"You may now turn over the paper."

Not exactly the most memorable phrase, but it did the trick. With the sound of a wave crashing on to a pebbled beach, all at once, in perfect unison, three hundred and fifty students turned over their question papers and began the exam.

At which point my work was done. As the starter, my role was to get the exam underway - to fire the starting gun, as it were. After that our team of expert invigilators would take over, fetching and carrying extra writing paper, replacing faulty pens, dispensing paracetamol, and generally watching over proceedings with hawk-eyed levels of beadiness.

And as the bells in the clock tower chimed, all that remained for me to do was to tip-toe out of the hall. My big moment had passed. Now I knew what the man who starts the Grand National must feel like once he’s pulled the lever and the horses and jockeys have galloped over the horizon. All that preparation then it’s over.  

Admittedly, things hadn’t shaped up exactly as I’d planned. In my mind, the plan was to kick things off with a few well-chosen words of wisdom - an inspirational quote or two designed to calm student nerves; a carefully-crafted bon mot from a respected business leader or much decorated sportsperson. But when the moment arrived, it seemed as if everyone I was about to reference was either recently dead or recently publicly shamed. Not the sort of thing you want to distract the undergraduate mind with seconds before an exam. So it was au revoir to the inspirational sayings of Lance Armstrong and on with the script.

For as you and I know, exams are stressful enough without outside interference. These days, just gaining entry to the exam hall is like checking in for a long-haul flight. Upon arrival, students are required to divest themselves of all technological devices – phones, tablets, headphones, 3D glasses, jet packs. All gadgets must be placed in flight mode and stowed beneath seats. Fluids and prescription medicines must be carried in a transparent bag and declared to the invigilators. Wristwatches, until recently, were fine. All that changed with the invention of the smart watch. Smart watches are to exam invigilators what Magaluf is to the Spanish tourism industry. It won’t be long before someone orders a crackdown.

So there they were, three hundred-and fifty students ranked in rows, each with around fifteen hundred pounds’ worth of cutting-edge technology at his or her feet – more computing power per person than NASA used on the Space Shuttle. But rather than harnessing it and using it as a platform for learning, like most universities, we’re still getting to grips with how best to integrate it into mainstream education. This is why so many students are still required to sit two or three-hour exams. For many of them, this must feel outdated. Examinations made sense when ‘being educated’ meant being able to recall large amounts of information, but less so when that information is available everywhere via a multitude of devices.

That’s not to say that exams lack value. For some subjects, they remain an effective medium for assessing students’ levels of understanding. And what’s wrong with encouraging the development of memory skills? A good memory is also essential for mental wellbeing.

But exams should never be a default assessment tool – particularly given that the skills required to pass exams are rarely those required to function in the 21st Century.

In universities, the issue of authentic assessment is rapidly gaining traction. Authentic assessment is all about developing and applying types of assessment which from a student perspective are both meaningful and worthwhile. Authentic assessment includes presentations, team work tasks, work-based assignments and report-writing. And where some exams proscribe the use of technology, authentic assessment actually encourages students to integrate it into their learning.  

A few years ago while invigilating another exam, a student asked if he could use his laptop. When I told him this wasn’t allowed, he asked why then had he been allocated a specially designed ‘laptop desk?’ When I told him that no such thing existed, he pointed triumphantly to the hole in the top right-hand corner and said, “Well what’s that for then?”

For him, a digital native, this was clearly and self-evidently the hole through which a computer’s power cables are threaded.

Actually, it was for an ink well.

 

Dr Paul Redmond is director of Student Experience and Enhancement at the University of Liverpool.

Bored? You should be!

For students, digital technology is now a ubiquitous part of everyday life. Most will be unable to comprehend life ‘BC’ (Before Computers). It’s like trying to imagine life before The Simpsons. But while this technology is neither good nor bad, neither is it neutral. The digital revolution has changed forever the way people, particularly young people, interact with the world. To demonstrate this, let me ask you a question.

When was the last time you were bored? I mean, seriously bored. Watching paint dry bored. Three-toed sloth bored. Can’t remember, can you? That’s because the minute you got your hands on your first mobile phone you squandered forever the capacity to be bored. With its constant chatter and ego affirmation, digital technology has rendered boredom redundant. How can you be bored when in your pocket is all the world’s learning, all the world’s music library, all the world’s TV channels?

