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:
- Development (which includes lots of feedback)
- Autonomy (made possible by technology)
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.” 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. 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:
- 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.)
- 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!
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 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: www.letsalllearnhowtofish.com
 For more on results-only-work-environment see Jody’s website: www.gorowe.com
Any self-respecting leader should want to know: How am I doing? So, do you know your strengths? Weaknesses? Do you know your blindspots? (OK, that’s a trick question…) Mayor Koch of NYC made this line famous, “How’m I doin’?” Koch’s instincts were spot on: get real-time feedback.
FCG has always advocated for feedback rich environments. Especially for leaders. FCG’s process is bit more formal than Mayor Koch’s. We use a 360 feedback assessment. This process allows leaders to get a “report card” on their leadership. It’s remarkable how many investment leaders have NEVER been formally assessed. The same leaders who advocate careful, thoughtful, logical analysis of investment strategies show none of that same concern for their own leadership abilities. Apparently the fact that they’ve become a leader is evidence enough that they are fully qualified and not in need of any further development.
This lack of curiosity is astounding, another example of “willful blindness.” (See recent LOLs for description and discussion of this topic.) The ego of some investment leaders is world class. And amusing, if it weren’t so harmful. We worked with one senior PM who was universally viewed as a terrible leader. (Although, in fairness, an excellent performance record) Analysts feared him and dreaded his meetings. They routinely left the firm, even without job prospects. So, when the CEO of the firm insisted that this PM undergo an assessment of his leadership abilities, he let forth a great outcry of whining and complaining. The PM made sounds that could only be likened to a stuck pig. In fact, he resisted so violently that FCG finally relented and allowed him to pick his own raters. Not a normal practice for our 360 review.
Eventually, FCG administered the 360 process with his “chosen friends-and-family raters” and then compiled the results. Despite these hand-picked raters, the results were still disastrous. (Think about this for a second. He got to “stack the deck” in his favor, and the results were STILL horrible. That’s world class “bad.”) Admittedly, he earned high scores in “technical skills” (i.e. picking stocks), but the remaining scores for skills like listening, encouraging teamwork, self-awareness, delegation, etc. would make Putin or Mugabe look good. However, this PM spared himself the pain of actually seeing the poor results by NEVER looking at them. True. I handed him the report, sat down to debrief it with him, and he never touched it during his entire tirade about the stupid process, his lame team, or ungrateful clients. It’s safe to say that this PM is not our poster child for curiosity.
Interesting that these same “macho” PM’s who strut about the firm with their BSD’s actually are quite cowardly. Sure, they rationalize that they are avoiding the assessment exercise because it is:
- All of the above
But, actually, we all know the real reason: they’re afraid. Their arrogance is just a big façade to protect their fragile egos. (Enter Jack Nicholson: “You can’t handle the truth!”)
So, let’s flip this scenario. Consider a firm with excellent leadership. FCG recently worked with one. The two leaders at this firm stepped directly into the challenge of being assessed with no hesitation. Their thinking, “If I’m asking my senior team to be evaluated, then I’m going to lead the way. I won’t ask them to do something that I won’t.” Now THAT is leadership. Lead by example. And no surprise, the results for the two senior leaders at this firm were off the charts. We usually list the top five skillsets and the bottom five for each leader in the executive summary of the report. A standard strengths and weaknesses analysis. For these two leaders, we had to list over 20 skills as “strong suits” because on a 5 point scale, they were all tied at 4.9! Small wonder that this firm is so successful, even in these difficult markets. They are led brilliantly by these two senior people. The scores for the remaining eleven senior leaders were also good. Is this team perfect? Heavens no. Leadership teams, like families, are never perfect. They all have issues. But this team addresses them.
What distinguishes good teams, however, is their willingness to take the first step: diagnose. They are willing to take a good look in the mirror and see their reflection. The good and the bad.
This look in the mirror allows them to then take the second step: discovery. Once you have collected the data, then you can intelligently analyze them and discover: Where am I strong? Where am I weak? And, importantly, where are my blindspots? Each of the participants in the leadership assessment had “ah-ha” moments regarding these insights. Some had hidden strengths, like “strategic thinking,” that they were unaware of. We call these positive blindspots. Others had weaknesses, like “delegates well,” which surprised them. Negative blindspots. The goal of the 360 exercise is to arrive at a much clearer view of oneself as a leader. How am I perceived? Note, we all wake up in the morning with good intentions about our professional duties. The problem is that intentions do NOT always equal impact. The only way to gauge the slippage is an assessment process.
