Catalyst for Change

THE IMPACT OF MILLENNIALS ON

ORGANIZATION CULTURE AND POLICY
Celia Berenguer June Delano Karin Stawarky

MONITOR
Millennials’ heightened
expectations are likely to
CHANGE THE WORKPLACE
for everyone: employers and
employees of all generations.
CATALYST FOR CHANGE
THE IMPACT OF MILLENNIALS ON ORGANIZATION
CULTURE AND POLICY

Newly hired college graduates at a large global company

are introduced to senior executives during a yearly orien-
tation at NYC headquarters. Over dinner and cocktails,
the most junior employees rub shoulders with the top
executives, something that happens infrequently in the
company’s formal and hierarchical culture. At a recent
orientation, “Millennial Matt” chatted with the CEO and
his wife, and discovered that he lived close to them in a
posh suburb (Matt in a studio and the CEO on the family
estate). During the holidays a few months later, Matt found
himself in need of a ride to the office party. So he did what
any well-networked Millennial would do: called the CEO’s
wife to see if he could catch a lift into the city.

The Importance of Context

This story could be about impetuous youth, but it’s more than that. This
slightly disguised event really happened, and it aptly illustrates the differ-
ent expectations that Millennials (the generation born between 1977 and
2000) bring to a workplace shaped by Boomers and Generation X. Earlier
generations of corporate employees would not have called the CEO’s
spouse at home to ask a favor. Nor would they have strolled uninvited into
top executive offices or expected time off to build a school in Guatemala.

© 2009 Monitor Group 1

 Boomers and Xers might have wanted to do these things. They certainly
hoped for a more egalitarian organization and a more balanced life. The
difference, therefore, lies not in the hopes and dreams of Boomers, Xers and
Millennials — but in what Millennials expect and demand. Further, Monitor
research suggests those heightened expectations are likely to change the
workplace for everyone: employers and employees of all generations.

There has been an enormous amount of buzz in the media about Mil-
lennials as teenagers and young adults. Some of what is written could
perhaps be written about any group of young adults, but some is unique to
the Millennial Generation. They are technology savvy in ways unimagined
by previous generations. They have complex social networks of friends,
maintained by texting and internet sites. They spend long hours in virtual
games, building relationships with people they never meet face-to-face.
They freely disclose personal information and lifestyle choices. They
involve parents in their lives to an extent that puzzles earlier generations.
Their politics combine environmental awareness, social responsibility and
community action. And, it appears, they expect work to be challenging
and rewarding — and accommodating.

Millennials are just reaching management levels in corporations, so we are

only beginning to see the impact they will have on the organizations that
employ them. However, Monitor research has surfaced intriguing ideas
about how Millennials might trigger change in the workplace.

These are the five most significant outcomes:

• Increasing transparency and loss of privacy

• Unprecedented flexibility in working conditions and benefits

• New approaches to development and career planning

• Insistence on integrated, interconnected technologies

• Scarcity of qualified and willing employees for “traditional” jobs

Our research involved conversations with more than 100 senior HR ex-
ecutives in diverse companies and industries, backed by a review of the lit-
erature on Millennials. The results were surprisingly consistent, although

2 © 2009 Monitor Group

there are still too few of this new generation at management levels to be
certain about the long-term effects.

Nonetheless, some industries (notably the consulting industry) have em-

ployment cycles that rely heavily on new college graduates, and can be
looked to for indicators. Further, other companies are thinking hard about
Millennials as they prepare for the wave of Boomer retirements that will
happen soon — though how soon will be influenced by current economic
conditions. Our research, therefore, also suggests ways that companies can
anticipate and prepare for the increased representation of the Millennial
Generation in the talent pool, from practical managerial advice to large-
scale policy changes.

Increasing transparency and loss of privacy

Perhaps the most radical impact of Millennials on the workplace will be

triggered by their inclination to freely share private information and their
expectation that others will reciprocate. This generational phenomenon
represents a dramatic change in behavior and could influence corporate
culture and practices in many ways.

A Boomer mother volunteered to help her daughter move to Atlanta to

begin her first professional job at a major corporation. On the drive, they
talked about what her first day would be like, and the daughter said,
“Come have lunch with me and my new boss.” The mother quickly said
that it wouldn’t be appropriate; the first day was a time to get to know
people — especially the new boss. “Oh Mom,” sighed the daughter, “I’ve
already been texting with him and everyone else in the office. Plus I met
his wife on-line and saw a picture of his dog. These people are already my
friends and they’ve told me everything about the place.”

Human resource policies and, to a greater extent, managerial practices,

tend to assume that people won’t talk about salaries, bonuses and other
intimate details of their employment relationship. That assumption won’t
be safe as Millennials come into the workforce with a decade or more of
exposure on myspace, Friendster, Facebook and other social networking
sites. There’s already evidence that they will openly share salary informa-
tion, coaching conversations and development plans — testing the integ-
rity of the organizational systems.