Yet boredom is an essential, perhaps the essential prerequisite for innovation. According to a 2014 study in the Journal of Experimental Social Psychology, people who are bored are more likely to engage in ‘sensation seeking’ – they’re more likely to seek out activities and experiences which ‘engage their minds and stimulate the brain’s reward centres.’ These people are more prone to ‘divergent thinking styles’ – which includes the ability to come up with creative new ideas. If you want you and your team to be more creative, switch off the phones and do, well, nothing.  

For universities, this represents a challenge. So focused are we on enhancing the student experience that we have a tendency to urge students to be as busy and active as possible. What we also need to do is give them time and space to be bored. Boredom builds businesses, transforms industries and drives entrepreneurs to reimagine established products and services. As Steve Jobs himself said, “I’m a big believer in boredom. Boredom allows one to indulge in curiosity, and out of curiosity comes everything.”

Now we know why he ended up reinventing the phone.

Because happiness isn't the truth

Had he been alive today, the Greek philosopher Solon would have made a fortune from TV appearances. His off-beat way of telling it like was, particularly when the occasion didn’t call for it, would have gone down a storm on the Graham Norton Show.  

Take this famous one-liner which he delivered at a gathering of the ancient world’s nouveau riche – a kind of Athenian, ‘The Only Place is Ephesus.’  When asked to nominate which of the assembled celebs was likely to be the happiest, Solon – channelling Jose Mourinho - replied,

“Count no man happy until he is dead. Until then, all is luck.”

Even now, two-and-a-half millennia later, you can picture the awkward shuffling of sandals, the twitching of togas.

So who would have thought Solon’s approach to public speaking may be about to make a comeback?

As the new academic year gets underway I’ve been preparing to deliver a programme of welcome talks to our new first years. These talks are notoriously tricky to get right. The students are nervous, time is short, and there’s a lot of information to get across. And then there’s the generational shift which has occurred this year.

It’s incredible to think that the majority of this year’s new undergraduates were born in 2000. By 2019, their generation will have overtaken the Baby Boomers to become the world’s largest single demographic cohort. If their generation is half as dynamic as the Boomers, they’ll transform and redefine everything from politics to the world of work.

But Millennials also face their own unique set of challenges. Despite having double the life expectancy of their early 20th century ancestors, one-in-three of this generation may never be able to afford their own home. Instead, many will live with their parents well into their thirties – a challenging proposition for both parties. By the time they reach the age of thirty-two they will have experienced at least four significant career changes: so training and up-skilling will become the norm.

We also know that during their twenties one-in-four of them will go on to experience some form of mental health issue. It’s this that universities are determined to address – and welcome talks offer a useful forum for starting the conversation.

So this year, I channelled my inner Solon and did something new, bold and original: I told it like it is. Briefly, here’s the key points I delivered to our new first-year undergraduates. 

1.    No matter how great a time you’re having, you will get homesick. Everyone does. So when you feel it coming on, don’t sit in your room, find someone to have a chat with.

2.    University is often fantastic, but there will be times when it won’t be. Enjoy the good times and learn to stick out the bad times. 

3.    Be sceptical about what people write on social media. In real life, no one is “super excited” all the time.

4.    Put the phone down and get involved. Turn up to things. You’ll be amazed at what’s out there.

5.    And finally, in the words of another philosopher – this time from Liverpool - who in his own day developed a Solon-like reputation for telling it exactly like it was,

 

“It will all be OK in the end. If it’s not OK, it’s not the end.”

John Lennon and Solon – now that would be a chat show to remember!

 

"Senator, we run ads."

Every now and again, the old and new worlds of work collide – often with spectacular consequences. It happened again earlier this year, and all it took were four words.

On 11 April, Mark Zuckerberg, founder and CEO of Facebook, was summoned to Capitol Hill to be questioned by a panel of US senators. The Cambridge Analytica leak, in which it was claimed millions of people had had their personal data shared without permission, had led to concerns about the social media giant’s security policies. Then there was the issue of Facebook itself. What sort of Lex Luther-like powers was it packing? What secret strings was it pulling? And with its global reach and soft power, who was calling the shots - Facebook or the Fed? There was only one way to find out. Bring out The Zuck!

