Managing Millennials (20-35 year olds)

Should you worry about “generational differences?”  That’s today’s question.  After all, people are people, so shouldn’t you treat them all the same?  With respect and dignity.  Fairness.  Trust.  Same old stuff.  Right?

Not according to the top dog at Gallup.  When asked, “Are millennials really that different?”  Jim Clifton responded, “Profoundly so.”  And FCG agrees, having seen their impact on investment cultures.  But not all investment leaders see it that way.  Here is a vote from a roomful of investment leaders on the topic of managing millennials:

Two dissenting votes.  And these two leaders were not dragging their knuckles and breathing heavily through their mouths.  Quite the opposite.  They were sharp, good leaders.  Their rationale on voting no: “If you are a good manager, then you need to understand your people and deal with each of them individually.”  Each DID manage millennials and was doing it successfully because they WERE acknowledging the uniqueness of each employee.  What these two excellent leaders failed to realize is that many of us could use a “heads up” with regard to millennials.  We don’t necessarily see them as different so we make the mistake—in our busy work days—of treating them like boomers, i.e. older workers.  And, even if we do see the millennial difference, it still doesn’t answer the question:  “So, what are the new rules according to millennials?  And how does a firm respond to them?”  FCG’s experience with millennials reveals 5 major changes to be aware of:

  1. Purpose
  2. Development (which includes lots of feedback)
  3. Autonomy (made possible by technology)
  4. Transparency
  5. Causes


Gallup describes it as “Purpose over Paycheck.”  A survey of millennials showed the following shocker: Over 60% would rather make $40K in job they love, than $100K in one they think is boring.  One of the participants in the classroom mentioned above commented, “I tried to influence my millennial daughter to go into investing and she stopped me and said, ‘Mom, I’d rather shoot myself.  I like working in a rescue shelter.’”  Ok, then.  Boomers and Xers (the “older generations”) seem to understand this drive for purpose, as they chose it above all other motivational factors in this vote:

If you want to engage millennials, you need to understand their desire to do something meaningful.  And meaningful does NOT mean “make a lot of money.”  Investment leaders have to be able to articulate why their firm is contributing to a better society.  In FCG’s view, this should be an easy task, but many older leaders have trouble with it.  They’ve never really thought about it.  They are practical people who are deep into running the firm.  Purpose doesn’t really enter their thinking.  So, as a leader of millennials, be able to articulate a solid reason why the firm contributes to a better world.  For example:  “Our firm exists to positively influence people’s financial lives.”[1]  See?  It doesn’t have to be tricky, just clear and purposeful.


Note in the graph above, the second highest vote-getter is “development opportunities.”  FCG sees this factor in all of the culture work we do.  The biggest gap value in firms—that is, the difference between what firms “have” and what they “want”—is “leadership development/mentoring.”  And to show you how millennial dependent this factor is, take a look at the “want” vote in one firm when we slice the data by age groups. Employees at the same firm were asked to select 10 values that they want more of. Here is what the boomers said:

Notice, there is no demand for “leadership development/mentoring.”  Now look what the same firm’s millennials said:

Notice that “leadership development/mentoring” comes out as the 4th highest aspirational value, with nearly 40% of the millennials choosing it.

This is a typical response at investment firms.  So, what are the millennials asking for?  They want career paths:  what’s next for me?  How do I learn new skills and progress?  They want coaching and mentoring. Who will show me the ropes and take a sincere interest in my development?  They want feedback, and LOTS of it.  In other words, they want attention.  They had it from their “helicopter” parents and from their teachers, now they want it at work.  When millennials quit, the exit interviews often reveal, “I wasn’t getting enough face time with my boss.”  So, if you want to keep your talented millennials, you’d better find a way to meet these needs.


Millennials have grown up with technology, so they understand that knowledge work can be done anywhere.  Their mantra is, “work is something you do, not a place you go.”  Old-school bosses have to re-program their minds to understand this.  FCG has responded to this new reality by partnering with Jody Thompson, author of the book Why Work Sucks and How to Fix it.[2]  Jody developed the Results-Only-Work-Environment (ROWE) concept and has implemented it globally for firms.  She has helped boomers understand the shift from face-time to results-only.  We introduced Jody to two investment firms, each one a top firm as measured by leadership, culture and performance.  Interestingly, one firm embraced ROWE and in fairly short order moved to practices like no vacation policy and no office hours. (In other words, take vacation when you want and spend as much or as little time at the office as you wish.  Just make sure you deliver results. Jody is fond of saying, “No results. No job.”)  The second firm could not make the mental shift and balked at the program.  The first firm’s CEO told us recently that productivity in his view has increased.  The second firm still struggles with bouts of employee discontent, as workers complain about being treated unfairly in the “flex-time” arrangement.  With ROWE there is complete autonomy so all the grumbling about fair flex time goes away!  Here’s the catch:  managers in ROWE need to be very clear about roles, responsibilities and deliverables.  In other words:  accountability.


