Finding the right mix between encouraging learning and growth within an organization while still providing enough direction to keep the entity on course remains the biggest leadership challenge facing anyone seeking to harness the energy and enthusiasm of America’s youngest, largest and most diverse generation of workers. Although strategic direction will still come from the leaders of organizations in the future, new work processes and behaviors need to embrace the bottom-up approach to solving problems that Millennials, born between 1982 and 2003, favor.
Part of the answer to this challenge is to design work environments that simultaneously reflect the vision and values of the organization’s leadership while aligning the organization’s purpose with the desire of Millennials to find ways of working together to change the world for the better. Implementing such a strategy, however, requires transforming the world of work from cubicles to creativity and from hierarchy to democracy.
In order to bring organizations in line with Millennials’ desire to work in a consensual, participative, collaborative culture, leaders will need to learn how to “coordinate and cultivate” their organizations, rather than “command and control” them.
Coordinating innovation requires a deep understanding of the role each person plays in generating value for the organization. Techniques, such as Value Network Analysis (VNA), can create visual maps of the interactions between co-workers, thereby identifying opportunities to enhance the exchange of value between them. Based on this analysis, social media technology and newly redesigned workspaces can be deployed to increase the quantity and quality of value exchanges, unlocking individual creativity and turbo-charging organizational innovation.
Cultivating creativity, by contrast, requires a shift in the style of leaders from the Baby Boomer era preference for charisma and dramatic personalities to one more in line with Millennials’ desire to be mentored and supported by their boss, similar to the way they were raised by their parents. Offices designed to reflect this leadership style should be furnished in ways that build transparency into the physical structure of the office itself by eliminating cubicles, using glass walls where needed, and providing teams the opportunity to work in spaces as welcoming as their family rooms at home. Those empowered by this type of leader to do the critical work of the organization, regardless of rank, should have environments bathed in outside light and natural furnishings that will encourage and reward their creativity.
As with any momentous change, creating this new world of work will require the same level of creativity and innovation on the part of an organization’s leaders as those leaders wish to inspire in their workforce. Those who learn how to coordinate innovation and cultivate creativity have the best chance of bringing those same values to the organization they lead and ensuring the success of everyone in it. Those leaders courageous enough to make this shift will establish a foundation of trust among their employees whose innovation and creativity will generate the level of customer loyalty needed for success in the marketplace as well.
Millennials: Work is Not A Place, But What You Do
Video from Mike & Morley
Unlike Generation X, Millennials aren’t interested in balancing
work and life. Work is just one thing to do among many
in their blended, seamless daily life.
The fundamental disconnect between network TV and its potential millennial viewers is not the usual suspect, technology. Yes, millennials are devoted to social media and have none of the love of broadcast television that Boomers acquired in their youth, or even the type of affinity Xers have for cable TV that started when they were teenagers demanding, “I want my MTV.” According to leading communications research and consulting firm Frank N. Magid Associates, Xers and Boomers will engage in 8.4 and 7.2 non-TV activities during prime-time hours, while millennials will engage in 10.4 activities. Millennials are much more likely to go online, visit a social network, listen to or play music, play games or just socialize out of the house and away from the TV box when networks most want them to pay attention to their programming. But those behaviors are an indication of how poor the programming is, not the root cause of the problem.
There are too many cynical members of Generation X who don’t begin to understand millennials, if they even try, making programming decisions for the networks that are being greenlighted by even more clueless Boomers. The result are network bombs like the American version of “Kath & Kim,” the ill-fated “My Generation,” and the most recent ratings victim, “How to Live with Your Parents (For the Rest of Your Life).” These programs suffered from casting popular Gen X actors, who didn’t know how to behave as millennials, in plots that substituted stereotypes from Generation X’s youth for character development and were as out of touch with the current experiences of millennials as smart phones are from clamshell cell phones.
Millennials are an optimistic, collaborative generation that believe in social rules and try and live by them. Teenage smoking rates are now the lowest ever recorded. From 1993 to 2010, the gun homicide rate in America declined 65% for those ages 12 to 17, the largest percentage decrease among all age groups. Yet older generations in charge of creating programs designed to appeal to this age group continue to broadcast stories about kids flaunting the rules, getting in trouble with the law, and engaging in the types of behavior that X-ers and Boomers did when they were young. But that is not the way millennials live.