© 2009 Monitor Group 3

The most radical impact of
Millennials on the workplace may
be triggered by their inclination to
FREELY SHARE PRIVATE INFORMATION
and their expectation that others
will reciprocate.
 There’s a tendency to compare themselves to what others do on the outside.
They are more open with one another about who gets paid what than other
generations — both internal and external. They talk about this openly.

Millennials are forcing us to be more transparent around processes, to be

more upfront on needs and expectations.

The candid information exchange could easily expose a manager who

is allocating bonuses or plum assignments in a way seen as unfair. That
manager’s behavior could be posted on line in a blog or chat room, further
exposing what goes on behind company walls. Other activities — safety
violations, environmental risks, sexual harassment claims — could be simi-
larly shared. Many organizations have intellectualized about the “front
page rule,” e.g., would we be comfortable if this decision appears on the
front page of the local newspaper. With Millennials in the workplace, it
may no longer be an intellectual exercise.

In general, this new generation of workers will have different values about
company information. People who grew up with the Internet at their
fingertips have extraordinary skill at accessing and disseminating informa-
tion. Then there’s the sheer volume of information available in the public
domain, and the almost instantaneous sharing of newsworthy events, as
well as public processing of them. These combined factors have changed
attitudes about sharing information, including less regard for historical
norms about ownership and plagiarism. As one academic said, “privacy is
being redefined by this generation.”

Unprecedented flexibility in working conditions and benefits

Millennials were raised to believe they could have it all. Earlier generations
expected to sacrifice in one or more areas of their lives in order to achieve in
another. They accepted as inevitable the tradeoffs between friends and family,
career advancement, political activism, travel, personal expression, financial
security, etc. But Millennials believe differently. They expect to work hard,
they expect to deliver results and they expect their need for a balanced life
to be accommodated. That will have considerable impact on organizations.

© 2009 Monitor Group 5

 They feel like they are entitled to certain things. They’re not so much com-
pensation driven — it’s more like it’s all going to work for them the way
they want it to be.

The HR executives in the research told story after story about Millennials
who expected time off to visit out-of-town friends, go hiking in Chile,
build a school in Zimbabwe, work in the garden, co-write a book, etc. The
fundamental assumption is that work should be fluid enough to make
room for other interests and activities, which will push companies to focus
on outcomes rather than attendance and compliance. Managers will need
to be crystal clear about the results they want if employees are unwilling to
punch a clock, sit at a desk or follow timeworn procedures.

They expect the workplace to bend to their needs. We try to give them the
flexibility, on the other hand, it is a workplace; we’re here to make money
and you’re here to work.

Our policy about time off is only two weeks plus 10 holidays. Boomers paid
their dues and earned extra weeks of vacation. Their feathers are ruffled if
a 25-year-old walks in demanding a month of vacation to go hiking in
Europe every year. We have to figure out this generational divide and how
to work with it.

A related issue may originate with the fact that Millennials grew up on
computers, shaping the way they interact with the world. Imagine website
pull-down menus that allow you to make a series of choices about a topic
or product. That’s the interface the new generation wants when it comes
to benefits, working conditions and career choices. Over and over, the HR
executives we interviewed talked about Millennials asking for individual-
ized options way beyond current cafeteria-style plans.

A lot of programs, processes and structures are built for people who are
more willing to put up with less autonomy, more willing to be part of a
bigger structure. We need to develop just-in-time choices — give them what
they need to be highly successfully in the right way.

Companies that can’t accommodate this need for choice will find them-
selves struggling to hire and retain Millennials when the Boomer retire-
ment wave peaks.

6 © 2009 Monitor Group

Creative development and career planning

Millennials are coming into a workplace that was actually shaped in the
50s and 60s, and then refined by Boomers and Xers. The assumptions that
underlie traditional career planning and development activities are based
on organizational stability and employee longevity, and are irrelevant to
the new generation. So companies are inventing new ways to think about
careers and new ways to prepare employees for them.

We’re doing a lot of work with on-boarding. Our sense with that group
is they tend to be much more tribal — they like to be with a group. We’re
thinking about treating them as a cohort that can move through their
careers together.

Several companies have tried hiring groups of classmates or moving

intact cohort groups from project to project, looking for ways to motivate
and retain young employees. There’s some evidence it’s working, perhaps
because it parallels Millennials culture.

They do better in groups, working on meaningful projects that can be applied.

They travel in packs. They eat together. That’s how they were in college and
high school and they want that in the workplace as well. We laugh — if you
see one, you see five. They live together in the apartment complex.

