The Millennials Are Coming: Are You Ready?

On top of that, the leadership game itself is changing—and at high velocity. Aging infrastructure, price volatility, increasing mergers and acquisitions, escalating costs, and diminishing reserves all combine with shifting global political landscapes to raise the standards for effective leadership. Operational effectiveness is simply the price of admission for good leaders today. They must also be open to learn, lead change, and make decisions based on a clear ethical standard. Here is how the CEO of one energy firm described the company’s current leadership challenge:

"We believe that our 21^st century leaders must reflect strong ethics and values, emotional intelligence and a cohort approach.  Our culture looks to create an environment where leaders must be willing to be questioned, demonstrate vulnerability and not take things personal. In other words, good leaders need to be able to embrace change and overcome failures."

Another energy firm expects the business unit leaders in its operating companies to be able to meet the following business challenges in the next 2-5 years, concurrent with the anticipated exodus of industry leadership talent:  enhance operational excellence, drive growth, lead change in the industry, and foster a high performance culture.

This firm elaborates the elements of a high performance culture as involvement, collaboration, mutual care, shared commitment and agility.  These deserve notice because they relate to another demographic phenomenon:  the oncoming millennial generation who will serve as the industry's future leadership talent pool.

The 80 million members of the millennial generation, also known as generation Y, are those born between 1978 and 2000.  They are an even larger group than the baby boomers.  The characteristics of this generation have been analyzed, commented upon, and contrasted with the baby boomers and generation Xers who came before them.  Several key factors make millennials different.  Their "helicopter" parents hovered over them throughout their childhood and adolescence.  In addition, because millennials have had ready access to technology and media all their lives they are tech savvy and have developed homogenous thought and discourse through connectivity.  Further, the world in which they have come to maturity has been highly unstable, highlighted by such disruptive events as Columbine, 9-11, tsunami, and Katrina.  As a result, the millennials are impatient to live their lives.  But since the average millennial has emerged from college with $20,000 debt, they have deferred commitments to marriage and parenting. 

While much has been speculated and polled to determine how to attract and engage millennial employees and what they will be like in the workplace, graduate business schools have concrete experience to offer in these areas.  In 2006, the leading edge of the millennial generation entered MBA programs.  By 2008, millennials were the majority of MBAs, and by 2012 all MBAs will be millennials.  What have business schools learned about this generation that can help assure leadership succession in the energy industry?

Business school experience confirms that the millennial generation is best characterized as "the era of the perfected child."  Based on the factors that differentiate them from prior generations, millennials exhibit specific traits and values, in the classroom and student life, and from the application process to the placement office.

• They believe they are special.
• They are confident they will make a difference and exhibit a strong social consciousness.
• They are achievement oriented but also team-oriented.
• They are conventional and respectful.
• They are multi-cultural and inclusive.

What does this mean in the classroom?  Millennials demonstrate a mindset to follow the rules, work hard, and avoid mistakes rather than to win, excel, and stand out.  As a result, the best instructors provide millennials with structure, support, supervision, and frequent feedback.  Learning objectives, grading requirements, and assessment standards must be clearly communicated and straight forward.

Millennials eagerly take up assignments that require teamwork and technology.  They prefer fast-paced, inclusive, and entertaining learning activities rather than traditional styles.  (And many professors are learning to prefer this, too.)  However, in an academic setting, extensive use of technology and collaboration requires a more flexible and fuzzy definition of cheating.  For example, when students can access the Internet and share information with one another in real time during classes, and even tests, the boundaries that define original work need to be redrawn.  Further challenges for instructors dealing with millennials include providing structure and tools that help them develop more independence and creativity.  And on occasion, college professors must deal with "helicopter" parents of MBA students who aggressively support their adult children's need for clear and clearly applied rules and standards for admissions and grading.  The encouraging bottom line, though, is that millennials in MBA programs can be counted on for high academic performance.

What does all this mean in the workplace?

Millennials expect technologically connected work and social processes.  Email is outmoded.  Instant messaging and social networking technology are the norm.  It is easier for millennials than for earlier generations to blur the lines between personal and professional lives, but this does not mean that their lives will lack balance.  They are adept at multi-tasking, and do so in a way that blends personal and professional spaces throughout the day.  Old standards that distinguish "work time" and "work related activities" will have to be re-evaluated just as "cheating" is in academia.

Millennials expect to share information quickly, on demand, and in digestible sound bites.  In this respect, they expect to relate to authority on an equal footing. However, since they are team oriented and consensus driven they are not confrontational with peers or management.  Therefore, management may need to make special effort to encourage honest communication and feedback.  Although compliant, they will expect that decisions and policies are clear, transparent, and communicated authentically.

Because they are collaborative, compliant, and need more time and feedback from their managers, millennials should not be expected to respond to leadership that gives general direction and values employee initiative and autonomy to determine how best to carry out an assignment..