There are of course some bright spots in this dark landscape, such as much of the Disney Family Channel’s programming, or shows like “Modern Family” and “Parenthood” that are very good at capturing intergenerational differences, even if their portrayal of millennials still has a whiff of Generation X in it. But these exceptions merely prove the general rule that without a greater understanding of the unique characteristics of the millennial generation, network television can expect its ratings to go the way of Gen X-oriented networks like Fox, leading to a future where, to quote NBC Entertainment’s Chairman, “flat is the new up.” Or worse.
A remarkable, but mostly unnoticed, 2012 study found a powerful correlation between a community’s civic health and its economic well being. The analysis by the National Conference on Citizenship (NCoC) and its partners found that the density of non-profits whose purpose was to encourage their members’ participation within the community correlated strongly with the ability of a locality to withstand the effects of the Great Recession. The same analysis revealed that those municipalities having the greatest amount of “social cohesion,” defined as “interacting frequently with friends, family members, and neighbors,” also showed greater resilience in ameliorating job losses during economic downturns, independent of the density of their non-profit sector.
The numbers are startling. States with high social cohesion had unemployment rates two percentage points lower than their less connected counterparts, even controlling for demographics and economic factors. A county with just one additional nonprofit per 1,000 people in 2005 had half a percentage point less unemployment in 2009. And for individuals who held jobs in 2008, the odds of becoming unemployed were cut in half if they lived in a community with many nonprofit organizations rather than one with only a few, even if the two communities were otherwise similar. Given these results, every community interested in improving its economic vitality should be devising strategies to increase the civic health of their locality.
One way to accomplish this goal is to attract members of the hyper-connected but locally-focused Millennial Generation (born 1982-2003). People in their thirties—a group Millennials are just entering but will soon dominate—and early forties, the age when people are building families and careers, constitute the essential social ballast for any community, city or suburb. For the rest of this decade as well as the next, Millennials will comprise the cohort entering this key phase of life, contributing both economic stimulus and a new sense of community wherever they choose to live. Fortuitously, the same organization (NCoC) that produced the original report has just released a new study suggesting several strategies cities could use to attract America’s most community-oriented generation.
According to this year’s study, more densely populated communities face a major challenge in attracting civic-oriented Millennials. This is contrary to much of the conventional wisdom about both millennials and “community.” It found that members of the generation who reside in denser urban communities are less likely to engage in the type of service activities that nonprofits are designed to encourage. Except in the South, Millennials living in suburbia or more rural settings were more likely to engage in service activities with their peers than their urban counterparts. In fact, the worst community participation rates by far were found among Millennials in the country’s Northeastern cities.
A recent analysis by demographer Wendell Cox of Millennial living patterns validated these findings. He found that those major metropolitan areas with the least density gained the lion’s share of increases in populations of 25 to 34-year-olds in the first decade of this century. Another, as yet unpublished study by Cox, has found that the same holds true for 20 to 24-year-olds.
To fix that problem and increase their economic resiliency, more densely populated communities should actively encourage the formation of military veteran’s groups and other nonprofits that foster citizen participation and leadership skills. Other types of nonprofits that the earlier NCoC study suggested would help improve a city’s civic and economic vitality are sports clubs, labor unions and those that offer job-training opportunities. By providing such nonprofits with the space and resources to attract and engage America’s largest and most diverse generation, communities can gain the economic benefits that service organizations, such as Kiwanis and the Elks, brought to their communities in the past.
A recent review of the seven best cities for Millennials to obtain an initial foothold for their economic future placed greater Seattle at the top of the list. It was followed by Dallas; Minneapolis; Athens, Georgia; Ithaca, New York; Oklahoma City; and Phoenix. Most of these communities combine relatively lower levels of density with lower rates of unemployment making them especially attractive to Millennials.
One way for denser urban centers to compete with such localities is to gain a broad mix of educational attainment among their younger populations, thereby increasing their social cohesion and, ultimately, economic resiliency. This is because Millennials without a high school diploma are least likely to trust their neighbors but most likely to help those very same neighbors on a regular basis. Meanwhile, Millennials who attend college become more trusting of their neighbors wherever they end up settling, but less likely to help them out. In order to build both a trusting community and one where friends and neighbors help each other out, communities need to provide a broad range of jobs requiring various levels of education and encourage Millennials to stay in the place where they grew up or return there upon graduation.