The final step is development. Discovery leads to some good candidates for development. In this regard, the person doing the debrief must be skillful. Too often, the participants look for the weakest scores and decide, “Gee, I should get busy improving my attention to detail. I’m really weak at that.” Well, maybe. But FCG has had the most success with the following approach. Divide a person’s skillsets into three broad buckets:
These lower skills (C) are candidates for delegating. Rarely does the strategy of improving them pay off. In the example above—about detailed work—the leader should develop a strategy in which someone who is skilled at details can double-check their work and provide that skill for them.
If a leader is clever about how they organize the tasks on their team, they will familiarize themselves with this approach and then assign tasks accordingly. After a round of leadership assessments, FCG has facilitated the following exercise. All of the team’s tasks are written on sticky notes and placed on a wall. Then the leader asks team members to grab tasks which are high energy and high competence for them. In other words, “I like this task and I’m really good at it.” In many trials, we’ve never seen a bunch of “unclaimed” stickies. Occasionally, there will be one or two odious tasks that no one wants, but that’s rare. One person’s poison is another’s pleasure. Typically, all the tasks get chosen. Clearly, this is the most efficient way to allocate work. The tasks get allocated to the people who 1) like it, 2) excel at it.
So, as part of the development phase of assessments, we ask leaders to design a work schedule that allows them to spend 80% of their time in their areas of “genius.” (i.e. high energy/high skill areas) Assessments can be hugely valuable in confirming areas of genius, or uncovering hidden ones.
Strengths and weaknesses across all investment leaders are shown in the table below:
|Drive to win
||Integrity and trust
|Drives Firm Vision
||Comfort with Higher Managers
|Asset management expertise
|Effective decision making
||Delegates work to others
|Builds firm talent
||Builds effective collaboration
Clearly, investment leaders do a lot of things well, as highlighted in green. The weaknesses are shown in red. For each of these weaknesses, a relevant question is: does it matter? As stated above, the development strategy used by FCG advocates leveraging strengths. Think carefully about what is important to your role. And what is realistic. As a team leader I may be weak in “developing others.” Well, can someone else play that role? If I am the CIO, can my Director of Research cover that responsibility? Or take another competency: strategic thinking. Some people are natural strategists. They like it, and they are good at it. Others, not so much. It may be a huge waste of time to invest in raising someone’s strategic skills when the firm doesn’t need it. There are plenty of others who can fill that role around the leadership table.
So, do the leaders in your firm have the courage and curiosity to take an honest look at themselves? Do you? FCG’s experience in this regard has been universally positive, as long as the leaders are genuinely committed to learning and developing. Once again, the adversary in this situation is our old friend: Ego. Fearful and suspicious by nature, the Ego does NOT want to be placed under the bright lights. That would be terrible. The Ego thinks: “I could be exposed as a fraud! I could be far less wonderful than I think I am! I could be forced to admit my shortcomings! I could be vulnerable!” And since the Ego doesn’t trust anyone, the thought of being exposed or vulnerable is untenable. It must be avoided at all costs. “Hunker down, stay under your rock, be safe” is the advice of the Ego to all leaders.
So, who are you listening to? Your Ego. Or Mature Self. If you haven’t been formally assessed in many years, then it is the Ego. And the Ego loves your willful blindness! Keep pretending that it’s ok to do nothing. Just as you:
- Don’t maintain your car
- Don’t brush your teeth
- Don’t get medical check-ups
Oh wait. You DO those things right? Well then why wouldn’t you get your leadership checked out!? You get the idea…
Give us a call and let us connect you to firms that have done these leadership assessments. They are the best advocates. They know the value they got.
Ok, sorry for the shameless advertising. Shifting back to curiosity,
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 360 refers to the fact that feedback is gathered from bosses, peers and direct reports. Hence the visual image of “360 degrees.”
 This is an extreme statement but true: we canvassed the whole firm and found NO one who supported his leadership abilities.
 I realize that Putin is reported to have very high “approval ratings” and I thank the source for the hardy laugh I had while reading it.
 See Michael Lewis, Liar’s Poker for description of BSD’s.
 I wish I could be gender neutral in my criticism of investment leaders, but, alas, the senior positions are mostly held by men.
 I love my 93 year old mom’s recent comment about mirrors: “Their quality has really gone down in the last few years.”
 Since I slipped into shameless promotion, I should mention that FCG can help your firm through this same diagnose, discover, and develop (3 D’s) process regarding: strategy, investment philosophy and process, compensation, succession planning, culture, and—as discussed in this blog—leadership.