So there he was, in a hearing room at the Hart Senate Office Building on Capitol Hill, Mark Zuckerberg, suited and booted and looking for all the world like an undergraduate on a work placement. Around him were assembled the world’s media – all waiting for the moment that the questions would begin. And who better to kick things off than the longest serving public servant in United States history. Step forward 84-year old Utah senator, Orrin G. Hatch. At last, the moment when a politician would exert authority and show who was boss. And

And boy, did he fluff his lines.   

“So, how do you sustain a business model in which users don’t pay for your service?”

For half a second, silence. Zuckerberg blinked, seemed confused. It was like he’d just been asked what kind of bees produced milk. When he recovered, his answer was devastating:

“Senator, we run ads.”

It must have taken a lot of self-control not to yell, “Duh!” But a Duh moment is what it was. As in, “We run ads - DUH!” Without understanding how Facebook makes its money, the 21st century makes no sense. Here, in real time, was a full-on collision of the old and the new worlds of work: on one side, the old world of work, a world in which businesses made or sold tangible things that you could drop on your foot and which were paid for by customers. And on the other, the world of ‘thin air’ organisations worth more than nation states, with miniscule workforces and billions of monthly users – most of whom don’t pay a thing.  

When the Q&A was over, Hatch and Zuckerberg looked at one another in polite bafflement. My advice is to get used to that look. You’ll be seeing a lot more of it in the years to come. It’s the look of the old world of work as it encounters the new.

In the 20th century, to understand the old world of work, it was said that first you had to grasp the four P’s – Place, Product, Promotion, and Price. 

From now on, four words will do: “Senator, we run ads.”

When Brains met Brawn

On the face of it, universities don’t appear to have much in common with the glamorous, dangerous, star-studded world of Formula 1. Lewis Hamilton doesn’t exactly look or behave like your average don. And no academic would waste excellent champagne by spraying it over the vice chancellor – gold TEF or no gold TEF.

But forget the fast cars, sun-drenched race tracks, movie stars, jet-set lifestyles, the Russian oligarchs basking on their moored-up super-yachts … put all that aside, and you’ll see that higher education and Formula 1 could be twins separated at birth.

This newsflash came to me while reading Ross Brawn’s book, Total Competition. During a lengthy and tumultuous career, Brawn formed and led a number of hugely successful grand prix teams. As supremo, he worked with the top drivers: Schumacher, Rosberg, and champagne-sprayer-in-chief himself, L. Hamilton. During an average season, Brawn’s teams were like the Big Four accountancy firms at a graduate awards dinner: they won most of the awards.

And then he was gone. Vamoosed. Retired to write his memoirs.  Rumour had it that there might have been a falling out with a certain pint-sized billionaire. But even if you are unmoved by the whiff of high-octane motor fuel, Brawn’s career advice is well worth heeding. There’s a lot we in our sector can learn from the world’s leading petrol head. And to benefit, you don’t need a pad in Monaco.

For example, consider what F1 has done for hospital administration. A few years ago I worked with a business professor who had been approached by a head of Accident & Emergency who was worried that her patients were having to wait too long before seeing a doctor. Patients were arriving at the hospital in ambulances only to have to sit around for hours before even catching a glimpse of a white coat. To make matters worse, once better, they were also spending hours waiting to be discharged. What should have been a smooth in-out operation was beginning to look like Euston Station during a train strike.

Clearly, something was very wrong with the hospital’s administration. The prof had an idea. He got in touch with a UK-based Formula 1 team and asked if they might be willing to help. This team was famous for being able to change a set of tyres in under two seconds (remember that when you next visit Kwik Fit). Over the course of several days they worked alongside A&E staff to revolutionise their processes. The results were dramatic, leading to a sharp reduction in waiting times. The name of the hospital cannot be disclosed, but if ever you visit your granny in hospital and find her surrounded by a team of 20 nurses in helmets and anti-inflammatory suits, that’ll be it.  

Universities are also thinking about how to make processes more efficient and effective. F1 teams are obsessive about stripping out inefficiencies and maximising teams. They manage complexity while striving for simplicity.