Communities interested in enhancing their social cohesion should take a close look at the example set by the civic leaders of Kalamazoo, Michigan. Under its Kalamazoo Promise program, families that enroll their children in the local school district get help with college tuition on a sliding scale based on how many grades of education the child completes in the city’s schools. The strategy, which has led to greater demand for housing within the school district’s boundaries as well, encourages the development of a community with a wide range of educational success among its residents.
The most recent study also found that once Millennials complete their schooling and begin to settle down their civic engagement increases. In fact, those 29 and under who are married and have children are more likely than those over thirty who do not have a family to participate in activities, such as helping neighbors, that in turn lead to greater social cohesion.
One strategy for encouraging college educated Millennials to settle in the community where they grew up, may lie with making the cost of college locally more affordable. For example, in contrast to many states that are shortsightedly reducing their subsidies of in state tuition, North Dakota issuing some of its increased tax revenue from the state’s explosion in energy production to limit tuition increases for their residents and increasing the amount of needs-based tuition aid and scholarships for those who decide to attend any college in the state.
Building better communities requires encouraging the human interaction and connectivity that make a municipality more resilient in times of economic difficulty. Building this type of social capital comes naturally to Millennials, the nation’s most connected generation. Non-profits that attract younger people should be actively encouraged to set up shop in cities and localities across the country. Programs that support educational attainment and employment opportunities for Millennials should be viewed as another essential element of economic strategy. Today, community’s economic health is inextricably intertwined with the type of civic vitality that local Millennials can generate.
Baby boomers, growing up in what appeared to be the never-ending prosperity of the 1950s and '60s, were at various times amused, mystified, and infuriated by the economic caution of their GI or Greatest Generation mothers and fathers, often labeling the penny-pinching of their parents “Depression mentality.”
Now, a half-century later, many of those same boomers, perhaps with a greater degree of understanding this time, are watching their own "millennial-generation" offspring (born from 1982 to 2003) develop the same habits of frugality and restraint that the millennials’ great-grandparents did in the 1930s and '40s. This change in attitude and behavior will impact America’s consumer spending and the way businesses and advertisers will need to approach their customers for decades to come.
The notion that millennials are willing to curb their spending might surprise some who have said the generation is self-centered and entitled, but it shouldn’t. The reasons for millennials' financial prudence are clear: Like the GI generation, millennials grew up in a time of relative prosperity, only to face a major economic downturn just as they were emerging into adulthood and the workforce.
Throughout the Great Recession that began in 2008, youth unemployment was almost
always nearly double that for the entire adult population. In January, when the nation’s unemployment rate was 7.9 percent, it was above 13 percent for those 16 to 30 years old.
In addition, millennials are not only the most highly educated generation in U.S. history, but also the generation with the most-ever student debt. A 2010 Pew report on America’s generations indicates that a majority (54 percent) of millennials had attended college, the first generation to have done that. Unfortunately, college costs and the loans millennials have assumed to pay those costs have risen sharply as well. In 2011, college seniors graduated with an average loan debt of $26,600, up 5 percent from just a year earlier.
As a February Pew report indicates, factors like these have shaped the consumer and financial behavior of millennials across a range of areas, from where they live, to how they travel and how they spend:
Where Millennials Live
More than a few observers have labeled millennials a generation exhibiting an extreme unwillingness to “launch” into full-fledged adulthood. One major reason for this is the economic pain visited upon the generation by the Great Recession. As many as three in 10 people ages 25-34 reported still living with their parents in 2011, something that might have benefitted both millennials and their parents from an economic and cultural perspective but still stigmatized many in this generation among older adults.
Even when millennials have been able and willing to strike out on their own, they have frequently rented rather than purchased their homes, causing some to label them “Generation Rent,” a designation first used in Great Britain, but one that seems to apply to many young Americans as well. As a result of remaining with their parents or renting, according to Pew, homeownership among 25- to 34-year-olds fell from 38 percent in 2001 and 40 percent in 2007 (years when virtually all in that age range were members of Generation X) to 34 percent in 2010.
This is not likely to be the final word on the subject; a 2010 Pew survey of millennials showed that they ranked homeownership behind only being a good parent and having a good marriage as an important value. But when millennials do move toward homeownership in overwhelming numbers, because of their “recession mentality” they are likely to be more cautious about the size and cost of their home and the type of mortgages to which they commit than previous generations have been.