Recognition is another interesting challenge for companies. As children,

Millennials were rewarded almost regardless of accomplishment — a
generation that earned prizes for showing up and trying. In the work-
place, that appears to translate into wanting rapid promotions and lots of
feedback. A number of companies are trying frequent “mini-promotions”
with small wage increases as a way to keep Millennials satisfied about
their career movement. That may signal a swing away from compensation
broad-banding and back toward more complex pay matrixes.

And what about training? Several HR executives reported that Millenni-

als simply won’t stay put for a day-long class. Other generations may have
been equally unhappy in the classroom, but they put up with it. Millenni-
als grew up accustomed to lots of stimulation and self-directed learning,
and they won’t tolerate less. Just-in-time learning delivered through media
seems to be the preferred alternative.

© 2009 Monitor Group 7

 We need different training approaches to use with the Millennials as
opposed to Gen X and Boomers. We’re looking at podcasts, mobile learning,
getting it delivered over phones.

Other companies are trying small cohort learning groups and peer men-
toring, using the Millennials’ natural social style as a platform for develop-
ing new skills and knowledge. But whatever the approach, it’s clear that
the era of multi-day, faculty-centric programs is finally coming to an end.

Lastly, on the high potential front, companies are just beginning to think
about how to prepare Millennials for leadership roles. If Boomers retire
sooner rather than later, there will be no choice but to put young, relatively
untested employees into management and executive positions. And it may
be harder to recognize the best leadership talent.

Perhaps our definition of a high potential may evolve. The definition of

performance would have to be modified. High performing has meant
working a 60-hour week; if you don’t put that in, you’re not a high
performer. This is not the expectation of Millennials.

At a minimum, our HR executives said, the importance of job rotations

and supervised on-the-job learning will increase dramatically.

Insistence on integrated, interconnected technology

There is a story the military tells about young soldiers in Iraq who grew
impatient with the slow flow of information about roadblocks and snipers
and other security details. Their impatience led them to create informal
web sites where they shared critical information on a minute-by-minute
basis, live from the action. The solution was typically Millennial, using
new technology to bypass a frustratingly slow system (and, the military
will tell you, triggering a host of security concerns in the process).

Similar stories were told in the research interviews about Millennials.

Frustrated with the ubiquitous low-quality conference phones, young em-
ployees used a cluster of cell phones instead. Or, engaged in round robin
use of data “thumbs” to quickly share a document. Or used freeware on
the internet or texted a friend in another company for help. Whatever the

8 © 2009 Monitor Group

Millennials’ fundamental assumption
is that work should be
FLUID ENOUGH TO MAKE ROOM FOR
OTHER INTERESTS AND ACTIVITIES.
 solution, the generation that grew up with the latest and greatest gadgets
doesn’t have patience with anything less. One HR executive reported that
Millennials consider the company’s technology an important criterion for
whether they will take a job.

Technology within the work environment makes a difference. They find it

shocking that their conference rooms don’t have built-in projectors. They
say, “I want to work in a modern facility that’s up-to-date.”

Another characteristic of the under-30 crowd is their continuous, on-line

interaction with friends, families, colleagues and the world at large. Access
to this kind of communication is a condition of employment for many in
the generation, and companies are struggling to figure out the rules. Is it
okay to text during a meeting? Boomers say it’s rude; Millennials say it’s
multi-tasking. Is it okay to complain about work on your Facebook page?
Boomers say it’s disloyal. Millennials say its being honest (and, by the way,
none of the company’s business). Clearly, corporate cultures will need to
sort this one out, and the most common approach so far is to fight fire
with fire.

Our company launched a Facebook-like company directory. People put the

info they want on them. It’s a very different way to look each other up, to
know about other people in the organization.

We have our own corporate version of Facebook that mostly Millenni-

als are using — sharing a lot more than others in the organization, way
beyond work-related information.

Companies with significant populations of young adults are rapidly build-

ing internal social networks. In fact, a whole new consulting specialty is
growing to help create them. And forward-thinking employers are putting
networks to good use.

We have a next generation network for anyone in the Millennial genera-

tion. It seems to be very social, very fun (that is high on their agenda); it is
an informal way to generate and refine new ideas, to open up a dialogue
with that generation of workers to give them chance to interact, share
ideas, not bound by a particularly structure so that innovation hap-
pens — organically, naturally.

10 © 2009 Monitor Group

Scarcity of qualified and willing employees for “traditional” jobs

Without going into all the demographics, Boomers were a big generation,
Gen X was a relatively small generation, and Millennials are a huge gen-
eration that is entering the workforce. The economy is the key unknown
variable in how this will play out: will Boomers stay for another decade,
blocking Millennials’ advancement or will they depart en masse leaving
millions of empty jobs for unprepared young adults? Our interviewees
didn’t know which scenario is more likely, but in either case they expect
that recruiting and retaining Millennials will be a challenge.