If you’re also looking to simplify processes or make systems more efficient, here’s Ross Brawn’s top ten tips:

1.       Strategy is a system: a philosophy from which process flows. Ultimately, strategy is a philosophy of processes. As ‘Integrating, applying processes and approaches, smoothing out.’

 2.       As far as possible, avoid unnecessary conflict: strategy is about winning not fighting.

 3.       Build trust consciously: treat people how you want to be treated yourself.

 4.       Know yourself and know the other.

 5.       Embrace humility. Despite his fabulous success, Brawn hardly ever bothered to turn up on the podium to collect awards and trophies. Instead, he let more junior members of the team take the glory.

 6.       Invest in people and culture.

 7.       Take the measure of time. Look to the long-term changes; plan and prepare for the changing landscape.

 8.       A complete process leads to a competitive product. Ross talked about the ‘complete car’ – that’s a competitive car. Bring together all the components.

 9.       Develop and apply a set of rhythms and routines. Plan the year ahead. Make sure everyone knows what his or her responsibilities will be. Question: what’s the plan for the coming year? What works? What do we need to do at each point in the year to yield the maximum result?

 10.   Just adopt: As Brawn writes, ‘Respect the competition and learn and steal from them: people, ideas, and methods, anything that can make you more competitive.’

In universities, we’d probably call stealing from the competition plagiarism. Perhaps it’s time we focus less on brains and more on Brawn.

"This is a day that I've been looking forward to for two and a half years."

Go on, admit it, you’re hooked. Sixteen words in and already he’s got you in a brain-lock. What exactly has Steve Jobs, that Mahatma Gandhi-lookalike in a turtleneck, been looking forward to for not one, not two, but a full two and a half years? We’re about to find out:

 "Every once in a while, a revolutionary product comes along that changes everything. And Apple has been – well, first of all, one’s very fortunate if you get to work on just one of these in your career.

 Apple’s been very fortunate. It’s been able to introduce a few of these into the world. In 1984, we introduced the Macintosh. It didn’t just change Apple; it changed the whole computer industry."

It’s at this point that the video shows the audience starting to whoop and applaud. It’s as if Elvis has re-entered the building clutching an Apple Mac. Despite the minimalist stage set and the studied casualness of the presenter, the excitement is at fever pitch.

“Well, today, we’re introducing three revolutionary products of this class. The first one is a widescreen iPod with touch controls. The second is a revolutionary mobile phone. And the third is a breakthrough Internet communications device.”

So, three things: a widescreen iPod with touch controls; a revolutionary mobile phone; and a breakthrough Internet communications device.

An iPod, a phone, and an Internet communicator. An iPod, a phone … Are you getting it? These are not three separate devices, this is one device, and we are calling it iPhone. Today, today Apple is going to reinvent the phone.”

If you haven’t watched it, you can catch it online. This was a speech given by Steve Jobs in January 2007 at the San Francisco Macworld convention. It’s since been heralded as one of the greatest speeches ever given by a business leader. Admittedly, the bar wasn’t set too high.  

 Watching it again ten years on, the first thing that strikes you is the hype. BC (before computers) CEOs didn’t act or talk like this. And they certainly didn’t wear jeans and white trainers. Imagine old Henry Heinz standing up and announcing, “Baked beans, tomato sauce, a can. Baked beans, tomato sauce, a can … Are you getting it? Today, Heinz reinvents the baked bean.”

But in Jobs’ defence, the hype turned out to be justified. Last year, sales of iPhones topped one billion. Jobs’ prediction about reinventing the phone proved spot on. If anything, he was underselling it. What no one at the time realised, however, was that once unleashed, the dogs of invention weren’t about to go back in their kennels.  

 Recently, I have been discussing the impact of the iPhone with students. For them, phones have always been smart, have always been mobile. The iPhone and its ilk are as ubiquitous for their generation as TV and radio were for their parents.’  

 But if technology is neither good nor bad, it’s definitely not neutral. What no one in 2007 realised was that Jobs’ invention would go on to transform not just the computing industry, but also the worlds of higher education and graduate recruitment.

 As we mark the tenth anniversary of Steve Jobs’ Macworld speech, here are five ways that the iPhone has changed the world of work as many of us now know it.

 

1. End of intermediaries

 Pre-smart phone, the only way to access the Internet was via a desktop computer. From 2007 onwards, the internet became personal and portable. You carried it in your pocket.

 This apparently minor detail empowered people – particularly the young – in ways that would have been unimaginable to earlier generations. It was like Gutenberg’s press, but pocket-sized and infinitely more powerful.

 It also sounded the death knell for any intermediary that traded by offering a gateway to information.

 In universities, the early casualties were the careers libraries. The iPhone led to a holocaust of lever-arch files, information booklets and employer brochures. From then on, recruiters and potential hires could liaise with one another unimpeded and without the need of a digital chaperone.

 2. Apps

 Since 2007, 140 billion apps have been downloaded from Apple’s iTunes store. In turn, millions of apps have been developed for almost every conceivable function, including of course, graduate recruitment. An entire industry of app designers, web managers, media buyers and e-commerce specialists has been created. It’s also created a new and thriving graduate recruitment industry in cyber security.

 3. Social media

 Although social media existed prior to 2007, smart phones turned it into a mass communication channel. Once you had a smart phone, no matter where you were or what you were doing, you were never more than a screen tap away from your ‘friends’. And yes, that includes lecture theatres.

 4. Blurring of work and leisure

 Pre-smart phones, there was no way you could take your Sony Walkman into a boardroom. In those days, work and leisure were clearly demarcated. But with an iPhone, your work emails sit seamlessly alongside your music library and your family photos. In Jobs’ ‘i-world’, work time blurs seamlessly with leisure time, and of course, vice versa.

 5. Virtual reality

 As anyone who has observed a room full of university students waiting for a lecture to begin will testify, thanks to smart phones, reality is fast becoming less interesting than the story told about it later. In other words by connecting us to the world digitization risks disconnecting us from the people next to us. We’re all together and thanks to our handheld devices, all alone.

 An iPod, a phone, an internet communicator … Are you getting it?

Generational Investing: the world according to Generation Selfie

Generational Investing: the world according to Generation Selfie (part

According to Alexis de Tocqueville, every generation is a new people. In this two-part article, Dr Paul Redmond presents an overview of Generational theory and an insight into how understanding generations can provide a powerful insight into investment behaviour.

 

‘Each new generation is a new people’

In ‘Democracy in America’, French political thinker Alexis de Tocqueville wrote, ‘Amongst democratic nations, each generation is a new people.’[i] In recent years this theory has been amply tested. As a result, almost 200 years after the publication of de Tocqueville’s seminal work, more information has been collected about today’s five generations than about any in history – not only in the West, but across the world. For business leaders and analysts, this knowledge offers numerous benefits. Extensive research is now available to provide a unique insight into how each generation thinks, behaves, and invests resources.

The aim of this article is threefold. First, it will provide a brief overview of generational theory, one of the most exciting and innovative theories to have emerged in recent years from the fields of sociology and demographics. Next, the article will focus on Generation Y – the ‘digital natives’[ii] who are currently transforming (and being themselves transformed) by the combined forces of technology, globalisation and values. Finally, the article offers key insights into how Generation Y are predicted to behave as investors and consumers.

 

Generation Y: the first digital natives

Generation Y (also referred to as ‘Millennials’) were born between 1980 and 1999 and, over the next decade, are on course to overtake the Baby Boomers to become the world’s largest generation. Globally, there are over 2 billion members of Generation Y, with 86% living in emerging markets.[iii] The impact of Generation Y will transform the workplace. Estimates are that by 2025, Generation Y will account for 75% of the global workforce.

While the Baby Boomers remain the generation that possesses the financial clout to outspend all other generations, there are signs that this prominence is set to wane. Generation Y is rapidly becoming the new economic powerhouse – in 2015 accounting for $1.3trn in consumer spending (by 2025 this figure is expected to reach $8.3trn in the US alone). None of this is accidental. Much of the wealth of Generation Y is being transferred to them by their Baby Boomer parents – an unprecedented $40trn inter-generational gift that analysts have termed ‘the Great Transfer’.