How Millennials Get Around
As illustrated in the 1973 classic film, American Graffiti, at least since the time that today’s senior citizens were teenagers, obtaining a driver’s license and eventually a car and then cruising the city or hitting the highway has been a romantic rite of passage for young Americans. Millennials have become the first generation since the GI Generation for which this is no longer clearly the case. Between 2001 and 2009, young people reduced their average driving per year from about 10,250 miles to around 7,900 miles, a decline of about 23 percent. Economics is certainly a part of it: According to Pew, 73 percent of households headed by an adult younger than 25 owned or leased a vehicle.
By 2011, that number had fallen to 66 percent. As a result, among the households of those under 35, the percentage with outstanding vehicle debt declined from 44 percent to 32 percent between 2007 and 2010. But financial reasons are not the only ones explaining the decline of the car culture among millennials. Car Connection, a publication focusing on automotive research, points to changes in communication technology (the millennials’ preference for social networking lessens the need for face-to-face contact), location (millennials increasingly living in urban and suburban areas where cars are not as necessary to get around) and “eco-friendliness” (millennials are the most environmentally conscious generation) as reasons why millennials drive less than older generations did when those cohorts were the age that millennials are now.
All of this suggests that in the years ahead auto manufacturers and advertisers will have to focus on the values that millennials will bring with them when they buy cars—a desire for high-tech, environmentally friendly, cost-efficient autos that can be customized to the individual preferences of the owner to the greatest extent possible.
How Millennials Buy
In perhaps no other way have millennials imitated their GI Generation great-grandparents financially more than in their attitude toward accumulating debt (other than the student loans that have been forced upon them just to go to college). Pew research shows that the number of young households carrying a credit-card balance has dropped from 50 percent in 2001 and 48 percent in 2007 to only 39 percent in 2010. During that same period, the average credit-card debt declined from $2,500 to $1,700 among those households. As a result, the debt-to-income ratio (outstanding debt compared to annual income) has fallen from 1.63 in 2007 to 1.46 in 2010 within the households of 25- to 34-year-olds. By contrast, among older households it continued to rise slightly during those years (from 1.08 to 1.22). This suggests that for many millennials conspicuous consumption may be a thing of the past. Members of the generation are likely to carefully plan their consumption, avoiding credit whenever possible, buying only those things they truly believe they need, and seeking the best possible value for the things they do purchase.
John Gerzema and Michael D’Antonio, in their 2010 book, Spend Shift, described how, in the “post crisis” world, consumers would seek products and services that provide both “value and values.”) The millennial generation is driving this change. Businesses and advertisers would be wise to follow where millennials are leading.
While it is still fashionable for politicians in both China and the United States to prove their domestic leadership credentials by taking tough stances against their nation’s chief economic rival, the results of recent Pew surveys conducted in the two countries suggest that this type of rhetoric is a holdover from an earlier era. An examination of the beliefs among the youngest generational cohorts in each country shows a distinct lack of the ideological vitriol so common in the 1960s and 1970s. As a result, we might see a far more congenial relationship between the world’s two great powers --- at least once the older generations fade away.
Let’s hope so, because older generations sometimes seem more committed to discord than accord. During the 2012 US presidential campaign both President Barack Obama and Governor Mitt Romney took full advantage of opportunities to criticize their opponent for the softness of his approach to China. Xi Jinping, who was named the General Secretary of the Chinese Communist Party about a week after Obama was reelected and will become China’s Premier early next year, has been no less willing to rhetorically censure the United States.
Yet the Pew research indicates that the youngest generational cohort in both the US and China holds positive attitudes toward and favors contact with the other country. In the United States that youthful cohort is the Millennial Generation (born 1982-2003), America’s largest and most ethnically diverse and tolerant generation to date. Of the 95 million US Millennials, about four in ten are nonwhite and one in twenty is of Asian descent, with Chinese-Americans comprising the largest portion of that segment. By contrast, among U.S. seniors and Boomers, only about one in five is nonwhite and about two-percent of Asian heritage.