This is a generation that harbors considerable distrust of large companies,

probably from watching their parents’ troubled careers. It won’t take much
for them to abandon corporate life altogether, yet the demographics mean
that companies must be able to attract them

Since compensation doesn’t seem to be a major motivator, they are looking

for other forms of reward: travel, new experience, camaraderie, contribu-
tion to the greater good and rapid advancement. Earlier generations would
have been happy with these rewards, too, but it wasn’t in their nature to
insist on all of them.

Millennials are saying to us, “If I am still in this role in a year, and no one
is talking about what my next move is, then I am going to look outside of
this company.”

Forbes magazine recently ran an article which questioned whether Mil-

lennials are entrepreneurial enough and competitive enough to start major
new business enterprises. The following response appeared on a popular
blog targeted to the under-25 generation:

OMG. What if Millennials are so ingrained with Barney-style values like

fairness, and cooperation, and love that we never build the next GE or
Coke? Heaven forbid, right?

That attitude is leading large companies to project-based work environ-

ments, where they hope to recreate the experience of moving from one
small company to another. One HR executive described his company’s
approach as a carefully crafted sequence of 3-year projects. Millennials

© 2009 Monitor Group 11

 stay for the duration of a project, and then the firm launches an aggressive
campaign to attract them to another project. So far, it’s working for them,
but it is still early.

Smaller companies benefit from the Millennials’ preferences on the re-

cruiting side, but are finding it hard to retain them. Their strategy, for the
moment, appears to be retooling their systems to tolerate much higher
turnover rates than in the past. That may be a harbinger of things to come
for everyone.

Conclusion

The one, absolute consistent in Monitor’s research is that the entry of Mil-
lennials into the workforce is going to bring about major change for every-
one. The expectations of these young adults are simply too different from
previous generations for it to be any other way. With that assumption, our
research suggests a short list of actions that will help any company prepare
for the future:

• Conduct multigenerational focus groups to surface and prioritize

HR policies and practices that need to be modernized

• Establish internal social networks — on-line and otherwise — to

channel and amplify communication

• Increase the use of rotational programs to provide lots of stimulus

and feedback

• Use various kinds of cohort groupings for orientation, learning,

career planning and other purposes

• Try many small experiments and advertise the successes

12 © 2009 Monitor Group

 The generation that grew up with
THE LATEST AND GREATEST GADGETS
doesn’t have patience
with anything less.
June Delano
June Delano is an innovator in the field of executive development who focuses on executive capa-
bility-building as a source of competitive advantage. She is known for her deep understanding of the
relationship between strategy and executive learning, as well as her ground-breaking designs. June
joined Monitor as a leader of the executive development practice after many years in the corporate
learning world. June has recently led strategic, enterprise-level projects with clients in telecommuni-
cations, biopharmaceuticals and investment banking, working in Asia, Europe and the Americas.

Celia Berenguer
Celia Berenguer had been dedicated to learning and development for 10 years. She has primarily
worked with large, global clients, crafting solutions to address a variety of issues including post-
merger integration, new culture development and working across cultures. Celia joined Monitor Group
as a lead practitioner in the field of leadership development where she has focused on developing
experiences that push the boundaries of traditional executive development. It was at Monitor that
she has been most exposed to developing High Potential populations and developed a keen interest
in understanding how Millennials will affect the future of organizations as a whole, and organizational
development in particular. Celia has led a variety of learning and development projects for pharma-
ceutical, consumer goods, telecommunications and financial services companies. Prior to joining
Monitor, Celia worked in the executive development arena at several renowned business schools in
the US and Europe, most extensively at Harvard Business School.

Karin E. Stawarky
Karin Stawarky is a founding leader of Monitor’s organization and leadership practice and is the
managing partner of the San Francisco office. In her practice, she works with client executives on a
spectrum of challenges related to aligning organizational and business strategy to drive results. Her
client work includes creating and implementing customer-driven, analytically based, and imple-
mentable strategies, designing and building high-performance organizations to meet new challenges
and opportunities, developing the capabilities required for sustained growth, and improving profit-
ability through greater organizational effectiveness. Her industry spans multiple industries, from life
sciences and high tech to consumer products and financial services. Previously, Karin was in strategy
and operations consulting with a focus on organizational transformation and change; she also worked
in marketing and brand management. Karin received her M.B.A. from the Amos Tuck School of Business
at Dartmouth College and is a summa cum laude, Phi Beta Kappa graduate of Bowdoin College. While
at Tuck, Karin was selected by the faculty for the Joshua and Sabra Hamilton Prize for excellence as a
general manager and selected by her peers to receive the Julia B. Stell Award for her leadership.

MONITOR
Founded in 1983 by six entrepreneurs, Monitor is a global firm which serves clients through a range
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grates these services in a customized way for each client.

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the ways that are most important to them. To that end, we offer a portfolio of services to those who
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