Thursday 12 April 2007

The Digital Generation and SA Business

Generation Y, Generation neXt, Gen Y2K, Generation E, Newmils, Echoes - those born between 1981 and 2001 have many labels. Whatever you call them, those coming into the world since the launch of the Apple III personal computer are more different from their previous generation than any group of people in history. As these people enter the workforce and the customer base, they present a significant challenge to managers and marketers. Or perhaps we present a challenge to them.

The term “Tech Generation” is being used more and more frequently in business to describe those late Gen X’s and early Gen Y’s now in their early to mid 20’s who have recently entered the workforce and who have been immersed in digital technology their entire lives. Computers and networks are not daunting or new to them – they had a PC at home the day they opened their eyes. They are as comfortable with the shifting ambiguities of relational data, organic networks, and distributed applications as their predecessors were with hierarchical structures, delegated administrative work, and central control. They can type a SMS message with their thumbs on a phone keypad as fast as could a 1980’s touch-typist on an IBM Selectric. They don’t use the same vocabulary, of course, and they leave out a lot of vowels and pay no attention to grammar, but they communicate very fast, very often, and very effectively. To those not attuned to the nuances of Tech Gen digital shorthand, it is as baffling as birdsong.

An article by global strategy and technology consulting firm Booz Allen Hamilton made the case that these born-digital “digital natives” are often at odds with the way things are done in conventional business, and that strategic management may have much to learn from them about thriving in a market soon to be dominated by digital-native consumers. They conclude that, “After years of debating the limitations of hierarchically run organisations and the merits of democratisation, the end of command-and-control management may finally be here.”

That’s a point I have been annoying people with for years: if knowledge flows and the processes that leverage them are evolving in real-time despite best efforts to corral them; and if departmental silos and companies themselves have become porous; and if peer-to-peer communication and distributed expertise are the de-facto norm; what purpose is served by old-school hierarchical structures? All they do is get in the way of progress, preserve dysfunctional power structures, and prevent businesses from successfully pulling off their own disruptive changes.

In several instances (such as Microsoft and the US military), digital natives have put sufficient pressure on senior management to stimulate significant shifts in strategy. This happens not by using the conventional channels, but by ignoring them completely and behaving in a way that is perfectly natural to a digital native. Disruptive technologies have bred a disruptive generation. It happens in every company – a programmer has a coding problem her cube-neighbour can’t help with, so she goes out to the discussion forums on the web and has a solution in minutes. Not the procedure outlined in the corporate problem-solving manual, but faster and more effective.

Consumers, too, have gone disruptive. No longer content to accept the half-truths and carefully crafted double-speak of ad agency copy writers or glib salespeople, digital consumers are better informed than any previous generation. They are suspicious of company representations, have faith in the opinions of fellow consumers, and network their knowledge and experience in a way that cuts through any facades put in place by marketers. Genuine brands with solid integrity win out. The rest struggle to survive.

Digital natives make fast decisions, sort through complex information, juggle knowledge resources, and, Nike-like, just do it. To an older generation, they are chaotic and have the attention span of a gnat; to the Tech Generation, they are merely parallel processing. Their lifetime of digital experiences dictates their approach to work, to learning, and to decision-making. According to the Booz Allen study, by the time they enter the workforce, the average digital native has spent 10,000 hours playing video games; sent and received 200,000 e-mails and instant messages; and spent 10,000 hours talking, playing games, and using data on mobile phones. Reading books? Only 5,000 hours at most.

These are not the same kind of people we were hiring or selling to ten years ago. Do we continue to treat them the same, subject them to the same processes, force them into the same structures and behaviour norms? Do we suppress and channel their inherent vitality and flexibility, or do we exploit and encourage it for the good of our organisation? To do so we probably have to slaughter many of the sacred cows of our professions and seek out new models for management and marketing.

One thing is certain: every year will bring more and more digitally blasé recruits into our companies and our stores. Like the nomads who gradually infiltrated and overwhelmed the culture of the citizens in Kafka’s story An Old Manuscript, they will appear among us and start to dominate our culture and change our norms. Will we be left marginalised in our own companies, unable to speak the new language or to influence our direction, or will we seize the opportunity to find and nurture new ways, better ways, to learn, to communicate, and to grow?

(based on an article by Godfrey Parkin originally published in December 2004)