Generational theorists have not definitively named the Millennials’ Chinese counterparts. Some observers, however, have called at least their urban segment “Little Emperors.” Similar to American Millennials, this generation was often reared by their own hovering “helicopter parents” in a highly protected, hyper-attentive manner that reflected the importance of these special children—the product of China’s “one child” policy—and the great expectations their parents had and continue to have for their offspring. The result of this upbringing are cohorts of civic-minded, pressured, conventional, patriotic American and Chinese young people who revere their parents, are optimistic about their nation’s future, and open to the world.
In China, the Pew research, conducted in March and April, 2012, contained a battery of questions probing attitudes toward the United States, its interactions with China, and its influence on Chinese society. Across all of these questions, the youngest cohort (18-29 year olds) held significantly more favorable opinions about America than older Chinese. Given that Chinese who are 50 or older include generations that established the Communist regime in 1949, fought American troops in Korea, and were part of the ideological Red Guards of the 1960s, this is not altogether surprising.
Overall, a majority (51%) of China’s youthful cohort held a positive view of the U.S. as compared with only 38% of older Chinese. More specifically, majorities of 18-29 year olds said they admired American technological and scientific advances (77%), American ideas about democracy (59%), U.S. music, movies, and television (56%), and agree that it is good that American ideas and customs are spreading to China (50%). Across all of these dimensions favorable attitudes toward the United States and its influence were at least 15 percentage points higher among the youngest Chinese cohort than the oldest. In only one area, the American way of doing business, did less than a majority of 18-29 year old Chinese (48%) indicate admiration of the United States; even on this dimension there was a 12-point gap between the positive opinions of younger and older Chinese respondents.
Pew did not ask the same questions in its American surveys that it did in the Chinese study. However, it did examine many of the same dimensions permitting valid comparison of survey results in the two countries. In a November 2011 survey examining the large generation gap in U.S. politics Pew asked if it was better for the United States to build a stronger economic relationship with China or to get tough with China on economic issues. American Millennials, a generation corresponding to Chinese 18-29 year olds, overwhelmingly favored a policy focusing on building stronger trade relations with China rather than one based on toughness (69% to 24%). By contrast, a plurality of the two oldest American generations—Boomers and seniors—believed that a tougher approach instead of closer economic ties with China was best (48% to 45%). These results reflect the far greater support of Millennials than older generations for free trade agreements overall (63% to 42%).
In its April 2012 Values survey, Pew examined the openness of Americans to “foreign,” if not specifically Chinese, influences. In one question, respondents were asked to agree or disagree with the statement: “It bothers me when I come in contact with immigrants who speak little or no English.” Only 32% of American Millennials compared to 44% of all older generations agreed. In another item Pew asked for agreement or disagreement with this statement: “the growing number of newcomers from other countries threatens traditional American customs and values.” Only four in ten Millennials (41%) as compared with a majority (53%) of Boomers and seniors agreed.
American Millennials are a generation that seeks to resolve disputes and conflicts by searching for win-win solutions rather than absolute victories over their opponents. Recent research suggests that their Chinese counterparts share many of the same attitudes. This bodes well for relations between their two countries in coming decades. The big question for the more immediate future is whether older generations in America and China will be able and willing to set aside the attitudes based on the ideologies and policies of the past long enough for Millennials on both sides of the Pacific to forge a new, less contentious relationship.
Since at least the time of Socrates, older generations have criticized younger ones for not being as smart, hardworking, polite, selfless, or strong as they themselves were when they were young.
For that reason, it’s hardly surprising that a cottage industry has arisen devoted to attacking the nation’s youngest generation, Millennials (born 1982-2003), as a lazy, soft, self-centered, and narcissistic “me” generation.” Why? Research suggests this tsk-tsking of young adults has found a receptive, albeit selective, audience among older Americans.
Attacks on young people make for provocative media copy and may help sell books or generate publicity for those who find satisfaction in criticizing other generations. But, contrary to these charges, both generational theory and the real-life attitudes and behavior of Millennials demonstrate that, in fact, their cohort is far more accurately described as a “we” than a “me” generation.
Four types of generations have cycled throughout American history.
William Strauss and Neil Howe, the founders of generational theory, know that not everyone in a particular generation can be painted with the same brush.
They make a strong case that both of the two generations that immediately preceded the Millennials—Generation X and Baby Boomers—contain a larger share of individuals who are inwardly focused and self-oriented than does the Millennial Generation.
