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Chapter 1
THE NEW WORKPLACE REALITY
THE CHANGING NATURE OF LEADERSHIP

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As the Loretta Lynn song says, “We've come a long way, baby.” Over the past half century or so, workplace practices and expectations have changed dramatically – and for the better. When the first Baby Boomers entered the workforce, they were taught that leaders give orders, ensure that the orders are followed, and deal with employees who don't comply. The dictatorial leader is rapidly disappearing from today's workplace, though, having been replaced by leaders who are expected to build partnerships both inside and outside the organization – a shift in leadership styles that recognizes that coalition building can be more effective for companies than rigid control. Does this shift mean that a manager can't make decisions unless all of his or her direct reports agree with them? Of course not. It does mean, though, that employees of any age will expect to have input on decisions that affect them, and that the lack of such input will significantly diminish their commitment to accomplishing the company's goals.

The changing expectations for company leaders are also being shaped by the fact that employees of all ages lack trust in corporate America. During the 1980s, Baby Boomers and Generation X lost that trust during the heyday of building shareholder value through layoffs, when even healthy companies joined the downsizing movement in order to increase their market shares. Millennials, too, aren't exhibiting great faith in the business world today, and if these trends continue, this lack of trust is likely to still be around when Generation Z begins to enter the workforce. Regardless of the decade or the generation, though, this lack of trust – and the resulting lack of strong loyalty to a company – can affect everyone negatively, particularly when employees favor pursuing career advancement elsewhere over staying with their current organizations. In order to prevent that exodus, managers need to figure out how to adapt to changing expectations about employee loyalty.

The changing demographic within the United States (nay, the world) is another cultural shift that will require leaders to rethink not just their leadership styles but their entire business plans, because the employee base isn't the only population that's changing: customers and suppliers are changing as well. Over the next few decades, the United States will become an older and more ethnically diverse country. For example, according to the US Census Bureau, over the next few decades, nonwhite ethnic groups will increase in number dramatically, and by 2042 no single ethnic group will be the majority. The Hispanic population will be the leaders of this demographic shift, with its size “more than [doubling], from 53.3 million in 2012 to 128.8 million in 2060.”6 Also expected to double in size by 2060 is the population age 65 and older, which will grow from 43.1 million to 92.0 million.

Many would argue that corporate leadership has had to deal with managing change for at least the past decade or so. As Ad J. Scheepbouwer (then‐CEO of Royal KPN) pointed out in IBM's 2008 survey of 1,00 °CEOs, “We have seen more change in the last 10 years than in the previous 90.”7 Technological advances drove most of that change and continue to do so, with Scheepbouwer's words still applicable nearly a decade after he uttered them. In spite of widespread awareness of such change, many companies' management practices have failed to respond to the new workplace reality.

Shocking but true: even though the first Millennials joined the workplace roughly 10 years ago, many companies still struggle to figure out how to cope with the Millennials in their midst. And with the first members of Generation Z poised to enter the workforce full time in just a few short years and other changing workplace demographics, the stage is set for disaster for those companies still lagging in their management practices. Even with these realities staring them in the face, though, many companies still resist change. Why? Because change is hard – even when (and sometimes especially if) it's absolutely necessary. But market‐leading organizations recognize the importance of change and achieve success in part because of their ability to adapt rapidly to the changing needs of their customers and clients. Those companies embrace change because doing so lets them create new opportunities ahead of their competitors.

Enacting change at your organization means updating your leadership tactics, which in turn means letting go of old habits and instead thinking about motivation and engagement in a new light – a task that isn't easy to accomplish in even the most relaxed and low‐stakes situations, let alone when engaging in something as difficult (and somewhat esoteric) as managing employees. Unfortunately, managing employees is even more complicated by the fact that according to Gallup only “one in 10 people possess the inherent talent to manage” – and companies fail to pick good managers a staggering 82 percent of the time.8 When this is combined with the added challenge of having four generations in the workplace, the odds increase that companies will experience high turnover or low employee engagement (both of which can hugely affect an organization's bottom line) – and managing becomes a lot more complicated.

6

US Census Bureau. “US Census Bureau Projections Show a Slower Growing, Older, More Diverse Nation a Half Century from Now.” US Census Bureau website. December 12, 2012. http://www.census.gov/newsroom/releases/archives/population/cb12‐243.html.

7

IBM. “IBM Global CEO Study: The Enterprise of the Future.” IBM website. 2008. http://www‐03.ibm.com/industries/ca/en/healthcare/files/2008_ibm_global_ceo_study.pdf.

8

Beck, Randall, and Jim Harter. “Why Good Managers Are So Rare.” Harvard Business Review online. March 13, 2014. http://hbr.org/2014/03/why‐good‐managers‐are‐so‐rare/.

Clash of the Generations

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