Organisational Change Management Volume 2

2. Generational Differences

Understanding generational differences is important in laying the foundation for change. On the other hand, be careful of stereotyping.

In the wealthier countries, the different generations have been described as "thrift generation", "baby boomers", "X generation", "Y generation" and "Z generation" and are defined:

. Thrift generation or ancients or oldies or builders ‐ members were born before 1940 and are thrifty irrespective of wealth; they hate any form of waste and have acquired wealth beyond their expectation owing to inflation and superannuation.

. Baby boomers - members were born between 1945-1960, are demand-driven, and at the first signs of marital stress they divorce; generally they lack spirituality; they dictated the arrival of Big Mac, blue jeans, retirement villages, KFC and crematoriums, and wealth creation is important to them.

Baby boomers
"...will help double the number of people over 60 to 2 billion by 2050......by the end of this decade, the annual global consumer spending by those aged 60 and over will reach $US 15 trillion..."
Milken Institute as quoted by James Thomson 2018

The baby boomers see themselves as youthful and independent, and don't see themselves as ageing. They are not impulse buyers and like to do their research. They have a renewed sense of confidence and a lot to give. They have done things differently like education, music, work, holidaying, etc compared with their parents.

. X generation - members were born between 1964 - 1975, are insecure, and afraid that their parents will divorce; they possess a strong sense of failure; they are not interested in commitment and prefer genuine friendships between sexes without romantic involvement.

. Generation Y - members were born between 1975-1985, have developed individual values; they are spiritual; they are fearless of technology and take for granted many things that the baby boomers saw as treats; they are not into wealth creation and prefer to work to get money to spend on holidays.

. The Z generation - members were born after 1985, and are labelled the Infotronic Generation; they have a dominating interest in electronic communications like television, home computers and other electronic gadgets, ie they are true digital natives; they have never know a world without the Internet, mobile phones, MP3 players, etc; they are born into smaller families and older mothers; are growing up faster, educated earlier and exposed in marketing at an younger age.

The differing attitudes of generations need to be considered. For example, the ageing baby boomers, who are currently in positions of power and influence, do not see "retirement" as the end of a productive working life. Furthermore, if population growth falls below replacement rates, people stay at work longer to provide the wealth required to pay for health care and pensions, especially with other pressures on public money like child-care and education. Also, amongst the baby boomers there is an increasing trend to a SKIN mentality (spend kid's inheritance now)

. Perhaps the most noticeable difference between adults and youth is that the latter is better able to multi-skill with the new technology, ie simultaneously do their homework, listen to music and send instant messages.

Another noticeable difference between adults and youth is attitude to investments. In developed countries, many of the younger generation have the following attitude to investments, ie

"...unlike previous generations, many......don't have pensions or retirement savings plans, are mistrustful of socking money away in investment funds and are fully accustomed to owning digital assets that have no concrete properties. As traditional paths to upper-middle-class stability are being blocked by debt, exorbitant housing costs and a shaky job market..."
Teddy Wayne, 2017

This has resulted in some preferring to invest in digital currencies or crypto-currency as a hedge against another stock market crash as well as a better investment despite its volatile nature, eg it is not unusual to have double-digit percentage fluctuations within a day. Also, crypto-currencies have the stigma of illegal activities like black market money laundering, drug dealing, hacking, manipulation, etc. However it is seen as an alternative to the additional government control financial system.

. Some research on comparing young vs. older minds found

"...the younger subjects performed 10% better when they were not interrupted. Younger minds may be quicker than older ones, but when under the pump and constantly interrupted, the older group caught up......older minds have a faster 'fluid intelligence' that enables them to block out interruptions and focus..."

Martin Westwell, as quoted by Mike Hanley, 2007c

Millennials (born between 1980 & 2000) tend to focus on issues they care about like climate change, health care, education, same-sex marriage, economy, etc; this is called issue-based focus.  Their medium of choice is the Internet, ie they have grown up with the Internet around Microsoft, Google, Wikipedia, social media (Facebook, etc), smart phones, digitalisation, globalisation, etc.  This has resulted in an explosion in information and choices; with little brand loyalty. They account for 1/3rd of the Australian voters and by 2015 they will make up 75% of Australia's workforce (Anne Hyland, 2016)

"...the Internet has enabled hundreds of thousands of people to find alternative ways of organising not just society but the economy; witness the birth and meteoric growth of companies like Uber and Amazon to Airbnb..."

Anne Hyland, 2016

This group has a growing frustration with the lack of engagement and transparency in mainstream politics. This is not necessarily a new phenomenon. In the past issues like the Vietnam war, woman's rights, Aboriginal issues, etc have all started from the periphery and become mainstream over time.

This demographic is very well informed and extremely savvy in how they consume messaging. The millennials tend to use online concepts rather than the more traditional tools of political campaigning like polling and focus groups.

"...once you have a relevant message, young voters can...... be a bit harder to get to using the traditional mainstream broadcast communication tools of politics.  We relied almost exclusively on narrow-cast, highly individualised and targeted online communications and lots of direct and face-to-face campaigning for our younger voter campaigns..."

George Wright (Australian Labor Party's campaign director, 2016

An example is 16-year-old Chloe Scott, who lives on a dairy farm, obtaining 160,000 signatures to the petition calling on Australia's Deputy Prime Minister Barnaby Joyce to act on the massive cuts to milk prices that was undermining the dairy farming industry's welfare.  This helped put pressure on the Australian government to provide around A$ 600 m. support package after the milk prices were slashed by processors Fonterra and Murray Goulburn.

The Millennials are having a negative impact on products and industries like taxis, landline, snail mail, etc

After the GFC and Covid-19 pandemic, they are less optimistic about economic opportunity and more risk averse than previous generations in those attitudes and behaviours. However, they appear to be prioritising wealth and material goods, ie

"...It's a shift towards extrinsic values - money, fame and riches - rather than toward intrinsic values like relationships and community feeling..."

Jean Twenge as quoted by Riley Griffin 2018

They are having a negative impact on

- shopping malls (they want personalised, digitally augmented shopping experiences; more bricks and mortar shops are disappearing)

- print magazines (changing to digital formats)

- football (with a link between head injuries and degenerative brain diseases, fewer young  males are playing football)

- cash (prefer to use cashless options like credit cards and apps, ie mobile device is also a payment advice)

Some millennials are embracing the FIRE movement, ie financial independence, retire early, ie

"...seeing it as a way out of soul-sucking, time-stealing work and an economy fuelled by consumerism..."

Stephen Kurutz 2008

 

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