Managing Generation X

June 1, 2004
ALMOST HALF of the workers in the United States are now less than 40 years old. That can be good news or bad news for today's over-40 managers. Today's

ALMOST HALF of the workers in the United States are now less than 40 years old. That can be good news or bad news for today's over-40 managers.

Today's workers bring a wealth of talent and abilities to their jobs. One of the challenges facing older managers is to understand and manage a group of newcomers whose attitudes and work ethics are substantially different from theirs.

It may not be easy, but it can be done — to the benefit of everyone — according to Bruce Tulgan, author of 12 books and founder of Rainmaker Thinking, a company best known for studying young people in the workplace and intergenerational differences.

Tulgan's company has spent the past 10 years studying the frontlines of the workplace. The firm has interviewed more than 10,000 people in 700 companies and has looked at survey data from more than one million respondents. Among the questions the company asks: How are you being managed? How does that affect your performance? How do you want to be managed?

The conclusion: it is getting harder to manage people.

“A lot of people will give you a lot of big ideas,” Tulgan said in his address at the Truck Trailer Manufacturers Association convention. “I'm not going to give you any big ideas — I'm just going to tell you what people are telling us on the front lines of the workplace.”

This is not your father's generation entering the job market. Norms and values of the workforce are changing, and that is making it more difficult for management, Tulgan said.

“There is a long-term shift away from the old-fashioned hierarchical approach to relationships in the workplace,” he said. “You used to hitch your wagon to an established organization, pay your dues, and climb the ladder. You did as you were told. You worked hard, and when you retired, you got a reward.”

Tulgan said the shift is away from the hierarchical approach and towards what he called the “short-term transactional” model. Under this model, present and potential employees want to know what the company wants and what it has to offer today, tomorrow, and next week. They were free agents — not people who planned to spend their career with one company.

“Ten years ago when we first studied this, it was considered a Generation X thing,” Tulgan said. “People coming into the workforce for the first time were considered to have an attitude. They had a short attention span, didn't work as hard, and wanted immediate gratification.

“Over the past 10 years, Generation Xers have grown up, but they haven't settled down. And instead of their attitude going away, it has spread across the workforce to people of all ages.”

Another surprise: During the downturn of the economy, the free-agent mindset got stronger. The reason — when times were booming, Generation Xers used their present job as a stepping stone to a better one. During the downturn, they used their present job as a safe harbor until a better one came along. But from the employer's perspective, the results were the same.

Conceding that there have always been generational differences in the workforce, Tulgan said that the situation now is different for three reasons:

  • Numbers. At one end of the spectrum, the workforce is getting older. Ten percent of the workforce was born before 1946, and every day, 10,000 Baby Boomers turn 55. At the other end of the spectrum, the workforce is getting younger. In the middle, the workforce is shrinking. This makes age differences more pronounced.

  • The demise of the seniority system. In this system, the older, more experienced people were in charge, and the younger people did as they were told. But in today's world, the only thing that matters is how much work an individual can perform. “In that environment, the seniority system is getting weaker and weaker.”

  • A changing business environment.

Tulgan said four generations are working together today:

  1. The Silent Generation. These are born before 1946. They make up 10% of the workforce.

  2. The Baby Boomers. They were born between 1946 and 1964. They comprise 46% of the workforce.

  3. Generation X. They were born between 1964 and 1977 and represent 29% of the workforce.

  4. Generation Y. They were born after 1977 and are 15% of the workforce.

Tulgan portrayed two stereotypes of Generation X. The first is that they are of a group of people who are slackers, disloyal, do not want to work hard, and want everything on their terms. Later, when the Internet burst on the scene, they were viewed as a new generation of business geniuses who could set up businesses without offering products or services.

“The reality of Generation X is that we were an accident in history,” Tulgan said. “Generation X just happened to be the people coming into the workplace for the first time during the 1990s when some of the most profound changes in the economy, society, culture, and the workplace were just starting.”

When Tulgan's company asked Gen Xers what they thought about the revolution taking place in the workplace, they would reply, “What revolution?” They had no other experience.