Millennials expect full transparency in the work place.  They are suspicious of “need-to-know” communication policies.  Old-school, command-and-control thinking revolves around the concept that leaders have the information/solutions and workers execute their orders.  This approach was fully prevalent in the 1950’s and 60’s.  As the workplace shifts from command-and-control to facilitative leadership, where collaboration is the rule, the millennials are asking the obvious question:  “why can’t we have full access to information?”  The knee-jerk response from many boomer bosses is a chest-grab of fear.  “Are you kidding?!  We’d lose all control!”  (One leader smirked, “You’re suggesting we give the keys to the inmates?”  Then it was OUR turn to do a chest-grab.  You think of your staff members as inmates?!)  To be clear, some information requires confidentiality for legal reasons or for reasons of integrity (a promise made to NOT share information).  We understand that.  But far too often leaders withhold information because “we’ve never shared it before.”  In other words, there is no valid reason to withhold.  It’s just the way it has always been done.  FCG has seen many cases of increased trust, respect and morale when leaders open the kimono and begin to share more and more information with staff members.


Millennial’s interest in causes extends well beyond pledging to United Way.  Millennials have logged more volunteer hours in their short lives than the Xers and Boomers have combined.  Investment firms that allow themselves to be a conduit for volunteer opportunities will attract millennials.  Increasingly FCG’s clients have set up foundations to support worthwhile causes.  A client example: The mission of our Foundation is to make a positive impact by actively engaging all employees in identifying and supporting charitable organizations of excellence.  Another client donates 50% of profits to their foundation which actively engages in causes like ending genocide on the planet.  Talk to your employees.  Find out what they care about.  Get involved.

Solutions and Common Ground

Wise leaders will pay attention to the needs of millennials because they will be over half of the workforce by 2020.  FCG offers these tips:

  1. Accept that millennials bring new values and attitudes to the work place and respond accordingly. The “big 5” discussed above are important to millennials and must be addressed in some measure.  If you wish to attract and retain top young talent, then you have to build a desirable workplace.  Millennials differ from prior generations in that they are quick to assess and leave poor cultures.  (Boomers leave jobs after 7 years, Xers 5, and millennials 2.)
  2. Recognize and leverage the common ground areas:
  • Collaboration/teamwork. As you see in the culture survey results above (ABC firm), all generations embrace collaboration.  So, you can always bring conflict back to, “We all want to work well as a team.”  Invoke mutual purpose and work out a solution.
  • Respect/trust. These pillars of strong culture are also important to both generations. Willingness to understand and respect different viewpoints builds trust.  Take a curious stance towards different values.  Don’t be the leader in the cartoon below…
  • Accountability. Each generation accuses the other of being “entitled.”  Entitlement ends when accountability starts.  FCG has found that all generations embrace accountability.  The key is to create accountability while eliminating fear and blame.  This can be done through clear roles, responsibilities, decision rights, and goals.  Plus, skillful feedback: both positive and negative.  FCG has yet to hear talented millennials or boomers say, “No way. We do NOT want that sort of accountability here!”

Returning to our two dissenting leaders mentioned earlier, we applaud them for doing a fine job managing millennials.  Our advice to them?  Keep up the good work, but please, don’t spread the word that “all generations are the same, just be a good manager and you’ll do fine.”  Why? Many of us are not born leaders and we need all the help we can get.  The tips offered above will help.  And if you ignore them, you may lose some talented workers.  And it won’t be like the old days where they “quit and stay.”  They will quit and leave!