- Baby Boomers (born 1946-1964) were encouraged by their parents to develop strongly held internal values, which, as Boomers aged, gave their lives meaning and on which they continue to be unwilling to compromise.
- Gen-Xers, (born 1965-1981) reared by their parents in an unprotected, critical manner, often became individualistic risk-takers and entrepreneurial adults.
- Millennials, by contrast, are considered a “civic” generation and have historically been group-oriented, problem-solving, institution builders or, in other words, a “we” generation.
- As teens, almost all are involved in community service. Among 2011 college freshmen, 88 percent had participated in such activities while in high school.
- The contribution of these young Millennials to America’s nonprofits is both striking and crucial. In 2008, according to the Corporation for National and Community Service, Millennials provided over a billion hours of service, worth more than $22 billion.
- Some would argue that as impressive as these numbers may be, much of this teenage community service is actually “forced labor” because it is a graduation requirement at many US high schools and, therefore, will not be sustained once Millennials graduate.
- But, in fact, most Millennials do retain at least this lesson from high school as they age. Among Millennials entering college in 2011, for example, 70 percent said it is “essential or very important to help people in need,” the highest percentage ever recorded.
- After leaving college, 60 percent said they wanted to engage in service to “help the country” and they have delivered on this pledge. An April 2012 Pew survey indicates that 58 percent of Millennials (compared with 51 percent of older generations) had “done volunteer activities through or for an organization within the previous year.
A 2010 Cone Cause Evaluation study found that when deciding where to work, 87 percent of Millennials, compared with less than 70 percent of the overall population, consider the causes a company supports.
Some Millennials are creating social entrepreneurships that let them use their energy and talent in original and imaginative ways.
- For starters, they are creatively solving problems in arenas ranging from the environment to education and from economic opportunity to civil liberties in dictatorial countries.
- Others expect to implement their values when they join more traditional organizations. In either case, more than other recent generations, Millennials will be driven by a desire and a need to make the world a better place.
- This will permeate all aspects of their lives; not only their free time, but their work as well.
Older workers, take heart! And take a page from—or at least understand—the Millennials playbook.
Traditional or social entrepreneurs who recognize the Millennial Generation is a “we” rather than a “me” generation, and operate on that basis, will be in the best position to compete and prosper in the Millennial era ahead.
How Millennial are you?
To find out, take this quiz, courtesy of Pew Research:pewresearch.org/millennials/quiz.
In the last half of the 19th century, Horatio Alger, Jr. defined for the American popular culture what it meant to be a young entrepreneur.
Indeed, the writer of popular novels for children showed us through the heroes in his books that poor boys, by dint of hard work and better ideas, became rich and respected. (Note: Alger’s entrepreneur’s club was closed to girls in those days.)
But for those who are tracking this, it is clear that many Millennials (born 1982-2003), who are today’s teens and young adults, have a very different and broader conception of what it means to be an entrepreneur.
Members of this next generation are increasingly called “social entrepreneurs.”
This class of business leaders is defined by Businessweek as “enterprising individuals who apply business practices to solving societal problems such as pollution, poor nutrition, and poverty.”
Although the organizations created by the more than 30,000 American social entrepreneurs are focused on curing the world’s ills, they are not traditional charities. Many, in fact, are designed to make a profit—and as Businessweek reports, represent more than $40 billion in revenue.
Millennial Generation social entrepreneurs often focus on economic development, education, and the environment, issues that are of particular concern to their generation. And, they take full advantage of the social media communication technologies that Millennials use so effectively.
- To improve educational opportunities around the world Richard Ludlow created Academic Earth, a company that provides low cost or free online college education supported by online advertising.
Xavier Helgesen and Christopher Fuchs formed Better World Books, an online bookseller that has donated more than $5 million to literacy programs and libraries.
- To protect the environment while improving the living standards of the poor, Sam Goldman and Ned Tozun started d.light design to provide solar-powered LED lamps to rural families in Third World countries.
Brian Hayden and Duncan Miller founded Heatspring Learning Institute, a company that trains builders to design geothermal heating and cooling systems for homes.
- And, to resist tyranny and promote civil liberties in nations where traditional journalistic outlets are under pressure from dictatorial regimes, Rachel Sterne established Ground Report, an organization that encourages local residents to post their own reportage on her profit-sharing Web site.