Death of a myth

Businesses in the 1990s learned to be lean and flexible, Tulgan said. A by-product was the prospect of frequent job layoffs — and less job security. The myth of a career with a single company was dead.

Other key trends during the 1990s included the tech boom, the dot-com boom, and a drop in unemployment levels — all of which were occurring as these new workers were getting their first tastes of real work experience.

“Experienced businesses were looking at Gen Xers with fear in their eyes,” Tulgan said. “They began to think that Gen Xers had figured out magical business models — that they could make money without providing services or product. That was the myth of the new economy. People who thought the new economy was about dot.coms and magical business models were not paying attention. The real new economy — back then and right now — is about a highly interconnected, rapidly changing, fiercely competitive, knowledge-driven global marketplace in which needs become unpredictable. That means that staffing strategy has to change.”

A jungle out there

For organizations to be lean and flexible, they sometimes must make ruthless business decisions, Tulgan said. It also means that individuals must be very aggressive in order to get their needs met.

“That's the real new economy. The difference between Generation Xers and everyone else in the 1990s was that Generation Xers never had it any other way.”

As their parents did, members of Generation X are growing up, buying houses, and raising families. They are the first generation to reach adulthood in the real new economy, but as they mature, they no longer want to spend a lifetime with one company as previous generations did.

“We are learning what the new conservative adult, security-seeking behavior looks like, and it is not a return to tradition,” Tulgan said. “It's about keeping your options open, because you have to take care of your family. There is no going back.”

Tulgan also has been interviewing those born after Generation X — an age group that already makes up 15% of the workforce. While cringing at the label, he nevertheless called them Generation Y.

“They will be the most high-maintenance workforce in the history of the word, but the good news is that they will be the highest-performing,” Tulgan said. “We are learning from them that if you want high performance, you must commit to high maintenance.”

Tulgan pointed out that the newest members of the workforce will be high performers in part because of the concern parents and teachers have placed on their self-esteem.

“From the beginning, these people have been told that they can do anything, and they have bought it,” Tulgan said. “They have very high expectations. They want to identify and solve problems no one else has identified or solved. They want to invent services and products and make them better, faster, and smarter. And they are willing to do a lot of work very well and very fast all day long. But they are not willing to do that in exchange for long-term promises.”

Great expectations

Unlike Generation X, those born later also have high expectations for their employers and established institutions. The reason, according to Tulgan, is that established institutions such as the stock market performed well during the formative years of those in Generation Y.

“But they also know that institutions such as the Soviet Union disappeared, Tulgan said. “If the Soviet Union can disappear, they know that your company can, too. So no hard feelings, but they only want to know what you have to offer today, tomorrow, and next week. If you tell a young person what your company can do for them in 10 years, they think you are trying to sell them a bridge.”

Educators jumped on self-esteem research in the mid-1980s, Tulgan said. Children were taught that their own feelings were important and that they can play by their own rules. Tulgan played back an imaginary dialog from school.

“The last one in is a rotten egg,”

“Joey doesn't want to be the rotten egg.”

“Well, someone has to be the rotten egg.”

“No, everyone is a winner here.”

With that as background, it is no wonder employees arrive late to work. Arriving at 8 o'clock sharp is the company's rule, but it is not the employee's rule.

Tulgan told of a soccer coach who allowed his team to elect its most valuable player. Every player voted for himself. People who have been raised like this feel great about themselves, but they pose challenges for their employers.

“You can't just manage with your business card,” he said. “In their lifetime, technology became more complex, but increasingly easy to use. So for Generation Y, their information management tool of choice is the menu-driven information system. This makes them would-be experts on everything.”

They may always find the right answer, but they don't always have the wisdom or context to understand the right answer, Tulgan said.

Despite the inter-generational differences, Tulgan believes younger employees are onto something. They know how to tap into technology. He calls it just-in-time strategic thinking. But something has been lost in this mindset — patience and depth that comes from more lengthy learning processes.

“Whose job is it to provide the context, experience, and wisdom?” Tulgan asked. “That's your job. You can't just write off this new way of thinking, learning, and communicating. It's valuable.”

The combination of Generation X and Y represents 44% of the workforce, and they are quickly redefining the values of the workplace, Tulgan said.

Initially the Generation X attitudes shocked their older coworkers.

“If Baby Boomers had maintained their outrage about these demands, this whole free agent mindset would have dried up years ago,” Tulgan said. “There's not a trend in the Western world worth its salt without the Baby Boomers. But instead, Baby Boomers are beginning to make the same demands as their younger counterparts.”

A matter of loyalty

Even those born before 1946 are beginning to develop different attitudes about the workplace. They see loyalty between employer and employee as dead, and yet loyalty is one of their core values.

Tulgan's research shows that loyalty to employers is returning among younger employees. However, it is not an old-fashioned loyalty that comes when everyone else is loyal, too. It is a loyalty that comes from the free market.

“What do you get in the free market? You get whatever you negotiate,” Tulgan said. “That means that managing people has become a day-to-day negotiation — and that is high maintenance.”

Tulgan said that the only way to drive performance in today's environment is to tune into this transactional mindset. If employees do not want to work on Thursdays, effective managers say okay — but they must insist that the employee accomplishes some defined tasks by midnight Wednesday.

Many employers make special concessions to valuable employees. The employer tends to ask the employee to keep the arrangement quiet so that he does not have to make the same deal available to others. Tulgan offered this imaginary dialog after a manager gave a special concession to Mary:

“Excuse me, but I understand Mary doesn't have to work on Thursdays. That's not fair.”

“Fair? You must think we are running some sort of commune here. Please let me explain. Mary doesn't have to work on Thursday because she does more work than you! If I ask her to do something, she does it! If I don't ask her to do anything, she figures out what to do and does it anyway! Tell me what you want — Mondays off? Tuesdays? Do you want to bring your dog to work, you weirdo? Tell me what you want, because there are a few things I need from you!”

Instead of covering up special arrangements, Tulgan suggested putting up a billboard in the parking lot that says, “Mary doesn't have to work on Thursdays. Come by my office and find out why.”

Negotiations not enough

It is not enough to simply negotiate, Tulgan said. To be effective, managers must constantly be involved in the performance of employees.

“We call this hands-on transactional management,” he said. “You have to be hands-on because what if Mary doesn't deliver? There is an under-management epidemic in the workplace. There are too many people in leadership positions who don't know about their workers or what they are doing. They don't talk to their people enough. If they do talk, they discuss everything under the sun except the work. The only way flexibility works is if it goes hand-in-hand with accountability.”

Tulgan said that rewarding people with flexibility comes last. Managers must put expectations on the table and keep them on the table in order to drive performance. This means setting concrete goals with clear deadlines on a day-to-day basis.

Such a system rewards high performers and brings mediocre performers up to a higher level. But management must be out there coaching their employees. Those employees who are not performing to expectations should be given help. If the person does not respond to the help, management should find another job for that employee or terminate his employment.

Performance problems come down to one of three things, Tulgan said:

  • Ability

    If the natural abilities of the employee do not fit the task, change the task.

  • Skill

    If the person needs training, arrange for him to get it.

  • Will

    Sometime employees are capable of doing the job, but they don't want to.

“If that is the case, you must find that person's needle in a haystack,” Tulgan said, referring to a perk that is particularly important to that individual. “What one person really wants is more valuable to that person than its overall value in the marketplace. But to do that, you must get managers to untie their hands, roll up their sleeves, and have the guts and skill to supervise on a day-to-day basis. If that doesn't work, get rid of them.”

Tulgan gave four reasons to terminate employees.

  • They get paid.

  • High performers hate to work with low performers.

  • Low performers cause problems that high performers have to fix.

  • Low performers send a terrible message — that low performance is an option.

“If your problem is retaining good employees, the first step is to get rid of the low performers,” Tulgan said. “If you do, you create an environment that will allow you to more greatly reward your high performers.

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