Curiously yours,


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[1] Thanks to Michael Falk on our team, as he first suggested this purpose statement which was the driving force behind his recently published book on entitlements and sustainable economic growth. See his website for more on the book and how to order a free copy:

[2] For more on results-only-work-environment see Jody’s website:

No, Gordon: Greed is NOT Good

Raise your hand if you think the investment industry’s reputation is in need of an extreme makeover. Okay, except for the guy sleeping in the back row, everyone’s hand is up.  Clearly Robert Jones, CIO of Systems Two Advisors, raised his as well and was bold enough to state it in his JPM piece, Defending the Wall.[1]

I will leave it to my colleague Michael Falk in his blog to debate Jones’ various points on capital markets, crowd wisdom, and economic development.[2]

My interest in Jones’ piece is this passage:

“No one needs to promote greed; it’s deeply ingrained in all of us.  Wanting more than you need (aka greed) is, for better or worse, human nature.  The simple fact is this:  People who wanted more were more likely to survive and reproduce than people who were satisfied with what they had.  Greed is in our genes.  From an evolutionary perspective, we are all descendants of greedy ancestors.”[3]

Robert, Robert, Robert.  If your goal is to improve our industry’s reputation, you’re not helping. Defending greed doesn’t put us in a favorable light!  It just makes it easier to rationalize overcharging clients:  Phew.  We can’t help ourselves:  we’re just greedy.  Rats, I wish we were more fair-minded, but we’re not.  Too bad.  How else can you explain the profit margins in our industry?  And please, please don’t tell me it’s because of all the value we deliver.  I don’t want to hurt myself laughing.  Jack Bogle has shown us repeatedly that the average investor is better off with low cost index funds, especially after fees.  But, no, the long-only active level of profit wasn’t enough so then the really greedy folks got together and figured out an even better fee arrangement:  2 and 20.  Now we’re talking!  I can underperform and get even richer.  The Economist magazine ran a piece this month:  Hedge funds haven’t delivered on their promise.[4]  And quoted Warren Buffett, “There’s been far, far, far more money made by people on Wall Street through salesmanship abilities than through investment abilities.”[5] CALPERS eventually got smart and said, “Enough already, no more hedge funds.”[6]

Alas, if an extreme makeover is doable, it will be because we’ve shifted our thinking.  The JPM passage above is “old” thinking.  It’s not even accurate old thinking.  As to the “evolutionary perspective,” we can go right to the source—Darwin—who wrote:

In the long history of humankind (and animal kind, too), those who learned to collaborate and improvise most effectively have prevailed.”[7]

It’s not greed but collaboration that explains much of our survival.  And let’s go to another old master—Adam Smith—to get his take on greed.  The publisher of Smith’s economic classic writes,

Without Smith’s essential prequel, The Theory of Moral Sentiments, the more famous The Wealth of Nations can easily be misunderstood, twisted, or dismissed…Smith’s capitalism is far from a callous, insensitive, greed-motivated, love-of-profits-at-any-cost approach to the marketplace, when seen in the context of his Moral Sentiments.[8]

So, if we are to undo some of the damage done by Madoff, Boesky and those nasty Wall Streeters, let’s show the world that we understand the new thinking.  We’ve moved beyond the naiveté of MBA classes preaching about maximizing shareholder value and Milton Friedman’s nails-on-blackboard quote, “The only purpose of a business is to make a profit.”[9]  James Montier wrote, “It is quite staggering just how many bad ideas in economics appear to stem from Milton Friedman.”  Montier calls the profit/shareholder maximizing idea the “world’s dumbest.”[10]

And while we’re on the topic of greed, we are all clear that Gordon Gekko—“Greed is good”– was not the HERO of the movie Wall Street.  Right? (In one study of MBA students, over half the class thought he WAS:  I want to grow up to be like that.)[11]  The movie Wall Street and the books, Liar’s Poker and Bonfire of the Vanities wonderfully captured the ego and greed that ran through our industry in the 80’s.

But it doesn’t have to be that way.  We have a choice.  The investment industry can be a noble calling. But we have to shift from old to new thinking.  Let’s start by defining each.  The old thinking is nicely described in the JPM passage above.  So, what’s the new thinking?[12]

The new thinking shows up in the works of scholars like Adam Grant and Fred Kiel.  In simple terms it highlights the success of “generous/abundant” mindset over the old “greedy/scarcity” mindset that we learned about in the dismal science.  (Small wonder economics earned that title.)  To be sure, many people still choose the greed/scarcity mindset but it is a choice.  And we are all free to examine the evidence and then decide how we want to show up in the world.