Members of Generation Y are commonly referred to as the world’s first ‘digital natives’ – the first generation in history for whom computers are not strictly speaking ‘technology’ (the rule of thumb is if it’s been around before you were born, it’s not ‘technology’). As far as Generation Y is concerned the Internet has always existed, telephones have always been mobile, cameras have always been digital. With a default global mind-set Generation Y is naturally entrepreneurial, working ‘with’ organisations rather than ‘for’ them, and looking to take career breaks within the first five years after university.

 

Generation Y: motivations and priorities

Central to the Generation Y mind-set are authenticity and sharing. In a study by US Trust, 67% of Millennials claimed that their investment decisions were a way to ‘express their social, political or environmental values’. Accompanying this is a strong sense of independence. More than six out of ten Generation Y graduates intend to switch careers frequently during their working lifetimes. This compared to 84% of Baby Boomers who said they intended to remain in the same job for the rest of their working lives.

But this doesn’t mean that Generation Y isn’t ambitious. In a recent survey by PricewaterhouseCoopers, 52% of graduates said that the defining quality which would make a prospective employer attractive to them was the possibility of career advancement. 65% of respondents identified the opportunity for personal development.

Unlike Generation X, Generation Y is motivated by civic and global values. With a global outlook, Generation Y has a strong sense of right and wrong – which it sense-checks via social media. At work, Generation Y expects to be treated fairly and equitably – from day one. Running in parallel to this is a demand that organisations remain true to their stated corporate social responsibility (CSR) strategies. 

Generation Y as future investors

My own research has highlighted the impact of the 2008 economic downturn on the financial confidence and outlook of Generation Y.[iv] This downturn, first highlighted by the bankruptcy of Lehman Brothers, led to a generation-wide loss of faith in some high street financial institutions – a loss which, paradoxically, has left Generation Y in a ‘double-bind.’  On paper, they are the most educated and qualified generation in history. And yet in Europe alone, the spiraling costs of housing means that just under half of them still live at home with their parents. According to a study by Accenture, 80% of Generation Y believes that the economic downturn has taught them the importance of accumulated savings. Nevertheless, almost half have yet to start saving for retirement.

Generation Y’s lack of financial literacy is well documented along with a growing sense of alienation from high street banking institutions. According to Scratch Viacom’s ‘Millennial Disruption Index’ (MDI), 53% of Millennials fail to see any difference between what their current bank offers them versus its competitors. Partly this is down to a growing generational gap which is emerging between traditional banks and Generation Y.

‘YOLO’ (you only live once): Generation Y markets

Research shows that Generation Y inhabits a ‘sharing economy’, in which access to services and products are afforded a greater level of importance than purchases. Whereas earlier generations attached value to prestige purchases, Generation Y prioritises lived experiences – all of which, in order to register value, have to be socially referenced via social media. This constant social referencing is a key generational characteristic: unless an activity, experience or purchase has been shared via social media, as far as Generation Y is concerned, it does not fully exist. ‘Reality’ for this generation is not nearly as interesting as the story they will tell about it later via social media.

The growth of the sharing economy, coupled with Generation Y’s propensity to invest in services and experiences, means that potentially lucrative investment opportunities should arise in markets in which sharing opportunities are prevalent. Examples are shared finance, shared accommodation (an example of which is Airbnb), car sharing and car rentals, music and video streaming, hotel rooms, access to luxury goods, property sharing, self-storage and asset sharing. With their capacity to trigger the inner Generation Y entrepreneur, industries which provide opportunities for ‘C2C’ (customer-to-customer) transactions will be particularly important to Generation Y consumers.

C2C and F2F

Of course, what allows each of these areas to thrive and multiply is their almost seamless capacity to involve a strong digital interface. For Generation Y, accessing a product or service via the internet is a given. There is, however, a caveat. When seeking financial advice, my own research found that Generation Y still prefers ’F2F’ (face-to-face) interaction with a skilled financial adviser. In this, Generation Y reflects the values of previous generations. The only difference is that Generation Y expects the adviser to be available whenever he or she is required. No doubt this is another reason why high street banks are struggling to gain the attention of younger consumers.