These social entrepreneurs apply “a practical but innovative stance to a social problem, often using market principles and forces, coupled with dogged determination that allows them to break away from constraints imposed by ideology … and pushes them to take risks others wouldn’t dare.” Just as the Schwab Foundation for Social Entrepreneurship suggests, their approach combines the characteristics of Richard Branson and Mother Teresa.
It is not surprising that many Millennials have gravitated toward social entrepreneurship. Generational theorists categorize the Millennial Generation as a “civic generation,” a type of generation reared by its parents to focus on the needs of the group.
In a broader context, this means that civic generations create new institutions, often at the local level, designed to resolve large-scale economic and political issues and to advance humanity as a whole. One notable example of a civic generation is the Republican Generation (born 1742-1766), who created the United States and the constitutional order under which it has been governed for more than two centuries.
The civic GI Generation (born 1901-1924) created the economic and political arrangements that have been in force in the United States since the New Deal of the 1930s. For today’s civic generation, social entrepreneurship is often the social change institution of choice.
If there is any single trait that characterizes the Millennial Generation, it is its desire to leave the world a better place than the one older generations created. To do this, many Millennials have adopted an entrepreneurial approach, but with a key difference. Instead of using entrepreneurism for individual gain, Millennials are using it to solve the problems facing America and the world.
Eighty percent of Americans buy their first house between the ages of 18-34. While the Millennial Generation’s (born 1982-2003) delayed entry into all aspects of young adulthood has sometimes been characterized as a “failure to launch,” the generation’s preference for single tract, suburban housing should become the fuel to ignite the nation’s next housing boom as Millennials fully occupy this crucial age bracket over the next few years.
According to a study by Frank N. Magid Associates, 43 percent of Millennials describe suburbs as their “ideal place to live,” compared to just 31 percent of older generations. Even though big cities are often thought of as the place where young people prefer to live and work, only 17 percent of Millennials say they want to settle in one. This was the same percentage of members of this generation that expressed a preference for living in either rural or small town America. Nor are Millennials particularly anxious to spend their lives as renters. A full 64 percent of Millennials surveyed, said it was “very important” to have an opportunity to own their own home.
That hasn’t stopped a number of commentators from arguing that Millennials ought to prefer renting a loft apartment to buying a house and that they would be better off doing so. For example, sociologist Katherine Newman, is “hoping that the Millennial Generation doesn't set its sights on homeownership as a benchmark of economic stability, because it's going to be out of reach for so many of them that it will just be a recipe for frustration."
But survey research suggests it may be her hopes that will be dashed as the Millennial Generation matures. Eighty-four percent of 18-34 year olds who are currently renting say that they intend to buy a home even if they can’t currently afford to do so. As Neal Coleman, a married Millennial in his mid-twenties, put it, "You're freer when you own your own home, your own land. You're not beholden to a renter's contract, or lease. My feeling is that homeownership is an investment in being able to control your surroundings, to build a life for you and your family."
Glenn E. Crenlin from the Runstad Center for Real Estate Studies at the University of Washington believes that “what we're looking at in terms of the Millennial Generation is likely only a delay in homeownership of three to five years, not a long-term trend away from homeownership itself." He cites census data from the American Community Survey that shows a significant increase in homeownership among Millennials as compared to Baby Boomers when they were at the same age that Millennials are now. “While 900,000 households in the Millennial Generation [now] own their own home, only 500,000 Baby Boomer households owned their own homes at the same point in their lives.”
This data suggests the key to a resounding revival of America’s housing market may be the availability of affordable homes in neighborhoods with amenities that would appeal to Millennials and their young families. As always, safe streets and good schools are key components of such an environment. But so too are short commutes to work and nearby shops featuring the local products that appeal to younger customers.
Such neighborhoods already exist in many close-in suburbs whose housing stock is in need of some renovation, or “gentrification,” from energetic owners committed to improving their local community. These attributes describe Millennials precisely. Their willingness to invest sweat equity in rehabilitating their first home should be rewarded in the financing process either by counting its value toward a down payment or using it to wipe out some of the outstanding student debt with which many of the members of this generation are burdened. Alternatively, homes could be offered to Millennials as rentals with an option to buy and with the cost of any renovations performed by the renter deducted from the down payment required to make the conversion from rental to ownership.
Recently, National Association of Realtors President Moe Veissi announced that "Realtors are committed to ensuring that the dream of homeownership can become a reality for generations of Americans to come." To start making that dream come true for Millennials, realtors and those who finance home purchases need to create innovative new offerings tailored to the needs and wants of Millennials. Policies and programs that will enable America’s most populous generation to own a piece of the American Dream offer the best hope for igniting the home construction boom critical to boosting country’s still sagging economy.
Martha Beck, as with many of her Boomer Generation peers, finds the principles to guide her life though a deep exploration of her inner self.
Boomers, like other “idealist” generations before them, believe life should be about a search for truth that their inner consciousness reveals.
The generations that come along after this “idealist” type, such as Generation X, and the Lost generation of F. Scott Fitzgerald in the 1920s, react against the previous generation’s efforts to change society according to notions of some revealed truth, but join the “idealist generation” in encouraging the celebration of individual effort and risk-taking.
As a result, “reactive” generations spark a renaissance of entrepreneurship in our economic life, even as overall confidence in our economic institutions declines as problems with an inner-directed approach to leadership become clear.
The latest example of this phenomenon was a March 14, 2012, op-ed piece in the New York Times by Gen Xer Greg Smith, entitled, Why I Am Leaving Goldman Sachs. In the article, Smith announced his resignation and decried the shift in the culture under the leadership of its CEO, Lloyd C. Blankfein, and its President, Gary D. Cohn—both Boomers.
When Smith first came to work for the company 12 years ago, he explains that he believed Goldman Sachs had a culture that encouraged leadership based on “new ideas, setting an example, and doing the right thing.” But now, he claims, the firm’s Boomer leaders failed to understand a basic truth: “If clients don’t trust you they will eventually stop doing business with you.”
This same focus on the customer was the first of nine principles that the Lost Generation founders of Goldman Sachs’ arch rival, Merrill Lynch, pronounced in 1940, which led to that firm’s great success.
But when Boomer Stanley O’Neal took over that company in 2003, he explicitly rejected what he called this “Mother Merrill” culture.
“To the extent that it is paternalistic and materialistic, I don’t think that is healthy. I guess there is something in me that rebels against that,” he told the New York Times, four years before the Merrill board fired him and CNBC put him on its list of the “Worst American CEOs of All Time.”
At the shareholder meeting called to ratify the once proud but now debt-burdened firm’s sale to Bank of America, Winthrop Smith, Jr., the son of one of the founding members of Merrill Lynch, denounced O’Neal in the same way that Greg Smith called out his former employer.
Smith, Jr. shamed the Merrill Lynch Board of Directors arrayed in front of him, for allowing one man to consciously unwind a culture and rip out the soul of this great firm.
What can we expect from corporations like these — and Gen Xers — in the years to come?
As more and more Xers publicly denounce the failure of Boomer-led institutions, and the need to deal with the problems that have been deferred for too long becomes urgently clear, today’s inner-driven, Boomer-led era will end in favor of a more outer-directed, customer-centric approach. [For more on this topic, take a look at futurist Andy Hines new book, ConsumerShift.]
This is why even as the reputations of large institutions have declined dramatically recently, small businesses and the entrepreneurial spirit they embody have become one of the most popular institutions in America.
A November 2011 national survey by Frank N. Magid Associates indicates that all big business’ approval ratings dwell in the lower regions reserved for Congress and politicians (31% favorable to 56% unfavorable). Wall Street and financial institutions fare even worse (23% favorable to 57% unfavorable).
By contrast, small business has an overwhelmingly positive rating of 82 percent favorable and 8 percent unfavorable. The differences exist, with little variation, across generational lines.
More and more members of Generation X (born 1965-1981) are entering the phase of life, from about age 44 to 65, which will provide the source of leadership for our society over the next decade.
During this same time, the large and group-oriented Millennial Generation (born 1982-2003) will be starting families and testing the values of the institutions they go to work for.
As these two generations begin to dominate American life and its economy, the entrepreneurial spirit and customer satisfaction focus they embody will force the leadership of many institutions to stop looking in the mirror for the answers to life’s challenges.
They will need to shift their focus to the dramatic changes taking place in the marketing landscape and embrace them in order to be successful. Customers, and their needs and wants, will become the North Star for an entire new generation of entrepreneurs.