So, what’s the evidence?

Adam Grant’s book, Give and Take, is a well-researched look at a new paradigm; it argues for the benefits of generosity.  Grant’s goal is “to persuade you that we underestimate the success of givers…[and show] why givers dominate the top of the success ladder.”[13]  Many thought leaders, including Dan Pink, Dan Ariely, and Robert Sutton enthusiastically endorse Grant’s research.  And Lenny Mendonca, director, McKinsey & Co. writes:

Give and Take will fundamentally change the way you think about success.  Unfortunately in America, we have too often succumbed to the worldview that if everyone behaved in their own narrow self-interest, all would be fine.  Adam Grant shows us with compelling research and fascinating stories there is a better way.[14]

For an industry struggling with rebuilding trust,[15] investment leaders would be wise to think carefully about this new paradigm.  One financial adviser credits his success to this strategy of generosity:

There’s no doubt that I’ve succeeded in business because I give to other people.  When I’m head-to-head with another adviser to try and win business, people tell me this is why I win.[16]

And regarding the “old” notion above that people are largely greedy, a study by Shalom Schwartz looked at values globally and found:

In all twelve countries, most people rate giving as their single most important value.  They report caring more about giving than about power, achievement, excitement, freedom, tradition, conformity, security, and pleasure.  In fact, this was true in more than seventy different countries around the world.  Giver values are the number-one guiding principle in life to most people in most countries.[17]

Another good resource for “new” thinking is Fred Kiel’s book, Return on Character.  Kiel applies many of the same principles as Grant, dividing leaders into self-focused (greedy) vs. character-driven (positive/compassionate).  Kiel’s research shows that

There is an observable and consistent relationship between character-driven leaders and better business results.  Leaders that rank high on the ROC scale achieve nearly five times the return on assets that leaders who fall at the bottom of the curve achieve.[18]

Kiel contrasts the old vs. new paradigms in this way:

The old Economic Human view of human nature is incomplete.  Classic economic theory’s view that human beings are totally rational and completely self-focused is an inadequate model for understanding effective leadership.

New research enables us to form a new and complete view of human nature, the Integrated Human.  This model of human nature views people as capable of becoming mature, complete, integrated humans, not just self-focused rationalists.[19]

As long as Joe and Joan Public view us as the former—coldly rational, self-focused and greedy—the industry will continue to rank at the bottom of the Edelman Trust Barometer.[20]  And for Joe and Joan to see us differently, we must begin to behave differently.  For example, in FCG’s work in the industry, we often poll CEO’s to collect data.  The vote below examines one of the most fundamental trust issues in the industry:  do you put your client interests first?  Look at the results![21]

Of the investment CEO’s present, over two-thirds of them answered that they do NOT always put client interests first!  Yikes.  (Robert Jones must be thinking, “See, I TOLD you they were greedy!”)  Indeed, and it’s no wonder that Joe and Joan don’t trust the investment industry.  It’s gotten to the point now where investment clients value “putting my interests first” twice as much as “investment performance.”[22]  Joe and Joan have lost so much confidence in the industry that they will settle for an honest advisor, forget about superior performance.  Just don’t rip me off!

So, my hope is that our industry will begin to explore this new mindset—abundant/generous—and come to see it as much more effective than the scarcity/greedy one.  And accept that there is choice; we don’t have to be greedy.  We can take a page from Maslow and move up the needs-hierarchy—past security and survival—to self-actualization:  The self only finds its actualization in giving itself to some higher goal outside oneself, in altruism and spirituality.[23]  Surely, given the intelligence and financial well-being of investment professionals, they are perfect candidates for pursuing self-actualization.  But collectively we must raise our sights above the lowest levels of the needs-hierarchy!  It was refreshing to see Charles Ellis, one of the most respected names in our industry, agree with this view:

The best long-term benefit of active investing—and all its many benefits—is not just economic but also spiritual.[24]

Ellis went on to echo FCG’s view that investments can and should be a noble calling:

To the extent investment experts continue to do the important work of advising clients on investment policies to achieve their true objectives and values and sustain their commitments through various markets, our profession will be appropriately admired and well rewarded.[25]

Old Thinkers: Meet the Millennials!