They will expect a workplace that displays diversity among their coworkers and leaders with no artificial barriers to responsibility.  Because they are well-traveled and multi-cultural, they are more adaptable than previous generations to the imperatives of global competition.

Finally, as achievers, millennials aim high and expect to move up quickly.  Thus they need authentic and reliable communication about the realities of what it takes to progress in the organization and support in fulfilling the requirements.

What millennials will be like when they assume positions of leadership is less clear.  While the leading edge of this generation is only now beginning to move into managerial roles, it can be speculated that conflict-oriented conversations will be difficult for millennials in supervisory positions.  Collective decision-making will be easier, but individual decision making may be more difficult.  As a result, millennials may not want positions of responsibility and authority as eagerly as past generations.

The experience of business schools suggests core strategies for companies to bring millenials into the workplace and tap their potential to contribute as industry leaders. 

To compete in attracting the millennial generation to their workplaces, employers should be able to articulate a vision that enables millennials to see how, by joining an organization, they can contribute to something meaningful.  Second, authentic recruiting  communications enables millennials to recognize an alignment of interests between them and a prospective employer.  Also, employers should be ready for parental involvement in exploring compensation offers, benefits, career paths and similar questions.

To keep millennials engaged once in the organization, managers should be prepared to give them clear direction and provide frequent follow-up.  Feedback should include progress on task components, full assignments, and fulfilling their position's mission.  It should also relate to their overall progress within the organization.  This includes readiness to discuss how the successful completion of a task can be recognized through promotion and salary increase, and the policies and practices that govern formal recognition and reward. Millennials also must be made to feel that their work is meaningfully contributing at the organizational and even social levels.  As one business school placement officer put it, "firms can satisfy millennials by clearly defining their career paths, monitoring their progress and communicating more frequently along the way.  They need to focus on offering more feedback, which doesn't have to be formal, yet provides these young employees with confirmation that they are making a difference and advancing.  They simply want to be recognized more.  This group has been playing organized tee-ball and soccer since they were pre-schoolers and getting a trophy-win or lose."

How to develop millennials as managers is less clearly defined.  One prominent high-tech firm offers a clue.  They include strength-based material, rooted in Gallup research, in their training for first line managers.  This provides millennial managers with tools that enable them to play on their subordinates' strengths rather than repairing their weaknesses.  In addition, appreciative inquiry methods will enable millennial managers to promote organizational effectiveness by sharing best practices among teams.  And proven methods of interpersonal communication will create a sense of safety and confidence when dealing with conflict and high pressure situations.

It helps that the experience of thought leaders in management development is that a new development model is emerging, one that is more applicable to the needs of the millennial generation.  Conventional wisdom is that seventy per cent of management development takes place on the job. Twenty per cent takes place through relationships with mentors and supervisors, and ten per cent takes place in the classroom.  According to the new model, fifty per cent of management development takes place through challenging assignments and formal and informal supervisory and mentoring relationships.  Thirty per cent takes place in today's "classroom" that combines face to face instruction, technology-enabled communication within learning groups, application-oriented simulations and projects, formal coaching relationships, and peer accountability, all in bite-sized chunks.  The remaining twenty per cent takes place outside the workplace, in the community, based on involvement with socially relevant activities.  For example, a manager can learn as much about team work by participating in a Habitat for Humanity project than by an artificial team building activity.

Looking more broadly at development opportunities will be the key to developing millennial managers.  "Like it or not," one business school faculty member says, "millennials are our future managers.  Employers must offer opportunity and challenges immediately, and de-emphasize promotions and titles and instead map out their potential for growth early in their tenure."  And today's managers from earlier generations will have to learn how to serve as instructors, mentors and coaches to a younger and more diverse group of high potentials.  Preparing older managers to mentor and coach millennial managers is comparable to what some organizations are already doing to prepare senior male managers to act as mentors to high potential females.  Old barriers and prejudices have fallen away in the face of broad social progress and the urgent need to develop a new generation of effective business leaders.  The will and intent is present in the current generation of senior managers, but not the know-how.   

Fortunately, business schools with experience in working with MBA students from the millennial generation can help firms in the energy industry tap the leadership potential in the oncoming millennial generation.  They can help the industry familiarize students with opportunities in the field.  For example, membership in the SMU Cox School of Business's student energy club is booming thanks to the support of firms in the industry ,as well as the current downturn of opportunity in traditional MBA fields.  Placement offices are eager to work with companies to provide students with internship opportunities that familiarize them with the realities of the workplace-and to familiarize companies with the unique qualities of the millennial generation students who will soon be their job candidates and high potential managers.  Finally, through business school executive and management education programs, firms can tap into educators with real-time experience working with the millennial generation for targeted management training, for millennials as well as their managers.  This training, particularly in interpersonal, communication, and leadership disciplines, will provide millennial high potentials with the tools and support to succeed as leaders and meet the expanded leadership requirements of the twenty-first century energy industry.