during childhood and adolescence have created a mindset that is focused less on fulfilling duties and more on having fun. They like to set their own rules, enjoy freedom and tend to avoid unpleasant tasks as much as possible. This focus on “having fun” can make younger people hard to manage because they get distracted easily and are not as process-oriented as their managers might wish.

On the bright side, this new generation brings a different kind of energy to the workplace. Work is more than just duty to them. They might not like routine work, but they are happy to dive in at the deep end and will see even challenging tasks through to completion if they know that they will get visibility for doing them.

Entitled: Members of Generation Me assume that they are entitled to certain things; that the world owes them something. The sense of entitlement has created a generation that comes to work feeling that “they are the project.” One implication of this is that these employees are increasingly focused on maximizing their own wellbeing.

At the same time, they independently build their careers. They are masters at creating their own brand. They want “custom deals” and they care about the benefits beyond the money, which is viewed as just a threshold issue. They are motivated by flexibility and the chance to acquire skills for their future career. They are willing to take new career directions and build personal, versatile skill sets to enhance the one brand they are loyal to – “Me.”

Instantaneous: Generation Me is used to having information available at their fingertips, anytime, anywhere. Raised with the computer, they have developed hypertext minds and prefer fast and random access.

When it comes to the workplace, Generation Me can get bored very easily and needs to be kept engaged with instant gratification and constant interaction. While it is often bemoaned that attention spans are getting shorter and Attention Deficit Hyperactivity Disorder (ADHD) is at an all-time high, often it is not that Generation Me cannot pay attention. Instead, they choose not to if the content doesn’t trigger their interest.

Once the challenge of getting their attention is mastered, this generation can react and pick things up very quickly; they adapt to change easily and are better than older generations at managing and assimilating the often overwhelming amount of information one has to deal with in today’s world. They can connect topics easier and tend to think less in silos and hierarchies and are, perhaps, the ultimate answer to complexity and information overload.

Digitally dependant: Generation Me consists of digital natives who speak the digital language. They consider “being offline” as a serious constraint to their ability to operate.

At work, they have difficulty managing the constant interruptions caused by their various devices. They spend incalculable amounts of time surfing the vast amount of information available online which can result in lower productivity and decreased efficiency.

In contrast, no workforce has ever been more flexible, more connected and easier to reach than today’s 20 to 30 year olds. Generation Me is comfortable with technology, used to interacting remotely and happy to check emails last thing at night and first thing in the morning.

Participatory: Digital natives have opinions and lots of ideas. They are used to generating and sharing information instead of just reactively and passively consuming it. Providing information is a way of self-expression for them. They tend to be open and honest about their feelings.

When it comes to the workplace, Generation Me wants to make their opinion heard and demands power, sometimes beyond their actual skill set. At times, when younger employees are required to just get a job done, they have a tendency to discuss and share their opinions much more than older generations.

On the bright side, this generation is collaborative and comfortable working in teams. They are very open and social and used to drawing on their networks for ideas, feedback or help. This, in turn, gives the company access to resources that normally would be out of reach. External networks are increasingly important for innovation and nobody masters them better than digital natives do.

How to deal with this?

Generation Me is expected to make up to 50% of the working population in developed countries by 2018. Managers – a lot of whom are from older generations – have to deal with the behaviors and expectations of this new generation, minimizing the gaps between different mindsets, while maximizing productivity and mutual satisfaction.

Consider these four tips to retain demanding, playful and opinionated Digital Natives as employees:

1. Give them freedom

The most connected and busiest generation ever is not going to give up its activities or way of communication just because of a job. Strict and rigid schedules are a sure way to lose your Generation Me employees. Forbid the use of social networking sites on the internet, and they will use their iPhone instead. Force them to be at work during specific hours and they will be there, but the output might not be what you expect. It is virtually impossible to force digital natives into a traditional face-to-face, 9-to-5 work scheme, both physically and mentally.

Instead, be as flexible as possible when it comes to schedules and locations. Implement ROWE (Results Only Working Environment), so that everyone has the freedom to be whatever and whoever they want to be, as long as the work gets done. This way, you compensate based on performance instead of traditional indicators such as working hours. And most importantly, let your younger employees have a say in the targets and goals that are used to measure their performance.

2. Create sense of ownership

Great role models give Generation Me clear boundaries and responsibilities to create a sense of ownership. Generation Me employees like space for creativity and the freedom to assume responsibilities. Micro managing them is one of the worst things you can do. Specify clear objectives and set limits explicitly so they know the rules and the expected result, but leave it up to them as to how they get there. This gives them space to unfold their creativity and truly feel ownership for a task. Rather than over-managing them, create trust-based relationships in which both parties act honestly and transparently, and give them the benefit of the doubt. To close the circle, give them visibility and personal credit for results achieved rather than letting them do the groundwork and presenting the results as your own, which will almost guarantee they won’t try as hard next time.

3. Coach them (and let them coach you)

Generation Me is concerned about building their personal brand, maximizing their own benefit and doing things that make sense to them. Knowing this, don’t expect them to sit in awe when you share your own knowledge with them. Hierarchy isn’t meaningful to them in this context. Instead, show them how you can be of value by helping them build their career and enhance their own skill set with relevant information, knowledge and discussions.

Mentoring and coaching are the magic words here, although informal coaching and mentoring programs may be more effective. Next, it is important to empower your Generation Me employees and let them teach the rest of your team (and you) as well. They want to work with people with whom they can connect. They like being friends with coworkers and they like to share information. Remember, they are closer to the latest developments than you might be, so try to be open to their often disruptive and somewhat disturbing views of the future. They can help you anticipate shifts in consumer behavior and the expectations of your business.

4. Reward them every day

Generation Me wants things and they want them now. Promising them a great job in three years does not do much for their motivation. They are used to ordering something on the internet today and receiving it tomorrow. So aim to show them short-term benefits while maintaining a vision of the big picture to show them how things fit together.

To keep your best and brightest, create a challenging environment. Acknowledge everyone’s performance so there are immediate rewards (and penalties) for the output of an employee. Create transparency around responsibilities and compensation and make it clear that it is “a privilege and honor to work here!” [2] This way, Generation Me’s general need for fairness and transparency will be satisfied and the equation is simple: I underperform – I will be noticed and there will be implications. I try hard and deliver good results – I get rewarded.

When it comes to Generation Me, business leaders must be aware of the times, and must mindfully change with them. Those companies that fully understand and appreciate the power of digital natives will have a competitive edge in the future. However, managers have to use new and often subtle methods and behaviors when dealing with this generation. This does not mean that all we have done in the past to attract and retain talent is obsolete. But we need to make some changes to our mindsets and work cultures. The future is about collaborating across all kinds of borders, including across generational borders. The power has shifted, and “we” can learn as much from younger people as “they” can learn from us.

Dr. Karsten Jonsen is a Research Fellow at IMD. Stephanie Weg and Rafael Martín are graduates of IMD’s 2010 MBA program. The two offer social media consulting through their company YNovation and prepared a session for IMD’s 2011 Orchestrating Winning Performance program. This article is an edited version.

The full version will be published in the July/August 2011 edition of The European Business Review.

Watch the related video about Digital Natives.

[1] Generation Me are typically thought of as those born after 1980. See also:
[2] Bruce Tulgan, Not everyone gets a trophy, Wiley 2009.

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