As both consumers and employees, members of Gen Y are changing the way people do business.
By Paula Felps
As the tech-savvy generation grows up and enters the workplace, businesses find themselves facing new challenges as well as abundant opportunities. Loosely defined as the generation born from 1978 to 1999, Generation Y, also known as Millennials or the Net Gen, is creating quite a buzz as it comes of age.
“This isn’t as tightly a defined market as we’ve had with previous generations,” notes Ian Wolfman, senior vice president of business development for the interactive marketing agency imc2. “In the past, generations were defined by birth rate or wars. This is the first time we have defined a generation by the way we market to them.”
And marketing to them seems to be foremost on the minds of most companies. Whether it’s attracting them as consumers or retaining them as employees, businesses are scrambling to rethink their strategies in response to the Millennials.
“This generation has an unprecedented mastery of media channels,” Wolfman says. “What that means remains to be seen. We don’t know if we’re creating a generation of ADHD adults, or if we’re going to see a generation that can multi-task better than our parents ever could.”
The vague portrait of the NetGen that has emerged so far is one of a generation that is smart and tech-savvy—but also is impatient and accustomed to being in control. Born with technology at their fingertips, they want their world to be much like their technology: always on, constantly changing, and available on demand.
“To them, that’s the status quo,” Wolfman says. “They look at technology and are annoyed that [everything isn’t] converged. They don’t want to go separate places to play their video games and watch TV and make phone calls and answer e-mail. And basically they’re just waiting for the marketplace to catch up to their expectations.”
Have It My Way
That’s already changing the fundamental marketing strategies for companies vying to reach the coveted youth market. Rather than marketing to mass audiences, businesses are beginning to target an expansive series of niche markets. As traditional media channels such as newspapers, television, and radio have expanded to include the Internet, podcasts and blogs, companies face new opportunities—and challenges—for reaching this booming market segment. Branding and developing customer loyalty by showing an alignment with their interests is becoming more relevant than blasting the airwaves with ads. (See “Building a Brand.”) And even traditional television advertising will become customized by the end of the decade.
“We are rapidly approaching the time when providers will use the TV to deliver ads targeted at very specific markets,” Wolfman says. “You’ll turn on the television and it will be able to target you with customized ads.”
He says that kind of specific marketing is all part of meeting Millennials’ expectations. While businesses continue scrambling to find new and more effective ways to market to them, those same companies also are looking at how to bring members of Gen Y into the workplace.
“This generation has a lot of characteristics that businesses can use to their advantage,” says Dan Howard, chair of the marketing department at SMU Cox. “For one thing, they are so globally oriented. They see things as connected in a way that previous generations didn’t. And they’re very adaptable. Because they live in a world where technology is constantly changing, they’re accustomed to things around them changing very rapidly.”
Of course, as employees, Millennials bring the valuable perspective of their own market. And Howard points out that some of the attributes others might perceive as negatives can actually be positives in the corporate world.
“We already know this generation is very smart. People talk about them being impatient. But I don’t see that as a negative,” he says. “It means they’re not going to sit around and wait for things to happen; they’re going to make it happen. It means that they’ll want to hit the floor running, and from an employer’s standpoint, that’s exactly what you want.”
It has implications for the competition as well.
“They better be ready to compete, because these guys are ready to go. And you better know your [technology] stuff, because they do. And they’re ready to tear it up,” Howard notes.
In that sense, Millennials aren’t much different from previous generations; it’s just that their vehicle for provoking change is different. Harnessing that excitement is both the challenge and the payoff for businesses.
“Is the NetGen going to change everything? Absolutely not,” Howard says. “Is it okay for them to think they are? Yes! That’s what fires them up. They think they’re smarter than us, they’re important, they have new ideas, and they are going to change everything that’s negative in the world and make it a positive. Businesses need to encourage them to institute change, because that’s how we keep evolving.”
As managers and employees adapt to a multi-generational workforce, change is certainly afoot as senior-level employees adjust to these younger managers and as entry-level Millennials report to bosses who previously subscribed to a different set of expectations.
“Millennials more so than any other group will vote with their feet—they are willing to leave more quickly than any generation,” says Mel Fugate, assistant professor of management and organization at the Cox School of Business. The result? Industries still operating on seniority-driven promotions and opportunities must change, or face turnover consequences, Fugate says, noting that as this group tends to delay marriage and parenting, they aren’t handcuffed to the same financial needs as their parents. And, yes, they’ll leave for a better opportunity, even for less money.
“Like it or not, Millennials are our future managers,” he says. Employers must offer opportunity and challenges immediately, a contrast from yesteryear’s pay-your-dues corporate society, and de-emphasize promotions and titles and instead map out their potential for growth early in their tenure.
The key to success? “Many of the solutions are the same going in both directions,” Fugate says. Managers should be more open to offering growth incentives, and newly promoted Millennial managers must learn to tap into the expertise of veteran employees and acknowledge the time their colleagues have put in.
The More Things Change…
Still, despite the many changes that are associated with Millennials, experts advise there’s no need to brace oneself for a huge shift in the corporate mindset. John Slocum, the O. Paul Corley Professor of Management at SMU Cox, is an expert on mythopoetic leadership, the concept that all cultures--including corporate cultures--are built on the foundation of myths and rituals and are, therefore, not likely to be swayed even by the emergence of new forms of communication.
“There’s more technology involved today, but corporations are still made up of people trying to reach a common goal,” Slocum says. “Culture—which consists of stories, myths, and rituals--is the glue that holds it all together. That culture is not going to be passed along by e-mail and text messages; it’s passed along through day-to-day personal contact.”
Like all generations before them, Millennials entering the workplace will have to adapt and learn to fit in with the corporate culture; meanwhile, corporate culture will continue embracing some of technology’s latest tools. But the notion that this generation differs dramatically from previous ones entering the workforce has been overplayed, according to Slocum.
“The reality of the next generation is that they still have to go to work and there are a lot of organizations with strong corporate cultures,” he explains. “And there are certain actions that are impossible to replicate on the computer. We will see some bending on the corporate side, but at the same time, these younger employees will be expected to play by the rules of corporate culture that are already defined.”
