In less than a decade from now, the Millennials (or Generation Y - those born between 1980 and 2000) will be firmly entrenched within all management layers of most large corporations around the world. As this begins to happen, it's interesting to ponder what this will mean for big business and what changes Gen Y will bring with them as they begin to take charge and steer the ship.
We all know who Generation Y they are – or we think we do. They're driven, abrupt, technologically savvy, information hungry, communicative multi-taskers, short of attention and seeking immediate gratification in everything that they do. Ironically, these personal growth seekers, are also the ones who seek constant feedback and positive reinforcement. Stated another way, these kids are difficult to engage and nearly impossible to manage.
There are a multitude of reasons for why this may be so. Generation Y was the first wave of workers who grew up with technology. They're comfortable leveraging multiple sources of data and information to simultaneously accomplish multiple tasks. They have had ample collaborative networks available to them to help them generate ideas and identify solutions. Income, status, and financial incentives are less important to them than quality of life.
So, what happens to the enterprise as they assume control?
A New Kind of Organizational Design
Today's organizational designs will likely be deemed obsolete. Millennials will demand a shift away from "command and control" reporting lines to more cooperative-based leadership models that provide greater autonomy and freedom of choice in the way work is performed.
Such a shift will stress and flex the organization in new and challenging ways. Looser, team-based organizational designs will need to be adopted. Gone are the days of multi-layered designs characterized by managers managing managers. Rather, temporary, purpose-based worker groupings emerge and flatter reporting structures are the upshot.
The pyramid management structure that we all grew up in will slowly be replaced with a more fluid and responsive network design. A networked organizational design is the next evolutionary step for today's "matrixed" organization.
In a network structure work is organized into projects, and, in turn, projects are grouped into portfolios (i.e., node in the network) of like kind. Execution of the projects within a portfolio is performed by workers who are assigned to the portfolio, in a "Just-In-Time" fashion.
Key knowledge workers may be permanently assigned to a portfolio (so to allow for needed deep intimacy and understanding of a portfolio's particular subject matter), while others may be temporarily assigned to play a particular project role for a specified duration. This allows an organization to better leverage its subject matter expertise across all of its portfolios.
This new type of organizational design provides work flexibility that Generation Y staff prefers and the scalability that businesses require in order to better manage costs and maintain quality through normal business cycles.
A New Kind of Operating Model
The shifting of the organizational design will, in turn, lead to a new kind of operating model – one that can accommodate a more transient workforce. Generation Y employees are very comfortable with a more integrated professional and personal life as long as working schedules are flexible.
To this end, operating models of the future will need to contemplate and weave the freelance and contract working arrangements preferred by Millenials, into the way work is performed. Indeed, the next generation of workers is willing to trade the routine, predictable and secure (which many find boring when compared to the multitasking, frenetic operating style that many favor) for the freedom to choose where, when and how work is executed.
This type of operating model, one characterized by pulling talent in as needed and freeing it up when demand is lower, fits hand and glove with the network design discussed above. These ideas can also be institutionalized at the same time that many businesses are recognizing that the use of contracted talent is a key ingredient to establishing the much needed agility required for success in the 21st century business environment.
It is fortuitous that the types of organizational changes and operating model evolution discussed will likely be accelerated by a need of big business to accommodate Generation Y work style inclinations. Several interesting implications emerge as a result. These include:
- Firms must make a conscious effort to establish programs aimed at creating a culture that attracts, develops and retains quality Generation Y personnel.
- Basic business principles around business ownership and profit sharing may be shaken to its roots with companies likely being forced to increase employee-based ownership to keep them interested.
- Since collaboration and flexibility will gain prominence in established work settings, positions and job titles might need to be redefined or removed altogether, if existing titles hinder teamwork and prevent required organizational elasticity.
- Thought must be given (and action taken) to harness the growing use of social networks within the workplace as Millennial will continue to call for more sophisticated means of "staying connected."
- Since many Generation Y workers will choose to be employed by more than one business at a time, provisions must be made to ensure that free agent personnel are trained in the organization's operating policies, procedures and quality standards, so that they can assimilate quickly and deliver desired results.
- The desire of Millennials to be employed by more than one company at a time can have serious implications regarding corporate espionage and intellectual property (IP) contravention. Couple this risk with the expanding use of social networks in the workplace, and, firms will need to extend security functions to minimize IP infringement risk.
- Given the need for workforce (and, therefore, operational) fluidity, physical location independence will be needed by business, as well. Plans to establish remote work locations that can be staffed on-demand by a team assembled of free agents will likely be part of the near-future business landscape.
- Businesses will be compelled to offer more "tailorable" and enhanced "lifestyle" benefits to employees. We are already seeing concierge services, childcare and eldercare offerings emerge in benefit packages. This trend will continue as a new generation of workers seeks ways to make their life easier.
- Customer participation in business decisions could increase, as well, given the fact that Millennial consumers will continue to call for a "Voice" in the ways products and services are customized and delivered to them.
- Existing older staff must be made aware of the trends taking shape in the employment market and the Company's desire to leverage the opportunities that exist there.
- Senior management teams must promote these cultural shifts through its actions and be prepared to actively manage the enterprise through the transitions that will be required to institutionalize these changes.
The 2020 Organization
The Year 2020 organization will be one that is markedly different than what we see today. It will be a world in which the next generation of worker chooses to embrace personal independence at the risk of security, and one in which businesses must work hard to attract this budding talent.
With this, comes a very real leadership challenge whereby organizations will need to think differently about their management structure and the skills, competences and capabilities required to thrive in the new operating models that will result.
Clearly, a greater degree of emotional intelligence will be required by senior leaders so that they can proactively guide organizational transformation while continuing to grow and evolve successful enterprises.
Without greater insight and sensitivity, companies of tomorrow will be hard-pressed to create an organizational design or operating model that will consistently draw the best and brightest that Generation Y has to offer. However, through open mindedness and a willingness to break mold, some enterprises are already evolving towards the new operating models and organizational structures needed in the Year 2020.