Generational investing: the world according to generation selfie (part 2)

Dr Paul Redmond, Director of Student Life at the University of Manchester in the UK, explains the key findings of his work on ‘generational theory’ and the implications in a fast changing world. In this, the second of a two part series, Dr Redmond explains the implications for global businesses of aligning themselves with the values of Generation Y. He explores the importance of ‘authentic’ experiencesand reveals the three key messages that businesses need to heed to attract and retain Generation Y.

Part 2: Channeled disruption: attracting and retaining Generation Y

‘Burgernomics’

An example of the disruptive impact of Generation Y on established business models has recently appeared in the high street in the form of a US hamburger franchise called ‘Five Guys’. Originally a family business, Five Guys is taking a bite from the burger business, which in the UK, as in other countries, remains heavily dominated by Baby Boomer and Generation X leviathans such as McDonald's and Burger King. With over 1,000 restaurants globally, Five Guys is based on core Generation Y values: there is a strong emphasis on providing an ‘authentic’ experience, a dependency on ‘flash-mob’ word of mouth and social media marketing campaigns, a strong focus on values, eg, eating healthy and wellbeing, an engagement with the local community and an obsession with getting the product right (this was the firm that refused to deliver hamburgers to the US Pentagon – arguing that running a delivery service would reduce the quality of the product). In applying this core Generation Y business model, suddenly the old and established ‘Boomerist’ market leaders look distinctly out of touch, corporately hidebound and dated. The fact that the big burger chains sell cheaper burgers barely registers. Businesses like Five Guys have demonstrated that markets aimed at Generation Y do not have to be primarily price-sensitive. Far more important is the authenticity of the experience and the capacity to live up to the brand values. 

The success of firms such as Five Guys offer useful insights into how future businesses will need to compete if they are to attract and retain Generation Y consumers. Generation Y is almost naturally collaborative and places a strong emphasis on peer recommendations. Much of this is driven by social media, which now plays a powerful role in shaping Generation Y’s view of the world.

This is hardly surprising – the statistics alone are staggering. Generation Y owns more digital devices than any other generation. Studies show that globally, 94% of the cohort possesses a cell phone; 76% a smart phone; 70% a laptop; 69% an iPod/MP3 player; 63% a games console. Generation Y is the world’s first generation to have effectively digitised its leisure time.

 

Implications for organisations

For global businesses, the rise of Generation Y highlights a range of challenges. It is no surprise that many of today’s leading firms were built by Baby Boomers for Baby Boomers. As such, they reward traditional Boomer values such as loyalty, tradition, and top-down command and control models.

To attract and retain Generation Y – both as investors and employees – there are three key messages that all businesses need to heed:

1) New psychological contract

Unlike previous cohorts, Generation Y works ‘with’ organisations rather than ‘for’ them. This represents a major change in the traditional psychological contract between employers and employees. Where once employees would sell their time, often years in advance, in return for a regular pay check, Generation Y is motivated primarily by opportunities for career development and personal growth. Employers that can make the shift from the traditional to the new psychological contract will have a head start in recruiting and retaining Generation Y talent.

2) Living up to the value proposition

Generation Y is highly motivated by values and a sense of justice. Thanks to social media, organisations that fail to live up to their value proposition are at risk of being found out and publicly exposed. Walking the walk is a key Generation Y attribute that leading firms are quick to recognise and apply.

3. Managing social media

Globally, 90% of Generation Y employees have a social media profile. Facebook alone has over 1.4 billion monthly users and 930 million active daily users. For organisations, social media represents an opportunity and a threat – an opportunity, in that social media platforms provide an excellent opportunity for engaging with new online communities and by-passing traditional marketing barriers; a threat, in that unless businesses appoint social media managers, there is a danger that the business could find itself in one of the all too frequent social media firestorms that frequently light-up the Twittersphere. The message for business is simple: manage social media before it manages you.

 

Selected references

[i]Democracy in America’, de Tocqueville, A. (1835)

[ii] ‘Digital Natives, Digital Immigrants’, Prensky, M.: On the Horizon Journal (MCB University Press, Vol. 9 No. 5, October 2001).

[iii]Generation Next – Millennials Primer’, report by Bank of America Merrill Lynch (2015)

[iv]Generations Apart: exploring employee benefits solutions for today’s workplace’, Redmond, P, White Paper Report for Barclays plc (2013).