Finally, on the topic of greed, I’ll add one more puzzle piece:  the Millennials. FCG has researched this new generation—born between 1980 and 2000—and found that they are much closer to the abundant/generous mindset than the scarcity/greedy mindset.[26]  Consider these facts about the Millennials:

  1. Very attuned to social causes
  2. Over 85% said that money is not a good measure of success
  3. Over 60% expect their employer to contribute to their social causes
  4. Over 60% would rather make $40K in job they love, than $100K in one they think is boring

For investment professionals clinging to the old view, watch out.  Millennials are coming at us like a bullet train.  In less than 10 years, they will be over 75% of the workforce. And their values are much more in line with the new view.  They have donated more time to charitable causes than Xers and Boomers combined.  They are very big on purpose, with many choosing to work with ESG and SRI funds. The Gallup organization characterizes them in this way:

Boomers: My Paycheck                              Millennials: My Purpose[27]

Millennials don’t see money as the top value.  So, if you don’t familiarize yourself with the new thinking of Grant, Kiel and others, you may be increasingly out of sync in the future.

The Yin and Yang of it

In summary, let’s acknowledge the yin and yang of greed.  Yes, we can all be greedy, especially when we’re fearful:  There won’t be enough, I’d better grab all I can get.  But we can also be generous, when we feel confident and secure.  Grant argues that some of us are inclined—either by nature or nurture—to be more greedy (takers), while others are more generous (givers).  Again, the key is: we have a choice.  Anyone reading this piece is bright enough and wealthy enough to choose “generous” as a mindset.  Maslow and others see this choice as the natural evolution of human development.  And certainly investment professionals who have a fiduciary responsibility to steward OTHER people’s wealth should be deeply committed to this mindset.  Doctors are asked to live by the Hippocratic Oath, which ends with the statement, “may I long experience the joy of healing those who seek my help.”[28]  Similarly, for the investment industry to rebuild its reputation, we must encourage our colleagues to embrace the mindset of service:  experience the joy of helping our clients.  So, let’s all have a good chuckle at the Gordon Gekko part of ourselves—yes, it’s there—and then commit to the noble calling of fiduciary service.

No, Gordon, greed is NOT good.  Now, please give me back my wallet.

Curiously and generously yours,


P.S.  If you really liked this piece, send a generous donation to the “FCG New Thinkers Fund.”  You’ll feel SO good doing it! J

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[1] Robert Jones, Invited Guest Editorial, The Journal of Portfolio Management, Spring 2016

[2] Michael Falk, CFA is FCG’s expert on investments, markets and strategy. His first installment of “WTF” (“What the Falk?”) will discuss the merits of Jones’ JPM editorial.

[3] Ibid, pg. 4

[4] The Economist, Buttonwood, May 7, page 66.

[5] Ibid. pg. 66.

[6] To be clear, hedge funds are not the villain, but their fees ARE! The key is providing value: performance at the right fee level.

[7] See this website:

[8] Fred Kiel, Return on Character, pg. 18

[9] See this article on Montier:

[10] ibid

[11] “Greed is good:” Despite the notoriety of this encomium to enlightened self-interest, few people know that these words are based on an actual commencement speech, at what is now the Haas School of Business of the University of California at Berkeley, delivered by convicted insider trader Ivan Boesky in 1986, only eighteen months before his conviction.  From the article by Andrew Lo, The Gordon Gekko Effect.  See this article for the reference about students thinking Gekko was the hero.

[12] It’s actually not so new.  It dates back to Buddha and even before that in the oldest spiritual traditions.

[13] Adam Grant, Give and Take, pg. 9

[14] Endorsements in Give and Take

[15] See the Edelman Trust Barometer at their website.  The financial services industry ranks near the bottom.

[16] Grant, Give and Take, pg. 20

[17] Ibid, pg. 21

[18] Fred Kiel, Return on Character, pg. 3

[19] Ibid. pg. 49

[20] See the report on their website:

[21] Polling results from an investment conference in Canada with just under 100 CEO’s in attendance.

[22] See the CFA/Edelman report  “From Trust to Loyalty” in the Investment Industry:

[23] Maslow, from The Hierarchy of Needs

[24] FAJ, July/august, 2015, pg. 6

[25] ibid

[26] Kudos to Keith Robinson on our team for deep research into this generation. Principle resource, Managing the Millennials, by Espinoza, Ukleja & Ursch

[27] See the Gallup Report on Millennials, “How Millennials want to Work and Live” available on their website.

[28] See the final line: